Saturday, 28 December 2013

BB0031 - Management development


Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0031 - Management development

Marks 30 (2 CREDITS )


Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.


Q. 1. What are the different types of decisions? Explain with examples

Ans : Decision making is the heart of modern administration. According to M.T. Copeland, administration essentially is a decision making process. Whatever, an administrator does he does through decision making. An administrators life is filled with a constant series of decisions. Everyday hundreds of decisions are made by the administrator consciously or unconsciously. Decisions which are relatively minor are taken almost subconsciously following rules and patterns of behavior established over many previous encounters with the problem. All major decisions however are taken very carefully and consciously. Such decisions usually involve the application of considerable human judgment and experience before a solution is obtained.

Types of Decisions:-

1. Organisational and personal decisions:-

Organizational decisions are made to advance the interest of the organization. When an executive acts formally in his expected role in an organization he makes organizational decisions making become organizations official decisions making power is delegated to others also and calls for decisions at subordinate levels supporting it.  

Example:-

An executive who charges jobs or organization is making a personal decision. Decisions to many to buy a house, to purchase a car are examples of personal decisions. Such decisions life of an executive but may affect the personal life of an executive but may affect the organization sometimes directly or indirectly.

2. Individual and group decisions:-

When a decision is taken by an individual in the organization, it is known as individual decision. These are concerned mainly with routine problems for which broad policies are available. Such decisions are generally taken in small organizations and in those organizations where autocratic style of management prevails.

Example:-

Decisions taken by the board of directors or a committee are, examples of group decisions. Group decision making generally results in more realistic and well balanced decisions and encourages participative decision making.

3. Routine and strategic decisions:-

Routine decisions are made repetitively following certain established rules, procedures and policies. They do not require collection of new data and can be taken without much deliberations. Such decisions are taken generally by the executives at the middle and lower management levels.

Example:-

Launching a new programme, location of a new plant, installation of a computer system are examples of strategic decisions.

4. Programme and non-programme decisions:-

Programmed decisions are concerned with relatively routine and repetitive problems. Information on these problems is already available and can be processed in a pre-planned manner. Such decisions have short-term impact and are relatively simply. They are, made at lower levels of management. These decisions require little thought and judgment. The decision maker identifiesthe problem and applies the predetermined solution. For example, if an employee is habitually late comer he can easily be dealt with under the established procedure. Non-programmed decisions deal with unique or unusual problems.

Example:-

To order firing on a rioting mob, to impose curfew in the city, opening of a new branch are examples of such decisions. The ability to make good non-programmed decisions help to distinguish effective executives from non effective executives.


Q. 2 Discuss Line organizations in detail.

Ans : Line organization:-

This is the oldest form of organisation. This is known by different names, i.e. military, vertical, scalar, departmental, organisation. All other types of organisation structure have mostly been either modifications of this organisation. The concept of line organisation holds that in any organization derived from a scalar process, there must be a single head who commands it. Although an executive can delegate authority, he has ultimate responsibility for results. According to McFarland, "Line structure consists of the direct vertical relationship which connect the positions and tasks of each level with those above and below it." According to Allen, "Organisationally, the line is the chain of command that extends from the board of directors through the various delegations and redelegation of authority and responsibility to the point where the primary activities of the enterprise are performed."

Features of line organisation:

(1) There are many levels of management depending upon the scale of business and decision-
making ability of managers. Each level of management has equal rights.
(2) There is vertical flow of authority and responsibility. The lower positions derive authority from y
the positions above them.
(3) There is unity of command. Every person is accountable to only one person (his immediate boss)
and none else. A person receives orders only from his immediate boss.
(4) There is scalar chain in line organisation. The flow of orders, communication of suggestions and
complaints etc. are made as it is in the case of a ladder. One cannot defy the claim.
(5) There is limit on subordinates under one manager. A manager has control only over the
subordinates of his department.

Advantages of Line Organization:-

1.Simplest- It is the most simple and oldest method of administration.
2.Unity of Command- In these organizations, superior-subordinate relationship is maintained and scalar chain of command flows from top to bottom.
3.Better discipline- The control is unified and concentrates on one person and therefore, he can independently make decisions of his own. Unified control ensures better discipline.

Disadvantages of Line Organization:-

1.Over reliance- The line executive’s decisions are implemented to the bottom. This results in over-relying on the line officials.
2.Lack of specialization- A line organization flows in a scalar chain from top to bottom and there is no scope for specialized functions. For example, expert advices whatever decisions are taken by line managers are implemented in the same way.
3.Inadequate communication- The policies and strategies which are framed by the top authority are carried out in the same way. This leaves no scope for communication from the other end. The complaints and suggestions of lower authority are not communicated back to the top authority. So there is one way communication.


Q. 3 Mr. Narayan is Senior Manager HR with BrightShine Paints. He wants to develop a system which helps in drafting the plans and achieving them. It shall also help in improving the communication between the superior and subordinates. Suggest a technique which may help to achieve this. Explain the technique in detail.

Ans : Technique used by Mr. Narayan:-

Mr. Narayan can use the Management by Objective (MBO) Technique:
MBO relies on the defining of objectives for each employee and then to compare and to direct their performance against the objectives which have been set. It aims to increase the performance of the organization by matching organizational goals with the objectives of subordinates throughout the organization. Ideally, employees receive strong input to identify their objectives, time lines for completion, etc. MBO includes continuous tracking of the processes and providing feedback to reach
the objectives. According to George S. Odiorne, the system of management by objectives can be described as a process whereby the superior and subordinate jointly identify its common goals, define each individual's major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.

Introduction:
There are various management philosophies and types used in the world of business. These types of management differ from one another. In some cases, a few of these management types can be mixed together in order to create something customed for a specific requirement.

Steps:-

1.The management chunks down the organizational goals and assign chunks to senior managers.
2.Senior managers then derive objectives for them to achieve the assigned organizational goals. This is where senior managers assign the objectives to the operational management.
3.Operational management then chunks down their objectives and identify the activities required for achieving the objectives. These sub-objectives and activities are then assigned to rest of the staff.
4.When objectives and activities are assigned, the management gives strong inputs to clearly identify the objectives, time frame for completion, and tracking options.
5.Each objective is properly tracked and the management gives periodic feedback to the objective owner.
6.In most occasions, the organization defines processes and procedures in order to track the objectives and feedback.
7.At the end of the agreed period (usually an year), the objective achievement is reviewed and an appraisal is performed. Usually, the outcomes of this assessment are used to determine the salary increments for year ahead and relevant bonuses to employees.

Figure:- MBO process:


Advantages:-

(1) MBO ensures better and more effective management. MBO forces management to think of planning for results, rather than merely planning activities. MBO also force managers to think how the objectives can be achieved and what resources would be required, MBO also provides the standards of control. All these lead to better management.
(2) MBO results clarification in organisational roles and structure and responsibilities of individuals for achieving the goals. Thus various positions are treated as responsibility, authority and resources at their disposal. This process identifies and removes many deficiencies in the organisation.
(3) It reveals organisational deficiencies such as overlapping of authority, ineffective delegation and communication.
(4) It elicits people's commitment for performance.
(5) It furnishes objectivity and reduces the element of pure judgment.



BB0031 - Management development


Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0031 - Management development (4 Credits )

Marks 60

Q.1 Explain the features of Management.

Ans : Features of management:

1. Multi-disciplinary approach:

Management has grown as a separate discipline drawing upon the knowledge and skills of various disciplines like economics, commerce, cooperation, finance, political science, sociology, statistics, demography, quantitative techniques, engineering, ecology, geography, biology, etc.

2. Dynamic and relative principles:

Management principles and systems are dynamic, open, progressive and flexible in nature-not rigid, closed or absolute. They can be adapted or modified to suit the requirements of different types of organizations and changed situations.

3. Organized activity:

Management is not an isolated activity but is essentially a team­work in formally organized groups.

4. Existence of objective:

Determination of organizational objectives and their accomplishment form the core of managerial activity.

5. Working with and through people:

Management is essentially leading, guiding, developing and motivating people to effective performance for attainment of common goals.

6. Integration of resources:

Management is integrating and balancing of all resources- both material and human-for their optimum utilization, so as to achieve effective results.

7. Management- Both a Science and an Art:

Management is a science because it consists of an organized knowledge and systematic body of principles. It is, however, a combination of social sciences and behavioral sciences, not an exact science like the physical or natural sciences.

8. Management a profession:

Management has now emerged as a profession as managers, to be effective, must acquire the basic professional knowledge and skill in managing, through formal management education or management training; develop the right managerial attitude, sense of professional responsibility and service motive follow the professional code of ethics; and associate themselves with professional management associations or institutions.

9. University of Management:

The basic process and the principles of management are applicable in all situations, in different organizations and countries, with such modifications as deemed necessary.

10. Management both a technical and a social process:

Management integrates, in all its decisions and actions, the technical and the social aspects, the economic and the human aspects of the organization.

11. Management includes administration:

Although different authors have expressed different views about the use of these two terms and many of them have mentioned several points of distinction or difference between them, for all practical purposes, management and administration are considered as the same - with regard to responsibilities, tasks and process.

12. Management a multi-purpose organ:

Management is a "multi-purpose organ" of a business enterprise (which is itself a specific organ of a industrial society") that "manages a business, manages managers, manages workers and work" to quote the inimitable words of Peter Drucker, "If one of them were omitted, we would not have management anymore and we also would not have a business enterprise or an intestinal society".


Q.2 Discuss the kinds of plans.

Ans : Types of plans:

Planning is a process and plan is its outcome. Plan is a sort of commitment to accomplish all the activities needed for the attainment of special results, from this point of view there are many plans. The following study will help in understanding different kinds of plans.

1.Objectives:

objectives are those end points for the attainment of which all the activities are Undertaken.
Following are the examples of objectives:
(I )To improve the communication system to hold regular staff meeting and publish a newsletter.
(2)To cross the 20,0 00 crore mark in turnover of soaps.

2. Strategies:

Strategies refer to those plans which are prepared in view of the move of the competitors and whose objective is to make possible the optimum utilization of resources.

3. Policies:

Policies are those general statements which are decided for the guidance of the employees while taking decision. Their purpose is laying down a limit within which a particular work can be done or decision taken. Objectives decide what is to be achieved and the policies tell us how it can be achieved.

4.Procedures :

Procedures are those plans which determine the sequence of any work performance. For example, the recovery of money from the debtors can be done in the following order:
(a)Writing letters, (b) connecting on telephone, (c) Meeting personally,(d0 taking legal action.
This is the procedure of collecting money from all the debtors. There is a difference between policies and procedures.

5. methods:

Methods is that plan which determines how different activities of the procedure are completed. Methods is not related to all steps but only to one step of the procedure . it is more detailed than procedure . there may be many methods to do a particular work. After extensive study, a method has to be selected from which a worker feels minimum fatique, increase in productivity and there is reduction in costs.

6 Rules:

Rules till us what is to be done and what is not to be done in particular situation. In the absence of rules there is no need to take any decision. Whatever is said in the rules has to be followed without any thinking. For example, the rule “ No smoking in the factory “is applicable to everybody and it must be observed. Provision for punishment in case of non-observing of the rule can also be made.

7.Budget:

Budgets describe the desired results in numerical terms. A budget is that planning which provides detailers about estimated money, material time and other resources for the achievement of pre determined objectives of various departments. For example, the sales department’s budget gives estimated figures about the type of material that will be purchased, its quantity, the time of purchase and the amount to be spent on it. Similarly, budget of other departments are also prepared. 


Q.3  Explain various objectives of coordination.

Ans : Co-ordination means to integrate (bring together) all the activities of an organisation. It is done for achieving the goals of the organisation. There must be proper co-ordination throughout the organisation.The synchronization and integration of activities, responsibilities, and command and control structures to ensure that the resources of an organization are used most efficiently in pursuit of the specified objectives. Along with organizing, monitoring, and controlling, coordinating is one of the key functions of management.

1. Coordination encourages team spirit:-

There exist many conflicts and rivalries between individuals, departments, between a line and staff, etc. Similarly, conflicts are also between individual objectives and organisational objectives. Coordination arranges the work and the objectives in such a way that there are minimum conflicts and rivalries. It encourages the employees to work as a team and achieve the common objectives of the organisation. This increases the team spirit of the employees.

2. Coordination gives proper direction:-

There are many departments in the organisation. Each department performs different activities. Coordination integrates (bring together) these activities for achieving the common goals or objectives of the organisation. Thus, coordination gives proper direction to all the departments of the organisation.

3. Coordination facilitates motivation:-

Coordination gives complete freedom to the employees. It encourages the employees to show initiative. It also gives them many financial and non-financial incentives. Therefore, the employees get job satisfaction, and they are motivated to perform better.

4. Coordination makes optimum utilisation of resources:-

Coordination helps to bring together the human and materials resources of the organisation. It helps to make optimum utilisation of resources. These resources are used to achieve the objectives of the organisation. Coordination also minimise the wastage of resources in the organisation.

5. Coordination helps to achieve objectives quickly:-

Coordination helps to minimise the conflicts, rivalries, wastages, delays and other organisational problems. It ensures smooth working of the organisation. Therefore, with the help of coordination an organisation can achieve its objectives easily and quickly.

6. Coordination improves relations in the organization:-

The Top Level Managers co-ordinates the activities of the Middle Level Managers and develops good relations with them. Similarly, the Middle Level Managers co-ordinates the activities of the Lower Level Managers and develops good relations with them. Also, the Lower Level Managers co-ordinates the activities of the workers and develops good relations with them. Thus, coordination overall improves the relations in the organisation.

7. Coordination leads to higher efficiency:-

Efficiency is the relationship between Returns and Cost. There will be higher efficiency when the returns are more and the cost is less. Since coordination leads to optimum utilisation of resources it results in more returns and low cost. Thus, coordination leads to higher efficiency.

8. Coordination improves goodwill of the organization:-

Coordination helps an organisation to sell high quality goods and services at lower prices. This improves the goodwill of the organisation and helps it earn a good name and image in the market and corporate world.


Q.4 Write a note on Human Relations School of Management.
Ans : The human relations approach can also be seen as a response to a highly charged and polarized social climate in which labor and management were viewed as fundamentally opposed to one another, and communism was seen as a very real and immediate danger to the social order -- the notion of class struggle propounded by Marxist theorists was taken very seriously. By focusing on the extent to which workers and managers shared economic interests in the success of the organization, the human relations approach can be seen as an attempt to move beyond the class struggle idea. Of course, the human relations approach (which really emerged in the late 1930s) was made possible by the fairly coercive suppression of the most radical organized labor movements. The sidebar describes one such movement, and is provided in order to indicate the social climate extant in the period immediately preceding the emergence of the human relations approach.
In essence, the human relations approach sees the organization as a cooperative enterprise wherein worker morale is a primary contributor to productivity, and so seeks to improve productivity by modifying the work environment to increase morale and develop a more skilled and capable worker.

The basic principles of the human relations approach are as follows:

(1) Decentralization :

The strict notion of hierarchy employed by classical management theorists is replaced with the idea that individual workers and functional areas (i.e., departments) should be given greater autonomy and decision-making power. This requires greater emphasis on lateral communication so that coordination of efforts and resources can occur. This communication occurs via informal communication channels rather than the formal, hierarchical ones.

(2) Participatory Decision-Making :

Decision-making is participatory in the sense that those making decisions on a day-to-day basis include line workers not normally considered to be "management." The greater autonomy afforded individual employees -- and the subsequent reduction in "height" and increase in span of control of the organizational structure -- requires that they have the knowledge and ability to make their own decisions and the communication skill to coordinate their efforts with others without a nearby supervisor.

(3) Concern for Developing Self-Motivated Employees :

The emphasis on a system of decentralized and autonomous decision-making by members of the organization requires that those members be highly "self-motivated" (that is, able to set their own task-related goals and monitor their own performance in achieving them). So one goal of managers in such an organization is to design and implement organizational structures that reward such self-motivation and autonomy. Another is to negotiate working relationships with subordinates that foster effective communication in both directions.
Thus, the human relations approach suggests changes in the structure of the organization itself, in the nature of work, and in the relationship between supervisor and subordinate. Each of these changes relies upon assumptions about the individual, the organization, and communication , just like any other theory of organizations.


Q.5  Discuss the various kinds of decisions.

Ans : There are many types of decisions which would be required to make as a manager. Three most widely recognised classifications are:

1. Personal and Organisational Decisions
2. Basic and Routine Decisions
3. Programmed and Non-programmed Decisions

1. Personal and Organisational Decisions :-

the basic difference between Personal and Organisational decisions is that "personal decisions cannot ordinarily be delegated to others, whereas organisational decisions can often if not always be delegated"  .Thus, the manager makes organisational decisions that attempt to achieve organisational goals and personal decisions that attempt to achieve personal goals. The personal decisions can affect the organisation, as in the case of a senior manager deciding to resign. However, if we analyse a decision, we may find that the distinctions between personal and organisational decisions are a matter of degree. We are, to some extent, personally involved in any organisational decision that we make and we need to resolve the conflicts that might arise between organisational and personal goals.

2. Basic and Routine Decisions :-

Another common way of classifying types of decisions is according to whether they are basic or routine. Basic decisions are those which are unique, one-time decisions involving long-range commitments of relative permanence or duration, or those involving large investments. Examples of basic decisions in a business firm include plant location, organisation structure, wage negotiations, product line, etc. In other words, most top management policy decisions can be considered as basic decisions. Routine decisions are at the opposite extreme from basic decisions. They are the everyday, highly repetitive, management decisions which by themselves have little impact on the overall organisation. However, taken together, routine decisions play a tremendously important role in the success of an organisation. Examples of, routine' decisions are an accountant's decision on a new entry, a production supervisor’s decision to appoint a new worker, and a salesperson's decision on what territory to cover. Obviously, a very large proportion of the decisions made in an organisation are of the routine variety. However, the exact proportion of basic to routine types depends on the level of the organisation  which the decisions are made.

3. Programmed and Non-programmed Decisions:-

The difference between Programmed (routine, repetitive) decisions and Non-programmed (unique, one-shot) decisions. While programmed decisions are typically handled through structured or bureaucratic techniques (standard operating procedures), non-programmed decisions must be made by managers using available information and their own judgement. As is often the case with managers, however, decisions are made under the pressure of time.
An important principle of organisation design that relates to managerial decision making is Gresham's Law of Planning. This law states that there is a general tendency for programmed activities to overshadow non-programmed activities. Hence, if we have a series of decisions to make, those that are more routine and repetitive will tend to be made before the ones that are unique and require considerable thought.


Q.6  Write a note on Internal and External sources of recruitment.

Ans : Definition of Recruitment:

“Recruitment Is The Process Of Finding And Attracting Capable Applicants For Employment. The Process Begins When New Recruits Are Sought And Ends When Their Applications Are Submitted. The Result Is A Pool Of Application From Which New Employees Are Selected.”

Meaning Of Recruitment:

Recruitment Is Understood As The Process Of Searching For And Obtaining Applicants For Jobs; From Among Them The Right People Can Be Selected. Though Theoretically Recruitment Process Is Said To End With The Receipt Of Applications, In Practice The Activity Extends To The Screening Of Applications So As To Eliminate Those Who Are Not Qualified For The Job.

Internal Sources of Recruitment
The internal sources 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 :

Here, the vacancy is advertised within the organisation. The existing employees are asked to apply for the vacancy. So, recruitment is done from within the organisation.

4.Retired Managers :

Sometimes, retired managers may be recalled for a short period. This is done when the organisation cannot find a suitable candidate.

5.Recall from Long Leave :

The organisation may recall a manager who has gone on a long leave. This is done when the organisation faces a problem which can only be solved by that particular manager. After he solves the problem, his leave is extended.

External Sources of Recruitment:

1.Management Consultants :

Management consultants are used for selecting higher-level staff. They act as a representative of the employer. They make all the necessary arrangements for recruitment and selection. In return for their services, they take a service charge or commission.

2.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. This is because it gives a very wide choice. However, it is very costly and time consuming.

3.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. This source is used for recruiting qualified, trained but inexperienced candidates.

4.Recommendations :

The organisation may also recruit candidates based on the recommendations received from existing managers or from sister companies.

5.Deputation Personnel :

The organisation may also recruit candidates who are sent on deputation by the Government or Financial institutions or by holding or subsidiary companies.


BB0031 - Management development


Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0031 - Management development  Set 2

Marks 30 (2 CREDITS )


Q.1 Write a detailed note on scientific management.

Ans : According to writer, “the term 'scientific management characterises that form of organisation and procedure in purposive collective which rests on Principles of laws derived by the process of scientific investigation and analysis, instead of on tradition or on policies determined empirically and casually by the process of trial and error”. It is therefore a body of rules together with their appropriate expression in physical administrative mechanisms and specialised executives, to be operated in co-ordination as a system for the achievement of a new strictness in the control and process of production. He noticed that there were much disorder and wastage of human as well as other resources at work place. The managers and staffs had no concept about systematic and efficient performance of task. And all were following traditional ways of doing work. So he tried to remove these problems through the development of new concept. Thus the scientific management concept was developed.
Scientific management is the application of efficiency methods of business organisations by taking into view the complete round of activities, observing and recording results with the object of fixing upon a “standard bet” at each stage; then making the results known as widely as possible so that each may know what is on record, and so that every worker's skill, experience, and observation may be available for his fellow-workers and the hole business; and also by adopting the educational methods and ideals. Scientific management is based on the analysis, planning and control functions. And job accomplished by analyzing, and works can selected and trained scientifically. In this, management role is to determine the kind of work for which an employee suited and hire and assign workers accordingly. Management is not responsible for execution of work but they are responsible for how the work is done. Co-operation between management and workers can enhance the work and achieve the maximum output.

Principles of scientific Management:

Under scientific management, Taylor developed the following parameters for organization.

a. Scientific work study
b. Task planning
c. Tools and materials
d. Selection and Training
e. Standardization
f. Worker management interrelationships
g. Differential piece wage system

Objective of Scientific Management:

1.Scientific utilization of various resources like human power, material etc.
2.To provide trained and efficient work force.
3.To provide standardize methods of work.
4.To provide a scientific base for selecting material, and equipment.
5.To provide extra wages to the worker for higher production.
6.Replace old rule of thumbs to new scientific methods.
7.To develop a good rapport between management and workers.
8.To achieve higher production, with reduce costs and maximum efficiency.
9.Less wastage.


Q.2 Define staffing and explain features of staffing.

Ans : Staffing :

As a management function, staffing, or human resource management, is the one that deals with the acquiring, training, appraising and compensation the staff that work for a business. Effective staffing management is crucial to the success of a business. Without the right staff, a business or organization may be unable to deal with any changes or anything new in an efficient and successful manner. Within staffing there are three main principles that should be adhered to in order to run a smooth and cooperative business. These principles are that all managers are human resource management, employees are very important and that human resource management is a matching process.

Features of Staffing:

1)Staffing is a function of management.

2)It is an integral part of the management process.

3)Staffing function is related to employment of personnel of all types - managerial as well as operative in the organization.

4)Staffing includes a variety of activities through which the organization tries to ensure that various positions remain filled by the most suitable personnel.

5)Staffing function is performed by every manager in the organization like other managerial functions, viz., planning, organizing, directing, and controlling, though they receive considerable staff assistance in performing staffing function.

6)It is a continuous and never ending function. Manager of human resources department have to fulfill the staffing needs of an organization not only at the time of its inception but at all times. In addition, it has to hire, train and develop the staff which is an ongoing process.

7)It is a pervasive function. In large organizations, there is generally a separate human resources department. The manager of human resources is responsible for the recruitment, selection, training and appraisal of his subordinates.

8)Staffing is a difficult function since it deals with the needs of human beings. Individuals are not having mere factors of production but they have their own needs, emotions and aspirations.

9)The main aim of staffing is to ensure optimum utilization of resources as well as to provide personal and social welfare satisfaction to employees.

10) Staffing is an integral part of the management process and also it is the responsibility of every manager. In the large or big organisation staffing function is performed by the separate personnel department. It is the duty of every manager to perform the staffing activities such as selection, training, performance appraisal, and remuneration of the employees.

11) Staffing function is continuously performed in the established as well as in the new organisation.

12) The purpose of staffing is to ensure that the right number and the right type of the people are working on the right jobs at the right time and right place. Its objective is to ensure optimum and efficient manpower in the enterprise.


Q.3 What is Co- ordinations and what are the objectives of co ordination?

Ans : Co- ordination :

Co-ordination means to integrate (bring together) all the activities of an organisation. It is done for achieving the goals of the organisation. There must be proper co-ordination throughout the organisation.The synchronization and integration of activities, responsibilities, and command and control structures to ensure that the resources of an organization are used most efficiently in pursuit of the specified objectives. Along with organizing, monitoring, and controlling, coordinating is one of the key functions of management.

1. Coordination encourages team spirit:

There exist many conflicts and rivalries between individuals, departments, between a line and staff, etc. Similarly, conflicts are also between individual objectives and organisational objectives. Coordination arranges the work and the objectives in such a way that there are minimum conflicts and rivalries. It encourages the employees to work as a team and achieve the common objectives of the organisation. This increases the team spirit of the employees.

2. Coordination gives proper direction:

There are many departments in the organisation. Each department performs different activities. Coordination integrates (bring together) these activities for achieving the common goals or objectives of the organisation. Thus, coordination gives proper direction to all the departments of the organisation.

3. Coordination facilitates motivation:

Coordination gives complete freedom to the employees. It encourages the employees to show initiative. It also gives them many financial and non-financial incentives. Therefore, the employees get job satisfaction, and they are motivated to perform better.

4. Coordination makes optimum utilisation of resources:

Coordination helps to bring together the human and materials resources of the organisation. It helps to make optimum utilisation of resources. These resources are used to achieve the objectives of the organisation. Coordination also minimise the wastage of resources in the organisation.

5. Coordination helps to achieve objectives quickly:

Coordination helps to minimise the conflicts, rivalries, wastages, delays and other organisational problems. It ensures smooth working of the organisation. Therefore, with the help of coordination an organisation can achieve its objectives easily and quickly.

6. Coordination improves relations in the organization:

The Top Level Managers co-ordinates the activities of the Middle Level Managers and develops good relations with them. Similarly, the Middle Level Managers co-ordinates the activities of the Lower Level Managers and develops good relations with them. Also, the Lower Level Managers co-ordinates the activities of the workers and develops good relations with them. Thus, coordination overall improves the relations in the organisation.

7. Coordination leads to higher efficiency:

Efficiency is the relationship between Returns and Cost. There will be higher efficiency when the returns are more and the cost is less. Since coordination leads to optimum utilisation of resources it results in more returns and low cost. Thus, coordination leads to higher efficiency.

8. Coordination improves goodwill of the organization:

Coordination helps an organisation to sell high quality goods and services at lower prices. This improves the goodwill of the organisation and helps it earn a good name and image in the market and corporate world.

BB0030 – Role of International Financial Institutions


Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0030 – Role of International Financial Institutions – 2 Credits

(Book ID: – B0172 )

Assignment Set- 1 (30 Marks)

Note: Each question carries 10 Marks. Answer all the questions.


Q.1. Explain why Special Drawing Rights were introduced by IMF. Discuss how SDRs are used by member countries.

Ans :  Special Drawing Rights by IMF :

The SDR was created by the IMF in 1969 to support the Bretton Woods fixed exchange rate system. A country participating in this system needed official reserves—government or central bank holdings of gold and widely accepted foreign currencies—that could be used to purchase the domestic currency in foreign exchange markets, as required to maintain its exchange rate. But the international supply of two key reserve assets—gold and the U.S. dollar—proved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF. However, only a few years later, the Bretton Woods system collapsed and the major currencies shifted to a floating exchange rate regime. In addition, the growth in international capital markets facilitated borrowing by creditworthy governments. Both of these developments lessened the need for SDRs.
The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members.

Use of SDRs by member countries :

SDR allocations to IMF members:

Under its Articles of Agreement (Article XV, Section 1, and Article XVIII), the IMF may allocate SDRs to member countries in proportion to their IMF quotas. Such an allocation provides each member with a costless, unconditional international reserve asset on which interest is neither earned nor paid. However, if a member's SDR holdings rise above its allocation, it earns interest on the excess. Conversely, if it holds fewer SDRs than allocated, it pays interest on the shortfall. The Articles of Agreement also allow for cancellations of SDRs, but this provision has never been used. The IMF cannot allocate SDRs to itself or to other prescribed holders.
General allocations of SDRs have to be based on a long-term global need to supplement existing reserve assets. Decisions on general allocations are made for successive basic periods of up to five years, although general SDR allocations have been made only three times. The first allocation was for a total amount of SDR 9.3 billion, distributed in 1970-72, and the second allocated SDR 12.1 billion, distributed in 1979-81.
Separately, the Fourth Amendment to the Articles of Agreement became effective August 10, 2009 and provided for a special one-time allocation of SDR 21.5 billion. The purpose of the Fourth Amendment was to enable all members of the IMF to participate in the SDR system on an equitable basis and correct for the fact that countries that joined the IMF after 1981—more than one fifth of the current IMF membership—never received an SDR allocation until 2009. The 2009 general and special SDR allocations together raised total cumulative SDR allocations to about SDR 204 billion.


Q.2. Describe how IMF has impacted the Indian economy.

Ans : The relationship between India and the IMF dates back to the time when India needed economic reform packages to strengthen its international reputation and fiscal policy. IMF provided major loans to India to structure its finances and maintain average economic growth rate.

The International Monetary Fund (IMF) is an association of 186 nations, working towards strengthening the international fiscal system, protecting monetary stability, assisting international trade, endorsing greater employment, maintaining fiscal growth, and diminishing poverty rate across the globe.

The organization maintains its association by facilitating:

  • Policy guidance to administrations and nationalized financial institutions on the basis of the assessment of fiscal trends cross national know-how;
  • Providing study data, statistics, predictions and assessments based on the survey of international, local and respective financial systems and markets.
  • Providing loans to assist nations to surmount financial difficulties;
  • Providing provisional finances to help evade poverty in progressing nations and
  • Providing technological support and training to aid nations enhance the administration of their financial systems.

IMF and India Relations:

India is among one of the developing economies that effectively employed the various Fund programmes to fortify its fiscal structure. Through productive engagement with the IMF, India formulated a consistent approach to expand domestic and global assistance for economic reforms. Whenever India underwent balance of payments crises, it sought the help of IMF and in turn the internationally recognized reserve willingly helped India to overcome the difficulties.

Recently, India purchased IMF gold to lend money to developing countries. This proves that the fiscal reforms set in motion by the previous finance ministers have finally started gaining momentum, transforming India from fiscal borrower to major lender.

The speed at which the gold was purchased by India on September 18, 2009 astonished the market observers, who later considered it as a smart move towards shoring its bullion funds and steadily trying to stake on the US dollar. Some analysts predict that India is purchasing gold to move forward for higher voting share in the IMF. India is also seeking for a considerable say in global fiscal affairs and greater account in the IMF.

The Reserve Bank of India forfeited USD 1,045/ ounce of yellow metal paying the amount in hard exchange and not in the IMF's internal division of account.

The history of India's engagement with IMF illustrates that with premeditated planning it is possible to alleviate a macroeconomic calamity and sustain the rights of reform package without negotiating on democratic organizations or international policy autonomy.

IMF 2010-11 prediction of Indian Economy:

India's long term economic prospects will continue to remain sturdy in 2010-11 followed by lower growth rate at 7.7% for the FY 2011-12. Other than high inflation and rising financial deficit, the major areas of concern are rise in asset cost and the prospects of an unanticipated slowdown in the influx of foreign investment in India caused due by the chaos in worldwide financial markets.


Q.3. Discuss how World Bank has helped developing countries.  

Ans :  The World Bank is a vital source of financial and technical assistance to developing countries around the world. We help governments in developing countries reduce poverty by providing them with money and technical expertise they need for a wide range of projects—such as education, health, infrastructure, communications, government reforms, and for many other purposes.

Roles of world bank in the development of developing countries :

1. Eradicate Extreme Poverty and Hunger:

From 1990 through 2004, the proportion of people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries where 90% of the world's undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition.

2. Achieve Universal Primary Education:

The percentage of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005.

3. Promote Gender Equality:

The tide is turning slowly for women in the labor market, yet far more women than men- worldwide more than 60% – are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women's economic empowerment and promote shared growth.

4. Reduce Child Mortality:

There is some what improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. An estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes.

5. Improve Maternal Health:

Almost all of the half million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are numerous causes of maternal death that require a variety of health care interventions to be made widely accessible.

6. Combat HIV/AIDS, Malaria, and Other Diseases:

Annual numbers of new HIV infections and AIDS deaths have fallen, but the number of people living with HIV continues to grow. In the eight worst-hit southern African countries, prevalence is above 15 percent. Treatment has increased globally, but still meets only 30 percent of needs (with wide variations across countries).

7. Ensure Environmental Sustainability:

Deforestation remains a critical problem, particularly in regions of biological diversity, which continues to decline. Greenhouse gas emissions are increasing faster than energy technology advancement.

8.Develop a Global Partnership for Development:

Donor countries have renewed their commitment. Donors have to fulfill their pledges to match the current rate of core program development. Emphasis is being placed on the Bank Group's collaboration with multilateral and local partners to quicken progress toward the MDGs' realization.

BB0030 – Role of International Financial Institutions


Feb drive 2011

Bachelor of Business Administration-BBA Semester 6

BB0030 – Role of International Financial Institutions

Subject code – BB0030  (2 credits)

Marks 30

Q1. How has India benefited from International Development Association?

Ans :  The International Development Association (IDA) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. The IDA is a member of the World Bank Group and is headquartered in Washington, D.C., United States. It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from the lowest gross national income, from troubled creditworthiness, or from the lowest per capita income. Together, the International Development Association and International Bank for Reconstruction and Development are collectively known as the World Bank, as they follow the same executive leadership and operate with the same staff

India largest borrower of IDA, which helps poorest countries. The IDA (International Development Association) benefits the Indian state in several ways, but overall its main objective is to help combat poverty.
Because India has a low gross national income and has a low credit rating, it would really struggle to borrow funds. The IDA works together with the International Bank to make it easier for under developed and developing countries to gain access to loans and grants, and being part of the IDA allows India access to that financial support.

The IDA lends to countries with the aim to finance projects that will develop infrastructure and improve education, healthcare, access to clean water and sanitation facilities, and environmental responsibility. It is considered to be the soft lending window of the World Bank, while the IBRD is considered to be the hard lending window. The association offers grants and loans with maturities ranging from 25 to 40 years, grace periods of 5 to 10 years, and interest rates of 2.8% or 1.25% depending on whether the borrower is a blend country and to which degree it is eligible. Regular IDA-eligible borrowers may take advantage of no-interest loans. Financial resources are allocated to eligible countries based on their success at implementing pro-growth and a poverty-reducing domestic policies. The IDA uses the World Bank's Country Policy and Institutional Assessment (CPIA) development indicator to determine each country's place in a resource allocation index. It then prioritizes its lending to those countries which are indicated to be most promising in terms of favorable policies and aid effectiveness. The IDA adopted the Crisis Response Window in 2007 to enable the rapid provision of emergency financing in response to crises. The association adopted the Immediate Response Mechanism in 2011 to provide IDA borrowers with immediate access to withdraw undisbursed portions of their loans, should a crisis arise that meets the mechanism's criteria


Q2. What are the types of assistance given by The International Finance Corporation?

Ans :

The International Finance Corporation (IFC) is the private sector lending arm of the World Bank Group, providing financial services to businesses investing in the developing world. As private enterprises often privilege “business confidentiality” over the public’s right to know, it is frequently difficult for the public to measure or influence the development impacts of the IFC’s activities.

The IFC was established in 1956 to support the growth of the private sector in the developing world. The IFC’s stated mission is “to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.” While the World Bank (IBRD and IDA) provides credit and non-lending assistance to governments, the IFC provides loans and equity financing, advice, and technical services to the private sector. The IFC also plays a catalytic role, by mobilizing additional capital through loan syndication and by lessening the political risk for investors, enabling their participation in a given project. The IFC has worked with more than 3319 companies in 140 countries since its inception in 1956.
The IFC is one of the fastest growing institutions in the World Bank Group, with a committed portfolio of USD $32.4 billion for IFCs own account, and $7.5 billion in loan syndications as of Fiscal Year 2008. It is a public entity, although its clientele consists of transnational, national, and local private sector companies, operating in a competitive and fast-moving business environment.

Investment services:

The IFC's investment services consist of loans, equity, trade finance, syndicated loans, structured and securitized finance, client risk management services, treasury services, and liquidity management. In its fiscal year 2010, the IFC invested $12.7 billion in 528 projects across 103 countries. Of that total investment commitment, approximately 39% ($4.9 billion) was invested into 255 projects across 58 member nations of the World Bank's International Development Association (IDA)

Advisory services:

In addition to its investment activities the IFC provides a range of advisory services to support corporate decision making regarding business, environment, social impact, and sustainability. The IFC's corporate advice targets governance, managerial capacity, scalability, and corporate responsibility. It prioritizes the encouragement of reforms that improve the trade friendliness and ease of doing business in an effort to advise countries on fostering a suitable investment climate. It also offers advice to governments on infrastructure development and public-private partnerships. The IFC attempts to guide businesses toward more sustainable practices particularly with regards to having good governance, supporting women in business, and proactively combating climate change.

Asset Management Company:

The IFC established IFC Asset Management Company LLC (IFC AMC) in 2009 as a wholly owned subsidiary to manage all capital funds to be invested in emerging markets. The AMC manages capital mobilized by the IFC as well as by third parties such as sovereign or pension funds, and other development financing organizations.


Q3. In what way has the Asian Development Bank assisted India? Give current information also.

Ans : India joined ADB at its founding in 1966 and since lending operations began in 1986, the world’s largest democracy of 1.2 billion people has undergone dramatic changes. Growth rates have climbed steadily from under 3% in the 1970’s to over 8% in fiscal year 2010, as the government carried out major economic reforms. But while the past four decades have seen a significant reduction in absolute poverty and the emergence of a burgeoning middle class, vast numbers of people still remain poor, and the country needs to address the challenge of ensuring that growth is inclusive. The goal of ADB’s current partnership with India is to help ensure the benefits of a fast expanding economy are shared by all, and that the growth is made environmentally sustainable, amidst increasing pressure on natural resources.

Past support

ADB’s early assistance was focused on support for national programs in sectors including transport, energy and urban infrastructure development. While it remains committed to providing support in these sectors, ADB has also been widening the scope of its assistance into areas such as agribusiness infrastructure, water resource management, climate change resilience, and tourism development.
It has also begun to shift its operations to assist individual states, particularly states which are economically lagging behind. Expanding the use of renewable energy, including solar power and providing assistance to deepen public-private partnerships for infrastructure development, are also an important part of the ongoing India-ADB partnership.

Present support :

In 2010, new highs were set for loan approvals and the performance of projects and programs in ADB’s broad portfolio of activities. Contract awards and disbursements also reached record levels. At the end of 2010 cumulative lending assistance had reached over $24 billion. Development gains in India have been achieved in many areas, with primary school enrolment rates likely to meet, or even exceed, this key 2015 Millennium Development Goal (MDG). However the country needs to keep pushing hard in progressing other key MDG indicators and continue to address structural changes to ensure growth is inclusive and sustainable.

Future progress:

Looking forward, ADB’s focus will be on helping India meet the goals of its current five year economic development plan, which includes improving the delivery of essential services to the poor, building up the rural economy, balancing growth with protection of the environment, and reducing development gaps between states, regions, sectors, and genders.

Earlier in 2011, a new three-year country business plan was signed that will see ADB provide India with lending assistance of $6.25 billion for 2012-2014. This assistance will be targeted across a broad range of areas, including the continued rollout of infrastructure in states and rural areas where the need is greatest.

Creating an environment for small businesses and the private sector to flourish, along with tackling daunting climate change and other environmental challenges are also high on the agenda.