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IGNOU ASSIGNMENT GURU 2019-20

Course Code : BCOC-132
Course Title : Business Organisation and Management
Assignment Code : BCOC – 132/TMA/2019-20
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SECTION A
Q1 COMPARE THE COMPANY FORM OF ORGANISATIONS WITH THE STATUTORY

CORPORATION. WHICH OF THE TWO WOULD YOU RECOMMEND FOR MANAGING PUBLIC
ENTERPRISES AND WHY?
ANSWER:
COMPARISON BETWEEN COMPANY FORMS OF ORGANISATIONS AND STATUTORY

CORPORATION:
Main features of company form of organisation:
1) Incorporation: A company is an incorporated association. It comes into existence only

after registration under the Companies Act.
2) Artificial Person: A company is regarded as an artificial person as it is created by law and

can be effaced only by law. It has no body, no soul, no conscience, still it is in a position to
exist. Like any other person it can own property, conduct a lawful business, enter into
contracts with others, buy, sell and hold property, all under its own name and its own seal.
3) Separate legal entity: A company has a distinct entity separate from its members. A
shareholder of a company can enter into contract with the company and can sue the
company and be sued by it. You know that in the case of partnership, every partner is an
agent of the firm and also that of the other partners. But the shareholder is not the agent of 2
the company or its shareholders. He cannot bind them with his acts.
4) Common seal: As the company is not a natural person, it cannot sign the documents. It
has a device in the form of common seal on which its name is engraved. This common seal is
a substitute of its signatures. It is affixed on all important legal documents and contracts. It is
used at the direction of the board of directors and two directors have to sign as witnesses
wherever it is affixed on any document.
5) Perpetual succession: A joint stock company has a continuous existence. Its life is not
affected by the death, lunacy, insolvency or retirement of its shareholders or directors.
Members may come and go, but the company continues its operations until it is legally
dissolved. Thus, a company has perpetual succession irrespective of its membership. This
feature provides stability to this form of organisation.
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Public Corporation is a corporate body created by the Parliament or State Legislature as the
case may be, by a special Act which defines its powers, duties, functions, immunities and the
pattern of management. Public Corporation is also known as statutory corporation.
Normally, the public corporations are constituted for any of the following purposes: i) To
transfer the business of a nationalised undertaking to the corporation. ii) To facilitate the
acquisition of undertakings belonging to an existing company. iii) To promote, develop and
operate certain schemes. iv) To extend certain social services and utility-services. v) To
provide for regulation and control of the working and operations of an institution or for
other matters connected therewith or incidental thereto.
I RECOMMEND DEPARTMENTAL OR COMPANY FORM OF ORGANISATION OUT OF TWO

(COMPANY FORM OF ORGANISATION AND STATUTORY CORPORATION) FOR MANAGING
PUBLIC ENTERPRISES. THE REASONS FOR MY RECOMMENDATIONS ARE AS FOLLOW:
Under the departmental form of organisation, the enterprise is organised, financed and
controlled in the same way as any other government department. The overall control rests
with the concerned minister and the minister is answerable to the legislature for its efficient
operations. It is financed through annual budget appropriations made by the legislature and
its revenues are paid into the treasury. It is subject to budget accounting and audit controls
as applicable to other government departments. Employees of this organisation are civil
servants. Departmental organisation has certain advantages. Since its accountability to
legislature is complete, government gets maximum degree of control over the operations of
these enterprises. Therefore, there is limited scope to misuse public funds. The government
can use departmental undertakings as instruments of its social and economic policy. The
surpluses coming from these undertakings can be utilised by the government for the
economic progress of the nation.
Public corporation form of organisation has certain merits. Being an autonomous corporate
body, it can manage its affairs independently with initiative and flexibility, and can also avoid
red-tapism. Since it has financial independence, it can easily raise capital whenever needed.
As it works with service motive and answerable to legislature, it protects the public interest
and avoids the defects of profiteering, exploitation, illegitimate. speculation, etc. It can
secure working efficiency and economies of scale. Public corporations suffer from
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excessive government interference, inflexibility in policy matters, clash of interest among
Board members, excessive public accountability and lack of commercialism. Government
company is a corporate body registered under Indian Companies Act in which not less than
51% of the paid-up share capital is held by the central government or any state government
or by several state governments or partly by the central government and partly by one or
more state governments. Any company which is a subsidiary of such a company is also
considered a government company. For establishing a government company, the
government need not go to the legislature. In this form of organisation, there is scope for
private participation in the capital as well as management. It is managed by the Board of
Directors consisting of members nominated by the government and the elected members
of the private shareholders, if any. It has financial autonomy and independent staffing
system. It is free from auditing, accounting and budgetary controls applicable to
departmental organisations.
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The relative assessment of the features of all the three forms indicates that the
departmental form of organisation is suitable for such undertakings which are very
important from the view point of public interest and national interest. The company form of
organisation is best suited for commercial and industrial undertakings, while public
corporations should be preferred for public utility undertakings.
Q2 WHAT IS MEANT BY MORALE? OUTLINE THE FACTORS THAT INFLUENCE THE MORALE
OF EMPLOYEES IN AN ORGANISATION. WHAT IS THE SIGNIFICANCE OF LEADERSHIP VIS A
VIS MORALE?
ANSWER:
MORALE:
Employee morale is the relationship that a particular employee or a group of employees

have with their work and the organization they work for. High employee morale means that
employees are happy, and this is reflective in the kind of work they produce. On the other
hand, low employee morale results in less productivity and pessimism among employees. It
is important for every organization to continually keep employee morale high.
According to Dalton E. McFarland, morale is basically a group phenomenon. It is a concept

that describes the level of favourable or unfavourable attitude of employees collectively to
all aspects of their work—the job, the company, their tasks, working conditions, fellow
workers, superiors and so on.
FACTORS INFLUENCE THE MORALE OF EMPLOYEES IN AN ORGANISATION:
1. The Organization:
The first factor affecting the employee morale is the organization itself. The organization
influences the worker’s attitudes to their jobs. The public reputation of an organization may
build up for better or worse, their attitudes towards it.
2. The Nature of Work:
The nature of the work, the worker is expected to perform also affects his attitude towards
the job as well as his morale. If the employee is expected to perform routine or specialized
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jobs, he will feel bored and alienated. Repetition of the same task again and again makes the
working situation worse for the employees.
3. The Level of Satisfaction:
The level of satisfaction, a worker derives from his job is another determinant of morale. If
the job factors and the satisfaction they bring is perceived to be favourable by the
employee morale will tend to be higher than if their factors seem to be unfavourable. The job
factors include the factors such as opportunities for promotions, job security, steadiness of
employment, opportunities to learn the job and to use his own ideas, pay working
conditions, recognition, cooperativeness of co-workers, group relationship etc.
4. The Level of Supervision:
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The level of supervision received by an employer has a tremendous influence on his morale.
High rate of employee turnover indicates that the leadership is ineffective. On the other
hand, if employees are given freedom to do the job, their morale will be high. Nobody likes
to be supervised all the time.
5. Concept of Self:
What is the employee’s concept of himself? The answer to this question influences the
attitudes of the employees to the organizational enuronment. How an employee perceives
himself, is a very important question. The morale of persons who have lots of self-
confidence or who enjoy good mental and physical health is generally high as compared to
those who lack self-confidence or suffer from poor physical or mental health.
6. Worker’s Perception of Rewards System:
The worker’s perception of past rewards and future opportunities for rewards affect their
morale to a substantial extent. If the workers regard the rewards as fair and satisfactory,
their morale will tend to by higher than if the perception is in the opposite direction.
Moreover, if the rewards and opportunities for the future tend to be bleak, morale will tend
to be low as compared to the situation where the worker perceives opportunities for
satisfaction and for attainment in the rewards that lie ahead in the future.
6. The Employee’s Age:
Studies have reported that age and morale are directly related. Other things being equal,
elder employees seem to have higher morale. This is because of the reason that perhaps
younger workers are more dissatisfied with higher expectations than their elders.
SIGNIFICANCE OF LEADERSHIP VIS A VIS MORALE:
Significance of leadership:
1. It improves motivation and morale of employees:
A successful leader influences the behaviour of individuals. He/she enhances the levels of
involvement of the individual employees in their work.
2. It leads to higher performance: 5

Leadership motivates the group to strive for achieving the results that is achieving the
organizational goals.
3. It is an aid to authority:
Leadership is a process of influencing others. The mere use of authority by managers may
not lead to results.
4. It determines organizational success:
In the process of unification of group efforts to achieve organizational goals, leadership

enhances organizational efficiency. Good managers alone cannot achieve this.
5. It helps to respond to change:
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Organizations today need to quickly respond to changes. A change in the technology,

process, methods, and plans (including strategic plans), always encounters resistance from
people working in organizations.
Significance of morale:
i) Willing cooperation towards goals of the organization.
(ii) Loyalty to the organization and its leadership.
(iii) Good discipline or voluntary conformance to rules and regulations.
(iv) High degree of employee’s interest in his work and organization.
(v) Pride in the organization.
(vi) Reduction of rates of absenteeism and labour turnover
Q3 ENUMERATE THE ASSUMPTIONS OF MC. GREGOR’S THEROY X AND THEORY Y. WHICH

ONE IS PRESENTLY APPLICABLE IN INDIA AND WHY?
ANSWER:
ASSUMPTIONS OF THEORY X:
1. Man is lazy; he does not want to work.
2. People dislike responsibilities, they do not have ambition.
3. People consider self-interest as the priority, not the organisational interests.
4. People oppose change.
5. People have no interest in solving organisational problems.
6. People need to be motivated.
7. People need to be controlled and threatened.
8. Sometimes, punishment has to be used to get work done
ASSUMPTIONS OF THEORY Y: 6
1) Engaging in physical and mental efforts — as natural as play or rest. The average human
being does not inherently dislike work.
2) External control and the threat of punishment are not the only mean of directing efforts
towards organisational objectives. Man will exercise self-direction and self-control in the
service of objectives to which he is committed.
3) Commitment to objectives follows the rewards associated with their achievement. The
most significant of such rewards namely satisfaction of ego and self-actualisation needs,
can be the direct result of efforts toward organisational objectives.
4) The average human being learns, under proper conditions, not only to accept but to seek
responsibility. Avoidance of responsibility, lack of ambition and emphasis on security are
generally consequences of experience and not inherent human characteristics.
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5) The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity
in the solution of organisational problems is widely, not narrowly, distributed in the
population.
6) Under the conditions of modem industrial like the intellectual potentialities of the average
human being are only partially utilised.
THEORY Y IS PRESENTLY WORKING IN INDIA, BECAUSE OF FOLLOWING MERITS OF IT:
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Q4 DESCRIBE THE CONCEPT OF PRODUCT LIFE CYCLE. EXPLAIN VARIOUS STAGES OF

PRODUCT LIFE CYCLE.
ANSWER:
CONCEPT OF PRODUCT LIFE CYCLE:
Like human beings, products also have a distinct life cycle. A product generally passes
through four stages during its entire life from birth to death. These stages are: 1)
Introduction, 2) Growth, 3) Maturity, and 4) Decline or Obsolescence. Thus, product life
cycle refers to the stages a product goes through from its introduction, through its growth
and maturity, to its eventual decline and death (withdrawal from the market)
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Product Life Cycle concerns the life of a product in the market & the stages a product goes
through from when it was first thought of until it finally is removed from the market. Not all
products reach this final stage. Some continue to grow and others rise and fall.
STAGES OF PRODUCT LIFE CYCLE:
1. Market introduction Stage
This is the time when a new product is launched in the market and the duration of this stage
depends on the product’s rate of penetration through the market segment concerned. This
could be the most expensive stage for a company while launching a product as the cost of
things like research and development, consumer testing can be very high. This period ends
when awareness of the product is high enough to attract wider user groups.
2. Growth Stage
In the growth stage, the sales of the product take off. The product starts to generate profits
at this point as the sales are continuously rising. During this stage, the product is still
vulnerable to failure. Competitor products, perhaps launched by more powerful firms, can
enter the market at this stage. The end of growth is sometimes characterized by reduced
prices (even though profits may be still high).
3. Maturity Stage
During this stage, the main aim of the company is to maintain market growth. Due to the
time-scales of PLCs, at any point of time, the majority of products are in the maturity stage
of the life cycle. In this stage, there is a need for a sustained promotional activity, even if
only to retain existing customers. Price war should be avoided where possible. The aim for
price cutting should be to increase purchases.
4. Decline Stage
During the Decline stage, the market starts to shrink. Market intelligence should be able to
identify the cause of this phenomenon. The decision to abandon a product possess
problems for the firm and if often not made early enough. On the other hand, it may be
worth expanding the product’s life well into decline while the number of competitors is
falling. 8
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Q5 WHAT DO YOU MEAN BY BUSINESS ETHICS? STATE THE MAJOR COMPONENTS OF

BUSINESS ETHICS.
ANSWER:
BUSINESS ETHICS:
Business ethics is a type of connected morals that analyses moral standards within a
business setting; the different moral issues that can emerge in a business setting; and any
exceptional obligations or commitments that apply to people who are occupied with a trade.
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As a rule, business ethics are a regulating discipline, whereby specific moral measures are
pushed and after that connected. It makes explicit decisions about what is correct or wrong,
or, in other words, it makes guarantees about what should be done o should not be done.
The term ‘Business Ethics’ refers to the system of moral principles and rules of the conduct
applied to business. Business being a social organ shall not be conducted in a way
detrimental to the interests of the society and the business sector itself. Every profession or
group frames certain do’s and do not for its members. The members are given a standard in
which they are supposed to operate. These standards are influenced by the prevailing
economic and social situations. The codes of conduct are periodically reviewed to suit the
changing circumstances.
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“Business Ethics is generally coming to know what is right or wrong in the work place and
doing what is right. This is in regard to effects of products/services and in relationship with
the stake holders.” —Cater Mcnamara
“Business ethics in short can be defined as the systematic study of ethical matters
pertaining to the business, industry or related activities, institutions and beliefs. Business
ethics is the systematic handling of values in business and industry.” —John Donaldson
There is no unanimity of opinion as to what constitutes business ethics. There are no

separate ethics of business but every individual and organ in society should abide by certain
moral orders.
MAJOR COMPONENTS OF BUSINESS ETHICS:
Reliability:
Reliable systems are efficient systems, and efficiency is key to succeeding in today’s
competitive marketplace. These two terms describe different measures of success, but
both are equally essential. Reliability refers to a system’s ability to consistently perform well,
while efficiency measures that system’s output within a given period. Fewer mistakes lead to
greater efficiency over time.
Trust:
Do you have a strong team that customers can rely on to get the job done? Most companies
benefit far more from attracting return customers than continually prospecting for new
business, only to see it walk away. Likewise, trust proves beneficial when dealing with
suppliers and service providers. Vendors should know that orders will always be correct and
will always arrive on time
Morality:
Good business ethics involves rewarding your employees. When an employee is rewarded,
he/she works harder leading to more profits.
Profitability:
Being ethical does not mean not making any profits. Every organisation has a responsibility
towards itself also i.e., to earn profits. Ethical companies are bound to be successful and
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more profitable in the long run though in the short run they can lose money.
Other components are:
Relationship
Principle
Choice
Behaviour
SECTION B
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Q6 WHAT ARE THE FACTORS WHICH HAVE TO BE CONSIDERED WHILE SELECTING A

SUITABLE BASES OF DEPARTMENTATION?
ANSWER:
FACTORS WHICH HAVE TO BE CONSIDERED WHILE SELECTING A SUITABLE BASES OF

DEPARTMENTATION:
1) Specialisation:
Specialisation brings about internal economies in the business. Therefore, it is an important

consideration while choosing a particular basis of departmentation. The management
should group various activities into units in such a way which leads to specialisation of work.
Overspecialisation should be avoided because it may result in loss of motivation among the
personnel.
2) Economy:
This factor is of great relevance to the number of departments to be created. Creation of a

new department increases various costs. This is because the new department requires
additional personnel, space and equipment. Therefore, management should see that the
departments created make the best possible use of these factors and maximum economy is
achieved by creating the departments.
3) Appreciation of key areas:
All the important areas of the business on which the success of the business depends must
be given proper weightage. That is why, in practice, function is taken at the top of the
organisation structure. Separate departments are created for important functions like
production, financing, marketing etc. Sometimes, local conditions are very important.
Therefore, the management should give necessary attention to the local conditions at the
time of determining the basis of departmentation.
4) Minimum conflicts:
The jurisdiction of the departments should be clearly laid down in order to avoid conflict
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among them. The authority of the managers of different departments should be clearly
specified. IGNOU ASSIGNMENT GURU Page-
5) Coordination:
The basic purpose of departmentation is the achievement of organisational goals.

Coordination in the operations of different departments is essential to achieve the
organisational goals. Therefore, departmentation should always facilitate coordination in the
organisation.
6) Control:
Control is an important function of management by which it guides and checks the activities
of different departments and personnel. The selected basis of departmentation should
ensure effective control to achieve the organisational goals more economically and
efficiently. Departmentation should make easier for top management to ensure
performance and to hold people accountable for results.
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7) Human consideration:
Departmentation should not only consider the technical aspects of the organisation but it
should also give due attention to the human factor. The existence of informal groups,
cultural pattern, value system, etc., should be given due weightage at the time of grouping
the personnel.
Q7 BRIEFLY EXPLAIN THE DYNAMICS OF EMPLOYER AND EMPLOYEES RELATIONSHIP.
ANSWER:
Employer-employee relations is one of the most delicate and complex problems of industrial
society today. When an employer hires a new employee, s/he should not be considered as
only new member of the Organisation. s/he should initiate new relationship in the
Organisation. Managing these relationships are most important task for the success of the
organisation. Industrial progress may hamper without labour management cooperation and
industrial harmony. Therefore, creation of good relations between employers and
employees becomes essential for smooth functioning of the Organisation.
According to Dale Yoder, the term employer-employee relations refer to “the whole field of
relationship among people, human relationship that exist because of the necessary
collaboration of men and women in the employment process of modern industry”. The clear
spelt out roles and responsibilities of employer and employee may lead to good relationship.
Employer-employee relationship exists from employment relationship. Employment
relationship exists when a person performs work or services under certain conditions in
return for remuneration. It is through the employment relation-ship, the reciprocal rights
and obligations are created between the employee and the employer.
The employer-employee relations may involve: (i) the relations between the various unions
(ii) the relationship between the State and the unions and (iii) the relationship between the
employers and the Government.
According to the International Labour Organisation, ''employer-employee relations comprise
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relationships between the State on the one hand and the employers’ and employees’ of
organisations on the other hand and the relationship among the occupational organisations IGNOU ASSIGNMENT GURU Page-
themselves.
Q8 DESCRIBE MAIN FEATURES OF MNCs.
ANSWER:
The term “multinational corporation” is variedly defined. In a broad sense, Multinational

Corporation refers to a corporate giant business firm having extended its productive
activity in many nations besides its home country. David E. Liliental, considering a wider
parameter, defines the MNCs as “corporations which have their home in one country but
operate and live under the laws and customs of other countries as well.” For brevity, MNC
refers to the business enterprise operating in more than one nation.
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A “multinational corporation” is also referred to as an international, transactional or global

corporation. Actually, for an enlarging business firm, multinational is a beginning step, as it
gradually becomes transnational and then turns into a global corporation. For, transnational
corporation represents a stage where in, the ownership and control of the concerned
organisation crosses the national boundaries.
The following are the main features of MNCs:
1. MNCs have managerial headquarters in home countries, while they carry out operations in
a number of other (host) countries.
2. A large part of capital assets of the parent company is owned by the citizens of the
company’s home country.
3. The absolute majority of the members of the Board of Directors are citizens of the home
country.
4. Decisions on new investment and the local objectives are taken by the parent company.
5. MNCs are predominantly large-sized and exercise a great degree of economic

dominance.
6. MNCs control production activity with large foreign direct investment in more than one
developed and developing countries.
7. MNCs are oligopolistic in character. It is sustained by modern technologies, management

skill, product differentiation and enormous advertising.
8. MNCs are not just participants in export trade without foreign investments.
Q9 WHAT ARE THE STEPS INVOLVED IN THE COMMUNICATION PROCESS? DISCUSS
ANSWER:
1. Sender:
The sender is the first component of the process of communication. The sender may be a
speaker, a writer or any other person. He is the one who has a message and wants it to share 13
it for some purpose.
2. Ideation:
Ideation is the preliminary step in communication where sender creates an idea to

communicate. This idea is the content and the basis of the message to be communicated.
Several ideas may generate in the sender’s mind.
The sender must identify, analyse and arrange the ideas sequentially before transmitting
them to the receiver.
3. Message:
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The message is the heart of communication. It is what the sender wants to convey to the
receiver. It may be verbal i.e. written or spoken or non-verbal i.e. body language, space
language etc.
4. Encoding:
To encode is to put the idea into words. In this step the communicator organises his ideas
into a series of symbols or words which will be communicated to the intended receiver.
Thus, the ideas are converted into words or symbols.
5. Transmission:
Next in the process of communication is the transmission of the message as encoded

messages are transmitted through various media and channels of communication channel
connects the sender and the receiver.
The channel and media should be selected keeping in mind the requirement of the receiver,
the communication to be effective and efficient the channel should be appropriate.
6. Receiver:
Receiver is the person or group for whom the message is meant. He may be a listener, a
reader or a viewer. Any neglect on the part of the receiver may make the communication
ineffective.
7. Decoding:
Decoding means translation of symbols encoded by the sender into ideas for
understanding. Understanding the message by the receiver is the key to the decoding
process.
The message should be accurately reproduced in the receiver’s mind. If the receiver is
unable to understand the message correctly the communication is ineffective.
8. Behaviour of the Receiver:
It refers to the response by the receiver of the communication received from the sender. He
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may like to ignore the message or to store the information received or to perform the task
assigned by the sender. This communication is complete as soon as the receiver responds. IGNOU ASSIGNMENT GURU Page-
9. Feedback:
Feedback indicates the result of communication. It is the key element in the communication
and is the only way of judging the effectiveness of communication It enables the sender to
know whether his message has been properly interpreted or not.
Systematic use of feedback helps to improve future messages. Feedback, like the message
could be oral, written or non-verbal. It has to be collected from the receiver.
Q10 WHAT ARE THE FEATURES OF E-COMMERCE?
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ANSWER:
1. Ubiquity- The traditional business market is a physical place, access to treatment by

means of document circulation. For example, clothes and shoes are usually directed
to encourage customers to go somewhere to buy. E-commerce is ubiquitous
meaning that it can be everywhere. E-commerce is the world’s reduce cognitive
energy required to complete the task.
2. Global Reach- E-commerce allows business transactions on the cross country bound
can be more convenient and more effective as compared with the traditional
commerce. On the e-commerce businesses potential market scale is roughly
equivalent to the network the size of the world’s population.
3. Universal Standards- E-commerce technologies is an unusual feature, is the technical
standard of the Internet, so to carry out the technical standard of e-commerce is
shared by all countries around the world standard. Standard can greatly affect the
market entry cost and considering the cost of the goods on the market. The standard
can make technology business existing become more easily, which can reduce the
cost, technique of indirect costs in addition can set the electronic commerce
website 10$ / month.
4. Richness- Advertising and branding are an important part of commerce. E-
commerce can deliver video, audio, animation, billboards, signs and etc. However, it’s
about as rich as television technology.
5. Interactivity- Twentieth Century electronic commerce business technology is called
interactive, so they allow for two-way communication between businesses and
consumers.
6. Information Density- The density of information the Internet has greatly improved, as
long as the total amount and all markets, consumers and businesses quality
information. The electronic commerce technology, reduce the information
collection, storage, communication and processing cost. At the same time, accuracy
and timeliness of the information technology increases greatly, information is more
useful, more important than ever.
7. Personalization- E-commerce technology allows for personalization. Business can be
adjusted for a name, a person’s interests and past purchase message objects and
marketing message to a specific individual. The technology also allows for custom.
Merchants can change the product or service based on user preferences, or 15
previous behaviour.
SECTION C
Q11
A. LONG-RANGE PLANNING IS CONCERNED WITH MAKING TODAY’S DECISIONS WITH A

BETTER SENSE OF FUTURITY.
ANSWER:
The term long-range planning refers to the process of formulating the long-range objectives
of an organisation and of determining the ways and means of achieving such objectives. The
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term long-range indicates the extent of future time horizon, the fairly long period of time
which can be visualised and verbalised into tentative objectives by the organisation. The
duration and limit of long-range differs from enterprise to enterprise and from situation to
situation. For some enterprises, 3 to 5 years is a fairly long-time horizon, while for others, 25
to 30 years and even beyond is the relevant planning time frame. The long-range planning
period is determined keeping in view the nature of the enterprise’s business, its size and
growth rate, the extent of variability of the environment, the time required for converting
major decisions into tangible results and so on.
Long-range planning provides a framework for determination of such critical goals as the
desired growth rate of the enterprise’s assets or sales and profitability, new activities in the
future, major new investments, areas of development, and disinvestment, and so on. As
Peter Drucker stated, every enterprise should ask itself these and similar questions in the
context of complex and dynamic nature of external environment. Business and other
organisations cannot expect that their present businesses, product lines and activities,
technology, profit levels and markets will continue to remain relevant in the future. Long-
range planning is intended to induce such awareness and to enable managers to make
current major decisions with a fairly good sense of future Outlook.
B. CONTROL IS A FUNDAMENTAL MANAGEMENT FUNCTION THAT ENSURES WORTH

ACCOMPLISHMENT ACCORDING TO PLAN.
ANSWER:
Control is a device or a procedure which keeps the manager informed as the activities for
which he is responsible and which assures him that his plans and policies are being carried
out according to schedule. The nature of control function will be clearly understood from
the following characteristics of control:
1) Control is all pervasive function
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2) Control is a continuous process
3) Planning is the basis of control: Control can be exercised only with reference to and on
the basis of plans
4) Action is the essence of control: Control is an action-oriented process. A manager

initiates action which guides the operation within the sphere of plans. In order to prevent a
recurrence of deviations, a manager modifies or improves the existing plans
. 5) Control is a forward-looking process: Control aims at future. Although past experience

is the criteria for future standards, control is concerned with checking the current
performance and providing guidelines for the future. Therefore, control is both backward-
looking and forward-looking. It looks at future through the eyes of past.
6) Delegation is the key to control: Effective control requires adequate delegation of

authority.
SOLVED ASSIGNMENTS
C. MONEY HOLDS THE KEY TO WORK MOTIVATION IN MODERN BUSINESS

ORGANISATIONS.
ANSWER:
Money plays an important role in motivation. Management generally make use of financial
incentives like wages and salaries, bonus, retirement benefits, insurance, medical
reimbursement, etc. to motivate the workers. However, such incentives may not always
prove to be motivating. In many cases, management may have to increase the financial
incentives to keep the workers with the organisation. This can be appreciated from the
practice of making wages and salaries competitive among various enterprises so as to
attract and maintain good work-force. Money is a real motivating factor when the
physiological and security needs of the workers have not been fully satisfied. Money plays a
significant role in satisfying these needs. Therefore, management can use financial
incentive for motivation. Money also helps in satisfying the social needs of employees to
some extent because money is often recognised as a symbol of status, respect and power.
Besides money is an important means of achieving a ‘minimum standard of living’ although
this ‘minimum’ has the tendency to go up as people become more affluent. But this should
not lead one to conclude that money will always be a motivating factor to all people.
Money provides for the satisfaction of physiological and safety needs only which have been
called hygienic factors by Herzberg. Hygienic factors include: wages and salaries and other
fringe benefits. The presence of these factors at a satisfactory level prevents job
dissatisfaction. They do not provide ‘on a job satisfaction’ to the employees and, therefore,
cannot be considered as motivational factors. According to Herzberg, in order to motivate
the employees, it is necessary to provide for the satisfaction of ego, social and self-
actualisation needs.
D. WORTH MAXIMISATION IS PREFERRED OVER PROFIT MAXIMISATION
ANSWER: 17
BASIS FOR
PROFIT MAXIMIZATION WEALTH MAXIMIZATION
COMPARISON
Concept The main objective of a The ultimate goal of the

concern is to earn a concern is to improve the
larger amount of profit. market value of its
shares.
SOLVED ASSIGNMENTS
BASIS FOR
PROFIT MAXIMIZATION WEALTH MAXIMIZATION
COMPARISON
Emphasizes on Achieving short term Achieving long term

objectives. objectives.
Consideration of No Yes
Risks and
Uncertainty
Advantage Acts as a yardstick for Gaining a large market

computing the share.
operational efficiency of
the entity.
Recognition of No Yes
Time Pattern of
Returns
Profit Maximization is the capability of the firm in producing maximum output with the
limited input, or it uses minimum input for producing stated output. It is termed as the
foremost objective of the company.
It has been traditionally recommended that the apparent motive of any business
organisation is to earn a profit, it is essential for the success, survival, and growth of the
18
company. Profit is a long-term objective, but it has a short-term perspective i.e. one
financial year. IGNOU ASSIGNMENT GURU Page-
Wealth maximizsation is the ability of a company to increase the market value of its common
stock over time. The market value of the firm is based on many factors like their goodwill,
sales, services, quality of products, etc.
It is the versatile goal of the company and highly recommended criterion for evaluating the
performance of a business organisation. This will help the firm to increase their share in the
market, attain leadership, maintain consumer satisfaction and many other benefits are also
there.
Q12
A. COMMERCE AND INDUSTRY
SOLVED ASSIGNMENTS
ANSWER:
BASIS FOR
INDUSTRY COMMERCE
COMPARISON
Meaning Industry is an economic Commerce is a business

activity, concerned with the activity, wherein
procurement and exchange for goods and
processing of raw materials services for value, is
into finished products, that done on a large scale.
reaches the customer.
Capital High Comparatively low

Required
Involves Conversion of resources Activities essential for

into useful goods. facilitating the buying
and selling of goods.
Represent Production part of business Distribution part of

activities. business activities.
Risk High Comparatively low
The significant differences between industry and commerce are discussed in detail, in the
points given below: 19
1. The industry is defined as an economic activity, concerned with the procurement and
processing of raw materials into finished products, that reaches the customer.
Commerce is described as a business activity, wherein exchange for goods and
services for value is done on a large scale.
2. A huge capital investment is required to start an industry. On the other hand,
commerce requires comparatively less capital investment.
3. Industry involves the conversion of resources into useful goods. As opposed to,
commerce which involves activities that are essential for facilitating the buying and
selling of goods.
4. The industry is an indicator of production part of business activities. Unlike
commerce which deals with the making goods available to the customers, i.e. the
distribution part.
SOLVED ASSIGNMENTS
5. Industry involves high risk in comparison to commerce.
B. OUT-SOURCING AND OFF-SHORING
ANSWER:
BASIS FOR
OUTSOURCING OFFSHORING
COMPARISON
Meaning Outsourcing is the Offshoring refers to the

assignment of business relocation of business
peripheral operations to an processes in a different
external organization. country.
What it implies? Shifting operations to third Shifting activities or

party. offices.
Objective Focus on core business Lower labor cost

activities
Function Non-employees Employees of the

performed by organization
Location Within or outside the Outside the country.

country.
C. LINE ORGANISATION AND FUNCTIONAL ORGANISATION 20

ANSWER:
Line organization is a commonly used organizational structure where direct lines of authority
flow from top management and the lines of responsibility flow in the opposite direction. This
is a top-down approach to management where the decisions are made by the top
management and communicated to the lower level staff in the hierarchy. Line managers are
assigned to manage teams that operate with the intention of achieving an intended result.
Line organization is the oldest and simplest method of administrative organization.
A functional organization is a widely used organizational structure in which the organization

is divided into smaller groups based on specialized functional areas such as finance,
marketing, and production. These functional areas are also referred to as ‘silos’. Each
function is managed by a departmental head who has a dual responsibility to be accountable
SOLVED ASSIGNMENTS
to the top management and to direct the respective department to achieve favourable
performance.
D. DELEGATION AND DECENTRALISATION
ANSWER:
BASIS FOR
DELEGATION DECENTRALIZATION
COMPARISON
Meaning Delegation means handing Decentralization is the final

over an authority from one outcome achieved, when the
person of high level to the delegation of authority is
person of low level. performed systematically and
repeatedly to the lowest level.
What it is? Technique of management Philosophy of management.
Accountability Superiors are accountable Department heads are

for the acts done by accountable for the acts of the
subordinates. concerned department.
Requirement Yes, for all organization No, it is an optional philosophy

delegation of authority is which may or may not be adopted
very necessary. by the organization.
21
Liberty of Work Subordinates do not have A substantial amount of freedom

full liberty. is there.
Control The ultimate control is the The overall control vests with top
hands of superior. management and delegates
authority for day to day control to
departmental heads.
SOLVED ASSIGNMENTS
Relationship Creates superior- A step towards creation of semi-

subordinate relationship. autonomous units.
22
SOLVED ASSIGNMENTS
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SOLVED ASSIGNMENTS

IGNOU ASSIGNMENT GURU 2019-20

Q1 COMPARE THE COMPANY FORM OF ORGANISATIONS WITH THE STATUTORY

COMPARISON BETWEEN COMPANY FORMS OF ORGANISATIONS AND STATUTORY

Main features of company form of organisation:

1) Incorporation: A company is an incorporated association. It comes into existence only

2) Artificial Person: A company is regarded as an artificial person as it is created by law and

I RECOMMEND DEPARTMENTAL OR COMPANY FORM OF ORGANISATION OUT OF TWO

Employee morale is the relationship that a particular employee or a group of employees

According to Dalton E. McFarland, morale is basically a group phenomenon. It is a concept

FACTORS INFLUENCE THE MORALE OF EMPLOYEES IN AN ORGANISATION:

2. The Nature of Work:

3. The Level of Satisfaction:

4. The Level of Supervision:

6. Worker’s Perception of Rewards System:

6. The Employee’s Age:

SIGNIFICANCE OF LEADERSHIP VIS A VIS MORALE:

1. It improves motivation and morale of employees:

2. It leads to higher performance: 5

4. It determines organizational success:

In the process of unification of group efforts to achieve organizational goals, leadership

5. It helps to respond to change:

Organizations today need to quickly respond to changes. A change in the technology,

i) Willing cooperation towards goals of the organization.

(ii) Loyalty to the organization and its leadership.

(iii) Good discipline or voluntary conformance to rules and regulations.

(iv) High degree of employee’s interest in his work and organization.

(v) Pride in the organization.

(vi) Reduction of rates of absenteeism and labour turnover

Q3 ENUMERATE THE ASSUMPTIONS OF MC. GREGOR’S THEROY X AND THEORY Y. WHICH

1. Man is lazy; he does not want to work.

2. People dislike responsibilities, they do not have ambition.

3. People consider self-interest as the priority, not the organisational interests.

4. People oppose change.

5. People have no interest in solving organisational problems.

6. People need to be motivated.

7. People need to be controlled and threatened.

8. Sometimes, punishment has to be used to get work done

THEORY Y IS PRESENTLY WORKING IN INDIA, BECAUSE OF FOLLOWING MERITS OF IT:

Q4 DESCRIBE THE CONCEPT OF PRODUCT LIFE CYCLE. EXPLAIN VARIOUS STAGES OF

CONCEPT OF PRODUCT LIFE CYCLE:

STAGES OF PRODUCT LIFE CYCLE:

1. Market introduction Stage

Q5 WHAT DO YOU MEAN BY BUSINESS ETHICS? STATE THE MAJOR COMPONENTS OF

There is no unanimity of opinion as to what constitutes business ethics. There are no

MAJOR COMPONENTS OF BUSINESS ETHICS:

Other components are:

Q6 WHAT ARE THE FACTORS WHICH HAVE TO BE CONSIDERED WHILE SELECTING A

FACTORS WHICH HAVE TO BE CONSIDERED WHILE SELECTING A SUITABLE BASES OF

Specialisation brings about internal economies in the business. Therefore, it is an important

This factor is of great relevance to the number of departments to be created. Creation of a

3) Appreciation of key areas:

The basic purpose of departmentation is the achievement of organisational goals.

Q7 BRIEFLY EXPLAIN THE DYNAMICS OF EMPLOYER AND EMPLOYEES RELATIONSHIP.

According to the International Labour Organisation, ''employer-employee relations comprise

Q8 DESCRIBE MAIN FEATURES OF MNCs.

The term “multinational corporation” is variedly defined. In a broad sense, Multinational

A “multinational corporation” is also referred to as an international, transactional or global

The following are the main features of MNCs: