I. Choose the Correct Answer
Q1. ________ is a system in which superior and subordinate jointly identify common goals. Answer: MBO (Management by Objectives)
Q2. The first step in MBO is: Answer: Defining Organisational Objectives
Q3. ________ is a principle of managerial control. Answer: MBE (Management by Exception)
Q4. MBO harmonises individual goals with organisational goals. This is a feature of: Answer: MBO
Q5. Expand MBO: Answer: Management By Objective
Q6. MBO harmonises: Answer: Individual and organisational goals
Q7. "Attempting to control everything results in controlling nothing." This principle belongs to: Answer: MBE (Management by Exception)
Q8. KRA stands for: Answer: Key Result Areas
Q9. The principle of management where only exceptional matters are brought to the attention of superiors: Answer: MBE (Management by Exception)
Q10. Find the odd one out: Profitability, Market standing, Innovation, Loss Answer: Loss — Profitability, Market standing, and Innovation are examples of Key Result Areas; Loss is not.
II. Match the Following
Q1.
| Column I | Column II | ||
|---|---|---|---|
| i | Matching Resources | 2 | Framed on basis of resources |
| ii | Appraisal of Activities | 3 | Discussion between superiors and subordinates |
| iii | Periodical Review | 4 | Hold meeting periodically |
| iv | Targets | 1 | Subordinate objective fixed |
III. Assertion and Reason
Q1. Assertion (A): KRA indicates the strength of the organisation. Reason (R): Objectives are expressed in a meaningful manner. Answer: Both A and R are true, but R is not the correct explanation of A — KRA indicates organisational strength in areas like profitability and market standing, while expressing objectives meaningfully is a separate aspect.
IV. Very Short Answers
Q1. Define MBO. Answer: According to George Odiome, MBO is a system in which superior and subordinate jointly identify common goals, define major areas of responsibility, and agree on the results expected from each individual. It is a process whereby superior and subordinate managers jointly identify common goals.
Q2. What are the objectives of MBO? Answer: The objectives of MBO are: (i) To measure performance, (ii) To relate individual goals to organisational goals, (iii) To stimulate motivation among employees, (iv) To serve as a control device.
Q3. What is MBE? Answer: Management by Exception (MBE) is a principle of managerial control based on the belief that attempting to control everything results in controlling nothing. Only significant deviations from expected results are brought to the attention of management.
Q4. State two advantages of MBO. Answer: (i) MBO helps managers understand their role in the organisation, (ii) MBO facilitates effective delegation of authority.
Q5. What is KRA? Answer: Key Result Areas (KRA) are areas fixed based on organisational objectives that indicate the strength of the organisation. Examples include profitability, market standing, and innovation.
V. Short Answers
Q1. What is Appraisal of Activities? Answer: Appraisal of Activities is a step in MBO where the superior and subordinate discuss the performance of the subordinate against the set standards at the end of a fixed period. It involves a review of actual performance compared with the predetermined objectives.
VI. Long Answers
Q1. Explain the advantages of MBE. Answer: The advantages of Management by Exception are:
1. Better utilisation of managerial talents: Managers focus only on exceptional matters, using their time and skills more effectively. 2. Facilitates delegation: Since routine matters are handled by subordinates, delegation of authority becomes easier. 3. Keeps management alert: Only exceptional matters reach the top, keeping managers attentive to critical issues. 4. Avoids uniform action: Different situations receive different treatment rather than a one-size-fits-all approach. 5. Provides better yardsticks: Performance is measured against standards, giving clear benchmarks for evaluation. 6. Objective performance appraisal: Subordinates are evaluated based on measurable results, not subjective opinion. 7. Separates important from unimportant data: Management focuses only on significant deviations, avoiding information overload. 8. Forces review of history: The process requires periodic review of past performance and standards.
Q2. Explain the disadvantages of MBO. Answer: The disadvantages of Management by Objectives are:
1. Fails to explain philosophy: MBO does not clearly explain the underlying philosophy of management to all employees. 2. Time-consuming: The process of setting objectives, reviewing, and appraising requires significant time and effort. 3. Emphasises short-term objectives: MBO tends to focus on short-term goals at the expense of long-term planning. 4. Does not facilitate subordinate input: In practice, objectives are often set by superiors with limited input from subordinates. 5. Rigid: MBO can become inflexible, with targets set at the beginning of the period not accommodating changes.
Q3. Explain the disadvantages of MBE. Answer: The disadvantages of Management by Exception are:
1. Only managers have power: MBE centralises decision-making with managers, which can demotivate employees at lower levels who feel they have no authority. 2. Takes time to pass issues upward: When problems arise, they must travel up the hierarchy before action is taken, causing delays in decision-making.