mb112 1007

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Question Paper
Introduction to Management - II (MB112): October 2007
• Answer all questions.
• Each question carries one mark.
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1. In an information system, which of the following refers to the physical equipment that is used to input, >
store and retrieve data?
(a) Hardware
(b) Software
(c) Data
(d) People
(e) Procedures.
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2. According to Maslow’s ‘Needs Hierarchy’ theory, basic needs such as food, clothing and shelter can be >
referred to as
(a) Physiological needs
(b) Safety needs
(c) Social needs
(d) Esteem needs
(e) Self-actualization needs.
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3. Which of the following is a theory proposed by Douglas McGregor, that has a pessimistic and rigid >
view of human nature?
(a) Theory X
(b) Theory Y
(c) Theory Z
(d) Expectancy theory
(e) ERG theory.
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4. Which of the following is the process of determining future human resource needs according to an >
organization’s strategic plan and devising the steps necessary to fulfill these needs?
(a) Human resource planning
(b) Organizational planning
(c) Performance appraisal
(d) Job analysis
(e) Recruitment.
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5. People such as Ramalinga Raju of Satyam Computers and Narayana Murthy of Infosys attained >
immense success within a short period of time by establishing new companies. Because of their
successful business endeavors they can be called as
(a) Creators
(b) Recruiters
(c) Managers
(d) Entrepreneurs
(e) Motivators.
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6. In Alderfer’s ERG theory, ERG stands for >
(a) Existence-relatedness-gain
(b) Existence-relatedness-growth
(c) Endurance-relatedness-growth
(d) Existence-resemblance-gain
(e) Endurance-resemblance-growth.
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7. The first stage in a corporation’s multinationalization is when the corporation >
(a) Multinationalizes ownership of corporate stock
(b) Multinationalizes management from top to bottom
(c) Establishes foreign manufacturing facilities
(d) Establishes sales organizations abroad
(e) Exports its products.
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8. Many managers use ‘MBWA’ as a control technique to monitor employees while they are performing >
their tasks. The practice of ‘MBWA’ refers to
(a) Management by wandering around
(b) Management by whistle-blowing around
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(c) Management by whims alone

(d) Management by work allocation
(e) Management by walking around.
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9. Which of the following conflict resolution techniques involves thrusting one’s own view on others? >
(a) Problem solving
(b) Forcing
(c) Smoothing
(d) Compromise
(e) Avoidance.
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10. Which of the following is the ability to develop new ideas and is a function of knowledge, imagination, >
and evaluation?
(a) Motivation
(b) Entrepreneurship
(c) Creativity
(d) Management
(e) Change.
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11. Which approach to a formal performance appraisal involves employees working at the same >
organizational level rating their co-workers?
(a) Superior’s rating of subordinates
(b) Peer assessment
(c) Group of superiors rating subordinates
(d) Subordinate’s rating
(e) 360 degrees assessment.
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12. Which of the following management information systems aims at facilitating 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.
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13. Various selection devices are used to choose candidates who best meet the requirements of a job. A >
formal interview would be the most appropriate selection device for which of the following positions?
(a) Crane operator
(b) Security guard
(c) Watchman
(d) Bank manager
(e) Office boy.
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14. Which of the following is a subsystem of the just-in-time approach and involves the use of cards and >
containers to move parts and components from one work area to another?
(a) Economic order quantity
(b) Linear programming
(c) Reorder point
(d) Kanban
(e) Distribution logistics.
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15. According to the University of Michigan studies, a leader who emphasizes the technical aspects of the >
job and is concerned with accomplishing the group’s tasks is said to be
(a) Employee-oriented
(b) Initiating
(c) Considerate
(d) Production-oriented
(e) Visionary.
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16. An individual’s inner state that causes him/her to behave in such a way as to ensure accomplishment of >
a goal is
(a) Ambition
(b) Attitude
(c) Motivation
(d) Perception
(e) Leadership.
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17. According to Fiedler’s leadership theory, which critical dimension of leadership refers to the influence >
of a leader’s position that enables him to get group members to obey instructions?
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(a) Leader-member relations

(b) Position power
(c) Task structure
(d) Concern for people
(e) Initiating structure.
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18. Effective leadership calls for various traits – physical, intelligence and ability, personality, task-related, >
and social. Which of the following is not a personality trait required for effective leadership?
(a) Adaptability
(b) Enthusiasm
(c) Aggressiveness
(d) Appearance
(e) Self-confidence.
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19. Information is one of the important resources for managers. For information to be useful to managers, it >
must possess certain attributes. The information attribute which tells whether the information pertains to
the situation at hand or not, is known as
(a) Information Accuracy
(b) Information Timeliness
(c) Information Relevance
(d) Information Completeness
(e) Information Frequency.
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20. In which of the following on-the-job training techniques, do trainees learn about the different functions >
in the organization by working in different job positions?
(a) Planned progression
(b) Job rotation
(c) Coaching
(d) Committees
(e) Temporary promotions.
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21. Management Information System (MIS) helps the manager to discharge his/her 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.
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22. The managerial creativity process involves certain phases. Which of the following is not a phase of the >
creativity process?
(a) Unconscious scanning
(b) Intuition
(c) Insight
(d) Logical formulation
(e) Brainstorming.
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23. The path-goal theory was developed by Robert J. House and Terence R. Mitchell and it is a type of >
situational leadership theory. According to this theory, what type of leadership includes consulting with
subordinates before making a decision?
(a) Directive
(b) Supportive
(c) Participative
(d) Achievement-oriented
(e) Instrumental.
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24. The recruitment process consists of various stages. Which of the following is the first step 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.
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25. The theory that states that, followers make attributions of heroic or extraordinary leadership abilities >
when they observe certain behaviors is known as
(a) Charismatic leadership
(b) Laissez-faire leadership
(c) Transactional leadership
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(d) Autocratic leadership

(e) Democratic leadership.
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26. Which of the following is not an example of personal loss that organization members fear as a result of >
change?
(a) Possibility of a reduction in personal prestige
(b) Disturbance of established social relationships
(c) Reduction in overall organizational productivity
(d) Personal failure because of an inability to carry out new job responsibilities
(e) Disturbance of established working relationships.
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27. A career strategy should be designed to overcome weaknesses and utilize strengths so as to take >
advantage of career opportunities. There are various steps in formulating a career strategy. Which of the
following steps will precede the others 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.
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28. A Funds Flow statement is >
(a) Source of funds statement
(b) A statement of use of funds
(c) A statement of sources and uses of funds for a definite period between two definite dates
(d) An income statement
(e) A balance sheet.
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29. A manager who re-designs the jobs of her subordinates so that they include a better chance for personal >
growth is using
(a) Motivation
(b) Leadership
(c) Job enlargement
(d) Job enrichment
(e) Job rotation.
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30. A message that is generated by the receiver in response to the sender’s original message is known as >
feedback. It is a very important component of the communication process. Feedback returns the
message to the sender and provides a check on
(a) How well the receiver is doing
(b) How well the sender is doing
(c) Whether understanding has been achieved
(d) What the sender should do the next time a message is sent
(e) The ability of the receiver to perform the task.
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31. A person, who had applied for the post of a service representative, is asked to handle a simulated >
situation involving a complaining customer, by the company. Which of the following selection tests is
being made use of?
(a) Physical examination
(b) Intelligence test
(c) Personality test
(d) Work sampling test
(e) Knowledge test.
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32. A PERT network is an important tool for improving productivity in an organization. Such a network >
depicts the sequence of activities needed to complete a project and the
(a) Costs associated with each activity
(b) Time required for each activity
(c) Stage of project reached
(d) Manpower required by each activity
(e) Cumulated amount of work completed.
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33. A skills inventory is a computerized database containing basic information about each employee that >
can be used to assess the availability of candidates for meeting current and future human resource
needs. Which of the following is an application of skills inventory?
(a) Forecasting manpower demand
(b) Forecasting manpower supply
(c) Replacement training
(d) Succession planning
(e) Planning human resource actions.
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34. According to Blake and Mouton’s Managerial Grid, managers who have a high concern for both
production, and employee morale and satisfaction fall under which of the following management styles?
(a) Country club management
(b) Team management
(c) Authority-obedience management
(d) Middle-of-the-road management
(e) Impoverished management.
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35. According to Kurt Lewin, work quality and group satisfaction were found to be highest using which of >
the following leadership style?
(a) Transactional
(b) Laissez-faire
(c) Autocratic
(d) Democratic
(e) Transformational.
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36. According to the Japanese management practices, what refers to a manager whose task is not only to >
supervise people at work but also to show fatherly concern for their subordinate’s private life?
(a) Ringi
(b) Henko
(c) Kacho
(d) Sushin Kayo
(e) Habatsu.
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37. An information system is an organized collection of data, equipment, procedures and people involved in >
the collection, storage and processing of data to produce information required in the management of an
organization. For an information system to be effective, it should provide
(a) Internal timely information
(b) External timely information
(c) Internal accurate information
(d) External accurate information
(e) Internal and external information that is timely and accurate.
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38. 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.
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39. In motivating people towards higher productivity and better performance, an important step is to >
identify what they want out of their jobs. To fulfill their demands and expectations, various motivation
techniques are used by managers. Which of the following is/are motivational techniques?
I. Job analysis.
II. Rewards.
III. Employee participation.
IV. Improving quality of work life.
(a) Only (II) above
(b) Both (I) and (II) above
(c) Both (III) and (IV) above
(d) (I), (III) and (IV) above
(e) (II), (III) and (IV) above.
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40. Globalization has become the buzzword in today’s corporate world. A large number of firms are >
expanding their businesses globally to stay ahead of the cut-throat competition. Therefore it becomes
necessary that managers manage their global businesses effectively. Successful global management
requires an attitude that is best described as
(a) Ethnocentric
(b) Parochial
(c) Geocentric
(d) Polycentric
(e) Regiocentric.
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41. If a manager is evaluating the quality of the company’s product by examining complaint forms >
submitted by customers, then he/she is using which of the following types of control?
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(a) Concurrent control

(b) Feedback control
(c) Preventive control
(d) Yes-no control
(e) Preliminary control.
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42. In addition to operations research, there are other techniques for improving productivity in an >
organization. One such technique is ‘quality circle’. The term ‘quality circle’ refers to
(a) Acceptable standards shared by a group’s members
(b) A stage in the group development
(c) A temporary group to establish a specific task
(d) A work group that meets regularly to discuss, investigate and correct quality problems
(e) An organization’s long-term commitment to the continuous improvement of quality.
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43. As the future cannot be predicted with absolute accuracy, career plans are developed in an environment >
of uncertainty. In this uncertainty, what should an individual do to formulate a career strategy?
(a) Develop contingency plans
(b) Develop long-range personal and professional goals
(c) Analyze environment threats and opportunities
(d) Develop short-range career objectives and action plans
(e) Monitor progress.
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44. In the operations research methodology, which of the following steps precedes the others? >
(a) Testing the model
(b) Deriving a solution from the model
(c) Putting the solution into effect
(d) Mathematical model construction
(e) Providing controls for the model.
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45. In Vroom’s expectancy theory, which of the following is the motivational component that refers to the >
preference of an individual for a particular outcome?
(a) Valence
(b) Expectancy
(c) Instrumentality
(d) Motivation
(e) Drive.
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46. In which of the following responsibility centers does the control system examine the role of assets in >
generating profit apart from measuring the monetary value of inputs and outputs?
(a) Profit centers
(b) Investment centers
(c) Revenue centers
(d) Standard cost centers
(e) Discretionary expense centers.
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47. Inventory is vital to organizations, as it represents considerable costs. So, various methods have been >
developed to control inventory related costs. Which is the inventory control method developed to
minimize 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.
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48. 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?
(a) Well-organized receiving and handling of materials purchased from suppliers
(b) Strong management commitment
(c) Suppliers located in diverse and distant locations
(d) High quality of materials purchased from suppliers
(e) Dependable and long-lasting relationships with suppliers and customers.
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49. Leadership that guides and motivates followers in the direction of established goals by clarifying role >
and task requirements is termed as
(a) Transformational leadership
(b) Situational leadership
(c) Traits based leadership
(d) Transactional leadership
(e) Laissez-faire leadership.
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50. Listening is one of the most essential ingredients of effective communication. No message can be >
properly understood without intent listening. 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.
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51. Managers must develop methods of measurement in order to signal when deviations from standards are >
occurring so that
(a) The plan can be abandoned
(b) Quality control personnel can be notified
(c) The measurement standards can be checked
(d) Corrective action can be taken
(e) Controls can be replaced.
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52. Managers need to consider the type of control system that they wish to use. Which control system helps >
managers to regulate and supply inputs to obtain maximum production without any interruption?
(a) Budgetary control
(b) Financial control
(c) Quality control
(d) Inventory control
(e) Clan control.
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53. Managers use several performance appraisal techniques. Which of the following is a five grade system >
supervisors’ use to rate individual employees on various characteristics?
(a) Formal appraisal
(b) Informal appraisal
(c) BARS
(d) Graphic rating scale
(e) 360-degree appraisal.
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54. Motivation theories can be broadly classified into two main categories by looking at their major areas of >
thrust. viz., content theories and process theories. Content theories of motivation focus on
(a) The level of satisfaction employees have with their job
(b) Achieving one’s potential and self-fulfillment
(c) Equitable distribution of tasks
(d) Analyzing what motivates people
(e) The dynamics of motivation and how the motivation process takes place.
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55. Performance appraisal methods must consider various aspects of a job. Which of the following types of >
appraisal involves evaluating an individual based on actual job performance?
(a) Behavior oriented
(b) Results oriented
(c) Work oriented
(d) Skills oriented
(e) Knowledge oriented.
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56. Performance appraisals are important in an organization because they >
I. Provide systematic judgments to support promotions.
II. Provide a basis for coaching.
III. Provide a basis for counseling.
IV. 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.
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57. Productivity can be improved through several techniques. Which of the following technique involves >
analyzing the operations of the product or service, estimating the value of each operation, and
modifying or improving the operation so that the cost is reduced?
(a) Time-event networks
(b) Value engineering
(c) Work simplification
(d) Quality circles
(e) Total quality management.
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58. Robert Tannenbaum and Warren H. Schmidt devised a continuum of leader behaviors. >
According to Tannenbaum and Schmidt, which of the following forces should managers consider while
deciding which leader behavior pattern to adopt?
I. Forces within themselves.
II. Forces within the situation.
III. Forces within subordinates.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (II) and (III) above
(e) All (I), (II) and (III) above.
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59. Ratio analysis is the process of determining and evaluating financial performance ratios. Liquidity ratios >
are used to
(a) Measure the effectiveness of an organization in managing its assets
(b) Measure the ability of an organization to meet its short-term obligations by using its current
assets
(c) Determine the ability of a firm to meet the long-term obligations
(d) Measure the profitability of an organization
(e) Assess the relationship between the sales and various assets of a firm.
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60. Ratio is an index that measures one variable relative to another and is generally expressed as a >
percentage or a rate. The ratio that tests how leveraged an organization is, may be referred to as
(a) Current ratio
(b) Return-on-investment
(c) Debt ratio
(d) Net profit margin
(e) Inventory turnover ratio.
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61. Professor Rensis Likert and his associates at the University of Michigan studied the patterns and styles >
of leaders and managers and suggested certain systems of management for understanding leadership
behavior. A manager exhibiting a lack of confidence or trust in subordinates, will be categorized into
which of Likert’s management systems?
(a) System 1 (exploitive-authoritative style)
(b) System 2 (benevolent-authoritative style)
(c) System 3 (consultative style)
(d) System 4 (participative leadership style)
(e) System 5 (consultative – authoritative style).
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62. Theories of motivation can be classified as content theories and process theories. Which of the >
following is a process theory of motivation?
(a) Maslow’s Needs Hierarchy theory
(b) Herzberg’s two-factor theory
(c) Alderfer’s ERG theory
(d) The Porter-Lawler model
(e) McClelland’s needs theory.
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63. Vikas Tripathi tore up his contract and threw it on his desk. He just learned that a new employee was >
hired in an entry-level position and this new employee was to earn 30 percent more than Vikas. Which
of the following process theories of motivation explains Vikas’s reaction to the situation?
(a) Needs hierarchy theory
(b) Expectancy theory
(c) Equity theory
(d) Alderfer’s ERG theory
(e) Porter Lawler model.
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64. When trying to control an organization, a manager should be cautious enough to avoid as many barriers >
as possible to successful controlling. Which of the following would generally not be considered a
barrier to successful controlling?
(a) Neglecting long-term goals for the sake of short term goals
(b) Focusing on specific organizational activities
(c) Filling of reports
(d) Neglecting the organizational members
(e) Focusing too much on data.
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65. Which model of leadership behavior proposes that a leader should adjust his or her leadership style in >
accordance with the readiness of followers?
(a) Path-goal theory
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(b) Vroom Yetten model

(c) Fiedler’s contingency model
(d) Hersey and Blanchard’s model
(e) Managerial grid.
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66. Which of the following control systems is/are used by all levels of management? >
I. Financial control system.
II. Budgetary control system.
III. Quality control system.
IV. Inventory control system.
(a) Only (II) above
(b) Only (III) above
(c) Both (II) and (III) above
(d) Both (III) and (IV) above
(e) (I), (II) and (IV) above.
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67. Which of the following controls is based on the idea that most of the negative deviations from standards >
can be overcome by applying the fundamentals of management?
(a) Preventive control
(b) Cybernetic control
(c) Direct control
(d) Steering control
(e) Yes-no control.
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68. Which of the following is not a situational theory of leadership? >
(a) Fiedler’s contingency approach
(b) The path-goal theory
(c) The trait theory
(d) The Vroom-Yetton model
(e) Hersey and Blanchard’s model.
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69. Which of the following is not an effective way to reduce resistance to change? >
(a) Making definitive changes
(b) Setting the stage for change
(c) Promoting real understanding
(d) Avoiding surprises
(e) Involving individuals who will be affected by a change, in planning and implementing it.
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70. Which of the following is not an element of a job specification? >
(a) Education
(b) Work experience
(c) Duties to be performed
(d) Communication skills
(e) Vision needed to perform the job.
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71. 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) Their style differs from that of Americans.
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72. Which of the following is/are control technique/s used to ensure effectiveness of a formal performance >
appraisal system?
I. Developing suitable standards.
II. Ascertaining information needed, through the source, schedule and method of appraisal.
III. Taking corrective action.
(a) Only (I) above
(b) Only (II) above
(d) Both (II) and (III) above
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73. Which of the following is/are key elements of Herzberg’s two-factor theory of motivation? >
I. Motivators.
II. Hygiene factors.
III. Valence factors.
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(a) Only (I) above

(b) Only (II) above
(c) Both (I) and (II) above
(d) Both (I) and (III) above
(e) Both (II) and (III) above.
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74. Which of the following is/are models of management proposed by Raymond E. Miles? >
I. Traditional model.
II. Human relations model.
III. Human resources model.
(a) Only (I) above
(b) Only (II) above
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75. Which of the following statements concerning grapevine is not correct? >
(a) Grapevine is generally used irregularly in organizations
(b) Grapevine can and often does generate harmful rumors
(c) Grapevine is used largely to serve the self-interests of people within it
(d) Some managers use grapevine to their advantage
(e) In time, and with proper pressure, grapevine can be eliminated.
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76. A manager inventory chart is used for identifying potential candidates in the organization. Which of the >
following is/are advantages of a manager inventory chart?
I. It provides a clear idea about the present and future staffing situation of an organization.
II. It shows the position to which a manager may be promoted.
III. It helps to identify the employees who are not performing up to expectations so that they can be
trained or replaced.
IV. Updating the chart requires little time and effort.
(a) Only (I) above
(b) Both (I) and (III) above
(c) Both (II) and (IV) above
(d) (I), (II) and (III) above
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77. A responsibility center is a sub-unit headed by a manager who is responsible for achieving one or more >
goals. Which of the following is/are true of responsibility centers?
I. An organizations choice of responsibility centers depends to a great extent on its control
mechanisms.
II. Sales or marketing units may be considered as revenue centers.
III. Organizations that have a divisional structure may opt for profit centers.
IV. Autonomous businesses may be considered as investment centers.
(a) Only (I) above
(b) Only (IV) above
(d) (II), (III), and (IV) above
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78. Control is an essential part of every organization. The management process is incomplete and >
sometimes useless without the control function. Control function plays an important role of assisting
managers in
I. Coping with uncertainty.
II. Detecting irregularities in the organization activities.
III. Centralizing authority.
IV. Avoiding complex situations.
(a) Both (I) and (II) above
(e) Both (I) and (IV) above.
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79. Hazard analysis and Critical Control Point Method (HACCP) is used in the food 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
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(b) Identifying control points

(c) Critical limits
(d) Establish corrective actions
(e) Establishing procedures to ensure correct working.
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80. In non-directive counseling, a manager should >
I. Raise appropriate questions.
II. Create an atmosphere of privacy to help the employee communicate freely.
III. Encourage the employee to find solutions through examples set by others.
(a) Only (I) above
(b) Only (II) above
(d) Both (I) and (II) above
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81. Operations management is a tool by which management can create and improve upon its 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 output of the transformation process that operations management oversees includes both
goods and services
(d) Labor 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.
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82. Information overload is a barrier to communication. Employees may react to information overload by >
I. Incorporating all information.
II. Making processing errors.
III. Disregarding certain information.
IV. Delaying information processing.
(b) Both (I) and (IV) above
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83 McClelland highlighted the importance of three basic needs namely need for achievement, need for >
affiliation and need for power. Which of the following is/are characteristics exhibited by achievement-
oriented people?
I. They enjoy a sense of intimacy and understanding.
II. They see every situation as an opportunity to seize control.
III. They take a realistic approach to risk.
IV. They have an intense desire for success.
(a) Only (II) above
(e) (I), (III) and (IV) above.
< A
84. In the Japanese management style, the management function of leading is characterized by >
I. Leader acting as a decision-maker and head of the group.
II. Paternalistic style of management.
III. Common values.
IV. Face-to-face confrontation; emphasis on clarity.
V. Bottom-up communication.
(a) (I), (II) and (III) above
(b) (I), (III) and (IV) above
(c) (I), (IV) and (V) above
(d) (II), (III) and (V) above
(e) (II), (IV) and (V) above.
< A
85. Which of the following is not an input in the ‘distribution logistics model’? >
(a) Manufacturing costs
(b) Procurement lead times
(c) Sales forecasts
(d) Customer service standards
10/23/2007
(e) Inventory plan.

< A
86. There are different information systems that serve the needs of different organization members at >
different organizational levels. Which of the following information systems has low-volume data and
analytical models as data inputs?
(a) Management Information System
(b) Decision Support System
(c) Executive Support System
(d) Transaction Processing System
(e) Office Automation System.
< A
87. To encourage formal organizational communication, managers should >
I. Support the flow of clear and concise statements through formal channels.
II. Ensure free access to formal channels for all organization members.
III. Assign specific communication responsibilities to staff personnel.
IV. Restrict the use of formal channels.
(a) Only (I) above
(b) Only (II) above
(e) (I), (II) and (III) above.
< A
88. Which of the following actions does an organization undertake, if manpower demand is high and >
manpower supply is low?
I. Outplacement.
II. Layoffs.
III. Internal promotions.
IV. Training and development.
(a) Only (II) above
(b) Both (I), and (II) above
(d) (I), (II) and (IV) above
<An
89. Which of the following are examples of feed forward control?
I. Quality control inspections.
II Procedures.
III. Policies.
IV. Budgets.
V. Balance sheets.
(a) Both (I) and (IV) above
(b)
Both (II) and (III) above
(c) (I), (IV) and (V) above
(d) (II), (III) and (IV) above
(e) All (I), (II), (III), (IV) and (V) above.
<An
90. Which of the following are the characteristics of the ‘leading’ function adopted in the U.S. management
style?
I. Leader acting as a social facilitator and group member.
III. Often divergent values, individualism sometimes hindering cooperation.
V. Communication primarily top-down.
(b) (I), (II) and (IV) above
(c) (II), (III) and (V) above
(d) (III), (IV) and (V) above
(e) (I), (III), (IV) and (V) above.
<An
91. Human resource planning consists of resource demand forecasting and resource supply forecasting.
Which of the following is not a long range factor in ‘resource demand forecasting’?
(a) Demographics
(b) Relocations/plant closings
(c) Economy
(d) Technological trends
(e) Social trends.
10/23/2007
<An
92. Which of the following is not a weakness of appraisal against verifiable objectives?
(a) Luck plays an important role in the performance of an individual
(b) In reality uncontrollable factors are rarely taken into consideration
(c) It is difficult to measure performance of non-performers
(d) It does not take into consideration managerial abilities of an individual
(e) It does not form a separate component from the job.
<An
93. Which of the following are reasons why productivity of knowledge workers is more difficult to measure
than productivity of industrial workers?
I. The quality of a knowledge worker’s output cannot be determined immediately.
II. 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.
(b) Both (III) and (IV) above
(c) (I), (II) and (IV) above
<An
94. Which of the following can be used in training high-potential employees to become effective leaders?
I. 360 degree feedback.
II. Organization culture workshops.
III. List of dos’ and don’ts.
IV. Community empathy.
(a) Only (II) above
(c) Both (II) and (IV) above
(d) (I), (II) and (IV) above
<An
95. Team building is one of the intervention techniques used in organization development. Which of the
following are the aims of team building?
I. Setting goals or priorities.
II. Examining processes such as decision-making and communications.
III. Examining relationships among the people doing the work.
IV. Amassing power to outdo other teams.
(a) Both (I) and (IV) above
(b) Both (II) and (III) above
<An
96. Which of the following is not true about a comprehensive interview?
(a) The unstructured interview yields more valid data than a structured interview
(b) The structured interview is useful if a large number of candidates have to be interviewed
(c) In an unstructured interview the candidate is allowed to talk freely on general questions
(d) Structured interviews are mechanical and may convey disinterest to the candidate
(e) Structured interviews do not allow the interviewer to probe interesting or unusual issues that
may arise during the interview.
<An
97. Which of the following is/are steps involved in the enterprise self audit?
I. Study the outlook of the industry in which the firm is operating.
II. Appraise the position of the firm.
III. Re-examine the basic objectives and major policies of the firm.
IV. Take the opinion of an outside firm.
(a) Only (II) above
<An
98. Which of the following statements about revenue centers is/are true?
10/23/2007
I. Sales and marketing departments are examples of revenue centers.

II. In revenue centers, outputs are measured in monetary terms and directly compared with input
costs.
III. A revenue center cannot be responsible for changes in profit levels.
(a) Only (II) above
(b) Only (III) above
<An
99. Which of the following statements is/are true about certified management audit?
I. It appraises an organization’s position – where it is, where it is heading, whether objectives are
met, whether revision of plans is required.
II. The responsibility of conducting a certified management audit lies with individuals within the
organization who have sufficient knowledge.
III. It takes a longer time to carry out than an accounting audit.
IV. It requires objective standards that should be applied impartially.
(a) Only (I) above
<An
100.Which of the following statements is/are true with respect to asset management ratios?
I. They are a test of the relationship between sales and various assets of a firm.
II. They are also called activity ratios.
III. A higher percentage indicates that a higher investment is needed in assets and the profitability is
lower.
(a) Only (I) above
(b) Only (II) above
(d) Both (I) and (II) above
10/23/2007
Suggested Answers
Introduction to Management - II (MB112): October 2007
1. Answer : (a) < TOP >
Reason : In an information system, hardware refers to the physical equipment that is used to
input, store and retrieve data.
Reason : According to Maslow’s ‘Needs Hierarchy’ theory, basic needs such as food, clothing
and shelter can be referred to as physiological needs.
Reason : Theory X is a theory proposed by Douglas McGregor, that has a pessimistic and rigid
view of human nature
Reason : Human resource planning is the process of determining future human resource needs
according to an organization’s strategic plan and devising the steps necessary to fulfill
these needs.
5. Answer : (d) < TOP >
Reason : Because of the success people such as Ramalinga Raju of Satyam Computers and
Narayana Murthy of Infosys attained within a short period of time by establishing new
companies, they can be called as entrepreneurs.
6. Answer : (b) < TOP >
Reason : In Alderfer’s ERG theory, ERG stands for ‘existence-relatedness-growth’.
7. Answer : (e) < TOP >
Reason : The first stage in a corporation’s multinationalization is when the corporation exports
its products.
Reason: Management by walking around (MBWA) is based primarily on personal observation.
Hence, option (e) is correct.
Reason: The conflict resolution technique of forcing involves thrusting one's own view on
others.
10. Answer : (c) < TOP >
Reason : Creativity is the ability to develop new ideas and is a function of knowledge,
imagination, and evaluation.
Reason : Peer assessment involves employees working at the same organizational level rating
their co-workers
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.
Reason : The interview, as a selection device, is most useful for selecting persons to managerial
jobs, such as the job of a Bank Manager.
Hence, option (d) is correct.
Reason : Kanban is a subsystem of the just-in-time approach and involves the use of cards and
containers to move parts and components from one work area to another.
Reason : A leader who emphasizes the technical aspects of the job and is concerned with
accomplishing the group’s tasks is said to be production-oriented, according to the
University of Michigan studies.
Reason : Motivation is an individual’s inner state that causes him/her to behave in such a way
as to ensure accomplishment of a goal.
10/23/2007

Reason : Fiedler’s position power refers to the influence of a leader’s position that enables him
to get group members to obey instructions.
Reason : Appearance is a physical trait, not a personality trait.
Reason : The information attribute which tells whether the information pertains to the situation
at hand or not, is known as Information Relevance.
Hence, option (c) is correct.
Reason : In job rotation managers are rotated through various types of jobs. As part of the job
rotation process, managers taken on non-supervisory work, observation assignments,
and managerial training positions.
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.
Reason : Brainstorming is not a phase of the creativity process.
Reason : According to path-goal theory, participative leadership style involves consulting with
subordinates, encouraging their suggestions, and carefully considering their ideas
when making decisions. It can result in increased motivation. So, (c) is correct
answer.
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.
Reason : Charismatic leadership theory states that followers make attributions of heroic or
extraordinary leadership abilities when they observe certain behaviors.
Reason : Reduction in overall organizational productivity is not an example of personal loss
that organization members fear as a result of change.
Reason : The steps in formulating a career strategy are as follows:
(i) Preparation of a personal profile.
(ii) Development of long-range personal and professional goals.
(iii) Analysis of the environment.
(iv) Analysis of Personal Strengths and Weaknesses.
(v) Development of Strategic Career Alternatives.
(vi) Consistency Testing and Strategic Choices.
(vii) Development of short-range career objectives and action plans.
(viii) Development of contingency plans.
(ix) Implementation of the Career Plan.
(x) Monitoring Progress.
Hence, option (b) is correct.
10/23/2007

Reason: A Funds Flow statement is a statement of sources and uses of funds for a definite
period between two dates.
Reason : A manager who re-designs the jobs of her subordinates so that they include a better
chance for personal growth is using job enrichment, which is defined as a job design
approach that upgrades the job-task mix in order to increase significantly the potential
for growth, achievement, responsibility and recognition. Job analysis is defined as a
systematic collection and recording of information concerning the purpose of a job, its
major duties etc. Job description is a statement of duties, working conditions and other
significant requirements associated with a particular job. Job rotation is a job design
approach that involves periodically shifting workers through a set of jobs in a planned
sequence.
Reason : Feedback returns the message to the sender and provides a check on whether
understanding has been achieved.
Reason : Work Sampling Test is used as a means of measuring practical ability on a specific
job. The applicant completes some job activity under structured conditions.
Reason : A PERT network depicts the sequence of activities needed to complete a project and
the time or costs associated with each activity.
Reason : Skills inventory is a computerized database containing basic information about each
employee that can be used to assess the likely availability of individuals for meeting
current and future human resource needs. Thus it is used in forecasting manpower
supply. (a) Forecasting manpower demand implies assessing how many people with
what abilities the organization will need in the foreseeable future to remain in action.
(c) Replacement planning is a means of identifying potential candidates to fill specific
managerial positions. (d) Succession planning provides the organization with a well-
qualified pool of individuals from which top-level and middle level managers can be
selected in future. (e) Planning human resource actions is the matching of projected
human resource needs with projected availability of human resources.
Reason : In team management, there is high concern for both production and employee morale
and satisfaction. 'Team Managers' believe that concern for people and for tasks are
compatible. They believe that tasks need to be carefully explained and decisions
endorsed by subordinates to achieve a high level of commitment.
Reason : Lewin found that work quality and group satisfaction were highest under democratic
leadership style.
Reason : Kacho refers to a manager whose task is not only to supervise people at work but also
to show fatherly concern for their subordinate’s private life.
Reason : For an information system to be effective, it should provide both internal and external
information that is timely and accurate.
Reason : Process consultation intervention technique is concerned with the interpersonal
relations and dynamics operating in work groups.
Reason : The following are motivational techniques:
II. Rewards.
III. Employee participation.
10/23/2007
IV. Improving quality of work life.

Reason : Successful global management requires an attitude that is best described as geocentric.
It is an approach whereby executives believe that a global view is needed in both the
headquarters of the parent company and its various subsidiaries.
Reason : Feedback control is a control type based on timing that involves regulation exercised
after a product or service has been completed, to ensure that they meet the standards
necessary for the transformation process.
Reason : The term ‘quality circle’ refers to a work group that meets regularly to discuss,
investigate and correct quality problems.
Reason : As the future cannot be predicted with absolute accuracy, career plans are developed
in an environment of uncertainty. Hence, individuals should develop contingency
plans based on alternate assumptions.
Reason : In the operations research methodology, mathematical model construction precedes
the other steps.
Reason : Valence is the motivational component that refers to the preference of an individual
for a particular outcome.
Reason : In investment centers the control system examine the role of assets in generating profit
apart from measuring the monetary value of inputs and outputs.
Reason : The Economic Order Quantity (EOQ) is an inventory control method developed to
minimize ordering and holding costs, while avoiding stockout costs.
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, 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.
Reason : Leadership that guides and motivates followers in the direction of established goals by
clarifying role and task requirements is termed Transactional leadership.
Reason : Avoiding eye contact is not an effective listening technique. Effective listening
requires eye contact.
Hence, option (b) is not an effective listening technique.
Options (a), (c), (d) and (e) are all effective listening techniques.
Reason : Managers must develop methods of measurement to signal when deviations from
standards are occurring so that corrective action can be taken.
Reason : Inventory control system helps a manger to manage the inputs in such a way that they
(inputs) are available at right time, at right place and in the right quantity with
minimum cost of maintenance.
Reason : Graphic rating scales use a number of factors, including general behaviors and
characteristics on which employees are rated by superior. Superiors rate individuals on
each factor, using a scale that typically has about five grades. So, (d) is correct answer.
10/23/2007

Reason : Content theory of motivation focuses on analyzing what motivates people.
Reason : Results-oriented appraisal implies evaluating an individual based on actual job
performance.
Reason : 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; and let subordinates know where they stand with the boss.
Reason : Value engineering involves analyzing the operations of the product or service,
estimating the value of each operation, and modifying or improving the operation so
that the cost is reduced.
Reason : The following forces should be considered by managers while deciding which leader
behavior pattern to adopt:
I. Forces within themselves.
II. Forces within the situation.
III. Forces within subordinates.
Reason : Liquidity ratios are used to measure the ability of an organization to meet its short-
term obligations by using its current assets.
Reason : Debt ratio measures the percentage of total assets financed by debt (including current
liabilities). So, it tests how leveraged an organization is.
Reason : A manager exhibiting a lack of confidence or trust in subordinates, will be categorized
into System 1 (exploitative-authoritative) of Likert’s Management Systems.
Hence, option (a) is correct.
Reason : The Porter-Lawler model is a process theory of motivation.
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. Therefore,
the equity theory explains Vikas’s behavior.
Reason : Focusing on specific organizational activities will not be a barrier to successful
controlling, rather it will help in successful controlling.
Reason : Hersey and Blanchard’s model proposes that a leader should adjust his or her
leadership style in accordance with the readiness of followers.
Reason : Quality control system is are used by all levels of management
Reason : Preventive control is based on the idea that most of the negative deviations from
standards can be overcome by applying the fundamentals of management.
Reason : The trait theory is not a situational theory of leadership.
Reason : Making definitive changes is not an effective way to reduce resistance to change.
Hence, option (a) is correct.
10/23/2007
Options (b), (c), (d) and (e) are all effective ways to reduce resistance to change.
Reason : Duties to be performed are a part of job description.
Reason : Japanese companies tend to make decisions by consensus because it is a reflection of
the larger societal cultural value on groups.
Reason : The following are control techniques used to ensure effectiveness of a formal
performance appraisal system:
I. Developing suitable standards.
II. Ascertaining information needed through the source, schedule and method of
appraisal.
III. Taking corrective action.
Reason : The following are key elements of Herzberg’s two-factor theory of motivation:
I. Motivators.
II. Hygiene factors.
Reason : The following are models of management proposed by Raymond E. Miles:
I. Traditional model.
II. Human relations model.
III. Human resources model.
Reason : Grapevine is an integral part of organizational communication and hence cannot be
eliminated.
Reason : The following are advantages of a manager inventory chart:

I. It provides a clear idea about the present and future staffing situation of an
organization.
III. It helps to identify the employees who are not performing up to expectations so
that they can be trained or replaced.
Statement (II) is not an advantage as the chart does not show the position to which a
manager may be promoted. Statement (IV) is also not true as updating the chart is
time-consuming and requires a lot of effort.
Reason : An organizations choice of responsibility centers depends to a great extent on the
structure of the organization and not on its control mechanisms. Hence, statement (I) is
not true. Statements (II), (III) and (IV) are true about responsibility centers. Hence,
option (d) is the answer.
Reason : Controlling function is gaining importance in today’s organizations due to a number
of factors. It plays an important role in assisting managers with changes like coping
with uncertainty and detecting irregularities. Centralizing authority and avoiding
complex situations are not applicable.
Reason : Hazard analysis involves identification of preventive measures the manufacturing
units can adopt, to control food safety hazards that arise during processing.
Reason : In non-directive counseling, a manager should
a.Be attentive and friendly
b. Raise appropriate questions.
c.Be tactful and enable the employee to think through the problem clearly
d. Create an atmosphere of privacy to help the employee communicate freely
e.Be a patient listener to help the employee to express his emotions freely
f. Encourage the employee to examine his own ideas and do some introspection.
10/23/2007m
Reason : Operations Management oversees the transformation process that converts resources
such as labor and raw materials into finished goods and services.
Hence, option (c) is true regarding Operations Management.
Options (a), (b), (d) and (e) are all false regarding Operations Management.
Reason : Employees may react to information overload by
i) Filtering information
ii) Making processing errors
iii) Disregarding certain information
iv) Delaying information processing
v) Ignoring communication.
Reason : The following are characteristics exhibited by achievement-oriented people:
III. They take a realistic approach to risk.
IV. They have an intense desire for success.
Statement (I) holds good for affiliation oriented people. Statement (II) holds good for
power oriented people.
Reason : In the Japanese management style, the management function of leading is
characterized by
III. Common values.
V. Bottom-up communication.
In Japanese management the leader acts as a social facilitator and group member.
Hence, statement (I) is not characteristic of Japanese management.
In Japanese management, confrontation is avoided; emphasis is on harmony. Hence,
statement (IV) is also not a characteristic.
Both statements (I) and (IV) are characteristics of the US style of management.
Reason : Inventory plan is an output in the distribution logistics model. The remaining options
are inputs.
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.
Reason : To encourage formal organizational communication, managers should support the
flow of clear and concise statements through formal channels, ensure free access to
formal channels for all organization members, and assign specific communication
responsibilities to staff personnel.
Reason : An organization undertakes the following actions if manpower demand is high and
manpower supply is low:
III. Internal promotions.
IV. Training and development.
Hence, option (c) is the answer.
89. Answer : (d) <TOP>
Reason : Policies, procedures, and budgets are examples of feedforward control. Quality
inspections are examples of concurrent controls and balance sheets are examples of
feedback controls.
Reason : The following are the characteristics of the ‘leading’ function adopted in US
10/23/2007
Management style:
III. Often divergent values, individualism sometimes hindering cooperation.
V. Communication primarily top-down.
Statement (I) and (II) pertain to the Japanese management style as in the American
style the leader acting as a decision maker and head of the group and the management
style is directive in nature.
91. Answer : (b) <TOP>
Reason : Relocations/plant closings constitute a short range factor in resource demand
forecasting. Hence, option (b) is the answer.
92. Answer : (e) <TOP>
Reason : It does not form a separate component from the job is not a weakness of appraisal
against verifiable objectives.
93. Answer : (c) <TOP>
Reason : The following are reasons why productivity of knowledge workers is more difficult to
measure than productivity of industrial workers
I. The quality of a knowledge worker’s output cannot be determined immediately.
II. The output of a knowledge worker often contributes only indirectly to the
achievement of the end-result.
IV. Knowledge workers often assist other organizational units and this contribution
is difficult to measure.
Reason : The following can be used in training high-potential employees to become effective
leaders:
I. 360 degree feedback.
II. Organization culture workshops.
IV. Community empathy.
Reason : The following are the aims of team building:

I. Setting goals or priorities.
II. Examining processes such as decision-making and communications.
III. Examining relationships among the people doing the work.
96. Answer : (a) <TOP>
Reason : Structured interviews yield more valid data than unstructured interviews, therefore,
option (a) is the answer.
Reason : The following are steps involved in the enterprise self audit:
I. Study the outlook of the industry in which the firm is operating.
II. Appraise the position of the firm.
III. Re-examine the basic objectives and major policies of the firm.
Reason : The following statements about revenue centers are true:
I. Sales and marketing departments are examples of revenue centers.
III. A revenue center cannot be responsible for changes in profit levels.
Statement (II) is not true because in revenue centers, outputs are measured in monetary
terms but are not directly compared with input costs. Hence, option (d) is the answer.
99. Answer : (c) <TOP>
Reason : The following statements is/are true about certified management audit:
III. It takes a longer time to carry out than an accounting audit.
IV. It requires objective standards that should be applied impartially.
Statement (I) - it appraises an organization’s position – where it is, where it is heading,
whether objectives are met, whether revision of plans is required – refers to enterprise
self audit.
The responsibility of conducting a certified management audit should be given to an
10/23/2007
external firm that individuals with sufficient knowledge. Hence statement (II) is not
true about certified management audit.
Reason : The following statements are true with respect to asset management ratios:
I. They are a test of the relationship between sales and various assets of a firm.
II. They are also called activity ratios.
III. A higher percentage indicates that a lesser investment is needed in assets and the
profitability is better. Hence statement (III) is not true.
< TOP OF THE DOCUMENT >
10/23/2007

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Suggested Answers with Examiner's Feedback Page 1 of 23

(c) Management by whims alone

(a) Leader-member relations

(d) Autocratic leadership

(a) Concurrent control

(b) Vroom Yetten model

(a) Only (I) above

(b) Identifying control points

(e) Inventory plan.

I. Sales and marketing departments are examples of revenue centers.

17. Answer : (b) < TOP >

28. Answer : (c) < TOP >

IV. Improving quality of work life.

54. Answer : (d) < TOP >

Reason : The following are advantages of a manager inventory chart:

Reason : The following are the aims of team building:

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