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Business Organization-2-July-Dec 14

Business Organization-2-July-Dec 14

Section A (20 Marks)

Write short notes on any four of the following:

  1. Cash Budget
  2. Sole Proprietorship
  3. Scalar Chain Principle
  4. Uses of Matrix Structure
  5. Emergence of Hierarchy

Section B (30 marks)

(Attempt any three)


  1. How will you classify the modern techniques of managerial control?
  2. Describe the various forms of business organizations in detail.
  3. Define MBO. Describe how MBO provides a framework in which behaviour of   subordinates are evaluated?
  4. What are the five types of power according to French andRaven? What are the effects of these types of power?

Section C (50 marks)

(Attempt all questions. Every question carries 10 marks)

Read the case “Fear of Going Private” and answer the following questions:

Case Study: Fear of Going Private

Several small communities in the same area decide to hire one private ambulance company to serve their population. A state environmental protection agency hires an independent contractor to clean up a hazardous waste site.

A town hires civilians instead of police officers to direct traffic around local road construction sites. All of these are examples of privatization, or contracting public services to the private sector.

Forces of change bring together two different types of organizational culture – public and private. Sometimes, these cultures clash on shared assumptions and espoused values as well as artefacts.

They may also clash in the way managers decide what to measure and control, how they allocate scarce resources, and how they set criteria for employee selection and promotion.

 Managers play a pivotal role in getting things done by motivating, inspiring and leading others at work.

 Employees who feel valued in the workplace tend to be more committed to their work. This results in higher levels of performance, reduced absenteeism and more competitive businesses.

Its core purpose is the promotion of the highest levels of management and leadership skills within both individuals and organisations.

 It meets this objective by providing a qualification framework and a full range of qualifications based on the National Occupational Standards for management and leadership which it founded. These provide benchmarks for measuring personal and corporate management performance.

It also works with businesses of different types and from different industries to find the solutions that will meet their specific requirements. A business may need its managers to focus on how well they communicate, improve how they inspire trust in others or build relationships with those around them.

Individuals and business-sponsored managers have equal access to the wide range of resources, information and guidance. It  provides for those following its programmes. This knowledge

resource includes online research, case studies, e-learning content, tutorials, assessments, podcasts and a range of problem solving tools to help managers find the right information when

they need it.

Leadership skills are growing within businesses. There are around 4.8 million managers in the UK economy. However, the proportion of these with management-related qualifications is

unlikely to rise by more than 20% over the next few years. An increasing number of employees are also required to take up management responsibilities in specialist technical areas.

The result is that the estimated number of new managers needed each year is around 114,000.

Management and leadership skills are needed in every industry and every walk of life. It is essential therefore for new managers to be provided with opportunities to learn how to manage and lead people.

A recent study (2010) showed that if organisations increased investment in practices that lead to employee engagement (such as personal development) by just 10%, this could increase profits

by £1,500 per employee per year. For example, in a company that employed 1,200 people, profits might increase by around £1.8 million.

Indeed, the shift from public to private service can be painful for many involved, and managers must make decisions carefully. The biggest fear that privatization raises is loss of public jobs. “You need to make sure that privatization doesn’t mean hundreds of [public employees] are suddenly without jobs,” says Chris Goodman, a contract coordinator for Los Angeles County. Los Angeles County has been on the frontier of privatization since the mid – 1980s and tries to counter the problem of layoffs by offering displaced employees, jobs in related departments.

But the big payoff to the county – and others that follow suit – is savings.

Los Angeles County saves about US $50 million each year by contracting out services such as security and training. In addition, the county offers opportunities to small entrepreneurs, particularly women and minorities. In a tight economy with an increasingly complex society, even the public sector is forced to change. “Change comes slowly in government,” notes Chris Goodman.

 “People are generally inclined to go with the old tools, and the old tools are to reduce services or raise taxes. But as their problems increase, local and state governments are becoming more open to new ways of dealing with their problems.” Managers at all levels – both public and private – must be willing to accept and implement changes that will affect their organization’s culture.

The privatization programmes help people develop management skills in a variety of ways. This might be through formal or informal training such as on-the-job training, e-learning or mentoring, or through continuous professional development, for example, social networking and management conferences or events. It provides access to all these routes and underpins a manager’s development.



  1. How might the manager of a state agency work with a private contractor to blend organizational cultures successfully?
  2. Point out some main differences between public and private sector.
  3. What is the biggest loss of privatization?
  4. Explain the features of tight economy.
  5. Write a brief summary of the above mentioned case in your own words.
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