Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
Yes, decentralisation is an optional policy, yet it is important in the organisation. It refers to systematic delegation of authority at all levels of management and in all departments of organisation to take decisions.
An organisation should choose to be decentralised because of its following importance:
1. Develops initiative among subordinates: It helps to promote self-reliance and confidence amongst the subordinates. This is because, lower managerial levels have been given freedom to make their own decisions and they learn to depend on their own judgement. It also helps to identify those executives, who have the potential to become dynamic leaders.
2. Develops managerial talent for the future: Formal training along with experience of handling independent assignments helps to create a reservoir of qualified and capable managers, who can take up more challenging positions in the upcoming ventures of the organisation.
3. Quick Decision-making: Under decentralisation, authority to make decisions is placed in the hands of those, who are responsible for executing the decisions. Since decisions are taken at levels nearest to the point of execution, there is no delay or distortion of information.
4. Relief to top management: It helps to reduce the amount of direct supervision over subordinates by giving them freedom to take decisions and act on their own. This reduces the workload of top executives and they can devote their time and attention to important policy matters.
5. Facilitates Growth: It provides greater autonomy to lower level managers and departmental heads. This encourages them to function more efficiently to prove their supremacy, and facilitate expansion and growth of the organisation.
6. Better Control: It makes it possible to evaluate performance at each level and make the departments accountable for their own results. Feedback is quick and leads to better control.
What are the steps taken by management in the planning process?
Why is management considered to be a multi-dimensional concept?
Explain the procedure for selection of employees.
How would you characterize the business environment? Explain with examples, the difference between general and specific environment.
Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure a cost saving of Rs 12, 00,000 per year. Name the objectives of management achieved by Indian Railways in the above case.
The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India after the announcement.
This step resulted in a substantial increase in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.
a. Enumerate the dimensions of the business environment highlighted above.
b. State the features of Demonetization.
Define scientific management. State any three of its principles.
Explain the qualities of a good leader? Do the qualities alone ensure leadership success?
Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.
Management is a series of continuous interrelated functions. Comment.
Explain the qualities of a good leader? Do the qualities alone ensure leadership success?
“Money Market is essentially a Market for short term funds.” Discuss.
What are various ways in which the objective of consumer protection can be achieved?
Product is a bundle of utilities. Explain.
Aval Ltd. is engaged in the business of export of canvas goods and bags. In the past, the performance of the company had been upto the expectations. In line with the latest demand in the market, the company decided to venture into leather goods for which it required specialised machinery. For this, the Finance Manager Prabhu prepared a financial blueprint of the organisation’s future operations to estimate the amount of funds required and the timings with the objective to ensure that enough funds are available at right time. He also collected the relevant data about the profit estimates in the coming years. By doing this, he wanted to be sure about the availability of funds from the internal sources of the business. For the remaining funds, he is trying to find out alternative sources from outside.
a. Identify the financial concept discussed in the above paragraph. Also, state the objectives to be achieved by the use of financial concept so identified. ( Financial Planning).
b. ‘There is no restriction on payment of dividend by a company’. Comment. ( Legal & Contractual Constraints)
State any two reasons why investing public can expect a safe and fair deal in the stock market. (Point w.r.t safety of Transactions – Functions of the Stock Exchange).
Sunrises Ltd. dealing in readymade garments, is planning to expand its business operations in order to cater to international market. For this purpose the company needs additional ₹ 80,00,000 for replacing machines with modern machinery of higher production capacity. The company wishes to raise the required funds by issuing debentures. The debt can be issued at an estimated cost of 10%. The EBIT for the previous year of the company was ₹ 8,00,000 and total capital investment was ₹ 1,00,00,000. Suggest whether issue of debenture would be considered a rational decision by the company. Give reason to justify your answer. (Ans. No, Cost of Debt (10%) is more than ROI which is 8%).
(Further information related to the above question 6) The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management consultant -Mukti Consultants - to recommend a restructure plan to bring the company back on the rails. Mukti Consultants undertook a study of the production process at the plant of the company Bhasin Limited and recommended the following changes —
• The company should introduce scientific management with regard to production.
• Production Planning including routing, scheduling, dispatching and feedback should be implemented.
• In order to separate planning from operational management ’Functional foremanship’ should be introduced.
• ‘Work study’ should be undertaken to optimise the use of resources.
• ‘Standardisation’ of all activities should be implemented to increase efficiency and accountability.
• To motivate the workers ‘Differential Piece Rate System’ should be implemented.
(The above changes should be introduced apart from the steps recommended as an answer to Part c - case problem 6 above.) It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.
a. Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome?
b. What precautions should the company undertake to implement the changes?
c. Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.
‘An effort to control everything may end up in controlling nothing.’ Explain.
Identify and state the force that binds all the other functions of management.