EKLAVYA NET PAPER 2 Business Management class 3.pdf

BUSINESS MANAGEMENT

1. EKLAVYA ACADEMY
COMMERCE &MANAGEMENT
BUSINESSMANAGEMEN
By,
Mrs.Abhilasha.N
Mcom, MPhil, NET-JRF,SET, (Ph.D. in commerce),
Contact No: 9620925899

2. Theterm‘motivation’hasbeenderivedfromtheword‘motive’.Motivemaybedefinedasan
innerstateofourmindthatactivatesanddirectsourbehaviour.Itmakesusmovetoact.Motivationis
somethingthatmovesthepersontoactionandcontinueshiminthecourseofactionalreadyinitiated.
AccordingtoS.P.Robbins,”Motivationisthewillingnesstoexerthighlevelsofefforttowards
organizationalgoals,conditionedbytheeffortandabilitytosatisfysomeindividualneed”.
Therelationshipbetweentheorganizationanditsmembersisinfluencedbywhatmotivates
themtoworkandtherewardandfulfilmenttheyderivefromit.Themanagerneedstoknowhowbestto
elicittheco-operationofstaffanddirecttheirperformancetoachievingthegoalsandobjectivesofthe
organization.
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MOTIVATION
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3. Motivation is a psychic force that drives an individual towards goalrealizations.
•Rensis Likert has called motivation as the core of themanagement.
•Motivation derived from Latin word Movere which means tomove.
•Need = physiological +psychological
•If the individual has high intensity for the achieving the goal then his level of motivation is alsohigh.
•Motivation-A goal directedbehavior.
•Motivation related tosatisfactions.
•Satisfactions refer to the contentment experiences of an individual which he derives out of needfulfillment.
•Persons motivated in totality not inpart.
•Nature of motivation –based on motives, affected by motivating, goal directed behavior, relatedto
satisfaction, person motivated in totality, complexprocess.
•Need is a natural and biological phenomenon in anindividual.
MOTIVATION
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4. TYPESOFMOTIVATION
Therearemainlytwotypesofmotivationssuchas
•ExtrinsicMotivation
•IntrinsicMotivation
ExtrinsicMotivationisgearedtowardexternalrewardsandreinforcer's.Someexamplesofexternal
rewardsaremoney,praise,awards,etc.Someexamplesofexternalreinforcer'sarepolicyand
procedures,disciplinaryaction,speedingtickets,boundary-setting,etc.Extrinsicmotivationis
externalinnature.Themostwell-knownandthemostdebatedmotivationismoney.Beloware
someotherexamples:Employeeofthemonthaward,Benefitpackage,Bonuses,Organizedactivities
IntrinsicMotivationisgearedtowardinternalrewardsandreinforcer's.Peoplemayworkatajob
becauseitgivesthemfeelingsofcompetenceandasenseofpersonalcontroldoingthejobisfun,
theworkismatterofpride,thetasksarechallenging,andsoon.Ourdeep-rooteddesireshavethe
highestmotivationalpower.Belowaresomeexamples:Curiostiy,independence,honour,poweretc
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6. THEORIES OFMOTIVATION
CONTENTBASED
“Identify internal factorsinfluencing
motivation or it answers to what
motivates anindividual”
PROCESSBASED
“Identify process by which internal
factors and cognitions influences on
motivation or The process theoriesdeal
with “How” the motivationoccurs”
Maslow’s need hierarchytheory Adam’s Equitytheory
Alderfer’sERG Vroom’s expectancytheory
Mc Celland’s needtheory Goal sittingtheory
Herzberg’s motivation Adam’s EquityTheory
X and Ytheory
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7. 1.MASLOW–HIERARCHYOFNEEDS:
Maslow'shierarchyofneedsisatheoryinpsychologyproposedbyAbrahamMaslowinhis
1943paper"ATheoryofHumanMotivation"inpsychologicalReview.Maslowsubsequently
extendedtheideatoincludehisobservationsofhumans'innatecuriosity.
Humanbehaviorisgoal-directed.Motivationcausegoal-directedbehaviour.Itisthrough
motivationthatneedscanbehandledandtackledpurposely.Thiscanbeunderstoodby
understandingthehierarchyofneedsbymanager.Theneedsofindividualservesasadrivingforce
inhumanbehaviour.Therefore,amanagermustunderstandthe“hierarchyofneeds”.Maslow
hasproposed“TheNeedHierarchyModel”.
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9. 2.Herzberg’s Motivation-HygieneTheory:
ItsgivenbyFredrickHerzbergandhisassociates,whostudiedthevariablesthatareperceivedto
bedesirabletoachievegoalsandtheundesirableconditionstoavoid.Inthiscontext,thestudy
wasconductedwhereintheexperiencesandfeelingsof200engineersandaccountantswere
analyzed.ItisalsocalledTWOFACTORTHEORY.
HYGIENEFACTOR
“These factors essential for existence of
motivation at workplace, if these factorsnon-
existent at workplace, then they lead to
dissatisfactions”
MOTIVATINGFACTOR
“Increaseinthesefactorswillsatisfyemployees
andhelpstoimproveperformance.Butdecrease
inthesefactorswillnotcausedissatisfactions”
Salary Promotion
Companypolicy Opportunity for personalgrowth
Physical workingconditions Recognition
Jobsecurity Achievement
Quality of supervision & relationship withothers Be role model toothers
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10. 3.McClelland’sNeedsTheory:
McClelland’sNeedsTheorywasproposedbyapsychologistDavidMcClelland,whobelieved
that the specific needs of the individual are acquired over a period of time and gets molded
with one’s experience of the life. McClelland’s Needs Theory is sometimes referred to asThree
NeedtheoryorLearnedNeedsTheory.
•NeedforPower(n-pow):WhatisPower?Poweristheabilitytoinduceorinfluencethebehaviorof
others.Thepeoplewithhighpowerneedsseekhigh-levelpositionsintheorganization,soastoexercise
influenceandcontroloverothers.Generally,theyareoutspoken,forceful,demanding,practical/realistic-
notsentimental,andliketogetinvolvedintheconversations.
•NeedforAffiliation(n-affil):Peoplewithhighneedforaffiliationderivespleasurefrombeinglovedby
allandtendtoavoidthepainofbeingrejected.Since,thehumanbeingsaresocialanimals,theyliketo
interactandbewithotherswheretheyfeel,peopleacceptthem.Thus,peoplewiththeseneedsliketo
maintainthepleasantsocialrelationships,enjoythesenseofintimacyandliketohelpandconsoleothers
atthetimeoftrouble.
•NeedforAchievement(n-ach):McClellandfoundthatsomepeoplehaveanintensedesiretoachieve.Hehas
identifiedthefollowingcharacteristicsofhighachievers:Intensedesireforsuccessandfearoffailureand
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11. 4.ALDERFER’S ERGTHEORY:
ofMaslow’s
Clayton Paul Alderfer’s ERG Theory is theextension
Needs Hierarchy,whereintheMaslow’sfiveneeds are
categorizedintothreecategories,Viz.ExistenceNeeds,RelatednessNeeds,and
GrowthNeeds.
•ExistenceNeeds:Theexistenceneedscomprisesofallthoseneedsthatrelate
tothephysiologicalandsafetyaspectsofhumanbeingsandarea
prerequisiteforthesurvival.Thus,boththephysiologicalandsafety
needsofMaslowaregroupedintoonecategorybecauseoftheirsame
natureandasimilarimpactonthebehaviorofanindividual.
•RelatednessNeeds:Therelatednessneedsrefertothesocialneeds,thatan
individualseekstoestablishrelationshipswiththoseforwhomhecares.
TheseneedscovertheMaslow’ssocialneedsandapartofesteemneeds,
derivedfromtherelationshipwithotherpeople.
•GrowthNeeds:ThegrowthneedscoverMaslow’sself-actualization
needsaswellasapartofesteemneedswhichareinternaltothe
individual,suchasafeelingofbeingunique,personnelgrowth,etc.
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12. X & YTHEORY
“ In 1957,Douglas Mc Geoger introduces X & Ytheory”
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14. ProcessTheories:
1.VROOM’SEXPECTANCYTHEORY:
Vroom’sExpectancyTheorywasproposedbyVictor.H.Vroom,whobelievedthatpeopleare
motivatedtoperformactivitiestoachievesomegoaltotheextenttheyexpectthatcertainactionsontheir
partwouldhelpthemtoachievethegoal.Also,calledVIEtheory(Valence,Instrumentalityand
Expectancy).
MOTIVATION = VALENCE *INSTRUMENTALITY*EXPENTANCY
•Expectancy –aperson’s belief that more effort will result in success. If you work harder, it will result in
betterperformance.
•Instrumentality–theperson’sbeliefthatthereisaconnectionbetweenactivity and goal. Ifyou
performwell,youwillgetreward.
•Valence–thedegreetowhichapersonvaluesthereward,theresultsofsuccess.
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2.ADAM’SEQUITYTHEORY:
TheAdam’sEquityTheorypositsthatpeoplemaintainafairrelationshipbetweenthe
performanceandrewardsincomparisontoothers.Inotherwords,anemployeegetsde-motivatedbythejob
andhisemployerin
casehisinputsaremorethantheoutputs.TheAdam’sEquityTheorywas
proposedbyJohnStaceyAdams,andisbasedonthefollowingassumptions:Individualsmakecontributions
(inputs)forwhichtheygetcertainrewards.
•Overpaid=Outcome>input(Guiltfeeling)
•Underpaid=Outcome<input(dissatisfaction)
•Equity=Outcome=Input(Satisfaction)
“EQUALPAYFOREQUALWORK”
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16. 3.GOALSETTINGTHEORY:
In1960’s,EdwinLockeputforwardtheGoal-settingtheoryofmotivation.This
theorystatesthatgoalsettingisessentiallylinkedtotaskperformance.Itstatesthatspecificand
challenginggoalsalongwithappropriatefeedbackcontributetohigherandbettertask
performance.Theimportantfeaturesofgoal-settingtheoryareasfollows:
Thewillingnesstoworktowardsattainmentofgoalismainsourceofjob
motivation.Clear,particularanddifficultgoalsaregreatermotivatingfactorsthaneasy,general
andvaguegoals.Insimple,intentiontoworktowardsagoalismainsourcesofworkmotivation.
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17. 4.REINFORCEMENTTHEORY:
Thistheoryisbasedontheconceptsofoperandconditioning developedbyB.F.Skinner.Itargues
thatthebehaviorofpeopleislargelydeterminedbyitsconsequence.Inotherwords,thoseactionsthattendtohave
positiveorpleasantconsequencestendtoberepeatedmoreofteninfuture,whilethose actions that tend to have
repeatednegativeorunpleasantconsequencesarelesslikelytoberepeated again.
The reinforcement theory suggeststhat managers should try to structure the contingencies of
rewardsandpunishmentsonthejobinsuchawaythattheconsequencesofeffectivejobbehaviorarepositivewhile
the consequences of ineffective work behavior are negative or unpleasant. The focus of this approach is upon
changingormodifyingthebehaviorofpeopleonthejob.thatiswhyitisalsoregardedasorganizationalbehavior
modification.
1.PositiveReinforcement:Amethodofstrengthening behaviorwithrewardsorpositive outcomes afteradesired
behavior isperformed.
2.Avoidance / Negative reinforcement: Used to strengthen behavior by avoidingunpleasant consequences that
would result if the behavior was notperformed.
3.Punishment:Usedtoweakenundesiredbehaviorsbyusingnegativeoutcomesorunpleasantconsequencewhen
thebehavior isperformed.
4.Extinction: Used to weaken undesired behaviors by simply ignoring or not reinforcing thatbehavior.
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19. LEADERSHIP
“Ability of a manager to induce the subordinates to work with confidence and
zeal”
TYPES OF LEADERSHIP:
1.TransformationalLeader:(Higher level –Top linegrowth)
-Given by James Burns(1978)
- It is the abilities that allow the leader to recognize the change to create
the vision to guide thatchange.
2.Transactional Leader: (Lower level –Bottom linegrowth)
-ByAdams
-It involves routineswork
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20. LEADERSHIPSTYLE
1.Authoritarian or autocratic :The autocratic style of leadership is also known as authoritative
style or directive style of leadership, in which the autocratic leader retains most of the authority for
himself/herself. An autocratic leader gives orders to his/her subordinates and expects that
subordinates should give complete obedience to the orders issued. In this type, the decisions are
taken by the leader without consultingothers.
2.Participative or democratic: This style of leadership is also known as participative style of
leadership. In this style, the subordinates are also involved in decision making. The democratic style
of leadership can be further categorized into three types: Consensus: A consensus leader makes a
decision only after consulting the group members. A decision is not made final until all the members
agree with the decisions. Consultative: A consultative leader takes the opinion of the employees
before making a decision Democratic: In the democratic style, the final authority of making
decisions rests with thesubordinates.
3.Delegating or Laissez faire leadership:The Laissez-Faire leadership is also known as free-
reign leadership. In this style of leadership, the decision making power is completely left withthe
subordinates.Theleader’sinvolvementinmakingdecisionisminimizedandthepeopleareallowed
tomaketheirowndecisions.Thegroupmembersaregivencompletefreedominsettingtheirown
goalsandachievingthem,whichgivethemcompleteautonomy.Employeesunderthisleader,tend
tobecomeself-sufficientandguidanceisnotofferedbyleadersunlessrequested
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21. LEADERSHIPTHEORIES
1.Great man theory: It says leaders are born and notmade
2.Trait theory (by Bernard) : Modification of great man theory he says leader need not
always be born, leadership qualities can be acquired. Certain identified qualities thatare
unique inleaders
3.Contingency theory (RM Stogdill): There is no one best style of leading.Leadership
effectiveness varies from situation tosituation.
4.LPC model (By Fiedler’s): Its refers to Lease preferred co-worker. High LPCleader
are “Relationship oriented” and low LPC leader are “Task oriented”leadership.
5.Behavioural theory: It advocates that leadership is shown by acts rather thantraits.
6.Michigan theory : It has two dimension: a) Employee oriented (Relationship)b)
Production oriented(Task)
7.Path Goal theory : Its given byRobertHouse,it’s the communication ofsituational
leadership and vrooms expectancy theory ofmotivation.
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22. MANAGERIAL GRID
“Its given by Blake and Mouton. It has two dimension a) Task concernfor
production b) Relationship concern forpeople”
1.9 (Country club) : High concern for
people and low concern for production (HCP
&LCP)
9.9 (Team management) : High concernfor
production and high concern forpeople
5.5. (Middle of the road): Middle path of
people andproduction.
1.1 (Impoverished) : Low concern for
people and low concern forproduction
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23. LIKERT MANAGEMENT SYSTEM
Its given by Rensis Likert. He has identified 5 system ofmanagement:
➢Exploitative : No trust and confidence insubordinates
➢Benevolent : Confidence and uses rewards to encourage but decision makingby
management
➢Participative : Leader engages subordinates in decisionmaking
➢Consultative : Leader consults workers in decisionmaking
➢Democratic –Completefreedom
TRIDEMENSIONAL GRID (3D management)
It is given by Reddin. He has given 3 dimension towardsleadership
a)Task
b)Relationship
c)Effectiveness
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24. SPAM OFMANAGEMENT
“Span of management/span of control/span of supervision”, it refers of
number of subordinates which should be put under one superior. Ideally
between 3 to 8 subordinates is good formanage.
RESPONSIBILITY
“Obligation of an individual to carry out assigned activities (mental or
physical) to the best of his or her ability. In simple, it refers to obligations to
dosomethings.Some of the types of responsibilitiescentre:
a)Costcentre
b)Profitcentre
c)Investmentcentre
d)Contributioncentre
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25. AUTHORITY (Formal right to dowork)
“Power and right of a person to use and allocate the resources efficiently to
take decisions and to give orders so as to achieve organisationalobjectives”
Therefore, Authority is the right whereas responsibility is obligation.
Authority flows download and responsibility flows upward (bottom totop)
DELEGATION
“Process of assigning authority from a superior to hissubordinates”
DECENTRALISATION
“Organisational process by which dispersal of authority take place through the
organisation. It is an end result of process of delegation. Top level manager
have overall control and operating control vests with thesubordinates.
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26. CORPORATE GOVERNANCE
“It is the way the companies are directed and managed”. It is conducted by
BOD and concerned committee’s for companies stakeholdersbenefits.
PRICIPLES OF GOODGOVERNANCE:
•Honesty
•Transparency
•Accountability
•Fairness
•Independence
•Responsibility
•Socialresponsibility
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27. CONTENTS OF CORPORATEGOVERNANCE
A)Composition of BOD
•SEBI has prescribed that all those companies whose share are listed on any
stock exchange must have atleast 50% independentdirectors
B)Disclosure ofinformation
C)Managementpractices
BUSINESSETHICS
“It refers to a code ofconduct thatbusiness are expected to follow while
doingbusiness”
Principles:a)Loyaltyb)Honestyc)Integrityd)Fairnesse)Leadership
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28. CORPORATE GOVERNANCE COMMITTEE REPORT
1.Cadbury committee Report,1992
2.Sarbanes Oxley Act2002
3.Kumar Mangalam Birla Committee Report,1999
4.JJ Irani Committee Report,2004
5.Narayan Murthy Committee Report,2003
6.Naresh Candra Committee Report,2002
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29. 1. In the managerial grid, the managers who have little
or no concern for production but are concerned onlyfor
people are known as what type of managers ?
(A)1.1Management
(B)5.5Management
(C)9.1Management
(D)1.9Management
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30. 2. The following are the steps of management controlprocess:
(i)Taking corrective action fromstandards
(ii)Establishingstandards
(iii)Measuring actualperformance
(iv)Comparing performance against standard Select the correct sequence of
these steps from the codes given below:
Codes:
(A) (i), (ii), (iii),(iv)
(B) (ii), (iii), (iv),(i)
(C) (iii), (iv), (i),(ii)
(D) (ii), (iv), (i),(iii)
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31. 3. Match the items of List –I with the items of List –II and select the
correct answer:
LISTI LISTII
i. AbrahamMaslow a) Achievementmotivation
ii. Herzberg b) ERGtheory
iii.Alderfer c) Two factortheory
iv.McClelland d) Need hierarchytheory
(A)(a) (b) (c)(d)
(B) (d) (c) (b)(a)
(C) (c) (b) (a)(d)
(D) (d) (c) (a)(b)
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32. 4. Match the names of the Authors given below with themotivational
theories they are associatedwith
LISTI LISTII
1.Herzberg a) ERGTheory
2. McGregor b) Three needtheory
3.Alderfer c) Theory x andy
4. DavidMcClelland d) Two factortheory
Codes:
(A)a b cd
(B)d c ba
(C)b a dc
(D) d c ab
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33. 5. Who has modified Maslow’s Hierarchical levels of needs and developed
ERGmodel?
(A)FrederickHerzberg
(B)David C.McClelland
(C)DouglasMcGregor
(D)ClaytonAlderfer
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34. 6. Where does recognition of an Employee fall in Maslow’s hierarchy of
needs theory?
(A)Self-actualisation
(B)Securityneeds
(C)Socialneeds
(D) Esteemneeds
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35. 7. Which one of the following is not an example of Herzberg’s hygiene
factors?
(A)Advancement
(B)Interpersonalrelations
(C)Jobsecurity
(D)Workconditions
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36. 8. According to which theory, people are motivated to the extent to which they
expect that their actions will help in achievement ofgoals?
(A) Vroom’s Vector ValenceTheory
(B)NeedTheory
(C)ZTheory
(D)XTheory
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37. 9. Identify the correct sequence of steps involved inplanning:
(i)Selecting the best course ofaction
(ii)Establishing the sequence ofactivities
(iii)Establishment of objectives
(iv)Evaluating alternativecourses
(v)Determining alternativecourses
codes:
(A)(i), (ii), (iii), (iv) and(v)
(B)(iii), (v), (iv), (ii) and(i)
(C)(v), (iv), (iii), (ii) and(i)
(D) (iii), (v), (iv), (i) and(ii)
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38. 10. While establishing relation between Maslow’s and Herzberg’s theories,
which Needs of Hierarchy Theory will fall under the HygieneFactors?
(A)Self actualisation, esteem and socialneeds
(B)Esteem, social and safety needs
(C)Social, safety and physiologicalneeds
(D)Only socialneeds
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39. 11. Who has given ‘fourteen Principles ofManagement’?
(A)Barnard
(B) HenryFayol
(C)F.W.Taylor
(D)Flemming
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40. 12. Match thefollowing:
List-I
a.An ordinary person does not want to work on hisown
b.An individual is willing to work on hisown
c.MotivationalFactors
d.EsteemNeeds
List-II
1.HierarchyTheory
2.HygieneTheory
3.X-Theory
4.Y-Theory
Codes:
(A) 1 2 34
(B) 3 4 12
(C) 1 4 23
(D) 3 4 21
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41. 13. Which of the following is not a principle of management according
to Henri Fayol?
(A)Subordination of individual interest over the organizationalinterest
(B)Esprit decrops.
(C) Unity ofManagers
(D) Unity ofDirection
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42. 14. Who propounded “TheoryZ”?
(A) WilliamOuchi
(B)Peter F.Drucker
(C)Joseph H.Jurau
(D)DouglasMcGregor
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43. 15. According to McClelland’s Needs Theory, which of the following is
not a motivating need?
(A) Need forPower
(B) Need forSecurity
(C)Need forAchievement
(D)Need forAffiliation
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