Aspirant Academy

Society, Management and Accounting

Predicted Questions with Model Answers

General Management: Concept, Skills, Levels, Functions, MBO, Decision Making

Paper I · Unit 3 Section 9 of 11 0 PYQs 22 min
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Predicted Questions with Model Answers

Q1 (5 marks — 50 words): What is Management by Objectives (MBO)? Mention its main steps and two limitations.

Model Answer:

MBO (Drucker, 1954): managers and subordinates jointly set SMART objectives; performance evaluated against them. Steps: (1) Set goals (org → dept → individual); (2) Plan actions; (3) Implement; (4) Periodic review; (5) Final appraisal; (6) Reset. Limitations: (1) Overemphasis on quantifiable goals — creativity ignored; (2) Excessive paperwork reduces operational time.

Q2 (5 marks — 50 words): Explain Robert Katz's three managerial skills and their relative importance at different management levels.

Model Answer:

Katz (1955) identified three skills: (1) Technical — specific work proficiency; critical at lower level (supervisors); (2) Human — working with people; equally vital at all levels; (3) Conceptual — seeing the whole organisation; critical at top management. As managers move up, conceptual importance rises and technical importance declines.

Q3 (5 marks — 50 words): Distinguish between programmed and non-programmed decisions with examples.

Model Answer:

Programmed decisions: routine, structured, rule-governed, lower-level — e.g., leave approval, stock orders. Non-programmed decisions: novel, unstructured, judgment-based, top-level — e.g., market entry, crisis response. Simon's Bounded Rationality (1955): non-programmed decisions involve satisficing — choosing the first acceptable option due to constrained information, time, and cognitive capacity.

Q4 (5 marks — 50 words): State any five of Fayol's 14 principles of management with brief explanation.

Model Answer:

Fayol (1916): 14 principles. Five key: (1) Unity of Command — one boss per employee; (2) Authority = Responsibility — must be balanced; (3) Scalar Chain — top-to-bottom authority; Gang Plank for emergency lateral communication; (4) Division of Work — specialisation raises efficiency; (5) Esprit de Corps — team spirit; promote harmony and unity.

Q5 (5 marks — 50 words): What is the difference between centralisation and decentralisation? What factors determine the degree of decentralisation?

Model Answer:

Centralisation concentrates authority at top — ensures uniformity; suits small/crisis organisations. Decentralisation disperses authority downward — faster local decisions; suits large dispersed organisations. Five determinants: (1) size; (2) environmental dynamism (faster change → more decentralisation); (3) lower-level competence; (4) strategic importance of decision; (5) cost/reversibility.

Q6 (5 marks — 50 words): Explain "Bounded Rationality" in decision making. Who propounded this concept?

Model Answer:

Bounded Rationality (Simon, 1955; Nobel 1978): decision-makers lack full rationality due to: (1) limited information; (2) cognitive constraints — mind cannot process all alternatives; (3) time pressure. Result: managers are satisficers — they accept the first satisfactory option rather than the theoretical optimum. Contrasts with classical "rational model" which assumes complete information.