1.

In the past three to four decades, many management theorists, and writers have made
remarkable contribution in the study of management. By studying the various
approaches to management analysis, we can understand the concept of management
and have a better understanding of managerial functions. Which approach to
management emphasizes managing people by understanding their individual
psychological needs?
(a)  Empirical Approach                          (b)  Decision Theory Approach
(c)  Management Science Approach        (d)  Interpersonal Behavior Approach
(e)  Contingency Approach.
2. The communication process is made up of various components. Which of the following
is the actual physical product from the source?
(a)  Feedback                                        (b)  Filter                                               (c) 
Message
(d)  Channel                                           (e)  Understanding.
3. Which of the following would not be an accurate depiction of the differences between
strategic and tactical planning?
  Strategic planning is developed mainly by upper-level management and tactical
planning is generally developed by lower-level management
  Facts for strategic planning are generally easier to gather than facts for tactical
planning
  Strategic plans generally contain less details than tactical plans
  Strategic plans generally cover a longer period of time than tactical plans
  Managers who are engaged in the development of strategic plans tend to work in more
uncertainty than those managers engaged in the development of tactical plans.
4. Which of the following statements concerning grapevine is not correct?
  Grapevine is generally used irregularly in organizations
  Grapevine can and often does generate harmful rumors
  Grapevine is used largely to serve the self-interests of people within it
  Some managers use grapevine to their advantage
  In time, and with proper pressure, grapevine can be eliminated.
5. The conflict-resolution approach that corresponds with a high level of assertiveness
and a low level of cooperativeness, is referred to as
(a)  Compromising                                 (b)  Collaborating                                   (c) 
Forcing
(d)  Avoiding                                         (e)  Accommodating.
6. Mr. Sunil works for “Energy Engineering Works.” Apart from the regular compensation,
the company provides him with things such as tuition reimbursement, recreational
opportunities etc. What is the name given to these things of value?
(a)  Incentives                                        (b)  Benefits                                          (c) 
Rewards
(d)  Compensation                                 (e)  Social benefits.
7. The fact that 70-80 percent of a manager’s time is taken up by his interactions with
others, highlights the need for effective communication for successful management.
Which of the following strategies is not likely to improve communication effectiveness?
  Avoiding non-verbal cues
  Using simple, unambiguous language
  Using active listening techniques
  Using appropriate and consistent nonverbal cues
  Using the feedback loop in the communication process.
8. Two factor theory of motivation provides useful insights into the relationship between
individual and situational or hygiene factors. Which of the following is a hygiene factor?
(a)  Achievement                                    (b)  Interpersonal relations              (c) 
Recognition
(d)  Challenging work                             (e)  Increased responsibility.
 9. Identify the sequence of different steps in controlling.
  Measurement of performance.
   Comparison of actual and standard.
   Analysis of causes of deviation.
  Actual performance.
  Corrective action plan.

(a)  (III), (IV), (V), (I), (II)                           (b)  (II), (III), (IV), (V), (I)
(c)  (I), (II), (IV), (III), (V)                           (d)  (IV), (I), (II), (III), (V)
(e)  (V), (IV), (III), (II), (I).
10 JIT (Just-In-Time) inventory control is an approach to inventory control, which
. stipulates that materials should arrive just, as they are needed, in the production
process. Which of the following would generally not be associated with a successful
JIT program, for the purpose of inventory control?
  Well-organized receiving and handling of materials purchased from suppliers
  Strong management commitment
  Suppliers located in diverse and distant locations
  High quality of materials purchased from suppliers
  Dependable and long-lasting relationships with suppliers and customers.

Answers

Answer
1. : (d)Reason :    Interpersonal Behavior Approach to management emphasizes managing people
by understanding their individual psychological needs.  Hence, from above discussion, we can
infer that option (d) is correct.
Answer
2. :                  (c)Reason :   The communication process is made up of various components. The
message is the actual physical product from the source encoding. Hence, from above
discussion, we can infer that option (c) is correct.
Answer
3. : (b)Reason :    Strategic plan is used to establish overall objectives for the organization and
position the organization in terms of its environment. Facts for strategic planning are generally
more difficult to gather than facts for tactical planning. Hence, from above discussion, we can
infer that option (b) is correct.
Answer
4. : (e)Reason :    Grapevine is an integral part of organizational communication and hence cannot
be eliminated.
Answer
5. : (c)Reason :    The conflict-resolution approach that corresponds with a high level of
assertiveness and a low level of cooperativeness, is referred to as Forcing. Hence, from above
discussion, we can infer that option (c) is correct.
Answer
6. : (b)Reason :    The term associated with things such as tuition reimbursement, recreational
opportunities etc is benefits which is provided apart form the regular compensation. i.e. Benefits
are forms of supplementary compensation. They represent monetary and non-monetary
payments over and above the wages paid. (a) Incentives represent special compensation
opportunities that are usually tied to performance. (c) Rewards are given in recognition of
specific achievements whereas social benefits in the form of say club memberships are given to
enhance the employee status. (d) Compensation is the financial remuneration given by the
organization to its employers for their work.
7.  Answer :                                                                                                                         (a)Reason
:     Avoiding non-verbal cues is not likely to improve communication effectiveness. Rather, non-
verbal cues are very important for effective communication as they often help in understanding
the hidden feelings in people.
     Hence, from above discussion, we can infer that option (a) is correct.
Answer
8. : (b)Reason :    Interpersonal relationships can be considered as a hygiene factor under Two
factor theory.
Answer
9. : (d)Reason :    The steps in controlling are actual performance, measurement of performance,
comparison of actual and standard.  Analysis of courses of deviation and corrective action plan.
(d) is correct answer.
10. 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.

11. Information that originates outside the organization is known as external information.
Which of the following is/are example(s) of external information in an organization?
  Daily receipts and expenditures
  Salesperson Quotas
  Descriptions of customer satisfaction with products and services
  Quantity of an item in hand or in inventory
  Cost and selling price of the company’s item.
12. Which of the following decision-making models emphasizes short-run solution of a
problem rather than long-term goal accomplishment?
(a) Rational model                         (b) Satisficing model                      (c) Incremental
model  
(d) Garbage-can model                  (e) Decision tree.
13. Sofia works in one of seven research and development departments at General
Automobile Corporation. This would suggest that General Automobiles has a 
(a)  Functional structure                              (b)  Divisional structure         (c)  Flat
structure
(d)  High degree of centralization                (e)  Tall structure.
14. Which of the following information processing systems gives the output in the form of
summary and exception reports that are useful to the managers?
(a)  Decision support system                  (b)  Management information system
(c)  Office automation system                (d)  Transaction processing system
(e)  Executive support system.
15. In which of Likert’s four systems of leadership, managers do not have complete
confidence and trust in subordinates but nevertheless, solicit advice from
subordinates while retaining the right to make final decision?
(a)  Participative leadership style            (b)  Benevolent-authoritative leadership style
(c)  Consultative leadership style            (d)  Exploitative-authoritative leadership style
(e)  Trait theory of leadership style.
 16. Performance appraisals are important in an organization because they
  Provide systematic judgments to support promotions.
   Provide a basis for coaching.
   Provide a basis for counseling.
  Let subordinates know where they stand with the boss.
(a)  Only (I) above                                  (b)  Only (II) above                                
(c)  Both (I) and (IV) above                     (d)  (I), (III) and (IV) above                      
(e)  All (I), (II), (III) and (IV) above.
17. Ratio analysis helps a manager to compare the performance of the organization with
its previous performance or the performance of its competitors. Which of the
following is a ratio of creditors’ contribution to that of the owners?
(a)  Current ratio                                     (b)  Debt-equity ratio
(c)  Return on investment (ROI)               (d)  Net profit margin                  (e) 
Inventory turnover.
18. Which of the following inventory techniques uses cards to monitor inventory
movement?
(a)  ABC Analysis                                   (b)  JIT Approach                                   (c) 
Kanban
(d)  Kaizen                                             (e)  Economic Order Quantity.
19. A decision support system (DSS) is an interactive computer system used to plan and
make decisions. Which of the following is/are true with regard to Decision Support
System (DSS)?
  Executive decisions are the focal points in DSS.
   DSS specializes in easy-to-use software.
   DSS employs interactive processing.
  The control and use of DSS rests with the central information management
department.
(a)  Only (I) above                                  (b)  Both (I) and (II) above
(c)  Both (III) and (IV) above                    (d)  (I), (II) and (III) above
(e)  (II), (III) and (IV) above.
20. Which of the following is/are postulates of the path – goal theory?
  The leader clearly defines the path to goal attainment for subordinates.
   The leader motivates subordinates to participate in decision-making.
  The leader sets clear and specific goals for subordinates.
The leader suitably rewards employees as per their performance.
  Only (II) above                                 (b)  Only (IV) above
(c)  Both (II) and (IV) above                     (d)  (I), (II) and (IV) above                       
(e)  All (I), (II), (III) and (IV) above.

Answers

11. Answer : (c)Reason : Descriptions of customer satisfaction with products and services are
examples of external information in an organization. Hence from above discussion, we can
infer that option (c) is correct.
      Options (a), (b), (d) and (e) are all examples of internal information in an organization.
Answer
12. : (c)Reason :    Incremental model emphasizes short-run solution of a problem rather than
long-term goal accomplishment. (a) Rational model is a model of managerial decision-making,
which suggests that managers engage in completely rational decision process, ultimately make
optimal decisions and process, and understand all information relevant to their decisions at the
time they make them. (b) Satisficing model describe the way modern managers must, of
necessity, make decisions with incomplete information by choosing from among the few most
likely alternatives. (d) Garbage can model is a non-rational model of management decision-
making stating that mangers behave in virtually a random pattern in making non-programmed
decisions. (e) Decision tree is a quantitative decision-making tool based on a graphic model
that displays the structure of a sequence of alternative courses of action and usually shows the
payoff associated with various paths and the probabilities associated with future conditions.
Answer
13.: (b)Reason :    Sofia works in one of seven research and development departments at General
Automobile Corporation and this suggests  that General Automobile has a divisional structure.
i.e. to say divisional structure is a type of departmentation in which positions are grouped
according to similarity of products, services or markets. (a) Functional structure is a type of
departmentation in which positions are grouped according to their main functional or
specialized area. (c) Flat structure is a structure that has few hierarchical levels and wide
spans of control. (d) High degree of centralization is the tendency to restrict delegation of
decision-making in an organization structure, usually by holding authority at or near the top of
the organization structure. (e) Tall structure is a structure that has many hierarchical levels and
narrow spans of control.
Answer
14. : (b)Reason :    MIS (Management Information System) gives the output in the form of summary
and exception reports that are useful to the manager.
Answer
15. : (c)Reason :    When managers have substantial but not complete confidence and trust in
subordinates and solicit advice from subordinates while retaining the right to make final
decision, Likert’s four systems of management describes it as consultative leadership style. (a)
In Participative leadership style the manager has complete trust and confidence in the
subordinates in all the matters. (b) In Benevolent leadership style the managers have a
patronizing confidence and trust in subordinates, solicit some ideas and opinions from
subordinates, motivate with rewards and some fear and punishment, permit some upward
communication and allow some delegation of decision-making but with close policy control. (d)
In exploitative-authoritative leadership style the managers represents doctorial leadership
behavior with all decisions made by the manager. (e) Trait theory of leadership style assumes
that leaders share certain inborn personality traits.
Answer
16.: (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.
Answer
17.: (b)Reason :    Debt-equity ratio indicates what percentage of the organization’s assets creditors
furnish. (a) Current ratio is the ratio of current assets to current liabilities. (c) Return on
investment (ROI) is the ratio of net income to total assets. (d) Net profit margin is the ratio of
net income to net sales. (e) Inventory turnover is the ratio of cost of goods sold to inventory.
18. Answer : (c)Reason : Kanban is a subsystem of the JIT approach involving a simple parts
movement system that depends on cards and containers to pull parts from one work center to
another. (a)ABC analysis is a technique of inventory management, in which the inventory is
distributed based on price & usage of the inventory. (b) A JIT is an approach to inventory
control that emphasizes having materials arrive just as they are needed in the production
process. (d)  Kaizen is a Japanese term implying continuous improvement.
    (e)  EOQ is an inventory control method developed to minimize ordering plus holding
costs, while avoiding stock out costs.                    
19. Answer : (d)Reason :                                                      The following are the characteristics of
DSS:
          (I)    Executive decisions are the focal points in DSS.
              (II)    DSS specializes in easy-to-use software
              (III)   DSS employs interactive processing.
(1V) The control and use of DSS rests with the users and not the central information management
department
                      Statement given in (IV) is incorrect; hence option (d) is the correct answer.
Answer
20. : (e) Reason :   According to Path-Goal theory, the leader clearly defines the path to goal
attainment for subordinates, when leader motivates subordinates to participate in decision-
making and sets clear and specific goals to the organization and a leader should suitably
reward employees as per their performance. So, all the statements mentioned are true for
path-goal theory.
2 Behaviorally Anchored Rating Scales (BARS) is a sophisticated performance
1. rating method. Which of the following is not true with regard to BARS?
(a)   BARS minimizes subjective interpretation inherent in graphic rating scales
(b)   BARS makes use of ‘anchors’ (common reference points of performance)
(c)   BARS concentrates on job-specific behaviors and hence is highly meaningful
(d)   BARS is a simple and cost-effective rating method          
(e)   BARS can be applied in organizations where a large number of people perform
similar jobs.
2 Which of the following is not true with regard to functional authority?
2.
(a)  Functional authority is the authority staff members have over line members within
the   limits of their functions
(b)  Functional authority has the same effect as line authority but it doesn’t have the
right that line authority has, to punish violations or deviations in order to ensure
compliance
(c)  Functional authority is limited to those areas where a staff member has some
technical competence
(d)  The use of functional authority should be restricted to the procedural aspects of a
function
(e)   Functional authority is in sync with the principle of unity of command.
2 Creativity is an important factor in managing people. Which of the following is not
3. true with regard to the creative process?
(a)  Creativity is the ability to develop new ideas
(b)  The creative process starts with unconscious scanning
(c)  Intuition connects the unconscious with the conscious
(d)  Insight leads to intuition
(e)   Insight is tested against organizational reality.
2 According to "expectancy theory", the probability of an individual acting in a
4. particular way depends on
    The personality of the individual and the likelihood it will change.
     The company and its potential to be moving in the right direction.
III.    The situation.
IV.   The strength of that individual's belief that the act will have a particular outcome
and on whether the individual values that outcome.
(a)  Only (I) above                                  (b)  Only (IV) above
(c)  Both (I) and (III) above                      (d)  Both (II) and (IV) above
(e)  (I), (III) and (IV) above.
2 Which of the following techniques for improving productivity aims at reducing
5. costs by analyzing and improving individual operations of a product or service?
(a)  Work simplification                          (b)  Time-event network             (c)  Value
engineering
(d)  Total Quality Management                (e)  Quality Circle.
2 Span of control an important factor, which is to be taken into account when
6. undertaking organizational design. Maintaining a large span of control within an
organization is most effective in all except one of the following situations?
(a)   When subordinates prefer autonomy
(b)   When tasks are routine
(c)  When jobs are similar but have varying performance measures
(d)  When subordinates are highly trained
(e)  When managers are competent.
 2 Functional job analysis is a widely used systematic job analysis approach. Which
7. of the following dimensions of an individual’s job does functional job analysis
focus on?
    Data, people and jobs pertaining to the individual’s job.
     Interpersonal relationships required to perform the job.
III.    Tools and equipment used by the worker.
IV.   Products and services produced by the worker.

(a)  Only (I) above                                                          (b)  Only (III) above       

(c)  Both (II) and (IV) above                                             (d)  (I), (III) and (IV)
above                             
(e)  All (I), (II), (III) and (IV) above.
2 Organizational culture is the collection of shared values, beliefs, rituals, stories,
8. myths and specialized language that foster a feeling of community among
organization members. Which of the following is not a characteristic of
organization culture?
(a)   It differentiates one organization from another
(b)   It defines the internal environment of an organization
(c)   It ensures consistency in the behavior of organization members
(d)   It remains absolutely stable throughout the life of an organization
(e)   It is perceived by the organization members as well as by outsiders.
2 Management By Objectives (MBO) is a system for achieving organizational
9. objectives, enhancement of employee commitment and participation. Which of
the following is not an advantage of MBO?
(a)  Role clarity                                      (b)  Clarity in organizational action
(c)  Personnel satisfaction                      (d)  Basis for organizational change
(e)  Flexibility.
3 Which of the following are the characteristics of the planning process usually
0. adopted in Japanese Management style?
    Long-term orientation.                    
     Individual decision-making.
III.    Decisions flowing from bottom to top and back.    
IV.  Slow decision-making.

(a)  Both (I) and (II) above                       (b)  Both (I) and (III) above
(c)  Both (II) and IV) above                      (d)  (I), (III) and (IV) above
(e)  (II), (III) and (IV) above.

Answers

Answer
21.: (d)Reason :    BARS minimizes subjective interpretation inherent in graphic rating scales. They
make use of ‘anchors’ (common reference points of performance) and they concentrate on job-
specific behaviors and hence are highly meaningful. However, BARS are time-consuming and
costly to develop, as they should cover each dimension of all jobs in the department. As a
result, BARS tend to be used in situations in which relatively large numbers of individuals
perform similar jobs.
Answer
22.: (e)Reason :    The authority to control other departments, related to specific tasks, is known as
functional authority. It is defined as the formal authority staff members have over line members
within the limits of their functions. It has the same effect as line authority but it does not have
the right that line authority has, to punish violations or deviations in order to ensure
compliance. Functional authority is limited to those areas where a staff person has some
technical competence. The use of functional authority should be restricted to the procedural
aspects of a function. But functional authority violates the principle of unity of command since
authority over specific functional activities is exercised not only by line managers but also by
staff managers.
Answer
23. : (d)Reason :    Creativity is the ability to develop new ideas. The creative process comprises
four phases: unconscious scanning, intuition, insight, and logical formulation. Intuition connects
the unconscious with the conscious, and leads to insight. In the final phase of the creative
process, insight is tested against organizational reality.
Answer
24. : (b)Reason :    According to "expectancy theory", the probability of an individual acting in a
particular way depends on the strength of that individual's belief that the act will have a
particular outcome and on whether the individual values that outcome. Hence option (b) is the
correct answer.
25. Answer : (c)Reason : Value engineering involves analyzing the operations of the products or
service, estimating the value of each operation, and modifying that operation so that the cost is
lowered.
     (a) Work simplification involves teaching workers the concepts of time and motion studies,
layout of work situations, and workflow analysis in order to improve work methods.
  (b) Time-event network is a logical extension of the Gantt chart and uses Critical Path Method
to help in planning and controlling operations.
  (d) Total Quality Management (TQM) calls for active participation of all the members at all
levels of the organization in order to ensure its (the organization’s) long-term commitment to
improvement of quality.
    (e) A quality circle is a group of people who belong to an organizational area and who meet
regularly to solve the problems they face at work.
Answer
26. : (c)   Reason : Maintaining a large span of control within an organization is most effective in all
situations except when jobs are similar but have varying performance measures.
Answer
27.: (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.
  Products and services produced by the worker.
     Hence, from above discussion, we can infer that option (d) is correct.
Answer
28. : (d)Reason :    Organization culture is the collection of shared values, beliefs, rituals, stories,
myths, and specialized language that foster a feeling of community among organization
members. Organizational culture is distinctive and it differentiates one organization from
another. It is based on certain norms, which define the internal environment of an organization.
When the members of an organization interact with each other, they use a common language,
and follow the same norms and hence organizational culture ensures consistency in their
behavior. It is perceived by the members of the organization as well as by outsiders. Though
organizational culture is fairly stable, it keeps evolving from time to time.
Answer
29. : (e)Reason :    MBO helps in better managing the organizational resources and activities
through clarity of objectives, role clarity, periodic feedback on performance, and participation
by managers. It provides the key result areas (KRAs) where organizational efforts are needed,
which leads to clarity in organizational action. Since MBO allows participation of employees in
objective setting and a rational performance appraisal, it provides the greatest opportunity for
personnel satisfaction. Also, MBO stimulates organizational change and provides a framework
and guidelines for planned change, enabling the top management to initiate, plan, direct, and
control the direction and speed of change. However, MBO has some limitations also, which
include inflexibility in the organization, particularly when the objectives need to be changed.
Answer
30. : (d)Reason :    The characteristics of the planning process usually adopted in Japanese
Management style are: (1) Long-term orientation, (2) Collective decision-making, (3) Decisions
flowing bottom to top and back, (4) Slow decision-making. Hence,  (d) is the correct answer.
3 Which of the following refers to the flow of information among persons at different
1. levels, who have no direct reporting relationships?
(a)  Horizontal communication                 (b)  Diagonal communication                 
(c)  Upward communication                    (d)  Downward communication               
(e)  Forward communication. 
3 Every organization structure, even a poor one, can be charted. Which of the
2. following is false with respect to Organization Chart?
(a)   It is a vital tool for providing information about organizational relationships
(b)   It provides a visual map of the chain of command
(c)   Charting an organization structure can show up the complexities and
inconsistencies, which can be corrected
(d)   It shows authority relationships as well as informal and informational relationships
(e)   It helps managers and new personnel to know how and where they fit into the
organization structure.
3 As Arvind Misra is reviewing the progress of his organization in meeting its
3. organizational goals, he is struck by the fact that his organization has an
organizational structure that might be causing problems. The current structure
diffuses accountability, makes it difficult to respond to changing conditions quickly,
and results in situations where someone might have two bosses. Which of the
following organization forms best fits these disadvantages being experienced by
Mr. Misra?
(a)  Geographical structure                     (b)  Matrix structure               (c)  Divisional
structure
(d)  Customer structure                           (e)  Functional structure.
3 The garbage-can model is effective in which of the following situation/s?
4.
    When managers have no specific goal preferences.
     When the means of achieving goals are unclear.
III.    When there are frequent changes in the participants involved in decision-making.
  When the degree to which decision-makers can determine optimal decisions is
limited by the individuals’ capacity and intelligence.          
(a)  Only (IV) above                                                              (b)  Both  (I) and (II)
above                    
(c)  Both (III) and (IV) above                    (d)  (I), (II) and (III) above                       
(e)  All (I), (II), (III) and (IV) above. 
3 Which of the following is true about the conclusions drawn from the trait approach
5. to leadership?
(a)   The trait approach identifies traits that consistently separate leaders from
nonleaders
(b)   There are certain traits that guarantee that a leader will be successful
(c)   The trait approach is based on early research that assumes that a good leader is
born, not made
(d)   Leadership is a simple issue of describing the traits of successful leaders
(e)   The trait approach is based on early research that assumes that a good leader is
made, not born.
3 Which of the following information systems has low-volume data and analytical
6. models as data inputs?
(a)  Management Information System      (b)  Decision Support System
(c)  Executive Support System               (d)  Transaction Processing System
(e)  Office Automation System.
3 An objective is the object or aim of an action. Management by Objectives (MBO) is
7. a management process that is popular in many organizations. It is the joint setting
of goals and objectives by superiors and subordinates. A major difference between
traditional objective setting and MBO is
(a)   In MBO, there are multiple objectives covering a range of organisational activities
(b)   In traditional objective setting the objectives, once formulated, provide direction for
management decisions
 (c)   In traditional objective setting the objectives, once established, form the criteria
against which actual accomplishments can be measured
(d)   In MBO, organisation members may actually pursue objectives other than the
formal organisational objectives
(e)   Traditional objective setting is ‘top down’ only, while MBO is both a ‘top down’ and
‘bottom up’ process.
3 In the Japanese management style, the controlling function is characteristic of 
8.
    Focus on individual performance.
     Control by peers.
III.    Extensive use of quality control circles.
  Fixing blame.
(a)  Both (I) and (II) above                       (b)  Both (I) and (III) above
(c)  Both (I) and (IV) above                     (d)  Both (II) and (III) above
(e)  Both (II) and (IV) above.
3 The strengths and weaknesses of each alternative become obvious in which step
9. of the decision making-process?
(a)  Identifying the problem                     (b)  Identifying the decision criteria
(c)  Analyzing the alternatives                 (d)  Implementing the alternative
(e)  Obtaining the needed resources.
4 The recruitment procedure is initiated when a vacancy occurs and is reported to
0. the HR department. Which of the following is usually the first step followed in the
recruitment procedure?
(a)   Designing job description
(b)   Developing a job specification
(c)   Performing job analysis
(d)   Attracting a pool of applicants
(e)   Selecting best recruits.

Answers

31. Answer : (b)

Reason:  Diagonal communication refers to the flow of information among persons at different levels, who
have no direct reporting relationships.
32. Answer : (d)
Reason:  Organization Chart is a vital tool for providing information about organizational relationships. It
shows authority relationships and neglects significant informal and informational relationships.
Hence, option (d) is false with respect to Organization Chart. Options (a), (b), (c) and (e) are all
true with respect to Organization Chart.
33. Answer : (b)
Reason:  The matrix structure best fits the disadvantages being experienced by Mr. Misra.
34. Answer : (d)
Reason:  The garbage-can model is effective in the following situations
           I. When managers have no specific goal preferences
           II. When the means of achieving goals are unclear
III. When there are frequent changes in the participants involved in decision-making
Statement (IV) is a condition under which a satisficing decision is made
Hence, option (d) is the answer.
35. Answer : (c)
Reason:  The trait approach is based on early research that assumes that a good leader is born, not
made.
36. 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, option (b) is
correct.
37. Answer : (e)
Reason:  MBO is the joint setting of goals and objectives by superiors and subordinates and clarifying on
the objective itself. Traditional objective setting is ‘top down’ only, while MBO is both a ‘top
down’ and ‘bottom up’ process. Hence, option (e) is correct.
38. Answer : (d)
Reason:  In the Japanese management style, the controlling function is characteristic of 
           (i) Focus on group performance                      
           (ii) Control by peers
(iii) Extensive use of quality control circles
   (iv) Saving face
   Hence option (d) is the answer.
39. Answer : (c)
Reason:  The strengths and weaknesses of each alternative become obvious in “analyzing the
alternatives” stage of the decision-making process.
40. Answer : (c)
Reason:  The Recruitment Procedure consists of the following steps:
         Performing Job Analysis.
(ii)       Designing Job Description.
(iii)      Developing a Job Specification.
(iv)     Attracting a Pool of Applicants.
(v)       Selecting Best Recruits.
   Hence, from above discussion, we can infer that option (c) is correct.

41 Managers making ethical decisions may belong to any of the three levels of moral
. development. Which of the following stages describes the conventional level of moral
development?
  Following rules only when it is in one’s immediate interest
  Valuing rights of others and upholding absolute values and rights, regardless of the
majority's opinion
  Sticking to rules to avoid physical punishment
  Living up to what is expected by people who are close to oneself
  Following self-chosen ethical principles even if they violate the law.
42 Direct control is the control that is exercised after the deviations from plans have
. occurred. Which of the following is not an underlying assumption of direct control?
  Performance can be measured
  Personal responsibility is absent
  The time expenditure is warranted
  Mistakes can be discovered in time
  The individual who is responsible will take corrective steps.
43 Which function of management involves filling, and keeping filled, the positions in the
. organization structure?
(a)  Organizing                                       (b)  Planning                                          (c) 
Staffing
(d)  Controlling                                       (e)  Leading.
44 Which of the following is not true about ‘power’?
.
Power requires no formal position                          
Power works both ways – downward and upward    
Power is derived from many sources          
Formal authority is a type of power            
Power is a narrow term compared to authority.
45 In an organization, a superior has the right to get tasks accomplished by his
. subordinates, but the responsibility remains with the superior. This principle which
intends to eliminate the practice of “passing the buck”, is known as
(a)  Authority on par with responsibility    (b)  Hierarchy of authority
 (c)  Unity of direction                                                           (d)  Downward delegation of
authority
(e)  Unity of command.
46 Robert Owen was one of the prominent contributors to preclassical management
. thought. Which of the following did Robert Owen advocate/propose? 
Division of labor   
  Legislative reforms to improve working conditions of labor             
Profit-sharing plan             
Study of management       
Emphasis on the importance of business skills for running a business.
47 Informal communication is also referred to as
.
(a)  Grapevine                                        (b)  Buzz                                                (c) 
Pipeline
(d)  Noise                                              (e)  Uproar.
48 An intervention, in Organization Development (OD) terms, is a systematic attempt to
. correct an organizational deficiency uncovered through diagnosis. Which of the following
intervention techniques is concerned with the interpersonal relations and dynamics
operating in work groups?
(a)  Technostructural activity                   (b)  Team building              (c)  Skill
development
(d)  Process consultation                       (e)  Survey feedback.
49 Why do such companies as Ford, Federal Express, Boeing, or Proctor & Gamble put
. together cross-functional teams?
Because each member has unique knowledge that adds value to the overall decision
Because it is cheaper than hiring consultants
Because decisions can be reached at almost twice the speed of other decision format
styles
Because it diffuses risk (blame) of a wrong decision choice
Because of inadequate availability of manpower.
50 Which of the following is an advantage of the functional structure?
.
It follows principle of occupational specialization                
It permits growth and diversity of products and services     
There is better face-to-face communication with local interests        
There is improved environmental monitoring           
It improves coordination in a region. 

Answers

41. Answer : (d)

Reason:  Living up to what is expected by people who are close to oneself describes the conventional
level of moral development. Options (a) and (c) describe the  preconventional stage. Options
(b) and (e) describe the principled stage.
42. Answer : (b)
Reason:  The underlying assumptions of direct control are:
    Performance can be measured.
(ii)   Personal responsibility exists.
(iii)      The time expenditure is warranted.
(iv)     Mistakes can be discovered in time.
(v)   The individual who is responsible will take corrective steps.
       Hence, option (b) is not the underlying assumption of direct control.
Options (a), (c), (d) and (e) are all underlying assumptions of direct control.
 43. Answer : (c)
Reason:  The staffing function of management involves filling, and keeping filled, the positions in the
organization structure.
44. Answer : (e)
Reason:  Power is a much broader concept than authority. Therefore, option (e) is not true about power
and is the answer.
45. Answer : (d)
Reason:  The principle which intends to eliminate the practice of “passing the buck”, is known as
downward delegation of authority. In downward delegation, a superior has the right to get
tasks accomplished by his subordinates, but the responsibility remains with the superior.
46. Answer : (b)
Reason:  Robert Owen proposed legislative reforms to improve working conditions of labor.
47. Answer : (a)
Reason:  Informal communication is also referred to as grapevine.
48. Answer : (d)
Reason:  Process Consultation intervention technique is concerned with the interpersonal relations and
dynamics operating in work groups. Hence, option (d) is correct.
49. Answer : (a)
Reason:  Companies such as Ford, Federal Express, Boeing, or Proctor & Gamble put together cross-
functional teams because each member has unique knowledge that adds value to the overall
decision. A cross-functional team, in business, consists of a group of people working toward
a common goal and made of people with different functional expertise, which makes their
knowledge unique.
50. Answer : (a)
Reason:  Following the principle of occupational specialization is an advantage of the functional
structure. (b) Permitting growth and diversity of products and services is an advantage of
divisional structure. (c) Better face-to-face communication with local interests and (e)
improved coordination in a region are advantages of a divisional structure. (d) Improved
environmental monitoring is an advantage of the matrix structure.
5 Which of the following steps in the planning process involves the organization
1. asking the question “in which environment – internal or external – will our plans
operate”? 
(a)  Formulating supporting plans         
(b)          Comparing alternatives in the light of goals     
(c)   Considering planning premises      
(d)   Identifying alternatives       
(e)   Setting objectives or goals.
5 Sakshi Pathak is considering the following questions as she approaches a
2. planning period: (a) What industries should we get into or out of? (b) In which
businesses should the corporation invest money? Which of the following levels
would be appropriate to address the questions facing Ms. Pathak?
(a)  Corporate level                                (b)  Business level             
(c)  Operational level                                                            (d)  Functional level
(e)  Departmental level.
5 Which of the following managers deal with the actual operations of an
3. organization’s units?
(a)  First level                                         (b)  Top level                         (c)  Middle
level                       
(d)  Administrative                                  (e)  Customer support.
5 Which of the following is/are objectives of sensitivity training? 
4.
    It helps individuals gain insights into their behavior and helps them analyze the
way they appear to others.
     It helps individuals develop the skills necessary for diagnosing and understanding
of group processes.
  It exposes managers to theories, principles and new developments in management.
(a)  Only (I) above                                  (b)  Only (III) above                               
 (c)  Both (I) and (II) above                       (d)  Both (II) and (III) above                      
(e)  All (I), (II) and (III) above.
5 Douglas McGregor identified two opposing perspectives (Theory X and Theory Y)
5. that he believed typified managerial views of employees and suggested that
management must start with the basic question of how managers see themselves
in relation to others. Which of the following is not correct about his theory?
(a)   Theory X managers view people as having an inherent dislike of work
(b)   Theory X managers assume that people are self motivated and do not want to be
directed
(c)   Theory Y managers assume that the average person will accept, even seek,
responsibility
(d)   Theory Y managers view people as responsible and conscientious
(e)   Theory Y managers assume that people are internally motivated to accomplish the
goals and objectives.
5 Inventory is vital to organizations, as it represents considerable costs. Various
6. methods have been developed to control inventory related costs. Which inventory
control method minimizes ordering and holding costs, while avoiding stock-out
costs?
(a)  Mathematical model                         (b)  Linear programming                        
(c)  Economic order quantity                  (d)  JIT inventory system
(e)  Kanban.
5 Which of the following ratios tests the relationship between the sales and the
7. various assets of a firm?
(a)  Activity ratio                                    (b)  Current ratio      (c)  Inventory turnover
ratio 
(d)  Return on investment ratio                (e)  Debt ratio 
5 Which model/theory of leadership does Kavita Ramakrishnan use, when she
8. determines the effectiveness of decisions as measured by group
performance/participation; quality and acceptance?
(a)   House's Path-Goal Theory  
(b)  Fiedler’s Contingency approach
(c)  Blake and Mouton's Managerial Grid
(d)  Hersey and Blanchard's Situational Leadership Model
(e)  Vroom and Yetton's Normative Decision Model.
5 The bargaining power of buyers, as described by Porter, is high when 
9.
(a)  There are only a few players in the industry 
(b)          Their purchases form a large chunk of the sellers’ total sales    
(c)    There are no substitutes for products being purchased       
(d)   Products or services are critical to the buyer’s business
(e)   There are great differences in products, in terms of features, manufactured by
various suppliers.
6 Performance appraisals are important in an organization because they
0.
    Provide systematic judgements to support promotions.
     Provide a basis for coaching.
III.    Provide a basis for counseling.
  Let subordinates know where they stand with the boss.
(a)  Only (I) above                                  (b)  Only (II) above                                
(c)  Both (I) and (IV) above                     (d)  (I), (III) and (IV) above                      
(e)  All (I), (II), (III) and (IV) above.

Answers
 51. Answer : (c)
Reason:  The question “in which environment – internal or external – will our plans operate” is asked in
the stage/step when an organization is considering planning premises.    
52. Answer : (a)
Reason:  The puspose of the corporate level strategy is to identify the busines areas in which an
organization will carry out its operations. Therefore, the corporate level strategy would be
appropriate to address the questions facing Ms. Pathak
53. Answer : (c)
Reason:  Middle level managers deal with the actual operation of the organization’s units.
54. Answer : (c)
Reason:  Statements (I) and (II) are objectives of sensitivity training. Sensitivity training involves
training in small groups in which people develop a sensitive awareness and understanding of
themselves and of their relationships with others. Statement (III) is an objective of university
management programs.
55. Answer : (b)
Reason:  As per McGregor, Theory X managers assume that people prefer to be directed, wish to
avoid responsibility, have little ambition, and above all, want security. Hence, option (b) is not
correct about his theory. Options (a), (c), (d) and (e) are all correct about his theory.
56. Answer : (c)
Reason:  The Economic Order Quantity (EOQ) is an inventory control method developed to minimize
ordering and holding costs, while avoiding stockout costs.
57. Answer : (a)
Reason:  Activity ratio tests the relationship between the sales and the various assets of a firm.
58. Answer : (e)
Reason:  Kavita Ramakrishnan is using Vroom and Yetton's Normative Decision Model. In this model,
the degree of participation of employees in the decision making process is important. Also the
acceptance of the decision by subordinates is important.
59. Answer : (b)
Reason:  The bargaining power of buyers is high when their purchases form a large chunk of the
sellers’ total sales. The remaining options are factors that make buying power of suppliers
high. Hence, option (b) is the answer.
60. 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.
6 Managers at all three levels of management require different kinds of skills to
1. perform the functions associated with their jobs. A major difference in skill
requirements between middle level and top-level managers is that
(a) Top managers must generally be more skilled than middle managers in every
respect
(b) Top managers require better interpersonal skills but less conceptual skills than
middle managers
(c) Top managers generally require better technical and interpersonal skills than
middle managers
(d) Top managers generally require higher level conceptual skills but less
technical skills than middle managers
(e) Middle managers require better technical and conceptual skills than top
managers.
6 The behavioral approach of management thoughts can be classified into
2.       Bureaucratic management.
     Group influences.
III.    Hawthorne studies.
IV.    Contingency theory.

(a) Both (I) and (II) above

(b) Both (I) and (III) above
(c) Both (II) and (III) above
(d) (I), (II) and (III) above
(e) (II), (III) and (IV) above.
6 By studying the various approaches to management analysis, we can
3. understand the concept of management and have a better understanding of
managerial functions. Which approach to management emphasizes managing
people by understanding their individual psychological needs?
(a) Empirical approach
(b) Decision theory approach
(c) Management science approach
(d) Interpersonal behavior approach
(e) Contingency approach.
6 Immoral management not only ignores ethical concerns, but also actively
4. opposes ethical behavior. Organizations with immoral management is/are
characterized by
    Total concern for company profits only.
     Laws are regarded as hurdles to be removed.
III.    Less inclination to minimize expenditure.

(a) Only (I) above

(b) Only (II) above      
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) All (I), (II) and (III) above.
6 The communication process is made up of various components. Which of the
5. following is the actual physical product from the source?
(a) Feedback
(b) Filter
(c) Message
(d) Channel
(e) Understanding.
6 Practicing ethical guidelines enables managers to become followers of moral
6. management approach. They facilitate ethical business decisions. Which of the
following is not an ethical guideline for managers?
(a) Upholding human dignity
(b) Obeying the law
(c) Non-allowance for participation of stakeholders in the decision-making process
(d) Primum Non-Nocere
(e) Telling the truth.
6 Despite the many advantages of planning, there may be some obstacles and
7. limitations in this process, since nothing is perfect on this earth, as a general rule
of law. Which of the following would not be considered a potential advantage of
planning?
(a) It helps managers to be future oriented
(b) It enhances decision coordination
(c) It increases the amount of time available for other managerial functions
(d) It emphasizes organizational objectives
(e) It helps in offsetting uncertainty and risk.
 6 Which of the following would not be an accurate depiction of the differences
8. between strategic and tactical planning?
(a) Strategic planning is developed mainly by upper-level management and
tactical planning is generally developed by lower-level management
(b) Facts for strategic planning are generally easier to gather than facts for tactical
planning
(c) Strategic plans generally contain less details than tactical plans
(d) Strategic plans generally cover a longer period of time than tactical plans
(e) Managers who are engaged in the development of strategic plans tend to work
in more uncertainty than those managers engaged in the development of
tactical plans.
6 Using the BCG matrix requires considering which of the following factors?
9. (a) Types of risk associated with product development
(b) Threats that economic conditions can create in future
(c) Social factors
(d) Market shares and growth of markets in which products are selling
(e) Political pressures.
7 Proctor & Gamble (P&G) makes fourteen different laundry soap products and
0. completely dominates the laundry detergent market. Through constant changes
in packaging, it is trying to influence the perception of customers that its products
are unique. Which of the following generic strategies is P&G using?
(a) Cost leadership
(b) Differentiation
(c) Focus
(d) Globalization
(e) Niche strategy.

Answers

61. Answer :  (d)

Reason : The major difference in skill requirements between middle and top managers is that top
managers generally require higher level conceptual skills but less technical skills than
middle managers. Hence, from above discussion, we can infer that option (d) is correct.
62. Answer :  (c)
Reason : The behavioral approach of management thoughts can be classified into
·      Group influences
·      Hawthorne studies.
63. Answer :  (d)
Reason : Interpersonal Behavior Approach to management emphasizes managing people by
understanding their individual psychological needs.  Hence, from above discussion, we
can infer that option (d) is correct.
64. Answer :  (c)
Reason : Immoral management not only ignores ethical concerns, but also actively opposes
ethical behavior. Organizations with immoral maangement are characterized by
·      Total concern for company profits only.
·      Laws are regarded as hurdles to be removed.
·      Strong inclination to minimize expenditures.
Hence, option (c) is the correct answer.
65. Answer :  (c)
Reason : The communication process is made up of various components. The message is the
actual physical product from the source encoding. Hence, from above discussion, we
can infer that option (c) is correct.
 66. Answer :  (c)
Reason : Non-allowance for participation of stakeholders in the decision-making process is not an
ethical guideline for managers. Hence from above discussion, we can infer that option
(c) is correct. Options (a), (b), (d) and (e) are all ethical guidelines for managers.
67. Answer :  (c)
Reason : Planning can be defined as the process by which managers set missions and objectives,
assess the future, and develop courses of action to accomplish these objectives.
However, it need not increase the amount of time available for other managerial
functions. Hence, from above discussion, we can infer that option (c) is correct. Options
(a), (b), (d) and (e) are all potential advantages of planning.
68. Answer :  (b)
Reason : Strategic plan is used to establish overall objectives for the organization and position the
organization in terms of its environment. Facts for strategic planning are generally more
difficult to gather than facts for tactical planning. Hence, from above discussion, we can
infer that option (b) is correct.
69. Answer :  (d)
Reason : Using the BCG matrix requires considering market shares and growth of markets in
which products are selling.
70. Answer :  (b)
Reason : In the given example P&G uses the differentiation strategy.
71 The bargaining power of buyers, as described by Porter, is high when
. (a) There are only a few players in the industry
(b) Their purchases form a large chunk of the sellers’ total sales
(c) There are no substitutes for products being purchased
(d) Products or services are critical to the buyer’s business
(e) There are great differences in products, in terms of features, manufactured by
various suppliers.
72 The conflict-resolution approach that corresponds with a high level of
. assertiveness and a low level of cooperativeness, is referred to as
(a) Compromising
(b) Collaborating
(c) Forcing
(d) Avoiding
(e) Accommodating.
73 Which approach to decision-making under conditions of uncertainty believes that
. individual attitudes toward risk vary with events, with people and positions?
(a) Risk analysis
(b) Risk communication
(c) Decision trees
(d) Utility theory
(e) Game theory.
74 Which of the following are characteristics of a closed system?
.     It is perfectly deterministic and predictable.
     There is no exchange between the system and the external environment.
III.    It is a realistic view.
IV.   It is flexible and adaptable.

(a) Both (I) and (II) above

(b) Both (I) and (IV) above
(c) Both (II) and (III) above
(d) Both (III) and (IV) above       
(e) (I), (II) and (III) above.
 75 Information that originates outside the organization is known as external
. information. Which of the following is an example of external information in an
organization?
(a) Daily receipts and expenditures
(b) Salesperson quotas
(c) Descriptions of customer satisfaction with products and services
(d) Quantity of an item in hand or in inventory
(e) Cost and selling price of the company’s item.
76 The major disadvantage of the divisional structure is
. (a) Diseconomies of scale
(b) Requires people with general managerial capabilities
(c) Managerial vacuum
(d) Duplication of activities and resources
(e) It is slow in responding to changes.
77 Power based upon identification with a person who has desirable resources or
. personal traits is known as
(a) Coercive power
(b) Legitimate power
(c) Expert power
(d) Referent power
(e) Reward power.
78 Which of the following decision-making models emphasizes short-run solution of a
. problem rather than long-term goal accomplishment?
(a) Rational model
(b) Satisficing model
(c) Incremental model
(d) Garbage-can model
(e) Decision tree.
79 Which of the following is usually the first step followed in the recruitment
. procedure?
(a) Designing job description
(b) Developing a job specification
(c) Performing job analysis
(d) Attracting a pool of applicants
(e) Selecting best recruits.
80 Which of the following is not a part of the human resource management function in
. most organizations?
(a) Sanctioning
(b) Performance appraisal
(c) Training
(d) Human resource planning
(e) Compensation.

Answers

71. Answer :  (b)

Reason : The bargaining power of buyers, as described by Porter, is high when their purchases
form a large chunk of the sellers’ total sales.
72. Answer :  (c)
Reason : The conflict-resolution approach that corresponds with a high level of assertiveness and
a low level of cooperativeness, is referred to as Forcing. Hence, from above discussion,
we can infer that option (c) is correct.
 73. Answer :  (d)
Reason : The preference or utility theory is based on the belief that individual attitudes toward risk
vary with events, with people and positions.
74. Answer :  (a)
Reason : The following statements are characteristics of a closed system :
·      It is perfectly deterministic and predictable.
·      There is no exchange between the system and the external environment.
75. Answer :  (c)
Reason : Descriptions of customer satisfaction with products and services are examples of
external information in an organization. Hence from above discussion, we can infer that
option (c) is correct. Options (a), (b), (d) and (e) are all examples of internal information
in an organization.
76. Answer :  (d)
Reason : Duplication of activities and resources is a major disadvantage of the divisional
structure.
77. Answer :  (d)
Reason : Power based upon identification with a person who has desirable resources or personal
traits is known as referent power.
78. Answer :  (c)
Reason : Incremental model emphasizes short-run solution of a problem rather than long-term
goal accomplishment. (a) Rational model is a model of managerial decision-making,
which suggests that managers engage in completely rational decision process,
ultimately make optimal decisions and process, and understand all information relevant
to their decisions at the time they make them. (b) Satisficing model describe the way
modern managers must, of necessity, make decisions with incomplete information by
choosing from among the few most likely alternatives. (d) Garbage can model is a non-
rational model of management decision-making stating that mangers behave in virtually
a random pattern in making non-programmed decisions. (e) Decision tree is a
quantitative decision-making tool based on a graphic model that displays the structure of
a sequence of alternative courses of action and usually shows the payoff associated with
various paths and the probabilities associated with future conditions.
79. Answer :  (c)
Reason : The Recruitment Procedure consists of the following steps :
·      Performing Job Analysis.
·      Designing Job Description.
·      Developing a Job Specification.
·      Attracting a Pool of Applicants.
·      Selecting Best Recruits.
Hence, from above discussion, we can infer that option (c) is correct.
80. Answer :  (a)
Reason : Sanctioning means giving formal permission or approval. It not a part of the human
resource management function in most organizations. Hence, from above discussion,
we can infer that option (a) is correct. Options (b), (c), (d) and (e) are all parts of the
human resource management function in most organizations.
81 Which of the following is the first step in formulating a career strategy?
. (a) Development of strategic career alternatives
(b) Analysis of personal strengths and weaknesses
(c) Consistency testing and strategic choices
(d) Implementation of the career plan
(e) Monitoring progress.
82 Forces/traits within the manager that determine effective leadership behavior
. include his/her
    Values.
     Confidence in subordinates.
III.    Hunger for power.
IV.   Aggressiveness.

(a) Both (I) and (II) above

(b) Both (I) and (IV) above
(c) Both (III) and (IV) above
(d) (I), (II) and (IV) above
(e) All (I), (II), (III) and (IV) above.
83 Which of the following is an on-the-job training technique?
. (a) Organizational socialization
(b) Creation of “assistant-to” positions
(c) Performance appraisal
(d) Job enlargement
(e) Job analysis.
84 According to Maslow, a person who is looking for affection, belongingness,
. acceptance, and friendship is at which need level?
(a) Physiological
(b) Safety
(c) Social
(d) Esteem
(e) Self-actualization.
85 Creativity is an important factor in managing people. Which of the following is not
. true with regard to the creativity process?
(a) Creativity is the ability to develop new ideas
(b) The creativity process starts with unconscious scanning
(c) Intuition connects the unconscious with the conscious
(d) Insight leads to intuition
(e) Insight is tested against organizational reality.
86 Which of the following is not one of the leadership styles suggested by path-goal
. theory?
(a) Instrumental leadership
(b) Benevolent-authoritative leadership
(c) Supportive leadership
(d) Participative leadership
(e) Achievement-oriented leadership.
87 Which of the following is not an effective listening technique?
. (a) Avoiding premature evaluation
(b) Avoiding eye contact
(c) Exhibiting affirmative nods and appropriate facial gestures
(d) Finding an area of interest in what the other person is saying
(e) Judging the content of the message, but not the weakness of the speaker.
88 According to “Expectancy Theory”, the probability of an individual acting in a
. particular way depends on
The personality of the individual and the likelihood that it will change.
The company and its potential to move in the right direction.
The situation.
IV.   The strength of that individual's belief that the act will have a particular outcome
and on whether the individual values that outcome.

(a) Only (I) above

(b) Only (IV) above
(c) Both (I) and (III) above
(d) Both (II) and (IV) above
(e) (I), (III) and (IV) above.
89 Which of the following are reasons why productivity of knowledge workers is more
. difficult to measure than productivity of industrial workers?
    The quality of a knowledge worker’s output cannot be determined immediately.
     The output of a knowledge worker often contributes only indirectly to the
achievement of the end-result.
III.    Upgraded skills of knowledge workers due to rapid technological advances make
output measurement difficult.
IV.   Knowledge workers often assist other organizational units and this contribution is
difficult to measure.

(a) Both (I) and (II) above

(b) Both (III) and (IV) above
(c) (I), (II) and (IV) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III) and (IV) above.
90 Which of the following are the characteristics of the planning process usually
. adopted in Japanese Management style?
    Long-term orientation.
     Individual decision-making.
III.    Decisions flowing from bottom to top and back.
IV.   Slow decision-making.

(a) Both (I) and (II) above

(b) Both (I) and (III) above
(c) Both (II) and IV) above
(d) (I), (III) and (IV) above
(e) (II), (III) and (IV) above.

Answers

81. 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.
 82. Answer :  (d)
Reason : Forces/traits within the manager that determine effective leadership behavior include
his/her
·      Values.
·      Confidence in subordinates.
·      Aggressiveness.
83. Answer :  (c)
Reason : Creation of “assistant-to” positions is an on-the-job training technique.
84. Answer :  (c)
Reason : According to Maslow, a person who is looking for affection, belongingness, acceptance,
and friendship is said to be having a social need.
85. Answer :  (d)
Reason : Creativity is the ability to develop new ideas. The creative process comprises four
phases: unconscious scanning, intuition, insight, and logical formulation. Intuition
connects the unconscious with the conscious, and leads to insight. In the final phase of
the creative process, insight is tested against organizational reality.
86. Answer :  (b)
Reason : Path-goal theory suggests four types of leadership : Instrumental, supportive,
participative, and achievement-oriented leadership.
87. 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.
88. Answer :  (b)
Reason : According to "expectancy theory", the probability of an individual acting in a particular
way depends on the strength of that individual's belief that the act will have a particular
outcome and on whether the individual values that outcome. Hence option (b) is the
correct answer.
89. Answer :  (c)
Reason : The following are reasons why productivity of knowledge workers is more difficult to
measure than productivity of industrial workers :
     The quality of a knowledge worker’s output cannot be determined immediately.
     The output of a knowledge worker often contributes only indirectly to the achievement of
the end result.
     Knowledge workers often assist other organizational units and this contribution is difficult
to measure.
90. Answer :  (d)
Reason : The characteristics of the planning process usually adopted in Japanese Management
style are : (1) Long-term orientation, (2) Collective decision-making, (3) Decisions
flowing bottom to top and back, (4) Slow decision-making. Hence,  (d) is the correct
answer.

91. Which of the following skills is most important for first level managers and
includes knowledge of and proficiency in activities involving methods,
processes and procedures?
(a)   Human                                            (b)  Conceptual                                   
(c)  Design
(d)  Technical                                         (e)  Administrative.
92. The Gantt Chart (invented by Henry L. Gantt), still used today in the production
 planning area of many organizations was the first simple visual device to
maintain production control. It is essentially a bar graph with
(a)   Time on the horizontal axis; the activities to be scheduled on the vertical
axis
(b)   Time on the vertical axis; project completion on the horizontal axis
(c)   Time on the horizontal axis; project completion on the vertical axis
(d)   Time on the vertical axis; the activities to be scheduled on the horizontal
axis
(e)   Time on either axis; the activities to be scheduled on the other axis.
93. Controls can be classified based on timing or stage in the production process.
Which of the following statements is not true about the various types of
controls?
(a)   Steering controls are used following completion of activity
(b)   Preventive controls are used prior to the start of activity and feedback
controls follow completion of activity
(c)   Concurrent controls are used during the performance of activity and
feedforward controls prior to start of activity
(d)   Quality control tests of output are an example of concurrent control
(e)   Comparison of employee input per hour with established standards is an
example of steering control.
94. Which of the following arguments against a firm being socially responsible
indicates the belief that businesses are being socially responsible when they
attend only to economic interests?
(a)   Too much power                                                            (b)  Violation of
profit maximization
(c)   Excessive costs                                                            (d)  Lack of social
skills
(e)  Lack of accountability.
95. Practicing ethical guidelines enables managers to become followers of moral
management approach. They facilitate ethical business decisions. Which of
the following is not an ethical guideline for managers?
(a)   Upholding human dignity                 (b)  Obeying the law
(c)   Non-allowance for participation of stakeholders in the decision-making
process
(d)   Primum Non-Nocere                        (e)    Telling the truth.
96. The most general form of standing plans that specifies the broad parameters
within which organization members are expected to operate in pursuit of
organizational goals are called
(a)  Procedures                                      (b)  Programmes
(c)  Single-use plans                                                             (d)  Policies            
(e)  Rules.
97. Programmes and budgets are examples of
(a)   Single-use plans                                                            (b)  Standing
rules   (c)  Procedures
(d)  Gantt chart components                   (e)  Critical paths.
98. Management by Objectives (MBO) is a joint setting of goals and objectives by
superiors and subordinates. If you were responsible for setting up an MBO
program, which of the following steps would you need to complete before the
others?
(a)   Establish specific goals for various departments, subunits and individuals
 (b)   Formulate action plans
(c)   Clarify organizational roles
(d)   Implement and maintain self-control
(e)   Do performance appraisal.
99. Which of the following is not true regarding programmed decisions?
(a)   They are made in well-structured situations
(b)   They are based on established policies and procedures
(c)   They require managers to exercise discretion
(d)   They are made mostly by lower-level managers
(e)   They limit the managers’ flexibility.
100 Direct control is the control that is exercised after the deviations from plans
. have occurred. Which of the following is not the underlying assumption of
direct control?
(a)   Performance can be measured
(b)   Personal responsibility is absent
(c)   The time expenditure is warranted
(d)   Mistakes can be discovered in time
(e)   The individual who is responsible will take corrective steps.

Answers

Answer : (d)
Reason : Technical skills are most important for first level managers and include knowledge of and
proficiency in activities involving methods, processes, and procedures.
Answer : (a)
Reason : A Gantt chart is essentially a bar graph with time on the horizontal axis and the activities to be
scheduled on the vertical axis.  Hence from above discussion, we can infer that option (a) is
correct.
Answer : (a)
Reason : Steering controls are used during the performance of activity.  So option (a) is the answer.
Answer : (b)
Reason : The belief that businesses are being socially responsible when they attend only to economic
interests is known as “Violation of profit maximization” argument against a firm being socially
responsible. Hence from above discussion, we can infer that option (b) is correct.
Answer : (c)
Reason : Non-allowance for participation of stakeholders in the decision-making process is not an
ethical guideline for managers. Hence from above discussion, we can infer that option (c) is
correct. Options (a), (b), (d) and (e) are all ethical guidelines for managers.
Answer : (d)
Reason : The most general form of standing plans that specifies the broad parameters within which
organization members are expected to operate in pursuit of organizational goals are called
policies.
Answer : (a)
Reason : Programmes and budgets are examples of single-use plans.
Answer : (c)
Reason : MBO (Management By Objectives) is the process of joint setting of goals/objectives by the
superior and the subordinate, and clarifying on the objective itself.
The various steps in the MBO Process are:
Develop overall organizational goals.
Clarify organizational roles.
Establish specific goals for various departments, subunits and individuals.
Formulate action plans.
Implement and maintain self-control.
Do periodic review.
Do performance appraisal.
     Hence, from above discussion, we can infer that option (c) is correct.
Answer : (c)
Reason : Programmed decisions require managers to exercise little discretion.
Answer : (b)
Reason : The underlying assumptions of direct control are:
Performance can be measured.
Personal responsibility exists.
The time expenditure is warranted.
Mistakes can be discovered in time.
The individual who is responsible will take corrective steps.
Hence, from above discussion, we can infer that option (b) is not the underlying assumption of
direct control. Options (a), (c), (d) and (e) are all underlying assumptions of direct control.

01. Xeta Electronics Ltd. is faced with the problem of allocating resources to its
newly set up computer peripherals division, because of some practical
constraints like limited availability of resources, time, man-hours etc. Which of
the following decision-making techniques can help it solve the problem?
(a)  Linear Programming                         (b)  Decision tree     (c)  Simulation
(d)   Waiting-line method                         (e)  Game theory.
102 The concept of span of management concerns
. (a)   Seeing that managers at the same level have equal numbers of
subordinates
(b)   Employee skill and motivation levels
(c)   Supervision of one less than the known number of subordinates
(d)   A determination of the number of individuals a manager can effectively
supervise
(e)   The nature of organization structure.
103 Several fundamental aspects pertaining to the organization need to be
. considered to describe the process of organizing. Which of the following steps
are involved in the process of organizing?
I.     The objectives of the organization should be established.
II.    The supportive objectives and plans should be formulated.
III.   Emphasis on extreme occupational specialization.
IV.   Authority should be delegated to the head of each group to perform their
activities.

(a)  Both (I) and (II) above                       (b)  Both (II) and (III) above
(c)  Both (II) and (IV) above                     (d)  (I), (II) and (III) above
(e)  (I), (II) and (IV) above.
104 There are three major forms of divisional structures: product division,
. geographic division and customer division. Which of the following statements
 is not true about Customer Division or Departmentation?
(a)   It is set up to service particular types of clients or customers
(b)   It can address the special and widely varied needs of customers for
clearly defined services
(c)   It is accompanied by the benefits of specialization
(d)   Coordination between sales and other functions becomes easier
(e)   Facilities and manpower, specialized for certain customer groups may be
under-employed.
105 A matrix structure is a type of departmentalization that superimposes a
. horizontal set of divisional reporting relationships into a hierarchical functional
structure. The major disadvantage of the matrix structure is
(a)  Duplication of resources                  (b)  Lack of employee satisfaction
(c)  Lack of economies of scale             (d)  Its propensity to foster power,
struggles
(e)  Monotony of work.
106 Which of the following management information systems is an interactive
. computer system that provides managers with the necessary information for
making intelligent decisions? 
(a)  Transaction processing system         (b)  Decision support system
(c)  Office automation system                (d)  Executive support system
(e)  Line support system.
107 Which of the following statements is not true of internationalization of
. organizations?
(a)   To reach organizational objectives, management may extend its activities
to include an emphasis on organizations in foreign countries
(b)   In general, the larger the organization, the greater the likelihood that it
participates in international activities of some sort
(c)   A manager’s failure to understand different national sovereignties,
national conditions, and national values and institutions can lead to poor
investment decisions
(d)   Personal adjustments that employees of multinational corporations must
make can influence how productively they work
(e)   Generally speaking, a multinational organization transcends any home
country, whereas a transnational organization does not.
108 Which of the following can be said to be an appropriate technique for line
. personnel in reducing the line-staff conflict?
(a)   Emphasize the objectives of the organization as a whole
(b)   Make proper use of the staff abilities
(c)   Obtain any necessary skills they do not already possess
(d)   Deal intelligently with resistance to change rather than view it as an
immovable barrier
(e)   Ignore the abilities of the staff personnel.
109 From the delegator’s aspect, all of the following are the factors affecting the
. delegation of authority except
(a)  Love for authority                             (b)  Fear of exposure
(c)  Attitude towards subordinates          (d)  Fear of criticism
(e)  Personality traits of the superiors.
110 The characteristic of an organization that describes the degree to which the
. organization monitors and responds to changes in the external environment is
termed as
 (a)  Open-systems focus                        (b)  Means-end
orientation                      (c)  Control
(d)  Unit integration                                (e)  Closed-system focus.

Answers

Answer : (a)
Reason :   Linear programming is a mathematical technique used in optimum allocation of
resources in the organization.
(b)   Decision tree is a graphical method for identifying alternative actions, estimating
probabilities, and indicating the resulting expected pay-off.
   Simulation is the technique of developing a model that represents a real or existing
system for solving complex problems that cannot be readily solved by other techniques.
   Waiting-line or queuing model is a mathematical model that describes the operating
characteristics of queuing situations, in which service is provided to persons or units
waiting in line.
   Game theory is a technique for determining the strategy that is likely to produce
maximum profits in a competitive situation.
Answer : (d)
Reason : The concept of span of management concerns a determination of the number of
individuals a manager can effectively supervise.     
Answer : (e)
Reason : Several fundamental aspects pertaining to the organization need to be considered to
describe the process of organizing. It follows a logical sequence and consists of the
following steps.
The objectives of the organization should be established.
The supportive objectives and plans should be formulated.
Authority should be delegated to the head of each group to perform their activities.
Answer : (d)
Reason : Customer Departmentation is done to service particular types of clients or customers.
Coordination between sales and other functions becomes difficult, as Customer-based
Departmentation is applicable only to the sales function.
Hence from above discussion, we can infer that option (d) is not true about Customer
Departmentation.
     Options (a), (b), (c) and (e) are all true about Customer Departmentation.
Answer : (d)
Reason : The major disadvantage of the matrix structure is its propensity to foster power
struggles.
Answer : (b)
Reason:  Decision support system is an interactive computer system that provides managers with
the necessary information for making intelligent decisions.
Answer : (e)
Reason : Generally speaking, a transnational organization transcends any home country, whereas
a multinational organization does not.
Answer : (b)
Reason : Making proper use of the staff abilities is an appropriate technique for line personnel in
reducing line-staff conflict. Hence, from above discussion, we can infer that option (b) is
correct.
Answer : (d)
Reason : From the delegator’s aspect, all of the following are the factors affecting the delegation
of authority except Fear of criticism.          
Answer : (a)
Reason : Open-system focus is characteristic of organization that describes the degree to which
the organization monitors and responds to changes in the external environment.
12 It is a normal practice to categorize management into three basic levels: top management,
1. middle management and supervisory or first-level management. The managers at these
three levels require different kinds of skills to perform the functions associated with their
jobs. The major difference in skill requirements between middle and top managers is that

(a) Top managers must generally be more skilled than middle managers in every respect

(b) Top managers require better interpersonal skills but less conceptual skills than middle

managers

(c) Top managers generally require better technical and interpersonal skills than middle

managers

(d) Top managers generally require higher level conceptual skills but less technical skills

than middle managers

(e) Middle managers require better technical and conceptual skills than top managers.

12 According to the Scientific Management School of Thought, which of the following is

2. defined as the systematic, objective and critical examination of all the factors governing
the operational efficiency of a specified activity to bring about improvement? 

(a) Work methods study

(b) Micromotion study

(c) Time study

(d) Motion study

(e) Performance study.

12 Today, many organizations are involved in social activities. The belief that businesses are
3. being socially responsible when they attend only to economic interests is known as which
argument against a firm being socially responsible?

(a) Too much power

(b) Violation of profit maximization

(c) Excessive costs

(d) Lack of social skills

(e) Lack of accountability.

12 Which of the following are elements that aid in strategy implementation include bonuses,
4. awards and promotions?

(a) Technology

(b) Human resources

(c) Rewards system

(d) Decision processes

(e) Structure.

12 Which of the following is/are subsystem(s) that are frequently an integral part of
5. ‘Management by Objectives (MBO)’?

I.     Manpower planning.

II.     Compensation.

III.    Organization design.

IV.   Operations research.

(a) Only (III) above

(b) Both (I) and (II) above

(c) Both (III) and (IV) above

(d) (I), (II) and (III) above

(e) (I), (II) and (IV) above.

12 When decision makers construct simplified models that extract the essential features from
6. a problem without capturing all the complexities of a problem, they are acting under
which of the following?

(a) Bounded rationality

(b) Unbounded rationality

(c) Uncertainty

(d) Heuristics

(e) Kinesics.
12 There are both advantages and disadvantages of group decision-making. Which of the
7. following would generally not be considered an advantage of group decision-making?

(a) Groups generally come up with more and better decision alternatives than an
individual

can

(b) The members of the group tend to support the implementation of the decision more

fervently than they would if the decision had been made by an individual

(c) A group can bring much more information and experience to bear on a decision or

problem than an individual acting alone

(d) The group is more likely to use "groupthink" when coming to a decision

(e) A group is able to give different perspectives to a problem.

12 Rate of change is one of the factors that determines effective span of management.
8. Changes occur more rapidly in certain organizations than in others. This rate of change

(a) Determines how efficient subordinates are without guidance from their superiors

(b) Enables subordinates to clearly understand what is expected of them

(c) Determines the degree to which policies can be formulated and the stability that can
be achieved in the policies

(d) Helps identify deviation in plans

(e) Determines effectives of communication techniques.

12 Which of the following are the generic strategies suggested by Porter that might adopt to
9. make their organizations more competitive?

I.     Divestiture.

II.     Focus.

III.    Cost leadership.

IV.   Differentiation.

(a) Only (II) above

(b) Both (I) and (II) above

(c) Both (III) and (IV) above

(d) (II), (III) and (IV) above

(e) All (I), (II), (III) and (IV) above.

 13 Divisional structure is a type of departmentation in which positions are grouped according
0. to similarity of products, services or markets. Which of the following is not an advantage
of divisional Structure?

(a) Each unit or division can respond or react quickly, when required, because they

normally do not need to coordinate with other divisions before taking an action 

(b) Coordination is simplified as each division is similar to an organization, containing the

various functions within it

(c) Individuals are able to develop in-depth areas of specialization to the same extent as
in

a functional structure

(d) It helps the organization to focus on serving a particular customer

(e) It helps to fix responsibility and accountability for performance.

Answers

121. Answer : (d)

Reason : The major difference in skill requirements between middle and top
managers is that top managers generally require higher level conceptual skills
but less technical skills than middle managers.

       Hence, from above discussion, we can infer that option (d) is correct.

122. Answer : (a)

Reason : According to the Scientific Management School of Thought, Work

Methods Study is defined as the systematic, objective and critical examination of
all the factors governing the operational efficiency of a specified activity to bring
about improvement.

       Hence, from above discussion, we can infer that option (a) is correct.

123. Answer : (b)

Reason : The belief that businesses are being socially responsible when they
attend only to economic interests is known as “Violation of profit maximization”
argument against a firm being socially responsible.

       Hence from above discussion, we can infer that option (b) is correct

124. Answer : (c)

 Reason : Bonuses, awards and promotions form part of the rewards system.

125. Answer : (b)

Reason : The following are subsystems that are frequently an integral part of
‘management by objectives’:

              I.     Manpower planning.

               II.    Compensation.

126. Answer : (a)

Reason : When decision makers construct simplified models that extract the
essential features from a problem without capturing all the complexities of a
problem, they are acting under bounded rationality.

127. Answer : (d)

Reason:  Sometimes cohesive “in groups” let the desire for unanimity override
sound judgment when generating and evaluating alternative courses of action.

       Hence, from above discussion, we can infer that option (d) would generally
not be considered an advantage of group decision-making.

       Options (a), (b), (c) and (e) are all advantages of group decision-making.

128. Answer:   (c)

Reason: Rate of change determines the degree to which policies can be

formulated and the stability that can be achieved in the policies.

129. Answer : (d)

Reason : The generic strategies developed by Porter to illustrate the kind of

strategies managers might develop to make their organizations more
competitive are as follows:

       I.     Cost leadership.

       II.     Differentiation.

       III.    Focus.

       Hence, from above discussion, we can infer that option (d) is correct.

130. Answer : (c)

Reason:  Divisional Structure is a type of departmentation in which positions are

grouped according to similarity of products, services or markets.

       Individuals are unable to develop in-depth areas of specialization to the

 same extent as in a functional structure.

       Hence from above discussion, we can infer that option (c) is not an
advantage of divisional structure.

       Options (a), (b), (d) and (e) are all advantages of divisional structure.

13 Delegate means to grant or confer on subordinates certain tasks and duties along with
1. sufficient authority, to accomplish these. Which of the following points is most likely to
increase the effectiveness of delegation?

(a) Detail how the required tasks are to be completed for the subordinate

(b) Predetermine the desired results and performance standards for the delegated task

(c) Explain the relevance of delegated tasks to larger projects or to department or

organization goals

(d) Maintain the authority necessary to accomplish the main tasks

(e) Retain the decision-making power for the delegated tasks.

13 Which of the following is/are reason(s) for line-staff conflict from the viewpoint of staff
2. personnel?

I.     Line managers do not seek input from staff personnel.

II.     Staff function dilutes the line manager’s authority.

III.    Line managers resist new ideas.     

IV.   Staff personnel lack a first-hand experience of operations.

(a) Only (I) above                                                              

(b) Only (IV) above

(c) Both (I) and (III) above                                                  

(d) Both (II) and (IV) above

(e) (I), (II) and (III) above.

13 In modern times, organizations have been trying to create a corporate culture with a
3. distinct identity by moulding the behavior of their members. The original source of an
organization’s culture is most strongly associated with

(a) Overseas influences

(b) Political factors in the external environment

(c) General economic trends

(d) The vision of the organization’s founder(s)

(e) The make-up of organizational members when the organization was established.

13 The selection process involves choosing the candidates who best meet the qualifications
4. and have the greatest aptitude for the job. Different kinds of selection devices are used for
the purpose. Which of the following selection devices involves presenting applicants with
a miniature model of a job and have them perform a task that is central to that job?  

(a) Personality test

(b) Work sampling test

(c) Application blank

(d) Knowledge test

(e) Intelligence test.

13 The success of an organization greatly depends on the decisions that managers make.
5. What are the three decision-making conditions, which managers deal with, in analyzing
decision alternatives?

(a) Certainty, uncertainty, risk

(b) Certainty, uncertainty, maximax

(c) Certainty, minimax, risk

(d) Maximax, uncertainty, risk

(e) Maximax, certainty, risk.

13 Apart from on-the-job training, there are many other approaches to manager
6. development. Development of organizing and intervening skills in group processes, usually
takes place in case of

(a) Sensitivity training

(b) Survey feedback

(c) Team building

(d) Process consultation

(e) Cooptation.

13 Every organization makes minor structural adjustments in reaction to changes. The forces
7. of change can be internal or external to the organization. Which of the following is not an
internal force of change? 

(a) Organizational strategy

(b) Technology

(c) Employee attitude

(d) Organizational culture

(e) Workforce.

13 Lyman Porter and his colleagues classified the underlying nature of people into six models.
8. Which of the following views proposes that people are unpredictable, subjective, relative
and unique in nature?

(a) Rational

(b) Emotional

(c) Behavioristic

(d) Self-actualizing

(e) Phenomenological.
 13 Different behavioral scientists have developed different theories on motivation. One such
9. behavioral scientist by the name of Herzberg gave the two-factor theory of motivation.
According to Herzberg’s motivation-hygiene theory, which of the following are  hygiene
factors?

(a) Personal life, security, salary and recognition

(b) Advancement, salary, status, company policy

(c) Relationship with peers, status, supervision and security

(d) Working conditions, relationship with subordinates, supervision and work itself

(e) Responsibility, salary, status, company policy.

14 The managerial grid identified five specific leadership styles. Which leader believes that
0. thoughtful attention to the needs of people for a satisfying relationship leads to a
comfortable, friendly organizational atmosphere and work tempo?

(a) Task

(b) Middle of the road

(c) Country club

(d) Team

(e) Impoverished.

Answers

131. Answer : (c)

Reason:  Delegate means to grant or confer. Thus, a manager grants or confers

on subordinates certain tasks and duties along with sufficient authority, to
accomplish these.

       Explaining the relevance of delegated tasks to larger projects or to

department or organization goals is most likely to increase the effectiveness of
delegation.

       Hence, from above discussion, we can infer that option (c) is correct.

132. Answer : (c)

Reason : The following are reasons for line-staff conflict from the viewpoint of
staff personnel:

·           Line managers do not seek input from staff personnel.

 ·           Line managers resist new ideas.   

              Statement (II) and (IV) are reasons for line-staff conflict from the
viewpoint of line personnel.

133. Answer : (d)

Reason:  The original source of an organization’s culture is most strongly

associated with the vision of the organization’s founder(s).

       Hence, from above discussion, we can infer that option (d) is correct.

134. Answer : (b)

Reason:  Work Sampling Test is a selection device which involves presenting

applicants with a miniature model of a job and has them perform a task that is
central to that job.

Hence, option (b) is correct.

135. Answer : (a)

Reason : The three decision-making conditions, which managers face in

analyzing decision alternatives are certainty, uncertainty and risk.

       Hence, from above discussion, we can infer that option (a) is correct.

136. Answer : (a)

Reason:  Sensitivity training is concerned with (i) better understanding of group

processes, (ii) development of organizing and intervening skills in group
processes and (iii) better insight into one's own behavior and the way one is
viewed by others. Hence, option (a) is correct.

137. Answer : (b)

Reason:  Technology is an external force of change.

Hence, option (b) is not an internal force of change.

Options (a), (c), (d) and (e) are all internal forces of change.

138. Answer : (e)

Reason:  The phenomenological view proposes that people are unpredictable,

subjective, relative and unique in nature.

139. Answer : (c)

Reason:  According to Herzberg’s motivation-hygiene theory, relationship with

peers, status, supervision and security are the four responses that are all
hygiene factors.
 Hence, option (c) is correct.

140. Answer : (c)

Reason:  According to the managerial grid, the country club leader believes that
thoughtful attention to the needs of people for a satisfying relationship leads to
a comfortable, friendly organizational atmosphere and work tempo.

14 The Managerial Grid, propounded by Blake and Mouton, is based on a manager’s concern
1. for people and concern for production. The most effective management style as
characterized by the Managerial Grid is

(a) High concern for people and low concern for production

(b) High concern for people and high concern for production

(c) Low concern for people and high concern for production

(d) Low concern for people and low concern for production

(e) Moderate concern for people and moderate concern for production.

14 In an effective organization, information flows in various directions. Which of the following

2. information flows takes place among persons at different levels, who have no direct
relationships?

(a) Downward

(b) Upward

(c) Horizontal

(d) Diagonal

(e) Formal.

14 Which of the following is a measure of how appropriate organizational goals are, and how
3. well an organization is achieving those goals?  

(a) Competitor analysis

(b) Environmental scanning

(c) Situational effectiveness

(d) Organizational effectiveness

(e) SWOT analysis.

14 Financial ratios are particularly important to managerial control in an organization. One  
4. such financial ratio, viz., return on investment, is a ratio that attempts to measure a firm's

(a) Leverage

(b) Profitability

(c) Liquidity

(d) Reliability

(e) Serviceability.

14 According to the Tannenbaum and Schmidt model of leadership, which of the following
5. statement(s) describe more of a boss centered leadership?

I.     A manager more likely asks the group to make a decision.

II.     A manager permits subordinates to function within limits.

III.    A manager more likely "sells" the decision.

IV.   A manager presents ideas and invites questions.

(a) Only (III) above

(b) Both (I) and (II) above

(c) Both (II) and (III) above

(d) Both (III) and (IV) above

(e) (I), (II) and (IV) above.

14 The process of assessing the organization's strategy and environmental demands and then
6. determining the appropriate organizational structure is called

(a) Organizational development      

(b) Organizational design

(c) Organizational chart      

(d) Organizational theory

(e) Organizational culture.

14 Hazard Analysis and Critical Control Point Method (HACCP) is used in the food
7. manufacturing industry to identify and prevent microbial and other germs from causing
harm to food. Which of the following principles involves identification of preventive
measures the manufacturing units can adopt, to control food safety hazards that arise
during processing?

(a) Hazard analysis

(b) Identifying control points

(c) Critical limits

(d) Establish corrective actions

(e) Establishing procedures to ensure correct working.

14 Management Information System (MIS) helps the manager to discharge his/her

8. managerial functions in a more efficient manner. The first necessary step to effectively
operate an MIS is

(a) Summarizing data

(b) Analyzing data

(c) Determining information needs

(d) Gathering appropriate information

(e) Generating reports from gathered data.

14 Which of the following statements is/are true about executive support systems?
9.
I.     They provide market intelligence, investment intelligence and technology intelligence.

II.     They make greater use of analytical models and are less interactive.

III.    They support decision-making at the top level of management.

(a) Only (I) above

(b) Only (II) above

(c) Only (III) above

(d) Both (I) and (III) above

(e) All (I), (II) and (III) above.

 15 In which of the following orientations toward international business, does a firm analyze
0. the needs of customers worldwide and then adopts standardized practices for all the
markets it serves?

(a) Ethnocentric

(b) Polycentric

(c) Geocentric

(d) Regiocentric

(e) Unicentric.

Answers

141. Answer : (b)

Reason:  According to the Managerial Grid, propounded by Blake and Mouton,

the most effective management style is characterized by high concern for
people and high concern for production.

Hence, option (b) is correct.

142. Answer : (d)

Reason:  Diagonal information flow takes place among persons at different

levels who have no direct relationships.

Hence, option (d) is correct.

143. Answer : (d)

Reason:  Organizational effectiveness is a measure of how appropriate

organizational goals are, and how well an organization is achieving those goals.

Hence, option (d) is correct.

144. 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, option (b) is correct.

145. Answer : (d)

Reason : According to the Tannenbaum and Schmidt model of leadership, the

following statements     describe more of a boss centered leadership
 ·           A manager more likely "sells" the decision.

·           A manager presents ideas and invites questions.

The other two statements describe the subordinate centered leadership.

146. Answer : (b)

Reason : The process of assessing the organization's strategy and environmental

demands and then determining the appropriate organizational structure is
called organizational design.

147. Answer : (a)

Reason:  Hazard analysis involves identification of preventive measures the

manufacturing units can adopt, to control food safety hazards that arise during
processing.

148. Answer : (c)

Reason:  MIS (Management Information System) can be defined as an

integrated, user-machine system for providing information to support
managerial, operational and decision-making functions in an organization.

The first necessary step to effectively operate an MIS is determining information

needs. 

Hence, option (c) is correct.

149. Answer : (d)

Reason : The following statements are true about executive support systems:

·           They provide market intelligence, investment intelligence and technology

intelligence.

·           They support decision-making at the top level of management.     

       The executive support systems make less use of analytical models and are
highly interactive. Hence, statement (II) is not true about ESS.

150. Answer : (c)

Reason:  In the geocentric orientation toward international business, a firm

analyzes the needs of customers worldwide and then adopts standardized
practices for all the markets it serves.
16 Departmentalization divides a large and complex organization into smaller and more
1. flexible administrative units. A type of departmentalization in which similar specialists
and people with common skills, knowledge and orientations are grouped together, is
referred to as

(a) Process departmentalization

(b) Functional departmentalization

(c) Product departmentalization

(d) Customer departmentalization

(e) Geographic departmentalization.

16 Which of the following statements is incorrect with respect to ‘functional authority’?

2.
(a) Managing functional authority relationships is similar to managing dual-boss
relationships

(b) It should be restricted to the procedural aspects of a function

(c) It is similar to line authority except that staff personnel with functional authority do
not have a right to punish violations from the intended course of action

(d) It should not be delegated too much down the line as such delegation may create
problems

(e) If unity of command were to be applied without exception, functional authority

would be exercised only by staff managers.

16 Every organization structure, even a poor one, can be charted. Which of the following is
3. false with respect to Organization Chart?

(a) It is a vital tool for providing information about organizational relationships

(b) It provides a visual map of the chain of command

(c) Charting an organization structure can show up the complexities and inconsistencies,
which can be corrected

(d) It shows authority relationships as well as informal and informational relationships

(e) It helps managers and new personnel to know how and where they fit into the
organization structure.
16 Various selection devices are used to choose candidates who best meet the qualifications
4. and have the greatest aptitude for the job. Asking a candidate for an automotive
mechanic’s position to assemble and disassemble part of an engine motor would be an
example of what kind of selection device?

(a) Psychological test

(b) Personality test

(c) Performance test

(d) Intelligence test

(e) Application blank.

16 Performance appraisal involves the formal evaluation of an individual’s job performance. 

5. Which of the following guidelines is least likely to improve the effectiveness of the
appraisal process?

(a) Stress both performance in the position the individual holds and the success with
which the individual is attaining organizational objectives

(b) Emphasize the evaluator's impression of the individual's work habits

(c) Ensure that the appraisal is acceptable to both the evaluator and the evaluated

(d) Ensure that the appraisal provides a base for improving individuals' productivity
within the organization by making them better equipped to produce

(e) Determine standards of effective performance.

16 Managers can adopt various methods to overcome initial resistance to change. In which
6. of the following methods of overcoming resistance to change, management neutralizes
potential or actual resistance by exchanging something of value for cooperation?

(a) Facilitation and support

(b) Manipulation

(c) Negotiation and agreement

(d) Explicit and implicit coercion

(e) Education and communication.

16 Douglas McGregor identified two opposing perspectives (Theory X and Theory Y) that he
7. believed typified managerial views of employees and suggested that management must
start with the basic question of how managers see themselves in relation to others.
Which of the following is not true about his theory?

(a) Theory X managers view people as having an inherent dislike of work

(b) Theory X managers assume that people do not want to be directed

(c) Theory Y managers assume that the average person will accept, even seek,
responsibility

(d) Theory Y managers view people as responsible and conscientious

(e) Theory Y managers assume that people are internally motivated to accomplish the
goals and objectives.

16 The manager of Master Products Ltd., a leading manufacturer of electrical components,

8. instructed Tarun, Shreya, Aparna, and Sheila, who all worked together, to teach each
other their job skills to be more effective. What is this called?

(a) Cross-training

(b) Role perception

(c) Training

(d) Simulation

(e) Apprenticeship.

16 Senthil is a salesperson for Cloud 9 Corporation's Chennai office. If the salespersons meet
9. their sales goals for the month, they are given an all-expense-paid trip to a Salgaonkar
Club football game. Football is not one of Chennai's favorite sports, and the Salgaonkar
Club is definitely not Senthil's favorite team. Which component of Vroom’s expectancy
theory influences Senthil’s performance?

(a) Effort-performance linkage

(b) Performance-reward linkage

(c) Effort-reward linkage

(d) Valence

(e) Instrumentality.
 17 Which of the following statements is/are true with respect to content theories of
0. motivation?

I.     Maslow’s self-actualization and esteem needs correspond to Herzberg’s motivators.

II.     McClelland’s need for achievement corresponds to Alderfer’s relatedness needs.

III.    Maslow’s esteem needs correspond to Alderfer’s need for power.

IV.   Herzberg’s hygiene factors correspond to McClelland’s need for affiliation, Maslow’s
social needs and Alderfer’s existence needs.

(a) Only (I) above

(b) Both (I) and (III) above  

(c) Both (II) and (IV) above

(d) (II), (III) and (IV) above

(e) All (I), (II), (III) and (IV) above.

Answers

161. Answer : (b)

Reason : A type of departmentalisation in which similar specialists and people with

common skills, knowledge and orientations are grouped together, is referred to as
Functional departmentalisation.

Hence, from above discussion, we can infer that option (b) is correct.

162. Answer : (e)

Reason : If unity of command were to be applied without exception, functional

authority would be exercised only by line managers. Hence, option (e) is incorrect
and is the answer.

163. Answer : (d)

Reason : Organization Chart is a vital tool for providing information about

organizational relationships.

It shows authority relationships and neglects significant informal and informational

relationships

Hence from above discussion, we can infer that option (d) is false with respect to
Organization Chart.

Options (a), (b), (c) and (e) are all true with respect to Organization Chart.
164. Answer : (c)

Reason : Performance Test or 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 (c) is correct.

165. Answer : (b)

Reason : Performance appraisal involves the formal evaluation of an individual's job

performance.

Emphasizing the evaluator's impression of the individual's work habits is least likely
to improve the effectiveness of the appraisal process.

Hence, from above discussion, we can infer that option (b) is correct.

166. 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.

167. Answer : (b)

Reason : As per McGregor, Theory X managers assume that people prefer to be

directed, wish to avoid responsibility, have little ambition, and above all, want
security.

Hence, from above discussion, we can infer that option (b) is not correct about his
theory.

Options (a), (c), (d) and (e) are all correct about his theory.

168. Answer :  (a)  

Reason : Tarun, Shreya, Aparna and Sheila all worked together, and to be more
effective they taught each other their job skills. This process is called job rotation or
cross-training. This is defined as a job design approach that involves periodically
shifting workers through a set of jobs in a planned sequence. (b) Role perception is
the individual’s understanding of the behavior needed to accomplish a task or
perform a job. (c) Training is the systematic development of knowledge, skills and
attitudes required by an individual to perform adequately a given job or a task. (d)
Simulation is a quantitative planning technique that uses mathematical models to
imitate reality. (e) Apprenticeship is providing training in basic skills and impart
knowledge in specified trades to apprentices in order to improve opportunities for
employment or to help them promote their own business.
169. Answer : (d)

Reason : Senthil’s performance is influenced by the component of valence.

170. 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.

III.    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.

17 The managerial grid, propounded by Robert Blake and Jane Srygley Mouton, is a well-
1. developed approach to defining leadership styles. It identifies five distinct leadership
styles. According to this grid, the (9, 9) manager

(a) Gives thoughtful attention to the needs of people, for a satisfying relationship leads
to a comfortable, friendly atmosphere and work tempo

(b) Believes that concern for people and tasks are compatible and that tasks need to be
carefully explained and decisions endorsed by subordinates to achieve a high level of
commitment

(c) Believes in compromise, so that decisions are taken but only if endorsed by
subordinates

(d) Exerts minimum effort to get required work done

(e) Is task-oriented and stresses the quality of the decision over the wishes of
subordinates.
17 Of the various leadership styles suggested by the path-goal theory, which of the following
2. statements is/are true about ‘supportive leadership’?

I.     It involves creating a pleasant organizational climate.

II.     It involves providing clear guidelines to subordinates.

III.    It shows concern for subordinates.

IV.   It corresponds to task-centered leadership described in other leadership theories.

(a) Only (II) above

(b) Both (I) and (III) above

(c) Both (II) and (IV) above

(d) (I), (II) and (III) above

(e) (I), (III) and (IV) above.

17 Communication can well be treated as the force that binds the organizational participants
3. together. We cannot expect effective management without communication. Which of the
following factors does not help in effective communication?

(a) Considering the total physical and human setting whenever you communicate

(b) Consulting with others, when appropriate, in planning communications

(c) Following up your communication

(d) Focusing the communication primarily at meeting the demands of an immediate

situation

(e) Looking for the central idea in the communication process.

17 Controls can be classified on the basis of their timing or stage in the production process.
4. With regard to the time element of controls, which of the following controls monitor
activities while they are being carried out?

(a) Feedback

(b) Feedforward

(c) Precontrol

(d) Concurrent

(e) Preliminary.
17 Financial ratios are particularly important to managerial control in an organization. One  
5. such financial ratio, viz., return on investment, is a ratio that attempts to measure a firm's

(a) Leverage

(b) Profitability

(c) Liquidity

(d) Reliability

(e) Serviceability.

17 Which of the following statements is/are true about investment centers?

6.
I.     The control system examines the role of assets in generating profit.

II.     In investment centers, outputs are measured in monetary terms and directly
compared with input costs.

III.    It helps top management calculate the mere inflow and outflow of currency, rather
than giving a total picture of profitability.

(a) Only (I) above         

(b) Only (II) above        

(c) Both (I) and (III) above  

(d) Both (II) and (III) above 

(e) All (I), (II) and (III) above.

17 Operations Management is a tool by which management can create and improve upon its
7. operations. Which of the following statements is true regarding Operations
Management?

(a) Operations managers are not found in the service sector

(b) Operations Management is concerned with only the input stage of product
development

(c) The outputs of the operations system include both goods and services

(d) Labour is part of the transformation stage and is not considered an input

(e) The techniques of Operations Management are not applicable to other disciplines
such as finance, marketing and human resource management. 
 17 Which of the following controls is the cause of an unsatisfactory outcome traced back to
8. the individual responsible for it, who is then made to correct the practice?

(a) Preventive control 

(b) Cybernetic control

(c) Direct control

(d) Steering control

(e) Yes-no control.

17 According to the Japanese management practices, what refers to “my/one’s company”

9. where people are treated as family members?

(a) Ringi      

(b) Henko    

(c) Kacho

(d) Kaisha   

(e) Habatsu.

18 Which of the following management information systems aims at facilitating

0. communication and increasing the efficiency and productivity of managers and office
workers through document and message processing?

(a) Transaction processing system

(b) Decision support system

(c) Office automation system

(d) Executive support system

(e) Line support system.

Answers

171. Answer : (b)

Reason : As per the managerial grid, the (9,9) manager believes that concern for
people and tasks are compatible and that tasks need to be carefully explained and
decisions endorsed by subordinates to achieve a high level of commitment.

Hence, from above discussion, we can infer that option (b) is correct.
172. Answer : (b)

Reason : The following statements are true about ‘supportive leadership’:

I.     It involves creating a pleasant organizational climate.

III.    It shows concern for subordinates.

Instrumental leadership involves providing clear guidelines to subordinates. Hence,

statement (II) is not true.          

Supportive leadership corresponds to relationship-oriented leadership described in

other leadership theories. Instrumental leadership corresponds to task-centered
leadership described in other leadership theories.

173. Answer : (d)

Reason : According to L.A. Allen, communication involves a systematic and

continuous process of telling, listening and understanding.

Focusing the communication primarily at meeting the demands of an immediate

situation is not a factor which helps in effective communication.

Hence, from above discussion, we can infer that option (d) does not help in effective
communication.

174. Answer : (d)

Reason : With regard to the time element of controls, concurrent controls monitor
activities while they are being carried out.

Hence from above discussion, we can infer that option (d) is correct.

175. 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.

176. Answer : (a)

Reason : The following statements is true about investment centers:

       I.      The control system examines the role of assets in generating profit.
 177. 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 tru e regarding
Operations Management.

Options (a), (b), (d) and (e) are all false regarding Operations Management.

178. 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.

179. Answer : (d)

Reason:  According to the Japanese management practices, Kaisha refers to

“my/one’s company” where people are treated as family members.

180. 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.

181. Planning by a supervisor of a goods processing department to rearrange the location of

several pieces of equipment so that the new order can begin on time, three months hence,
would be an example of a/an

(a) Tactical plan

(b) Operational plan

(c) Tactical goal

(d) Operational goal   

(e) Strategic goal.

182. As the size of the organization increases the more sophisticated the organizational structure
becomes. Hence management is categorized into three basic levels i.e. top-level
management, middle level-management and supervisory-level management. Which of the
following is false with regard to functions of supervisory management?

(a) Making detailed, short-range operational plans

(b) Reviewing performance of subordinates

(c) Making specific task assignments

(d) Counseling subordinates on production, personnel or other problems

 (e) Maintaining close contact with employees involved.

183. Which stage of the creativity process links the unconscious state of mind with the conscious
state?

(a) Unconscious scanning

(b) Intuition

(c) Insight

(d) Logical formulation

(e) Decision.

184. Span of management includes

I.     Assigning equal number of subordinates to managers at the same level.

II.     Assessing employee skill and motivation levels.

III.    Determination of how many people working with each other report to a single       
manager.

IV.   Determination of the number of individuals a manager can effectively supervise.

(a) Only (II) above

(b) Only (IV) above      

(c) Both (I) and (III) above

(d) Both (III) and (IV) above                                                                                     

(e) (I), (II) and (IV) above.

185. Management By Objectives (MBO) is a system for achieving organizational objectives,

enhancement of employee commitment and participation. Which of the following is not an
advantage of MBO?

(a) Role clarity

(b) Clarity in organizational action

(c) Personnel satisfaction

(d) Basis for organizational change            

(e) Flexibility.

186. Which of the following is the best explanation of why Japanese companies tend to make
decisions by consensus?

(a) It is a reflection of the larger societal cultural value on groups

 (b) It is more efficient and timely than any other method

(c) It is a carryover from Post-World War II influences from Americans

(d) The Japanese government mandates it

(e) Japanese companies style differs from that of American’s style.

187. Information provided by market intelligence agencies is part of which of the following types
of information systems?

(a) Management Information System

(b) Decision Support System         

(c) Executive Support System

(d) Transaction Processing System

(e) Office Automation System.

188. Which of the following responsibility centers are also referred to as ‘engineered expense
centers?’

(a)  Discretionary expense centers               

(b)  Standard cost centers                           

(c)  Profit centers

(d)  Revenues centers   

(e) Investment centers.

189. Lawrence is a new interviewer who just finished an interview with Pauline. Her professional
style and her flawless grooming immediately struck him. Lawrence gave Pauline a very good
evaluation although her previous work experience and educational background were not that
exceptional. What rating error did Lawrence succumb to?

(a) Halo effect

(b) Rater prejudice                   

(c) Shifting standards

(d) Different Rater patterns 

(e) Stereotyping.

190. Which of the following statements is false concerning Vroom's expectancy theory?

(a) It is based on self-interest where each employee seeks to maximize personal

satisfaction
 (b) Managers’ must understand which rewards employees will positively value

(c) The employee must see the connection between performance and rewards

(d) The theory is concerned with reality, not perceptions

(e) There are two crucial linkages among effort-performance-reward in the theory.

Answers

181. Answer : (b)

Reason : The given example is that of an operational plan. Operational plans help in
day-to-day functioning and are developed by lower level managers. They consider
time-frames of less than a year.

182. Answer : (d)

Reason : Counseling subordinates on production, personnel or other problems is a

function of middle level management.All other options are functions of supervisory
level management.

183. Answer : (b)

Reason : The intuition stage of the creative process links the unconscious state of
mind with the conscious state.

184. Answer : (d)

Reason : Span of management includes:

              Statement (III) – Determination of how many people working with each other
report to a single manager.

              Statement (IV) – Determination of the number of individuals a manager can

effectively supervise.

              Hence, option (d) is the answer.

185. Answer : (e)

Reason : MBO helps in better managing the organizational resources and activities
through clarity of objectives, role clarity, periodic feedback on performance, and
participation by managers. It provides the key result areas (KRAs) where
organizational efforts are needed, which leads to clarity in organizational action. Since
MBO allows participation of employees in objective setting and a rational
performance appraisal, it provides the greatest opportunity for personnel satisfaction.
 Also, MBO stimulates organizational change and provides a framework and guidelines
for planned change, enabling the top management to initiate, plan, direct, and control
the direction and Pace of change. However, MBO has some limitations also, which
include inflexibility in the organization, particularly when the objectives need to be
changed.

186. Answer : (a)

Reason:  Japanese companies tend to make decisions by consensus because it is a

reflection of thelarger societal cultural value on groups.

187. Answer : (c)

Reason : An executive support system (ESS) supports effective functioning and

decision-making at the top levels of an organization. An effective ESS provides
intelligent information – market intelligence, investment intelligence, and
technological intelligence.

A management information system (MIS) is a convergence of people, computer and

communication technologies, and procedures designed to quickly provide relevant
data or information, collected from both internal and external organization sources,
for organization use.

A decision support system (DSS) is an interactive computer system that is easily

accessible to and operated by people who are not computer specialists, who use the
DSS to help them to plan and make decisions.

A transaction processing system (TPS) records and executes the routine, day-to-day
transactions required to conduct an organization’s business.

An office automation system (OAS) aims at facilitating communication and increasing

the efficiency and productivity of managers and office workers through document and
message processing.

188. Answer : (b)

Reason : Standard cost centers are also referred to as engineered expense centers.

189. Answer : (a)

Reason : Lawrence has succumbed to Halo error, which is a common tendency to rate
subordinates high or low on all performance measures based on one of their
characteristics where as in rater prejudice managers allow their personal biases to
distort the rating they give to their subordinates. In shifting standards, managers rate
each subordinate by different standards and expectations. In different rater patterns,
managers differ in their rating styles. Some may rate harshly, others may rate easily.
Whereas stereotyping is the process of categorizing or labeling people on the basis of
a single attribute rating a person based on the characteristics of the group to which he
or the she belongs.
190. Answer : (d)

Reason : The  theory is concerned with reality not perceptions is false with regard to
Vroom’s expectancy theory.

              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.

19 Mark's Embroidery produces custom-made embroidery products. One department sells to

1. retail customers, another department sells to catalog customers and a third department
sells only to college bookstores. Mark's Embroidery is departmentalized by

(a) Product

(b) Customer

(c) Geographical location

(d) Process

(e) Function.

19 “When managers have substantial but not complete confidence and trust in subordinates
2. and solicit advice from subordinates while retaining the right to make final decision”,
Likert’s four systems of management describes it as

(a) Participative leadership style

(b) Benevolent-authoritative leadership style

(c) Consultative leadership style

(d) Exploitative-authoritative leadership style

(e) Trait theory of leadership style.

19 Ravi, a new recruit in Solaris Systems, perceives that his outcomes (pay, perks etc.) are
3. lower as compared to his inputs (qualifications, experience etc.) in relation to his
colleagues. Which of the following theories of motivation explains this phenomenon?

(a) Need hierarchy theory

(b) Two-factor model

(c) Equity theory

(d) Expectancy theory   

(e) ERG theory.

19 Which of the following statement(s) is/are true with respect to ‘discretionary expense
4. centers’?

I.     The output of a discretionary expense center cannot be directly used to produce
 revenues.

II.     Budgets for discretionary expense centers are developed only in terms of maximum
resources that can be consumed by them in a particular period.

III.    For assessing the budgetary performance, the expense constraints are established at
the discretion of the manager.

(a) Only (I) above

(b) Only (III) above

(c) Both (I) and (II) above

(d) Both (II) and (III) above

(e) All (I), (II) and (III) above.

19 Quantitative techniques are very useful in making decisions under conditions of varying
5. degrees of uncertainty. Torque Engineering Co. Ltd. faces the problem of allocating
resources to its newly set up hydraulic pumps division. Which of the following decision-
making techniques can help solve the problem?

(a) Linear programming

(b) Decision tree

(c) Simulation     

(d) Waiting-line method 

(e) Game theory. 

19 Blake and Mouton’s Managerial Grid is an approach to defining leadership styles based on
6. a manager’s concern for people and concern for production. Which of the following styles
of management assumes that exertion of minimum effort to get required work done is
appropriate to sustain organization membership?

(a) Authority-obedience management

(b) Team management

(c) Country Club management

(d) Impoverished management

(e) Organization-man management.

19 Which of the following refers to the process that helps new employees adapt to the
7. organization’s culture?

(a) Grapevine

(b) Orientation
 (c) Socialization

(d) Introduction

(e) Training.

19 Adaptability is essential for present day organizations to survive. Which of the following
8. are characteristics of adaptable organizations?

I.     Employees are given more freedom in decision-making.

II.     Management sets broad goals and objectives.

III.    Accountability revolves around positions.

IV.   Organizational learning is ongoing.

(a) Both (I) and (III) above

(b) Both (II) and (IV) above                         

(c) Both (III) and (IV) above   

(d) (I), (II) and (IV) above    

(e) All (I), (II), (III) and (IV) above.

19 Ratio analysis is a performance evaluation technique that involves determining and

9. evaluating financial ratios. In this regard, which of the following ratios measures a firm’s
financial risk?

(a) Profitability

(b) Liquidity 

(c) Activity  

(d) Leverage

(e) Return on investment.

20 Which of the following is a measure of how appropriate organizational goals are and how
0. well an organization is achieving those goals?  

(a) Competitor analysis

(b) Environmental scanning

(c) Situational effectiveness

(d) Organizational effectiveness

(e) SWOT analysis.

Answers

191. Answer : (b)

Reason : Mark's Embroidery is departmentalized by customer, i.e. to say customer

divisions are divisions set up to service particular types of clients or customers. Under
this method, activities are grouped according to the customers the organization
serves and service to the customers is of top priority. (a) Product divisions are
divisions created to concentrate on a single product or service of at least a relatively
homogeneous set of products or services. (c) Geographic divisions are divisions are
designed to serve different geographic areas. Under this method, territory or location
is taken as the basis for departmentation. (d) Process divisions are designed to
departmentalize the activities through the different process which the organization
follows. (e) In Functional departmentation activities are grouped according to their
main functional or specialized area such as Production, Finance, Marketing, HR, etc.

192. Answer : (c)

Reason : When managers have substantial but not complete confidence and trust in
subordinates and solicit advice from subordinates while retaining the right to make
final decision, Likert’s four systems of management describes it as consultative
leadership style.(a) In Participative leadership style the manager has complete trust
and confidence in the subordinates in all the matters.(b) In Benevolent leadership
style the managers have a patronizing confidence and trust in subordinates, solicit
some ideas and opinions from subordinates, motivate with rewards and some fear
and punishment, permit some upward communication and allow some delegation of
decision-making but with close policy control.(d) In exploitative-authoritative
leadership style the managers represents doctorial leadership behavior with all
decisions made by the manager. (e) Trait theory of leadership style assumes that
leaders share certain inborn personality traits.

193. Answer : (c)

Reason : J.S.Adam’s equity theory points out that people are motivated to maintain
fair relationship between their performance and reward in comparison to others. (a)
Maslow’s need hierarchy classifies human needs into five categories : physiological,
safety, belongingness, esteem, and self-actualization needs and states that they
follow an order. A satisfied need no longer motivates. (b) Herzberg’s two-factor model
distinguishes between motivators and hygiene factors. The presence of the former
(motivators) causes satisfaction but their absence doesn’t cause dissatisfaction. The
absence of the latter (hygiene factors) causes dissatisfaction but their presence
doesn’t guarantee satisfaction. (d) Victor Vroom’s expectancy theory holds that
people will be motivated to do things to achieve some goals to the extent that they
expect that certain actions on their part will help them to achieve the goal. (e)
 Alderfer’s ERG theory categorizes human needs into three : existence, relatedness,
and growth needs.

194. Answer : (e)

Reason : The following statements are true with respect to ‘discretionary expense
centers’:

              I.     The output of a discretionary expense center cannot be directly used to
produce revenues.

              II.     Budgets for discretionary expense centers are developed only in terms of
maximum resources that can be consumed by them in a particular period.

              III.    For assessing the budgetary performance, the expense constraints are
established at             the discretion of the manager.

195. Answer : (a)

Reason : Linear programming is a mathematical technique used in optimum allocation

of resources in the organization.

Decision tree is a graphical method for identifying alternative actions, estimating

probabilities, and indicating the resulting expected pay-off.

Simulation is the technique of developing a model that represents a real or existing

system for solving complex problems that cannot be readily solved by other
techniques.

Waiting-line or queuing model is a mathematical model that describes the operating

characteristics of queuing situations, in which service is provided to persons or units
waiting in line.

Game theory is a technique for determining the strategy that is likely to produce
maximum profits in a competitive situation.

196. Answer : (d)

Reason : Blake and Mouton’s Managerial Grid is an approach to defining leadership

styles based on a manager’s concern for people and concern for production.
Impoverished management assumes that exertion of minimum effort to get required
work done is appropriate to sustain organization membership.

197. Answer : (c)

Reason:  Socialization refers to the process that helps new employees adapt to the
organization’s culture.

198. Answer : (d)

Reason : The following are characteristics of adaptable organizations

 ·            Employees are given more freedom in decision-making

·            Management sets broad goals and objectives

·            Organizational learning is ongoing

·            Accountability revolves around projects and not positions

              Hence, option (d) is the answer.

199. Answer : (d)

Reason : Leverage ratio’s indicate the firms financial risk. (a) Profitability ratios
provide a firms overall economic performance (b) Liquidity ratios measure a firm’s
capacity to meet its short-term financial obligations. (c) Activity ratios reflects a firm’s
efficiency in resource utilization.

200. Answer : (d)

Reason : Organizational effectiveness is a measure of how appropriate organizational

goals are, and              how well an

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