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: Summer 2015

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Q1. List and describe the different strategies in the Organization.

Answer- Strategy
Once you have your vision, you have to see how that vision can be executed. Here is where strategy comes
in. Strategy means the grand plan and the term is borrowed from the military which distinguished between
the grand plan and actual action by calling the former strategy and the latter tactics.
Strategy in organisations can be divided into three:
Corporate strategy
Business strategy
Functional strategy
Let us now discuss each of them in detail.
Corporate strategy
If you are a company like TATA or BIRLA, you will have several businesses under you and a corporate
headquarters which controls these. Each of these businesses may be run by an independent company much
like Tata Motors runs the vehicle business and Tata Consultancy Service runs the IT business (they both are
different companies). The corporate headquarters will have grand plans on how each business should
operate. For example, it might say that that Tata Motors should design, develop, and manufacture an
indigenous small car Nano or that TCS should expand business to China. This grand plan created by the
corporate headquarters is called Corporate Strategy. It lays down the grand plan to be followed by each
business under a corporate headquarters. If you are small like Raju, you will not have a corporate strategy;
however, will still have a strategy for your business. Though you can call it the corporate strategy of Raju on
the argument that Raju is a corporate, it is perhaps inappropriate. Since Raju is not very big, usually we
prefer to call his strategy as business strategy.
Business strategy
Every business, small or big, will have a business strategy. This is the grand plan for doing business. For
example, Raju can make a grand plan of expanding his business to another district or having branches. He
can take a decision to be the provider of low cost furniture or highly differentiated furniture, household
furniture only, modular furniture only, a supplier of all furniture needs, etc. This is what business strategy is.
If you were a TATA company, each business of TATA (say Tata Motors, Tata Iron and Steel Company,
Tata Hotels, etc) would have their own business strategy in consonance with the corporate strategy.
Functional strategy
Once you have a business strategy, each independent department will need its own strategy. For example,
the HR of Tata Motors will need a strategy quite different from the HR of Tata Consultancy Service (TCS).
So, the operations, marketing, finance, HR, etc of each business will make their own grand plan or strategy
and this is called functional strategy. In the case of Raju, he might plan to hire more carpenters and pay daily
wages or wages per piece. This is the HR strategy (of course it is only one element of HR strategy but
illustrates what functional strategy means). In other words, the grand plan made by each functional area is
called functional strategy. Usually organisations have operations strategy, finance strategy, marketing
strategy, and HR strategy. If you are large and well diversified, you may have an information strategy,
supply chain strategy, etc. also and this depends to some extend on the nature of your business. For example,
if you are in retail chain business like Big Bazaar, you may have a merchandise strategy (what products to
sell) and supply chain strategy (how to procure the products at the lowest cost and move them nationally) as
these are very important to business success. Similarly, Raju too can have a strategy to purchase wood in
bulk from Malaysia and ship it and call it his procurement strategy.

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Q2. What do you mean by Decision Making? Explain Decision making under certainty, uncertainty and
risk. Describe the steps in Creative Decision making.
Answer- Decision making can be defined as the way of choosing from the alternatives. Since no action can
be taken without a decision, planning will not go any further without a decision and hence, decision making
is an integral part of planning even if it is done quickly or with little thought.

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Decision making under certainty, uncertainty, and risk

In the case under consideration, Rakhi, for example, does not have answers to so many questions,
yet she would take a decision. This is called deciding under uncertainty. While taking a decision
under uncertainty, we usually use experience, intuition, and often experimentation rather than
research and analysis.
Some of the decisions can be taken under certainty. For example, you can take a decision after
knowing the rent of the place and the contract details.
Decision under risk Risk is not the same as uncertainty. Risk can be estimated much like an
insurance company estimates the risk of a young person, old person, one with a heart ailment, etc.
Since risk can be estimated, we can hedge the risk.
Creative decision making
In a complex world, we have to take creative decisions more so when there is change and uncertainties. Let
us see how we do this.
Incubation To make creative decisions, first we allow a problem to simmer in our mind in the
unconscious. You must have observed how an important question remains in your mind without an
answer for some time and then you get an answer to it all of a sudden. This happens because you
incubate the problem enabling your brain to connect the various aspects and then find a possible
solution.
Intuition After you have incubated it for some time, you get an intuition, i.e., what is in the
unconscious is connected to the conscious. There is no clear explanation to this process but in
decision making, we accept that this happens in many cases.
Insight Insight is something concrete about the underlying nature of the problem and its solution
comes to us often when we are not thinking of the problem. Your brain connects the need of a
solution with the intuition and gives you possible answers. They are untested and may or may not
work. Insight is the result of hard work where you have thought of many variables, permutations, and
combinations.
Logical formulation or verification Here we verify the insight and see its viability and then take a
decision.
These are some of the ways in which we take decisions and since managers are paid first and foremost to
take decisions, it is important that we build on this basic input and fine tune our creative decision making
skills.
Creative decision making
In a complex world, we have to take creative decisions more so when there is change and uncertainties. Let
us see how we do this.
Incubation To make creative decisions, first we allow a problem to simmer in our mind in the
unconscious. You must have observed how an important question remains in your mind without an
answer for some time and then you get an answer to it all of a sudden. This happens because you
incubate the problem enabling your brain to connect the various aspects and then find a possible
solution.
Intuition After you have incubated it for some time, you get an intuition, i.e., what is in the
unconscious is connected to the conscious. There is no clear explanation to this process but in
decision making, we accept that this happens in many cases.

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Insight Insight is something concrete about the underlying nature of the problem and its solution
comes to us often when we are not thinking of the problem. Your brain connects the need of a
solution with the intuition and gives you possible answers. They are untested and may or may not
work. Insight is the result of hard work where you have thought of many variables, permutations, and
combinations.
Logical formulation or verification Here we verify the insight and see its viability and then take a
decision.

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Q3. What is meant by span of control? Differentiate between narrow span of control and wide span of
control. What are the factors that influence the span of control?
Answer- The term span of control indicates the number of employees or managers who work under one
head. Span of control may be narrow or broad. When a very few people report to a head and a chain is made
that way upward, then it is called narrow span. Thus in a narrow span, a department may have three or four
sections, under each section head, there could be another two or three sub section and under each sub section
there could be nine or ten employees. In a wide span there may be 20, 30, or more subordinates under one
head. Table depicts the advantages and disadvantages of narrow span and wide span.

Factors that influence the span of control

The time that a manager gets to spend with the subordinate is the fundamental factor. Based on this, several
sub factors emerge and are discussed below.
Training Wide span demands high level of training while in narrow span, one can manage with
less.
Task definition and delegation Wide span demands clear task definition and delegation while this
can be much less in a narrow span.
Well defined plans and repetitive process If the business has these, a wide span is viable, if not a
narrow span is preferred.
Verifiable objectives Wide span demands verifiable objectives and this is much less in narrow
span.
Speed of change When the speed of change is high, a wide span may not be practical from a
communication perspective but may not be practical if such changes need close control.
Organization structure, written and oral communication When this is of a higher order, wide
span can work well.
Effective interaction and meeting Wide span demands both more than narrow span.
Specialists When there are a greater number of specialists at the upper level, a wide span is
preferable. If the number of specialists is more at the lower level, then a narrow span can work
better.
Task simplicity If the task is simple, a wide span is viable.
Competency of managers With highly competent managers, a wide span works well.

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Subordinate readiness If the subordinates are mature and are willing to assume responsibility, a
wide span works well.

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Q4- Define Organizational behaviour. What are the various approaches to

Organisational behaviour?
Answer- Organizational behavior is a field of study that investigates the impact that individuals, groups
and structures have on behavior within an organization for the purpose of applying such knowledge towards
improving an organization's effectiveness.[1] It is an interdisciplinary field that includes sociology,
psychology, communication, and management; and it complements the academic studies of organizational
theory (which is focused on organizational and intra-organizational topics) and human resource
studies (which is more applied and business-oriented). It may also be referred to as organizational
studies or organizational science.

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Modern approach to organisational behaviour

There are four main approaches to organisational behaviour. They are:
Human resources approach
Contingency approach
Productivity approach
Systems approach
Let us now study each approach in detail.
Human resources approach
The human resources approach is concerned with the growth and development of people towards higher
levels of competency, creativity and fulfillment. People are the central resource in any organisation. Hence it
tries to create a work climate for improved abilities. This approach is also known as 'supportive approach'
because the manager's primary role changes from control of employees to providing an active support for
their growth and performance. Service based economy, where the service provider, the employee and the
customer have to work together (e.g., serving food in a restaurant, buying an insurance, etc.) has very high
relevance. Here the roles of leadership and the leading process are vital.
Contingency approach
It implies that different situations require different behavioural practices for effectiveness. Hence each
situation must be analysed carefully to determine the significant variables that exist in order to establish the
more effective practices. This approach ensures or at least encourages analysis of each situation prior to
action. Thus it helps to use all the current knowledge about people in the organisation in the most
appropriate manner.
Productivity approach
In this approach, the output per unit input is considered. Besides, economic inputs and outputs, we need to
have human and social inputs and outputs in workplace, is the premise of this approach.
Systems approach
We have already seen the systems approach. It means that the organization 'people' employ 'technology' in
performing the 'task' that they are responsible for, while the 'structure' of the organisation serves as a basis
for coordinating all their different activities. The systems view emphasises the interdependence of each of
these elements within the organisation, if the organisation as a whole is to function effectively.
Q5- Perception is the way we see and interpret things. Explain the importance of such perception.
What are the factors affecting perception?
Answer- Perception is the process by which individuals organise and interpret their sensory impressions in
order to give meaning to their environment.
Importance of perception

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Perception is perhaps the most important aspect of OB that we use in our daily life and in management. The
importance of perception is:
While creating vision for an organisation, our perception of the future and the way things should be
is a deciding factor.
While making strategy, out perception of the opportunities and threats make us see the same situation
differently.
Perception gives the impetus to seek more information to make more rational decisions e.g., the
perception of Rakhi on the situation of the bakery in trouble, made her travel and talk to the
employees to gain more information. If she had perceived what the manager did was right or that it is
too small a thing to intervene, she would not have made the effort to find out more information.
Perception affects the planning because the goals set depend on our perception of the world and the
employees and their ability to achieve them.
Business leaders make an effort to change the perception of the employees to bring about change.
The controls that we put in place are based on our perception of the competence and sincerity of the
employees.
Reasons for most workplace stress and conflict are differing perception and biases in perception.

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Factors affecting perception

Factors that affect perception are:
Perceiver related factors
Target related factors
Situation related factors

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Target related factors. These are novelty, motion, sound, size, background and proximity. We see how
these are used in business especially advertisements. Rakhi used to bake a cake for birthday of every one of
her employees. This is novelty because employers dont do it. Had the manager talked to this assistant
manager softly but firmly in his room the sound, background and proximity would have been more
appropriate for the advice rather than on the shop floor. If he had used the right body language and done
some small talk as a background, the advice would most probably have been received better. This is how the
target related factors affect perception.
Situation related. Time, work setting, work tradition, nature of word and social setting are important factors
in a work situation that affect perception.
The manager admonished his assistant manager with long experience during the peak work time, it was done
against a work setting that focus on total customer satisfaction if not literal pampering of the customers,
which was Sambhavis tradition, the nature of work too was service and the attraction was kid care and
merchandise, which makes the service very different from a standard eatery or even a good restaurant.
Hence the work setting too was very different.

Q6- Give the definition and importance of motivation. Describe Maslows hierarchy of needs theory.
Answer- Motivation is the process that account for an individuals intensity, direction, and persistence of
effort toward attaining a goal.
In general, motivation has the following benefits:
Puts human resources into action and enables organisations to coordinate its physical and financial
resources to achieve its goals.
Improves efficiency by increasing productivity and decreasing cost.

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It leads to innovation because of the desire to do a job better and accomplish a challenge.
It leads to best possible utilisation of resources.
It creates a co-operative work environment where high degree of coordination is achieved and
reduces the cost of controls.
It makes them goal oriented and therefore makes them capable of delivering even in the absence of
close supervision.
Leads to stability of work force and the consequent low turnover, recruiting cost and increases
predictability.

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Maslows hierarchy of needs theory

According to this theory, proposed by Maslow (1943), human beings have wants and desires which
influence their behaviour. Only dissatisfied needs can influence behaviour. The needs follow an order of
importance (called hierarchy) and when a lower need is satisfied, he has a need to satisfy a higher level
need. Maslow created the following five hierarchies1. Physiological Includes hunger, thirst, shelter, sex, and other bodily needs. So if the workplace does not
fulfil these, an individual will not be motivated. If he gets these, he will need the next hierarchy.
2. Safety Includes security and protection from physical and emotional harm and therefore he looks for
safer working place, and does not want to be threatened or abused in the workplace.
3. Social Includes affection, belongingness, acceptance, and friendship in the workplace and if he gets this,
he will be happy to work hard. Workplaces which guarantee this motivate them. We saw in the Hawthorne
experiments, how social relationship led to higher productivity.
4. Esteem Includes internal esteem factors, such as, self-respect, autonomy, and achievement; and external
esteem factors, such as status, recognition, and attention. So, when we set goals, supports him to achieve it
and rewards him for it, it fulfills his esteem needs and also other needs because of the money he gets as a
result which he can use to fulfill the other needs such as buying a house (safety), giving a party (social) or
donating for charity (self esteem or self actualisation). The focus of organisations today is to fulfil this need
and social need and so combine it with reward that he can fulfil most of his other needs.
5. Self-actualisation The drive to become what one is capable of becoming; includes growth, achieving
ones potential, and self-fulfilment.