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Darshan Institute of Engineering & Technology

150001 – Management – II Top 20 Questions Solutions

Darshan Institute of Engineering & Technology, Rajkot Page 1

1) Explain the importance of demand forecasting. State the features of a good demand forecasting method.

Importance of demand forecasting:

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase.

Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets.

Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market.

Often forecasting demand is confused with forecasting sales. But, failing to forecast demand ignores two important phenomena.

There is a lot of debate in demand-planning literature about how to measure and represent historical demand, since the historical demand forms the basis of forecasting.

The main question is whether we should use the history of outbound shipments or customer orders or a combination of the two as proxy for the demand.

Features of a good demand forecasting method:

The Qualitative forecasting helps in determining the quality things of the company that is the image of the company, demand situation of the company, customer satisfaction or the goodwill of the company.

The quantitative type of forecasting includes the things which can be measured for example what is the profit of the company, increase in demand, increase in customer etc.

It provides a clear picture of current and ongoing levels of sales force performance and satisfaction. With the success of this there was also increase in the sales volume of the company.

Many new ideas and products are successful because their creators identify an need in the market and verified the viability of that concept.

The time and money are extremely valuable to the company and cannot afford to waste them by investing them in producing a product or service that fails in the target market.

The more the company test the product the product before selling the more likely can increase the sales and earn profit.

http://en.wikipedia.org/wiki/Pricing

http://en.wikipedia.org/wiki/Market_entry




2) Discuss various bases for segmentation of business market. (i) Basis for Market Segmentation of Consumer Products:

1. Demographic Segmentation:

a) Gender: some products are segmented according to the gender. b) Age & Life Cycle Stage: tastes and preferences keep on changing with age and

life cycle-stage. Toys, Games, etc. c) Income and Social Class: tastes and preferences change with social class as

well. E.g. Cars, Bikes, Cloths, Shoes, etc. d) Generation: The new generation is tech-savvy and analyzes a product based on

the features and then makes a decision to buy the product.

2. Geographic Segmentation: Dividing the market according to geographical areas such as countries, states, cities, regions and zones is called as geographic segmentation. The company may either introduce customized product for the region or they may




have slight adjustment in the standard product. E.g. Times of India gives Rajkot, Rajkot Plus.

3. Psychographic Segmentation: a) Life style: lifestyle is a very important parameter which affects the buying

behavior of individuals. Based on the work one does, the need also changes. b) Values: Marketers use beliefs and values to determine the buying behavior of a

group of people. E.g. McDonalds’ introduce Mc’ Aloo Tikki in India & then Non-vegetarian burges.

c) Personality: The personality traits such as masculinity, sportsmanship, aggression form an important buying motivator.

E.g. Sporty person attracted to sports bike, Axe, Wild stone, etc.

4. Behavioral Segmentation: a) Benefits: Consumer market is segmented based on the benefits that the

customers seek from a product. E.g. Liril soap for freshness, Cinthol soap for anti body, Dettol soap for germs free, etc. b) Occasion: Markers can also be classified based on the occasions on which the

product is used. E.g. Archie’s & Hallmark cards for Valentine day, Mother’s day, New Year, etc. c) Usage Rate: Products are used by users with varying frequency of usage. Those

who use the product rarely, intermittently or regularly. d) Attitude: of the customers is also important factor in behavioral segmentation

of the consumer market. e) Loyalty of the Customers: The customers can be classified based on their

loyalty with the company. Loyalty of the customers can be classified into four types.

i. Staunch Loyalists: ii. Split Loyal:

iii. Shifting Loyalty: iv. Switchers:




(ii) Basis for Market Segmentation of Industrial Products: Few approaches have been advocated on industrial market segmentation. Some of the variables based on which industrial goods market can be segmented are: Demographics, Operating variables, Situational factors, Purchasing approaches and Personal characteristics. Here we will be discussing the variable one by one.




3) Define marketing and discuss the role of 4P in formulating marketing strategies. Marketing:

- According to Peter Drucker “the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customers so well that the product or service fits him and sells itself.”

- According to AMA “ Marketing is the process of planning, and executing the conception, pricing, promotion, distribution of ideas, goods and services to create exchanges that satisfies individual and the organizational goals.”

Role of 4P in formulating marketing strategies: 1. Product:

The terms “Product” refers to tangible, physical products as well as services. Product can be divided in Core products, Expected product and augmented product. Each of level adds some values and benefits to the product. The core product just satisfies the basic need. In augmented product, the marketers can add some benefits that may totally satisfy the customer and may lead to customer loyalty.

2. Price:




Price is an important element of the marketing mix. It is the monetary value that the customer gives the company in exchange to a product or service.

1. What is the value of the product or service as perceived by the buyer?

2. Is the customer price sensitive?

3. What discounts should be offered to trade customers, or to other specific segments

of your market?

4. How will the price set by the company against that of the competitors? 3. Place:

Place refers to having the right product, in the right location, at the right time to be purchased by customers with as much ease as possible. It means the way in which an organization will distribute the product or service they are offering to the end user. The product placement is done through a distribution channel with the help of number of intermediaries. Theses intermediaries can be Wholesalers, Retailers, Agents and Brokers.

4. Promotion:

To attain the sales goals, it is important that the customers are made aware about the product. The four major types of promotion that marketers use: A. Advertising:

This form of promotion involves non-personal, paid promotions using mass media outlets to deliver the marketer‟s message. media used for advertising: Television, Newspapers, Magazines, Pamphlets, Hoardings, Direct Mail, Newsletters, Radio, and Brochures.

B. Sales Promotion:

There are three basic categories of sales promotion: Consumer, Trade, & Business. C. Public Relations:

The opinion of the public is very important for the growth of any company.




D. Personal Selling:

This form of promotion involves personal contact between company personnel and those who have a role in purchase decisions.

4) Define market research. State its objectives. According to Philip Kotler,

“market research is a systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services.” Objectives

Identify the consumer response to the company’s product.

Know the consumer’s needs and expectation.

Seek maximum information about consumer, i.e. the know consumers’ income range, their location, buying behavior etc.

Know the nature and extent of competition and also the strength and weaknesses of the competitors.

Check the reaction of the dealers to the company policies.

Evaluate the reputation of the company in the market.

Identify and solve the marketing problem of the company

Facilitate company to select suitable sales promotion measures and test the effectiveness of the sales promotion techniques.

Help the marketing manager to decide about the quality of the product, product modification, packaging, pricing, branding, etc.

Forecast the feature sales and business condition.

5) Differentiate Marketing from Selling and enumerate various marketing concept in brief.

Difference between Selling and Marketing

Sr. No. Selling Marketing

1. Selling is done with the intent of Marketing is done keeping in interest of

benefiting the seller the buyers.

2. Selling is the process of fulfilling a Marketing is the process of establishing

need. needs.

3. It focuses on short term goals of the It focuses on fulfilling the long term

company. objectives of the company.

4. Selling means finding customers for Marketing aims at finding the right

the products that companies produce products for the customers.




Selling is just a part of marketing Marketing includes selling & it makes it

5. and so it is a much narrower term easier. It also includes planning, pricing, than marketing. packaging, advertising.

Selling starts from factory focuses Marketing starts from a well defined

6. on the company‟s existing products market and focuses on the needs of the to obtain profits. customers.

various marketing concept:

1) Production Concept: The market was a seller market and were not given any importance to product.

2) Product Concept: The product is the most important component of marketing.

3) Selling concept: It say that production of product is not everything, a company also had to sell them.

4) Marketing concept: It is based on the belief that company’s planning and operations should be customer oriented.

5) Societal Marketing concept: It holds that the organization should deliver superior value to customer in a way that improves the customer’s and society’s well being.

6) Holistic Marketing concept: It is based on development, design and implementation of marketing.

6) Explain the important functions of financial management. The various functions of financial management are:

1. Financing Decision:

Identify fund requirements-determining and classifying the short term and long term requirements.

Identifying and analyzing the various Methods of obtaining long and short term finance.

Determining the best mix of capital structure or leverage that is through debt and equity. Balance between the risk and return factors also should between the risk and return factors also should be considered.

2. Investment Decision:

Allocation of capital raised to various investment proposals.

Investment decision is mainly concerned with selection of assets.

Clear determination of long term assets such as fixed assets – land building, plant and machinery, furniture, etc. and short term assets such as current assets – Inventories, debtors, cash etc. for the organization has to be made.

The fixed assets require a block of funds to be invested and yield a return over a period of time in future.

Investments in current assets are known as working capital management. These are short term assets which can be converted into cash within a short period of time.

3. Dividend Decision:

Dividend in a portion out of the total profits earned by the company to be distributed to the equity shareholders.




Deciding percentage of earnings to be distributed in the form of dividend to the shareholders.

The decision of distribution of dividend of profits has to be decided considering the impacton the shareholders wealth.

Retaining profits is one of the cheapest sources of finance used for financing its business activity. 4. Liquidity Decision:

Liquidity decisions are concerned with working capital management.

It is concerned with the day-to-day financial operation that involves current assets and current liabilities.

7) Explain the role of finance manager. 1. Forecasting and Planning-

The financial manager must interact with other executives as they look ahead and lay the plans which will shape the firm’s future.

2. Major Investment and Financing Decisions-

A successful firm usually has rapid growth in sales, which requires investments in plant, equipment and inventory.

The financial manager must help decide the optimal sales growth rate, and he or she must help to decide what specific asset to acquire and the best way to finance those assets.

3. Coordination and control-

The financial manager must interact with other executives to ensure that the firm is operated as efficiently as possible.

All business decisions have financial implications, and all managers need to take this into account.

4. Cash flow and requirements-

It is the prime responsibility of the financial manager to see that an adequate supply of cash is available at proper time for the smooth running of the business.

A good financial executive should ensure that cash infow and outflow must be continuous and uninterrupted.

Here the financial manager has to decide how much cash he must retain to meet the current obligations so that there would be no idle cash balance earning nothing for the company.

5. Deciding upon borrowing policy-

Every organizations plans for the expansion of the business for which he requires additional resources.

Personal resources are limited and hence funds are arranged by borrowing money either from commercial bank or other financial institutions.

The financial manager at this time will take a decision about the time, source and how long they will be needed and from what source they will be repaid.

6. Others-

FM is a management job concerning the raising, using and distribution of funds.

The object of FM is the recycle and turnover of cash.

The main contents of FM are financing, investment and dividend distribution. The main function of FM is deciding, planning and controlling.

8) Define Finance management and enumerate objectives of financial management. Finance management means planning, organizing, directing and controlling the financial activities such

as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.




Objectives: 1. Maximizing the profit

Maximization of profits is generally regarded as the main objective of business enterprise. Each company collects its finance by way of issue of shares to the public.

Investors in shares purchase these shares in the hope of getting medium profits from the company as dividend it is possible only when the company’s goal is to earn maximum profits out of its available resources.

If company fails to distribute higher dividend, the people will not agree to invest their money in such firm and persons who have already invested will like to sell their stocks.

On the other hand, higher profits are the barometer of its efficiency on all fronts. 2. Maximizing the return to the shareholders

The second goal of finance management is to safeguard the economic interest of the persons who are directly or indirectly connected with the company.

The all such interested parties must get the maximum return for their contributions.

But this is possible only when the company earns higher profits or sufficient profits to discharge its obligations to them. Therefore, the goal of maximization of returns is inter-related.

3. Maximizing the wealth to the shareholders

Maximizing of profits is regarded as the proper objective of the firm but it is not as inclusive a goal as that of maximizing it value to its shareholder.

Value is represented by the market price of the ordinary share of the company over the long run which is certainly a reflection of company’s investment and financing decisions.

The management can make decision to maximize the value of its shares on the basis of day-today fluctuations in the market price in order to raise the market price of shares over the short run at the expense of the long run by temporarily diverting some of its funds to some other account.

It is therefore the goal of the financial management to ensure its shareholders that the value of their shares will be maximized I the long run.

9) Explain the relationship of financial department with other departments of a business. Finance is the blood of the organization & without proper arrangement in finance department no other

department function properly. Thus finance is the base of any organization to run the industry. 1. Relationship of finance with production department.

Production department’s main duty is to produce the goods. For producing goods, it needs raw material, labor and other expenses.

For paying all expenses, production department needs money and fund which will be fulfilled by finance department.

Finance department checks the budget of production department and allow funds for production department.

With this view, we can understand that production department is dependent on finance department’s decision.

2. Relationship of finance with marketing department.

Marketing department’s main duty is to sell maximum goods and satisfy the consumers.

Its product’s input cost will decrease if all products are sold by marketers of company.

For developing the product, promotion activities and distribution activities of marketing department need some money for paying salesman, advertising budget and other promotional




expenses.

For this marketing department makes his marketing budget and it is cleared by finance department, but sometime finance department will not specify all marketing expenses but marketing department need that type of expenses for promotion of sales.

3. Relationship of finance with human resource department.

Personnel are that science which manages the employees of company and finance is that science which manages the money.

If personnel department and finance department work together with co-operation, both departments can satisfy the objectives of company.

It is the objective of company to the development of employees. They are human resource capital of company.

Now, investment in training of employees, incentive schemes and retirement schemes, etc. should be calculated like other investment and both departments should take maximum advantages from this asset.

10) Explain the role of various financial regulatory bodies. Financial intermediaries provide key financial services such as merchant banking, leasing, hire

purchase, credit-rating, and so on.

Financial services rendered by the financial intermediaries’ bridges the gap between investors in financial instruments and markets.

These financial services are vital for creation of firms, industrial expansions and economic growth.

Before investors lend money, they need to be reassured that it is safe to exchange securities for funds or their funds are safely invested with an assurance to repay back the same on demand.

This reassurance is provided by the financial regulator who regulates the conduct of the market, and intermediaries to product the investors’ interests.

The Reserve Bank of India regulates the money market and Securities and Exchange Board of India (SEBI) regulates capital market, Insurance Regulatory Development Authority (IRDA) regulates the insurance sector.

The main function of RBI is to regulate money supply and liquidity. It is also known as Bankers bank.

SEBI was established in 1988 with the objective of investor protection in order to obtain steady flow of savings into the capital market.

It also ensures that practices are followed at the time of raising of the funds and issue of securities with minimum cost.

The Government established IRDA in order to promote an orderly growth in the life insurance and the general insurance industry.

11) Describe factors affecting the plant location planning and explain difference between process layout plant and product layout plant.

Factors Affecting the Plant Location planning: 1. Availability of Raw Materials: The factory needs to be close to these if they are heavy and bulky to transport. 2. Energy Supply: This is needed to work the machines in a factory. Early industries were near to coalfields. Today, electricity allows more freedom. 3. Proximity of Markets:




The cost of transporting finished goods, advertising and distribution etc. will be greatly reduced if the factory is located near the market. 4. Availability of Labour: A large cheap labour force is required for labour-intensive manufacturing industries. High-tech industries have to locate where suitable skilled workers are available. 5. Transportation and Communication facilities: A good transport network helps reduce costs and make the movement of material easier. Communication facilities like mail, telephone, telegraph etc must be adequate. 6. Climate conditions: Climate condition largely affect the certain production processes and also the efficiency of the employees. For ex. Textile mills require moist climate. That is why most of textile mills situated at Surat and Mumbai. 7. Cost of Land: Greenfield sites in rural areas are usually cheaper than brown field sites in the city. 8. Availability of Water: Water is used in each and every industry as a vital processing element and also required for drinking and sanitary purpose etc. 9. Ancillary Industries: The existence of ancillary industries may avail certain economic advantages. Many industries such as processing and assembly industries are not producing all their parts but purchase some of that from ancillary industries. 10. Government Policies: Industrial development is encouraged in some areas and restricted in others. Industries that locate in development areas may receive financial incentives from the government.

Difference between Process Layout Plant and Product Layout Plant:

Process Layout Plant Product Layout Plant

1-A process layout is when you group similar activities together according to the process or function they perform.

A product layout arranges activities in a line according to the sequence of operations for a particular product or service.

2-It is also known as functional layout. It is also called as line layout.

3-This type of layout is more suitable for job order industries.

It is used for mass production of standardized products.

4-Breakdown of one machine will not disturb the production process.

Breakdown of one machine will disturb the production process.

5-production can be easily increased due to Greater flexibility of physical resources.

Lesser flexibility of physical resources.

6-Lower initial capital cost is required. Higher initial capital investment in special purpose machines (SPM).

7- Material handling costs are higher. Low cost of material handling due to straight and short route and absence of backtracking.

12) Mention the factors influencing plant layout. Discuss the types of plant layout. Factors influencing plant layout:

1. Types of production or Product: The layout of the Automobile eng. Unit is quite different from the chemical or farmasuitical company.




2. Production System: The plant layout of the continuous production system is quite different from the intermittent production system. 3. Scale of Production: Scale and size of production also affect the plant layout. Like large scale production, small and medium scale production. 4. Type of Machines: The use of the single purpose and multipurpose machines substantically affect the plant layout. Similarly the noisy and vibrating machines needs the special attention in the layout selection. 5. Type of Building Facilities: The plant layout in the single storey building will be different from that in a multi storey building. 6. Availability of the total floor Area: The allocation for the space for the machines, work-branches, sub-stores, walkway etc. is made on the basis of the avail floor area. 7. Possibility of the Future Expansion: Plant layout is made in the light of the future requirements and installation of additional facilities. 8. Arrangement of Material Handling Equipment: The plant layout and the material handling services are closely related and the latter has a decisive effect on the arrangement of production process and plant services. Types of Plant Layout: There are mainly four types of Plant Layout:

Product or Line layout Process or Functional layout Fixed Position or Location layout Combined or group layout

1. Product or Line Layout:

In this type of layout, the machines and equipments are arranged in one line depending upon the sequence of operations required for the product.

The material moves to another machine sequentially.

It is used for mass production of standardized products. Advantages:

Low cost of material handling.

Continuous flow of work.

Optimum use of work space with effective work and simplified production control.

Lower manufacturing cost per unit.

2. Process or Functional Layout:

In process layout, all machines performing similar types of operations are grouped at one

Workstation1 Workstation2 Workstation4 Workstation3




location.

Process has dominating role rather than product.

More suitable for job order industries.

Advantages:

Lower initial investment with high degree machine utilization.

Supervision can be more effective.

Greater flexibility of resources. 3. Mixed or Combined Layout: Combination of Process and Product layout gives the benefits of both. So it is very commonly used in the industry. 4. Fixed position or Location Layout or Static product Layout or Project Layout:

In this type of layout, only the material and semi products have to move from operation to operation for the purpose of operating.

Here the product remains static and the men and machines move to perform operation on product.

Used where product is large & heavy in weight.

e.g. Ship Building, Jumbo Air Craft Manufacturing etc.

13) What are the sources of recruitment? Mention their advantages and disadvantages. “Recruitment is the process of searching for prospective employees and stimulating them to

apply for jobs in the organization.” The different sources of recruitment are classified into two categories

Milling

Plating Drilling

Grinding Assembly &Test

Raw

material

Machines/

Equipments

Labour

Air Craft Assembly

Finished

product

(Aircraft)




1. Internal Source: Source of recruitment within the organization.

2.External Source: Source of recruitment from outside the organization.

The internal source of recruitment are: 1.Promotions: Promotion means to give a higher position, status, salary and responsibility to the employee. So, the vacancy can be filled by promoting a suitable candidate from the same organisation. 2. Transfers : Transfer means a change in the place of employment without any change in the position, status, salary and responsibility of the employee. So, the vacancy can be filled by transferring a suitable candidate from the same organisation 3.Internal Advertisements:Organizations which go for an internal search normally announce the vacancy through the displays on notice boards, circulars sent to different departments. Candidates from within the organization respond to this “job posting” by sending their applications. Advantages of intenral source:

It is time saving, economical, simple and reliable

It increases the morale of the employees and it improves the relations in the organisation

Time and resource are saved on the selection and induction processes.

It motivates the employees of work hard in order to get higher jobs in the same organisation.

Disadvantages of intenral source:

An organization might miss out on talent that is available in the market.

It is important for any business to have fresh flow of ideas and opinions.

Those who are not promoted will be unhappy.

It has limited scope because it is not possible to fill up all types of vacancies from within the organisation.

The external source of recruitment are:

Management Consultants : Management consultants are used for selecting higher-level staff. They act as a representative of the employer

Public Advertisements : The Personnel department of a company advertises the vacancy in newspapers, the internet, etc. This advertisement gives information about the company, the job and the required qualities of the candidate. It invites applications from suitable candidates. This source is the most popular source of recruitment

Employment Agencies – There are certain professional organizations which look towards recruitment and employment of people

Labour Contractors – These are the specialist people who supply manpower to the Factory or Manufacturing plants. Through these contractors, workers are appointed on contract basis,

Campus Recruitment : The organisation conducts interviews in the campuses of Management institutes and Engineering Colleges. Final year students, who're soon to get graduate, are interviewed. Suitable candidates are selected by the organisation based on their academic




record, communication skills, intelligence, etc Advantages of extenral source:

It encourages young blood with new ideas to enter the organisation.

It offers wide scope for selection. This is because a large number of suitable candidates will come for the selection process.

Here there is no need to maintain confidential records

There is lesser chance of partiality through this method. Disadvantages of external sources:

The method is costly because it involves recruitment cost, selection, training cost.

The method is time consuming.

Selection process may not be effective enough to reveal the best candidate.

The existing managers may leave the organisation if outsiders are given higher post. 14) Define manpower resource planning. Explain the importance of manpower resource planning. Definition:

“The process by which management determines how an organization should move from its current manpower position to its desired manpower position is known as human resource planning”

Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization.

Human Resource Planning has got an important place in the arena of industrialization.

Human Resource Planning is the process of determining and ensuring that the organization has adequate number of qualified persons available at the proper times

Importance of manpower planning:

Key to managerial functions: The four managerial functions, i.e., planning, organizing, directing and controlling are based upon the manpower. Human resources help in the implementation of all these managerial activities. Therefore, staffing becomes a key to all managerial functions.

Reduces labor costs: Another Importance of Human Resource Planning is that a proper Human Resource plan reduces labor costs substantially by maintaining a balance between demand for and supply of HR

Better human relations: A concern can stabilize itself if human relations develop and are strong. Human relations become strong trough effective control, clear communication, effective supervision and leadership in a concern. Staffing function also looks after training and development of the work force which leads to co-operation and better human relations.

Higher productivity: Productivity level increases when resources are utilized in best possible manner. higher productivity is a result of minimum wastage of time, money, efforts and energies. This is possible through the staffing and it's related activities ( Performance appraisal, training and development, remuneration)

Safety of health: Another Importance of Human Resource Planning is safety of health. It provides for welfare, health and safety of its employees thus leads to an increase in productivity of the employees in the long run.

Effective motivation: Effective motivation is another Importance of Human Resource Planning. An effective Human Resource Plan provides multiple gains to the employee by way of




promotions, increase in salary and other fringe benefits. This definitely boosts employee morale.

Facilitates rise in skills: Another Importance of Human Resource Planning is that it facilitates the rise in skills, abilities and potential of the workforce through training and development. Training employees helps them improve in their working capacity thus tend to develop to a quality workforce.

15) Discuss the Objective and function of human resource management. Objective:

1. To establish and maintain sound organizational structure and desirable working relationships among all the members of the organization.

2. To secure the integration of individual or groups within the organization by co-ordination of the individual and group goals with those of the organization.

3. To create facilities and opportunities for individual or group development so as to match it with the growth of the organization.

4. To attain an effective utilization of human resources in the achievement of organizational goals. 5. To identify and satisfy individual and group needs by providing adequate and equitable wages,

incentives, employee benefits and social security and measures for challenging work, prestige, recognition, security, status.

6. To maintain high employees morale and sound human relations by sustaining and improving the various conditions and facilities.

7. To strengthen and appreciate the human assets continuously by providing training and development programs.

HRM functions can be broadly classified into two categories: 1.Managerial function 2.Operative functions 1.Managerial functions : Managerial functions of the human resource department are planning, organizing, staffing, directing and controlling. Planning:

Planning determining in advance the personnel programs and changes required that would contribute to the achivement of organizational goals.

Organizing:

Organizing involves establishing an intentional structure of roles for people in an organization.

Structural considerations such as the chain of command, division of labor, and assignment of responsibility are part of organizing function.

Staffing:

This is the process of obtaining and maintaing capable and competent personeel in various positiona at all levels.

Directing:

It is the process of directing all the available resources towards the common organizational goal. Controlling:

The measurement and rectification of activities to ensure that events conform to plan is known as controlling.




2.Operative functions: The operative functions of HRM are related to specific activities of HRM, viz., employement, development, compensation and employee relations. Employment:

This involves procuring and employing individuals with suitable knowledge, skills, experience, and aptitude necessary to perform various jobs.

Job Analysis:

To ensure the satisfactory performance of an employee, his skills, abilities and motives to perform a job must match the requirements of the job.

Recruitment:

Recruitment is the process of seeking and attracting prospective candidates against a vacancy in an organization.

Selection:

The purpose of employement selection is to choose the right candidate for a job. Training

Training is the systematic development of the knowledge, skills, and attitudes required to perform a given task or job successfully, in an individual.

Compensation:

Compensation includes all the extrinsic rewards that an employee receives during and after the course if his job, for his contributions to an organization.

Job evaluation:

It is a systematic determination of the value of each job in relation to other jobs in the organization, in the industry, and in the market.

Wages and salary administration:

Determining wage and salary rates on the basis of various factors like law, equity, fairness and performance.

Incentives:

Incentives are the rewards an employee earns in addition to regular wages or salary based on the performance of the individual, the team or the organization.

Employee relation: Employee relations deal with the employees in the organizational context, as a social group that contributes to the organization.

16) Discuss the objectives of human resource planning and mention the steps in HRP. Objectives:

The objective of HRP are: 1. To maintain the required quantity and quality of human resources required for s smmoth &

efficient functioning of the organization. 2. To forecast the turnover rate. 3. To plan to meet organizational human resources needs at the time of expansion or

diversification. 4. To foresee the effects of technological changes on the requirement for human resources, and to

provide for the same. 5. To develop the existing human resources to match the human resources requirements of the

future.




6. To optimize staffing in the organization. 7. To make contingent plans to handle sudden requirements and situations of shortfall. 8. To utilize human resources effectively and efficiently.

The basic steps of HRP are:

1) Analyzing the impact of the organizational strategy and objectives on different units of the organization in terms of the human resource requirements.

2) Involving the line managers in determining the human resource needs of their respective departments.

3) Forecasting the quantity and quality of human resource required by different departments. 4) Matching the current human resources supply in the organization with the numbers required in

the future. 5) Developing an action plan to meet the future requirements in terms of addition or separation, in

a planned and phased manner. 17) Discuss the steps involved in selection process. What are the advantages of interview? The Selection process in an organization depends on the organization’s strategy and

objectives,the tasks and responsibility of the job and the qualifications, experience and characteristics required in an individual to perform these task and responsibilities successfully.

The process of selection starts with a review of the applications. These applications can be either in a company specified format, or in the format submitted by individual applicants.

Applicants who do not match the required basic criteria are rejected at this stage. Some companies may also go in for an intial screening before aceepting application from the

Initial screening

Analyze application Blank

Conducting Employeement Test

Preliminary & Core Interview

Reference Checks

Medical examination

Job Offer




candidates.

Tests are normally conducted to analyze the skill levels of the candidates. These tests have to be in compliance with the law, validated by the organization and relevant to the job being offered.

Once the test results are analyzed and the unsuccessful candidates rejected, usually, the successful candidates are interviewed.

The candidate might have to go through one-to-one interviews with representatives from the department concerned and some of the other departments which have to work in close cocrdination with the position.

Finally the applicant will have an interview with the manager concerned. Based on these interviews and the feddback received, the organization decides whether to offer the applicant a job or not.

18) Explain the process of Management by Objectives. Definition:-

“A Management system in which the objectives of an organization are agreed upon so that Management and employees understand a common way forward”.

Process /Elements of Management by Objectives: There are 8 important and essential steps in the management by objectives process as follows:

1. Defining Organizational Objectives:

The definition of organizational objectives states why the business is started and exists.

First long term objectives are framed. Then short term objectives are framed taking in to account the feasibility of achieving the long term objectives

Defining Organizational

Objectives

Defining Goals of Each Section/Department

Fixing Key Result areas (KRA)

Setting Subordinate's Objectives or Targets

Matching Resoutces with Objectives

Periodical Review Meetings

Appraisal of Activities

Redesigning of Objectives




2. Defining Goals of Each Section/Department:

Objectives for each section, department or division are framed on the basis of overall objectives of the organization.

Period within which these Objectives/Goals should be achieved is also fixed. 3. Fixing Key Result Areas:

Key result areas (KRA) are arranged on a priority basis.

KRA indicates the strength of the organization.

The basis examples of KRA are profitability, market standing, innovation, brand generation etc. 4. Setting Subordinates Objectives or Targets:

There should be a free and frank discussion between the superior and his subordinates. Subordinates are induced to set standards themselves by giving an opportunity.

If Subordinates are allowed to do so, they may set high standards and the chances of their accomplishment are higher. In this way the objectives or targets of the subordinates are found.

5. Matching Resources with Objectives:

The objectives are formed on the bases of availability of resources. If certain resources are not adequately available, the objectives of the organization are changed accordingly.

So there is a need for matching resources with objectives. Then they should be properly allocated and utilized.

6. Periodical Review Meetings:

The superior-subordinates should hold meetings periodically in which they discuss the progress in the accomplishment of objectives.

The fixed standards may be changed in the light of progress. 7. Appraisal of Activities:

At the end of the fixed time period for achieving the objectives, there should be a discussion between superior and subordinates.

The discussion is related with the subordinate’s performance against the specific standards. The superior should take corrective action.

8. Redesigning of Objectives:

Every manager must frequently reappraise and redesigning the emphasis he gives to his various objectives.

The job is like that of a captain of large ship who is continuously changing his speed and direction in relation to his present position, tides, winds and other conditions.

Advantages/Features:

Motivation: - Employees involvement in goal setting process improves their job satisfaction, make them fell more empowered and hence more committed.

Clarity of goals: - Participative goal setting in the process of MBO involves clarity of goals of its subordinates.

Better communication and co-ordination: - Supervisors and subordinates interact on a frequent basis to maintain good communication and co-ordination amongst themselves.

Disadvantages:

Importance of the environment or the context in which the goals are set is under emphasized.

MBO emphasizes only on short term objectives and does not consider the long term objectives.

It just addresses on reaching the goals no matter how successfully the constraints and obstacles




were responded. 19) Define ‘strategy’. Explain the importance of strategy. Definition:-

“Strategy is organization’s pattern of response to its environment over a period of time to achieve its goals and mission”.

Importance of Strategy:-

With the increase in the pressure of external threats, companies have to make clear strategies and implement them effectively so as to survive.

The basis factor responsible for differentiation has not been governmental policies, infrastructure or labor relations but the type of strategic thinking that different companies have shown in conducting the business strategy provides various benefits to its users:

a. Strategy helps an organization to take decisions on long range forecasts. b. Strategy allows the firm to deal with a new trend and meet competition in an effective manner. c. With the help of strategy, the management becomes flexible to meet unanticipated changes. d. Efficient strategy formulation and implementation result into financial benefits to the organization in

the form of increased profits. e. Strategy provides focus in terms of organizational objectives and thus provides clarity of direction for

achieving the objectives. f. Organizational effectiveness is ensured with effective implementation of the strategy. g. Strategy contributes towards organizational effectiveness by providing satisfaction to the personnel. h. Strategy gets managers into the habit of thinking and thus makes them, proactive and more

conscious of their environment. i. Strategy provides motivation to employees as it paves the way for them to shape their work in the

context of shared corporate goals and ultimately achievement of these goals. j. Strategy formulation and implementation gives an opportunity to the management to involve

different levels of management in the process. k. Strategy improves corporate communication, coordination and allocation of resources.

20) Mention the objectives and steps in corporate planning. Corporate planning has been defined as a systematic approach to clarifying corporate objectives

strategic decision making and checking progress towards objectives.

A corporate plan is inwardly focused, lays a background and set of instructions to managers of an organization describing the role each department is expected to play in order to achieve organizational objectives.

Corporate planning is very similar to Strategic Planning as both focuses on efficiently achieving optimal performance from all business divisions.

They are both long range plans, both focus on the larger picture and then narrow their focus on the intrinsic details.

While Strategic Planning is outwardly focused, corporate planning is more inwardly focused on operations.

Corporate planning is the process of drawing up detailed action plans to achieve organizations goals and objectives, while taking into the resources of the organization and environment within which it operates.

A corporate plan is more like a business improvement plan that examines internal capabilities to take advantage of external opportunities.

The corporate Plan contains action steps that are needed to accomplish objectives, and therefore




also supplies a map to benchmark progress at regular periods.

Essentially, a business improvement plan, or corporate plan, is a road map that will allow the leader to guide the business to another level.

A Corporate Plan usually contains these elements: A version statement A mission statement An outline of the company’s resources and scope A listing of corporate objectives A listing of strategies to reach those objectives Corporate Planning Process:-

Establishing Mission and Objectives:

Corporate planning is an important and vital business process.

Under this, the organization’s top management sits down to formulate policies and strategies and communicate them downward for implementation.

This process of corporate planning entails preparing the company’s mission, goals and objectives.

Situation Analysis:

After the establishment of objectives, the organization devises a plan to reach those in accordance to its current situation.

The changes in the environment provide newer ways to reach them.

The organization conducts an environmental scan to assess available opportunities and identify its limitations and capabilities.

Strategy Formulation and Implementation:

After analysis of the firm and the environment in which it operates, the strategies are then formulated.

Three generic strategies that are considered while formulating strategy are cost leadership, differentiation and focus.

Control:

The implemented strategies are continuously considered and appraised.

Modifications are made from time to time to avoid deviations on the plan.

The standards of performance are set, performance is monitored and necessary action is taken to guarantee success.`

21) Define ‘strategy’. Explain the importance of strategy. Definition:-

“Strategy is organization’s pattern of response to its environment over a period of time to achieve its goals and mission”.

Levels of Strategy:-

Strategies exist at a number of levels in an organization. Still it is possible to distinguish at least three different levels of strategy which are shown below.

a) Corporate Level Strategy (Strategic Level) b) Business Level Strategy (Tactical Level) c) Function Level Strategy (Operational Level).




A. Corporate Level Strategy:

Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses.

It includes issues like diversity of the product, services or business units and how resources are to be allocated etc.

This kind of strategy is formulated by the top management of the Company.

The corporate level strategy is the strategy that determines what business a company is in, should be in, or wants to be in, and what it wants to do with these businesses.

It is based on the goal and the vision of the organization.

There are main three types of corporate strategy. a) Growth Strategy:

Growth Strategy is used when an organization wants to grow and does so by expanding the number of products offered or market served, either through its current businesses or through new businesses.

b) Stability Strategy:

It is the corporate strategy characterized by an absence of significant change in what the organization is currently doing.

c) Renewal Strategy:

When an organization is in trouble, managers have to do something.

Managers need to develop strategies that help them to address organizational weaknesses which lead to decline in organizational performances.

B. Business Level Strategy:

A business unit level strategy is strategy focused on how an organization will compete in each of its business.

For a small organization in only one of business or A large organization that has not diversified in to different products or market will compete in its primary or main market.

For organization in multiple businesses, each business unit has its own business strategy defining its competitive advantages, the products and services that it deals with; the customer by it wants to reach etc.




Business level strategy primarily formed by business managers or managers of the particular business unit.

Thus the content of business level strategy is a combination of goads and action both. C. Function Level Strategy:

Functional level strategy involves decision making with respect to specific functional areas, say Production, Marketing, Personneland Finance etc.

Decisions at the functional level are often described as operational or up to the some extent tactical decisions.

Functional strategy emphasize on doing things correctly. But this decisions are guided by overall strategic considerations and must be consistent with the framework of the business strategy.

In short Functional strategy is an approach taken by the Functional area to achieve corporate and business objectives and maximizing resource productivity.

In contrast with the other levels of strategy, Functional strategies serve as guidelines for the employees of each of the firms sub-divisions.

So, we can say that functional level strategy is more concerned with implementation of plans as directed by the business level strategy.

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