Birla Institute of Technology (BIT Mesra) 2003 MS Software Engineering Principles of Management (closed book) - Question Paper

MGTS ZC211 (EC-2 Regular)
Second Semester 2002-2003
Birla Institute of Technology & Science, Pilani
Distance Learning Programmes Division
Second Semester 2002-2003
Mid-Semester Test
(EC-2 Regular)


Course No. : MGTS ZC211
Course Title : Principles of Management
Nature of examination : Closed Book
Weightage : 40%
Duration : two Hours
Date of examination : 22/02/2003 (FN)

Note : Attempt all the ques.. begin every ans from a fresh page.

Q. 1. elaborate the major social responsibilities of business? (6)
Q. 2. How does st rategic planning differ from tact ical and operational planning? How
might the 3 levels complement 1 a different in an organization? (6)
Q. 3. elaborate the difficult ies you will face when you want to achieve organizat ional
objective with the help of MBO. (6)
Q. 4. explain the potent ial advantage and disadvantage of using a group to make
decision. provide example in your experience. (6)
Q. 5. Pick a job you have held and define it interms of span of control, delegation,
responsibility authority and accountability. (6)
Q. 6. Case Study (10)
The Municipal Water District
The district proposed an incentive program for its higher-level managers which
would be t ried for one year. The program, based on MBO concepts, was a
response to criticism from citizens in the community. Here is a summary of the
proposed program:
The object ives are to be set to represent higher-than-normal performance.
Furthermore, the emphasis will be on verifiable object ives against which
performance can be measured. 1 of the object ives for example, will be to
keep the avg. water bill increase at no more than 75 percent of the
inflat ion rate. The part icipat ing managers will receive only half of the cost - ofliving
increases granted to other employees. To be eligible for the other half,
they will have to achieve a few of the object ives. I f, on the other hand, most
of the above-normal object ives are achieved, their pay increases will be above
the inflat ion rate. No lump-sum bonuses will be granted, but the performance
of the managers will be reflected in their wages.
I t was computed that the program would outcome in savings of $15,000 to
$25,000 for the dist rict if none of the object ives were met . On the other hand,
if all the object ives were met , the cost to the company would be ranging from
$25,000 and $35,000 in salary increases. But the indirect savings were
est imated at $1 million or more. This incent ive program was submit ted to the
public through a poll, with arguments presented for and against the plan.
The arguments for the incentive program was as follows:
It would stop the rise in water rates.
Rewards would be based on performance.
Turnover of management personnel would be decreased.
The cost for outstanding performance would be low compared with the
potential savings.
The arguments against the incentive program were as follows:
The program would raise current object ives only to what would normally
be expected of the managers.
The company has 1 of the highest water costs in the state.
I f the general manager were to meet all the object ives he would get paid
more than a U.S. senator. I f 3 other high- level managers were to
achieve all their object ives, they would get paid more than the governor of
the state.
Since the budget is prepared by the identical person who would be the
beneficiary of the incent ives, there would be the temptat ion to “pad” the
budget.
The managers’ past performance was considered substandard. No bonus
should be offered to managers for improving their substandard
performance and doing what they should have been doing in the first
place.
The policy of the company states that it should supply adequate water at
the least possible cost . I f the mangers are not capable of performing
their job, they should seek employment elsewhere.
1. What do you think about the incentive program?
2. Do you think that the public should be polled on such a program? Why, or
why not?
3. As a consultant, what would you recommend?
________

Earning:   Approval pending.