IGNOU FREE SOLVED ASSIGNMENT: ECO - 03 MANAGEMENT THEORY (2019 - 2020) | IGNOU B.COM SOLVED ASSIGNMENTS

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As explained in the Programme Guide, you have to do one Tutor Marked Assignment in this Course.

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Ans: Human resource is of paramount importance for the success of any organization. It is a source of strength and aid. Human resources are the wealth of an organization which can help it in achieving its goals. Human resources management is concerned with the human beings in an organization. It reflects a new outlook which views organization’s manpower as its resources and assets. Human resource is the total knowledge, abilities, skills, talents and aptitudes of an organization’s work force. The values, ethics, beliefs of the individuals working in an organization also form a part of human resource. The resourcefulness of various categories of people and other people available to the organization can be treated as human resources. In the present complex environment no business or organization can exist and grow without appropriate human resources. So human resources has become the focus of attention of every progressive organization.

Human resource is a resource like any other natural resource. It meant that management can get and use the skill, knowledge, ability, etc. through the development of skills, tapping and utilizing them again and again. Human resource is that process of management which develops and manages the human elements of enterprise. It is not only the management of skills but also the attitudes and aspirations of people. When individuals come to work place, they come with not only technical skills, knowledge, experience etc. but also with their personal feelings, perceptions, desires, motives, attitude, values etc. So HRM will mean management of various aspects of human resources. An important element of human resource management is the ‘human approach’ while managing people. This approach helps a manager to view his people as an important resource. It is an approach in which manpower resources are developed not only to help the organization in achieving its goals but also to the self satisfaction of the concerned person. This approach focuses on human resource development, on the one hand, and effective management of people on the other. HRM approach is a fundamental change in philosophy and perspective from the earlier thinking about manpower resources. It emphasizes the human aspect of individual workers and their aspirations and needs. From the above discussion we can say that there is no more important resource than human resource

Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the organization. When more persons apply for job then there will be a scope for recruiting better persons. The job-seekers too on the other hand, are in search of organizations offering them employment. Recruitment is a linkage activity bringing together those with jobs and those seeking jobs.

Sources of Recruitment: The finding out where suitable candidates are available and informing them about the openings in the organization is the most important aspect of recruitment process. The candidates may be available inside the organization as well outsider it. Recruitment sources can be described as: internal and external sources.

A. Internal Sources: Internal source is one of the important sources of recruitment the employees already working in the organization may be more suitable for higher jobs than those recruited from outside. The present employees may help in the recruitment of new persons also internal sources are discussed as follows:

1.       Transfers: Transfer involves shifting of persons from present jobs to other similar places. These don't involve any change in rank, responsibility and prestige. The numbers of persons don't increase with transfer but vacant posts may be attended to.

2.       Promotions: Promotions refers to shifting of persons to positions carrying better prestige, higher responsibilities and more salaries. The higher positions falling vacant may be filled up from within the organization. A promotion doesn't increase the number of persons in the organization. A person going to get a higher position will vacate his present position. Promotion avenues motivate employees to improve their performance so that they get promotions to higher position.

3.       Present Employees: The present employees of an enterprise may be informed about likely vacant position. The employees recommend their relations or persons intimately known to them. Management is relieved of botheration for looking out prospective candidates. The persons recommended by the employees will be suitable for the job because they know the needs & requirement of various positions. The existing employees take full responsibility for those recommended by them and try to ensure their proper behavior and performance. This method of recruiting employees is suitable for lower position only. It may create nepotism and favoritism. The workers may be employees on the basis of their recommendations and not suitability.

a)      It creates a sense of security among employees when they are assured that they would be preferred in filling up vacancies.

b)      It improves the morale of employees, for they are assured of the fact that they would be preferred over outsiders when vacancies occur.

c)       It promotes loyalty and commitment among employees due to sense of job security and opportunities for advancement.

d)      The employer is in a better position to evaluate those presently employed than outside candidates.

e)      This is because the company maintains a record of the progress, experience and service of its employees.

f)       Time and costs of training will be low because employees remain familiar with the organisation and its policies.

g)      Relations with trade unions remain good. Labour turnover is reduced.

h)      As the persons in the employment of the company are fully aware of, and well acquainted wit, its policies and know its operating procedures, they require little training, and the chances are that they would stay longer in the employment of the organisation than a new outsider would.

i)        It encourages self-development among the employees. It encourages good individuals who are ambitious.

j)        It encourages stability from continuity of employment.

k)      It can also act as a training device for developing middle and top-level managers.

1.       Recruitment of internals leads to inbreeding and discourages new blood with new ideas from entering into the organization.

2.       It is possible that internal sources ultimately dry up and hence it may be difficult to find suitable persons from within the organization.

3.       In case of certain jobs such as advertising, style, designing, basic research etc recruitment from within is not desirable.

4.       As promotion is based on seniority, the danger is that really capable hands may not be chosen. The likes and dislikes of the management may also play an important role in the selection of personnel.

5.       Since the learner does not know more than the lecturer, no innovations worth the name can be made. Therefore, on jobs which require original thinking, this practice is not followed.

6.       Generally for middle level managers internal source is rarely used, however for promoting blue collar workers to white collar jobs internal source is more desirable.

B. External Sources: Every enterprise has to use external sources for recruitment to higher positions when existing employees are not suitable. More person are needed when expansion are undertaken. External methods are discussed as follows.

Advertisement: Advertisement is the best method of recruiting persons for higher and experienced jobs. The advertisements are given in local or national press, trade or professional journals. The requirements of jobs are given in the advertisement. The prospective candidates evaluate themselves against the requirement of jobs before sending their applications. Management gets a wider range of candidates for selection. The flood of applications may create difficulties in the process.

Employment Exchanges: Employment Exchanges run by the government are also a good source of recruitment. Unemployed persons get themselves registered with these exchanges. The vacancies may be notified with the exchanges, whenever there is a need. The exchange supplies a list of candidates fulfilling required qualification. Exchanges are a suitable source of recruitment for filling unskilled, semi-skilled, skilled and operative posts.

Education Institutions: The jobs in trade and industry are becoming technical and complex. These jobs require certain amount of educational and technical qualifications. The employers maintain a close liaison with universities and technical institutions. The students are spotted during the course of their studies. Junior level, executives or managerial may be recruited in this way.

Unsolicited Applicants: Persons in search of employment may contact employers through telephone, by post or in person. Generally, employers with good reputation get unsolicited applications. If an opening is there or is likely to be there then these persons are considered for such jobs. Personnel department may maintain a record of unsolicited applications. When jobs suitable for these persons are available these persons are available these are considered for employment.

Casual Callers: Management may appoint persons who casually call on them for meeting short-term demands. This will avoid following a regular procedure of selection. These persons are appointed for short periods only. They need not be paid retrenchment or layoff allowance. This method of recruitment is economical because management does not incur a liability in pensions, insurance and fringe benefits.

Labour Contractors: It is quite common to engage contractors for the supply of labour. When workers are required for short period and are hired without going through the full procedure of selection etc.., contractors maintain regular contracts with works at their places and also bring them to the cities at their own expense. The persons hired under this system are generally unskilled workers.

Labour Unions: Labour unions are one of the sources of external recruitment. The job seekers are required to register with labour unions, & the labour unions are require to supply the names of persons for filing the vacancies. This method may encourage good co-operation between business firms and labour unions, active participation of persons in labour unions, the development of leadership qualities in workers, etc.,

Consulting Agencies: Consulting agencies are one of the important sources of recruitment, especially for big companies. Consulting agencies are specialised agencies which recruit people on behalf of their clients. They invite application for jobs specified by their clients from job seekers through advertisements, screen the application, interview the candidates and select the suitable candidate. They do these services for their clients for some Fees.

Educational Institutions: Universities, Colleges & Management institute are also one of the sources of recruitment of personnel, particularly for the posts of Scientists, Engineers & Management specialist. They have there own employment bureaus to help business organizations in recruiting the students for various jobs.

Present Employees: Present Employees are also one of the sources of recruitment of personnel. The present employees of the concern are asked by the management to recommend suitable persons for employment in the concern.

1.       It will help in bringing new ideas, better techniques and improved methods to the organisation.

2.       The cost of employees will be minimised because candidates selected in this method will be placed in the minimum pay scale.

3.       The existing employees will also broaden their personality.

4.       The entry of qualitative persons from outside will be in the interest of the organisation in the long run.

5.       The suitable candidates with skill, talent, knowledge are available from external sources.

6.       The entry of new persons with varied expansion and talent will help in human resource mix.

1.       Orientation and training are required as the employees remain unfamiliar with the organisation.

2.       It is more expensive and time-consuming. Detailed screening is necessary as very little is known about the candidate.

3.       If new entrant fails to adjust himself to the working in the enterprise, it means yet more expenditure on looking for his replacement.

4.       Motivation, morale and loyalty of existing staff are affected, if higher level jobs are filled from external sources. It becomes a source of heart-burning and demoralisation among existing employees.

Ans: SPAN OF MANAGEMENT OR SPAN OF CONTROL

In the words of Spriegal, "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single executive should have more people looking to him for guidance and leadership than he can reasonably be expected to serve. The span of supervision is also known as span of control, span of management, span of responsibility, span of authority and span of direction.

                There are number of factors that influence or determine the span of Management in a particular organisation, the most important of these are as follows:

1.       The capacity and ability of the executive: The characteristics and abilities such as leadership, administrative capabilities; ability to communicate, to judge, to listen, to guide and inspire, physical vigour, etc. differ from person to person. A person having better abilities can manage effectively a large number of subordinates as compared to the one who has lesser capabilities.

2.       Competence and training of subordinates: Subordinates who are skilled, efficient, knowledgeable, trained and competent require less supervision, and therefore, the supervisor may have a wider span in such cases as compared to inexperienced and untrained subordinates who requires greater supervision.

3.       Nature of Work: Nature and importance of work to be supervised is another factor that influences the span of supervision. The work involving routine, repetitive, unskilled and standardized operations will not call much attention and time on the part of the supervisor.

4.       Time available for supervision: The capacity of a person to supervise and control a large number of persons is also limited on account of time available at his disposal to supervise them. The span of control would be generally narrow at the higher level of management because top manager have to spend their major time on planning, organising, directing and controlling and the time available at their disposal for supervision will be less.

5.       Degree of Decentralization and Extent of Delegation: If a manager clearly delegates authority to undertake a well-defined task, a well trained subordinate can do it with a minimum of supervisor's time and attention.

6.       Effectiveness of communication system: Faulty communication puts a heavy burden on manager's time and reduces the span of control.

7.       Quality of Planning: Effective planning helps to reduce frequent calls on the superior for explanation, instructions and guidance and thereby saves in time available at the disposal of the superior enabling him to have a wider span.

8.       Degree of Physical Dispersion: If all persons to be supervised are located at the same place and within the direct supervision of the manager, he can supervise relatively more people as compared to the one who has to supervise people located at different places.

9.       Assistance of Experts: the span of supervision may be wide where the services of experts are available to the subordinate on various aspects of work. In case such services are not provided in the organisation, the supervisor has to spend a lot of time in providing assistance to the workers himself and a such the span of control would be narrow.

3. Briefly explain the evolution of different management theories.                       (20)

Ans: Evolution of management thoughts

The practice of management is as old as human civilization. The ancient civilizations of Egypt (the great pyramids), Greece (leadership and war tactics of Alexander the great) and Rome displayed the marvelous results of good management practices. The origin of management as a discipline was developed in the late 19th century. Over time, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and disseminated. These attempts at classification have resulted in the identification of management approaches. The approaches of management are theoretical frameworks for the study of management. Each of the approaches of management are based on somewhat different assumptions about human beings and the organisations for which they work. The different approaches of management are:

a) THE CLASSICAL APPROACH: The classical approach is the oldest formal approach of management thought. Its roots pre-date the twentieth century. The classical approach of thought generally concerns ways to manage work and organisations more efficiently. Three areas of study that can be grouped under the classical approach are scientific management, administrative management, and bureaucratic management.

(i) Scientific Management: Frederick Winslow Taylor is known as the father of scientific management. Scientific management (also called Taylorism or the Taylor system) is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity. In other words, Traditional rules of thumb are replaced by precise procedures developed after careful study of an individual at work.

(ii) Administrative Management: Administrative management focuses on the management process and principles of management. In contrast to scientific management, which deals largely with jobs and work at the individual level of analysis, administrative management provides a more general theory of management. Henri Fayol is the major contributor to this approach of management thought.

(iii) Bureaucratic Management: Bureaucratic management focuses on the ideal form of organisation. Max Weber was the major contributor to bureaucratic management. Based on observation, Weber concluded that many early organisations were inefficiently managed, with decisions based on personal relationships and loyalty. He proposed that a form of organisation, called a bureaucracy, characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more efficient management. Weber also contended that managers' authority in an organisation should be based not on tradition or charisma but on the position held by managers in the organisational hierarchy.

b) Neo-classical approach: It can be studied under the following headings:

a) THE BEHAVIORAL Or SITUATIONAL APPROACH: The behavioral approach of management thought developed, in part, because of perceived weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency, process, and principles. Some felt that this emphasis disregarded important aspects of organisational life, particularly as it related to human behavior. Thus, the behavioral approach focused on trying to understand the factors that affect human behavior at work.

(i) Human Relations: The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of researchers participated in the studies, including Elton Mayo. One of the major conclusions of the Hawthorne studies was that workers' attitudes are associated with productivity. Another was that the workplace is a social system and informal group influence could exert a powerful effect on individual behavior. A third was that the style of supervision is an important factor in increasing workers' job satisfaction.

(ii) Behavioral Science: Behavioral science and the study of organisational behavior emerged in the 1950s and 1960s. The behavioral science approach was a natural progression of the human relations movement. It focused on applying conceptual and analytical tools to the problem of understanding and predicting behavior in the workplace. The behavioral science approach has contributed to the study of management through its focus on personality, attitudes, values, motivation, group behavior, leadership, communication, and conflict, among other issues.

b) THE QUANTITATIVE APPROACH: The quantitative approach focuses on improving decision making via the application of quantitative techniques. Its roots can be traced back to scientific management.

(i) Management Science: Management science (also called operations research) uses mathematical and statistical approaches to solve management problems. It developed during World War II as strategists tried to apply scientific knowledge and methods to the complex problems of war. Industry began to apply management science after the war. The advent of the computer made many management science tools and concepts more practical for industry

 (ii) Production And Operations Management: This approach focuses on the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an identifiable area of management study after World War II. It uses many of the tools of management science. Operations management emphasizes productivity and quality of both manufacturing and service organisations. W. Edwards Deming exerted a tremendous influence in shaping modern ideas about improving productivity and quality. Major areas of study within operations management include capacity planning, facilities location, facilities layout, materials requirement planning, scheduling, purchasing and inventory control, quality control, computer integrated manufacturing, just-in-time inventory systems, and flexible manufacturing systems.

c) SYSTEMS APPROACH: The systems approach focuses on understanding the organisation as an open system that transforms inputs into outputs. The systems approach began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems approach focuses on the organisation as a whole, its interaction with the environment, and its need to achieve equilibrium.

In simple words, a system may be defined as a set a interrelated and interdependent parts forming an organized unit or entity. These parts are known as sub-systems which interact with each other and are subject to change. They are interrelated as well as interdependent. Hence, changes in any sub-system lead to changes in others.

d) CONTINGENCY APPROACH: The contingency approach focuses on applying management principles and processes as dictated by the unique characteristics of each situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organisational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize the classical approach for its emphasis on the universality of management principles; however, most classical writers recognized the need to consider aspects of the situation when applying management principles.

 Ans: Basic differences between strategic planning and tactical planning:

Despite their differences, tactical and strategic planning are integrally related. Manager need both tactical and strategic planning program, and these program must be closely related to be successful.

a)      Line organisation is a simple form of organisation. But functional organisations are complicated.

b)      In the case of the line organisation, there is clear-cut line of authority but in case of functional organisation, there is no clear-cut line of authority .

c)       In the case of line organisation, there is clear-cut responsibility .In the case of functional organisation, there is clear-cut responsibility for the line officers, but staff officers do not have any responsibility.

d)      Because of clear-cut line authority, there is unity of command in the case of line organisation. There is no unity of command in the case of functional organisation, as a worker has to take instructions from several authorities.

e)      In the case of line organisation, there is flexibility in the sense that quick decisions and prompt actions can be taken to adjust to changing situations because of the existence of full authority. Functional organisation is rigid and inflexible.

f)       Strict discipline is enforced in the case of line organisation. In the case of functional organisation, enforcement of discipline is difficult because of lack of unity of command.

g)      Line organisation is suitable for small enterprises, trading as well as industrial. Functional organisation is suitable for large industrial enterprises.

1. Meaning:  Maslow's theory is based on the concept of human needs and their satisfaction.

Hertzberg's theory is based on the use of motivators which include achievement, recognition and opportunity for growth.

2. Basis of Theory: Maslow's theory is based on the hierarchy of human needs. He identified five sets of human needs (on priority basis) and their satisfaction in motivating employees.

Hertzberg refers to hygiene factors and motivating factors in his theory. Hygiene factors are dissatisfies while motivating factors motivate subordinates. Hierarchical arrangement of needs is not given.

3. Nature of Theory: Maslow's theory is rather simple and descriptive. The theory is based long experience about human needs.

Hertzberg's theory is more prescriptive. It suggests the motivating factors which can be used effectively. This theory is based on actual information collected by Hertzberg by interviewing 200 engineers and accountants.

4. Applicability of Theory: Maslow's theory is most popular and widely cited theory of motivation and has wide applicability. It is mostly applicable to poor and developing countries where money is still a big motivating factor.

Herzberg's theory is an extension of Maslow's theory of motivation. Its applicability is narrow. It is applicable to rich and developed countries where money is less important motivating factor.

5. Descriptive or Prescriptive: Maslow's theory or model is descriptive in nature.

Herzberg's theory or model is prescriptive in nature.

6. Motivators: According to Maslow's model, any need can act as motivator provided it is not satisfied or relatively less satisfied.

In the dual factor model of Hertzberg, hygiene factors (lower level needs) do not act as motivators. Only the higher order needs (achievement, recognition, challenging work) act as motivators.

Ans: Every enterprise has a number of policies. Some of these types are discussed as follows:

Ans: Organisation manual is a book which contains the information relating positions, authorities and responsibility, salaries, relationship, duties and functions of various employees of the organisation. The organizational manual describes the organization structure. The duties and responsibilities of each employee in department wise or section wise or division wise are also explained along with the line of Authority and responsibilities connected with them. Each employee can understand the relationship with others. Sometimes, a separate manual is prepared for each department in case of multinational corporations.

Advantages of Organisational Manuals

1. It defines the organisational relationships and draw a picture of the structure which is useful for understanding the organisation as a whole.

2. They are very useful in instructing new personnel on company organisation.

Disadvantages of organisational Manuals

1. Business is a dynamic organisation but the charts and manuals are static in nature. Because of this, they become outdated very soon. Management may incorporate the relevant changes in charts and manuals. But this can be done long after the change has taken place.

2. They tend to make people overconscious of being superiors and inferiors. This may destroy team spirit and encourage red-tapism.

Ans: The following are the principles of delegation:

Ans: A number of techniques or tools are used for the purpose of managerial control. Some of the techniques are used for the control of the overall performance of the organisation, and some are used for controlling specific areas or aspects like costs, sales, etc. The various techniques of control can be classified into categories, viz.,

a.      Budgetary Control: Budgetary control is the system of management control and accounting in which all operations are forecasted and so far as possible planned ahead, and the actual results compared with the forecasted and planned ones.

b.      Standard Costing: Standard cost is a pre-determined cost which is calculated from management’s standards of efficient operation and the relevant necessary expenditure.

c.       Break-even Analysis or Cost-Volume-Profit Analysis: Cost-Volume-Profit Analysis or Break-even Analysis is the study of the interrelationship between the cost (i.e., cost of production), volume (i.e., the volume of production and sales), the prices and the sales value, and the profits. In other words, it is the study of the inter-relationship between the cost (i.e., cost of production), volume (i.e., volume of production and sales), prices (i.e., selling prices) and profits.

d.      Inventory Control: Inventory is the stock of raw materials, work-in-progress, finished goods, consumable stores and spare parts and components at any given point to time. So, inventory control means control over different items of inventory or stock. “It is defined as physical control of stock items and implementing the principles and policies relating thereto”.

a.      Financial Statement Analysis: Financial statements are a means of managerial control. They can be used by the management for measuring and controlling the profitability, liquidity and the financial position of the business. By comparing the financial statement of the current year with those of the previous years and also by comparing the financial statement of their concern with those of other concerns engaged in the same industry.

b.      Return on Investment Control: Profits are the measure of overall efficiency of business. Profit earned in relation to the capital employed in a business is an important control device. ROI is used to measure the overall efficiency of a concern. It reveals how well the resources of a concern are used, higher the return better are the results.

c.       Management Audit: Management audit is an investigation by an independent organisation to find out whether the management is carried out most effectively or not. In case there are drawbacks at any level then recommendations should be given to improve managerial efficiency.

d.      Human Resources Accounting: The American Accounting Association has defined human resources accounting as “the process of identifying and measuring data about human resources and communicating this information to interested parties”.