ANSWERS to Combined Test 1 & 2

INTRODUCTION TO BUSINESS MANAGEMENT

Combined tests 1 & 2

 Marks                                    

1          Define the management process                                                                   2

            The process of transforming (or adding value to) inputs                  
            (resources) into outputs (products and services)

2          Define the meanings of: MNE and SME                                                         2

            Multinational Enterprise – a large organization with subsidiary
            offices in other countries.
            Europe: 250> staff and $50m> ; USA: 500> staff and $100m>

            Small to Medium Enterprises

            Small (<50 staff and <$10m)
            Medium (<250 staff and <$50m)

3          Describe the stages the management process                                              2

            Plan > Organize > Lead > Control

4          Draw a traditional management hierarchy and a flatter management         4
            hierarchy and describe the advantages and disadvantages of each

            Traditional ;  

Formal and centralised management with clear lines of authority and
responsibility, but poor communication between departments and
through  multiple levels of management; decision-making is slow and
prone to bureaucracy

            Flatter :          

Less formal and decentralised with less levels of management.

Knowledgeable and skilled staff are involved in decision-making.

Cost efficient because there are less managers, but they may have
too many staff to supervise effectively. The fewer the number of
managers and the more open the lines of communication, the
more likely are office politics and power struggles.

5          Mintzberg classifies management roles into 3 categories and                      6
            10 roles. State and briefly describe the 3 categories and name
             as many roles as you can

Informational
Obtaining, analyzing and disseminating information
(monitor, disseminator, spokesperson)

Interpersonal 

Personal communication with subordinates
            (authority figure, leader (motivator) and liaison
             (external communicator)

Decisional

Making business decisions and resolving problems
            (entrepreneurial, disturbance handler, resource
            allocator and negotiator)

6          Describe one of the following management models:                               4
            Frank Gilbreth, Max Weber, Henri Fayol or Mary Follett
           

            See Boddy, pp 43 - 53

7          What was the difference in management focus between                       2
            classical and neo-classical management models? Give
            examples of proponents of each                                                                    

            Classical management models focus on manufacturing process
            efficiency, eg Taylor and F. Gilbreth;

            Neo-classical models focus on the role, efficiency and motivation
            of employees

8          Quinn et al (2003) suggested that there were 4 cultural types              4
that could be defined as being flexible or controlled, and
being focused either internally or externally. Name and position
the 4 types in the relevant quadrant on the chart.   

      Flexibility

            Human relations                                 Open Systems



Internal   ______________________________________  External

            Internal process                                  Rational goal

                                                        Control

9          Handy (1993) identified and defined 4 cultural types.                        4
            What were they?

            Power: dominant, charismatic, entrepreneurial leader
            with implicit rules of behaviour

            Role :   typically, characterised by a detailed job description
                          containing specific responsibilities and requirements

            Task:   focuses on job completion rather than general role;
                        each person is valued for what they contribute; typically,
                        staff work in teams

Person: structure is designed to suit the individual. Typical of
            small, professional practices, eg doctors and lawyers,
            rather than an organization

10        Name and define the 4 market structures, and write them              5
            from left (Buyer Power) to right (Supplier Power)

             Perfect  competition   -   Buyer Power
             Monopolistic               -  Some Buyer Power
             Oligopoly                    -   Mostly Supplier Power
            Monopoly                   -  Complete Supplier Power

11        Michael Porter (1985) identified 5 ‘Forces’ that could be                 5
used to analyse the competitive environment of an
industry. Draw the 5 Forces diagram, name and describe
each of the forces, and the 6^th factor that he did not include.

            See Boddy, P 89