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Solution V sem University Examination 2019

5ME4-05 V Sem / III Year

RTU Paper Solution

Branch – Mechanical Engineering

Subject Name – Principle of Management

Paper Code – 5ME4-05

Date of Exam – 26/11/2019




Part-A



5ME4-05 V Sem / III Year Ans1. Management utilizes all the physical & human resources productively. This leads to

efficacy in management. Management provides maximum utilization of scarce resources by

selecting its best possible alternate use in industry from out of various uses. It makes use of

experts, professional and these services leads to use of their skills, knowledge, and proper

utilization and avoids wastage. If employees and machines are producing its maximum there

is no under employment of any resources.

Ans2. The main levels of management are:

1-Top level management. - Top level management consists of Chairman, Board of Directors,

Managing Director, General Manager, President, Vice President, Chief Executive Officer

(C.E.O.), Chief Financial Officer (C.F.O.) and Chief Operating Officer etc.

2-Middle level management.- This level of management consists of departmental heads such

as purchase department head, sales department head, finance manager, marketing manager,

executive officer, plant superintendent, etc.

3-Supervisory level, operational or lower level of management.- This level consists of

supervisors, superintendent, foreman, sub-department executives; clerk, etc.

Ans3. Appraisal –Appraisal is the systematic evaluation of the performance of employees

and to understand the abilities of a person for further growth and development.

Reward- Each element of compensation and benefits, is known as reward. Total rewards

include everything the employee perceives to be of value resulting from employment

relationship.

Ans4. Human Factors- In industry, human factors is the study of how humans behave

physically and psychologically in relation to particular environments, products, or services.

Individuals have a wide range of abilities and limitations. A Human Factors approach focuses

on how to make the best use of these capabilities by motivation with designing jobs and

equipment which are fit for people.

Ans5. Productivity–a ratio of production output to the input required to produce it–is one

measure of production efficiency. Productivity is defined as a total output per one unit of a

total input. Control management must implement control processes to maintain or improve

productivity.

Productivity growth is important to a firm because more real income means the firm can meet

its obligations to customers, suppliers, workers, shareholders, and governments, and still

remain competitive or even improve its competitiveness in the marketplace.

Part-B



5ME4-05 V Sem / III Year Ans1. (b) The techniques which Taylor regarded as its essential elements or features may be

classified as under:

1. Scientific Task and Rate-setting, work improvement, etc.

2. Planning the Task.

3. Vocational Selection and Training

4. Standardization (of working conditions, material equipment etc.)

5. Specialization

6. Mental Revolution.

1. Scientific Task and Rate-Setting (work study): Work study may be defined as the

systematic, objective and critical examination of all the factors governing the operational

efficiency of any specified activity in order to effect improvement.

Work study includes.

(a) Methods Study: The management should try to ensure that the plant is laid out in the best

manner and is equipped with the best tools and machinery. The Possibilities of eliminating or

combining certain operations may be studied.

(b) Motion Study: It is a study of the movement, of an operator (or even of a machine) in

performing an operation with the purpose of eliminating useless motions.

(c) Time Study (work measurement): The basic purpose of time study is to determine the

proper time for performing the operation. Such study may be conducted after the motion

study. Both time study and motion study help in determining the best method of doing a job

and the standard time allowed for it.

(d) Fatigue Study: If, a standard task is set without providing for measures to eliminate

fatigue, it may either be beyond the workers or the workers may over strain themselves to

attain it. It is necessary, therefore, to regulate the working hours and provide for rest pauses at

scientifically determined intervals.

(e) Rate-setting: Taylor recommended the differential piece wage system, under which

workers performing the standard task within prescribed time are paid a much higher rate per

unit than inefficient workers who are not able to come up to the standard set.

2. Planning the Task: Having set the task which an average worker must strive to perform to

get wages at the higher piece-rate, necessary steps have to be taken to plan the production

thoroughly so that there is no bottle neck and the work goes on systematically.



5ME4-05 V Sem / III Year 3. Selection and Training: Scientific Management requires a radical change in the methods

and procedures of selecting workers. It is therefore necessary to entrust the task of selection

to a central personnel department. The procedure of selection will also have to be

systematized. Proper attention has also to be devoted to the training of the workers in the

correct methods of work.

4. Standardization: Standardization may be introduced in respect of the following.

(a) Tools and equipment: By standardization is meant the process of bringing about

uniformity. The management must select and store standard tools and implements which will

be nearly the best or the best of their kind.

(b) Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely

to result in damage to machinery.

(c) Conditions of Work: To attain standard performance, the maintenance of standard

conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.

(d) Materials: The efficiency of a worker depends on the quality of materials and the method

of handling materials.

5. Specialization: Scientific management will not be complete without the introduction of

specialization. Under this plan, the two functions of 'planning' and 'doing' are separated in the

organization of the plant. The `functional foremen' are specialists who join their heads to give

thought to the planning of the performance of operations in the workshop. Taylor suggested

eight functional foremen under his scheme of functional foremanship.

(a) The Route Clerk: To lay down the sequence of operations and instruct the workers

concerned about it.

(b) The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of

work.

(c) The Time and Cost Clerk: To send all information relating to their pay to the workers and

to secure proper returns of work from them.

(d) The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.

(e) The Gang Boss: To assemble and set up tools and machines and to teach the workers to

make all their personal motions in the quickest and best way.

(f) The Speed Boss: To ensure that machines are run at their best speeds and proper tools are

used by the workers.

(g) The Repair Boss: To ensure that each worker keeps his machine in good order and

maintains cleanliness around him and his machines.



5ME4-05 V Sem / III Year (h) The Inspector: To show to the worker how to do the work.

6. Mental Revolution: At present, industry is divided into two groups – management and

labour. The major problem between these two groups is the division of surplus. The

management wants the maximum possible share of the surplus as profit; the workers want, as

large share in the form of wages. Taylor has in mind the enormous gain that arises from

higher productivity. Such gains can be shared both by the management and workers in the

form of increased profits and increased wages.

Ans1. (e) Fayol listed Fourteen Principles based on experience. He notes that Principles of

management are flexible, not absolute and must be usable regard less of changing and special

conditions. Some kinds of Principles appeared to be indispensable in every undertaking.

These are following

1. Division of Work:

Fayol applies the principle to all kind of work, management as well as technical.

2. Authority and responsibility:

Henri Fayol finds authority and responsibility to be related with the latter arising from the

former. He sees authority as a combination of official factors, manager‟s position and

personal factors, “Compounded of intelligence, experience, moral worth, past services etc.

3. Discipline:

Fayol declares that discipline requires good superiors at all levels.

4. Unity of Command:

This means that employees should receive order from one superior only.

5. Unity of Direction:

According to this principal, each group of activities with same objective must have one head

and one plan.

6. Subordination of individuals to general interest:

When the two are found to differ, management must reconcile them.

7. Remuneration:

Remuneration and method of payment should be fair and have maximum possible satisfaction

to employees and employer.

8. Centralization:



5ME4-05 V Sem / III Year Without using the term centralization of authority „‟Fayol refers authority dispersed or

concentrated.

9. Scalar Chain:

Fayol thinks of this as “Chain of Superior” from beigest to low ranks should be short

circuited.

10. Order:

Fayol classify this into “material” and “social” order. This is essential principle in

arrangement of things and people in an organization.

11. Equity:

Loyalty and devotion should be elected from personnel on biases of kindliness and justice,

when dealing with subordinate.

12. Stability of tenure:

In bad management, Fayol points out id dangers and costs.

13. Initiative:

Initiative is execution of a plan.

14. Esprit decors:

This is the principle that in the union there is strength. This principle emphasis on work,

Unity of communication, order to accomplishment of objective.

Ans.2 Graicunas has identified three types of superior- subordinates relationships:

1. Direct Single Relationships:

The direct single relationship arises from the direct and individual contact of the superior

with his subordinates. For example, if a manager A has two subordinates X and Y there

would be two direct single relationships.

2. Direct Group Relationships:

Hence relationships arise between the manager and group of his subordinates in all possible

combinations.

Thus in the above example there would be two direct group relationships:

(a) A with X, Y in attendance.

(b) A with Y, X in attendance.




3. Cross-Relationships:

These relationships arise among the subordinates working under a common superior.

In the above example there would be two cross- relationships:

(a) X with Y and (b) Y with X.

Thus, direct relationships = n

Direct group relationships= n

= n (2n-1 -1)

Cross relationships = n (n-1)

Total relationships = n[ +n-1]=n(2n-1+n-1)

Where n = number of subordinates.

For example, consider Gaurav (G) is a superior (boss) and Manoj (M) and Sameer (S) are his

subordinates (juniors or lower-grade employees).

According to V.A. Graicunas, Gaurav (G) has to control following three types of

relationships, with or among Manoj (M) and Sameer (S):-

(a) Direct Single Relationships :- G with M, and G with S, i.e. a total of 2 direct single

relationships.

(b) Direct Group Relationship :- G with M in presence of S, and G with S in presence of M,

i.e. a total of 2 direct group relationships.

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(c) Cross Relationships :-

M with S, and S with M, i.e. again a total of 2 cross relationships.

Therefore, total number of relationships which Gaurav (G) has to control are:- 2 + 2 + 2 = 6

relationships.

Thus, when the number of subordinates is 2, the number of relationships, which the superior

(boss) has to control is 6. Similarly, when the number of subordinates is 3, the number of

relationships to control will be 18.

Ans3. Since every organization is made of people, HRM is all about acquiring services of

people, developing their skills, motivating them to the foremost level and making sure that

they continue to maintain their commitment towards the organization. In short, HRM is

concerned with the management of employees from recruitment to retirement. Although

there are many functions of human resource management, here is a list of its five major

functions:

1. Recruitment And Selection

Recruitment is the process of captivating, screening, and selecting potential and qualified

candidates based on objective criteria for a particular job. The goal of this process is to attract

the qualified applicants and to encourage the unqualified applicants to opt themselves out.

Before starting the process of recruitment, the companies must execute proper staffing plans

and should grade the number of employees they are going to need. Forecasting of the

employees should depend upon the annual budget of the organization and short-term and

long-term goals of the organization.

Recruitment and selection process is very important to every organization because it reduces

the costs of mistakes such as engaging incompetent, unmotivated, and under qualified

employees. Firing the unqualified candidate and hiring the new employee is again an

expensive process.

2. Orientation

Many organizations do not provide a thorough orientation to the new employees. This is the

fundamental step to help a new employee to adjust himself with the employer and with his



5ME4-05 V Sem / III Year new job. Employee orientation program should include the objectives and goals of the

organization and how the employee can help to achieve the long-term and short-term goals of

the organization.

Giving intensive orientation to the employee is one of the major functions of human resource

management. The program should help the employee to know his assigned duties and his

exact job description, job role, and the relationship of position to other positions in the

organization. It gives clarification to the employee to take an active role in the organization.

3. Maintaining Good Working Conditions

It is the responsibility of the human resource management to provide good working

conditions to the employee so that they may like the workplace and the work environment. It

is the fundamental duty of the HR department to motivate the employees. The study has been

found that employees don‟t contribute to the goals of the organization as much as they can.

This is because of the lack of motivation.

Human resource management should come up with a system to provide financial and non-

financial benefits to the employee from the various departments. Employee welfare is another

concept which should be managed by HR team. Employee welfare promotes job satisfaction.

4. Managing Employee Relations

Employees are the pillars of any organization. Employee relationship is a very broad concept

and it is one of the crucial functions of human resource management. It also helps to foster

good employee relations. They have the ability to influence behaviors and work outputs.

Management should Organize activities which will help to know an employee at the personal

and professional level. Well-planned employee relations will promote a healthy and balanced

relation between the employee and the employer. It is the key for the organization to be

successful.

5. Training And Development

Training and development are the indispensable functions of human resource management. It

is the attempt to improve the current or future performance of an employee by increasing the

ability of an employee through educating and increasing one‟s skills or knowledge in the

particular subject.

Ans4. Motivation is a general term applying to the entire class of drives, desire needs similar

forces. To say that managers motivate their subordinates is to say that they do those things

which they hope will satisfy these drives and desire and induce the subordinates to act in a

desired manner.

The Need Want Satisfaction Chain:



5ME4-05 V Sem / III Year Motivation can be explain by a chain reaction: Felt needs give rise to want or goal sought

which cause tensions (that is unfulfilled desired), which give rise to action toward achieving

goals which finally result in satisfaction. This chain can be explained by figure.

The chain explanation is complex. In the first place, except for physiological needs, such as

food, need are not independent of person's environment. Many physiological needs are

stimulated by environmental factors the small of food may cause hunger; a lower

thermometer reaching may cause chills.

Environment has a major influence on our perception of secondary needs. The promotion of a

colleague may arouse one's desire for higher position. In second place, the need want

satisfaction chain does not always operate as simply as portrayed. Needs do cause behavior

but needs also may result from behavior. Satisfying one deed may lead to a desire to satisfy

more needs.

The hierarchy of need theory was presented by Maslow. Abraham Maslow saw human needs

in the form of hierarchy, ascending from the lowest to the highest He concluded that when

one set of needs is satisfied, this kind of need ceases to be motivators.

The needs placed by Maslow in an ascending order are these.

1: Physiological Needs:

These are the basic need necessary for human life. Such as food, water, warmth, shelter and

sleep Maslow said that until these needs are satisfied to the degree necessary to maintain life

their needs, will not motivate people.

2: Security or Salty Needs:

These are the needs to be free of physical danger and of the fear of losing of job, property,

food and shelter.

3: Affiliation or Acceptance Needs:

Since people are social beings, they need to belong to be accepted by other.

4: Esteem Needs:

According to Maslow, once people begin to satisfy their need to belong they tend to want to

be held in esteem both by themselves and by others. Esteem need produces such satisfactions

as power, prestige, status and self-confidence.



5ME4-05 V Sem / III Year 5: Need for Self-actualization:

Maslow regards this as the highest need in his hierarchy. It is desire to become what one is

capable of becoming.

Ans5. Control consists in verifying whether everything occurs in conformity with the plan

adopted, the instructions issued and the principles established. Its object is to find out the

weakness and errors in order to rectify them and prevent recurrence. It operates on

everything, i.e., things, people and actions". From the above definitions it is clear that the

managerial function of control consists in a comparison of the actual performance with the

planned performance with the object of discovering whether all is going on well according to

plans and if not why. Remedial action arising from a study of deviations of the actual

performance with the standard or planned performance will serve to correct the plans and

make suitable changes. Controlling is the nature of follow-up to the other three fundamental

functions of management. There can, in fact, be not controlling without previous planning,

organizing and directing. Controlling cannot take place in a vacuum.

The basic control process involves three steps.

1. Establishing standards.

2. Measuring performance against these standards.

3. Correcting variations from standard and plans / correction of deviations.

1. Establishing Standard

Standards are by definition is simply criteria of performance. Standards are the selected

points in a planning performance at which performance is measured, so that managers can

receive signals about how things are going.



5ME4-05 V Sem / III Year There are many kinds of Physical system standard.

(1)Physical Standard (2) cost Standard (3) capital Standard (4) revenue Standard (5) program

Standard (6) intangible Standard (7) goals/ objectives Standard (8) Strategic plans as control

point strategic control.

2. Measurement of Performance

It is the second step of control process. Although such measurement is not always

predictable, but if standard are appropriately drown and if means are available for

determining exactly what subordinates are doing then measurement of performance is fairly

easy. But there are many activities for which it is difficult to develop accurate standards and

there are many activities that are hard to measure. Technical kind of work is hard to measure

performance.

3. Correction of Deviationss

It is third and last step of control process. If performance is measured accurately, it is easier

to correct deviations manage know exactly where the corrective measure measure must be

applied correction of deviations is the point at which contact can be related to the other

managerial factions. Managers may correct deviations by redrawing their plans or by

modifying their goals or they may correct deviations by Clarification of duties.

There are many types of standards

1- Physical Standards

Physical standards are non-monetary measurements and common at operating level where

material is used, labor is employed, services are rendered and goods- are produce-they may-

reflect quantities such as labor hours per unit of output, unit of production per machine hour

etc. physical standards may also reflect quality such as hardness of bearing, durability of

fabric, fastness of color etc.

2- Cost Standards

Cost standards are monetary measurements and common at the operating level. Cost

standards are widely used to measure direct and indirect costs per unit produced, labor cost

per unit or per hour material cost per unit, machine cost per hour etc.

3- Capital Standards

There are varieties of capital standards. These standards are primarily related to the balance

sheet rather than to the income statements. Capital standards range from monetary

measurements to physical items. These standards may be indifferent ratios such as the ratio of

current assets to current liabilities etc.



5ME4-05 V Sem / III Year 4-Revenue Standards

Revenue standards arise from attaching monetary values to sales. They may include such

standards as average sales per customer etc.

5- Programs Standards

Such standards are determined for installing a variable budget program, for example program

for improving the quality of a sale fore.

6-Intangible Standards

Sometime it is difficult to establish standards for quantitative and qualitative measurement,

especially when human relationships count in performance. It is very difficult to measure

human attitudes, in connection with individual‟s loyalty, efficiency, etc. All this need to be

based on intangible standards.

7-Goals as Standards

Goal can be used as performance standards. Both in simple in complex operations

quantitative and qualitative Goals represents an important development in the area of

standards.

8-Strategic Plans as Contol Points for Strategic Control

Strategic plans require strategic control. Through the use of strategic control awareness about

the organizational performance and about ever changing environment by monitoring it.

Ans6. Chester Barnard gives vital communication functions for the overall organization and

that they could help the organization accomplish its goals. Barnard felt that it was particularly

important for managers to develop a sense of common purpose where a willingness to

cooperate is strongly encouraged. He is credited with developing the acceptance theory of

management, which emphasizes the willingness of employees to accept that mangers have

legitimate authority to act. Barnard felt that four factors affected the willingness of employees

to accept authority:

1. The employees must understand the communication.

2. The employees accept the communication as being consistent with the organization‟s

purposes.

3. The employees feel that their actions will be consistent with the needs and desires of

the other employees.

4. The employees feel that they are mentally and physically able to carry out the order.

5. Barnard‟s sympathy for and understanding of employee needs positioned him as a

bridge to the behavioral school of management, the next school of thought to emerge.



5ME4-05 V Sem / III Year Communication Techniques- Communication techniques also influence the span of

management. If every plan, instruction, order or direction has to be communicated by

personal contact than managers time will be heavily burdened. An ability to communicate

plans and instructions clearly and concisely also tends to increase a managers span.

Managerial leadership is "the ability to exert interpersonal influence by means of

communication, towards the achievement of a goal. Since managers get things done

through people, their success depends, to a considerable extent upon their ability to

provide leadership". In the words of R.T. Livingston - Leadership is "the ability to

awaken in others the desire to follow a common objective".

Part-C

Ans1.(a) Dhirubhai Amabani- Dhirubhai Ambani was one of the sons of Hirachand

Gordhanbhai Ambani, a village school teacher belonging to the Modh community and

Jamnaben Ambani and was born in Chorwad, Junagadh district, Gujarat. Dhirubhai married

Kokila, and they had four children; Mukesh Ambani, Anil Ambani, Nina Bhadrashyam

Kothari and Dipti Dattaraj Salgaocar. He migrated to the then British colony of Aden at age

17 where his brother was working. He initially served as a clerk at A. Besse & Co., which

then was the largest transcontinental trading firm east of Suez. He worked as an employer in

Yemen, then came to India with Rs. 50000 and started a textile trading company in 1958.

Ambani returned to India and started "Majin" in partnership with Champaklal Damani, his

second cousin, who lived with him in Yemen. Majin was to import polyester yarn and export

spices to Yemen. The first office of the Reliance Commercial Corporation was set up at the

Narsinatha Street in Masjid Bunder. It was a 350 sq ft (33 m2) room with a telephone, one

table and three chairs. Initially, they had two assistants to help them with their business.

During this period, Ambani and his family stayed in a two-bedroom apartment at the Jai Hind

Estate in Bhuleshwar, Mumbai. In 1965, Champaklal Damani and Dhirubhai Ambani ended

their partnership and Ambani started on his own. It is believed that both had different

temperaments and a different take on how to conduct business. While Damani was a cautious

trader and did not believe in building yarn inventories, Ambani was a known risk-taker and

believed in building inventories to increase profit. In 1966 he formed Reliance Commercial

Corporation which later became Reliance Industries on 08 May 1973.

Extensive marketing of the brand in the interiors of India made it a household name.

Franchise retail outlets were started and they sold the "only Vimal" brand of textiles. In the

year 1975, a technical team from the World Bank visited the 'Reliance Textiles'

Manufacturing unit.

In 1988, Reliance Industries came up against a rights issue regarding partly convertible

debentures. It was rumored that the company was making all efforts to ensure that their stock

https://en.wikipedia.org/wiki/Modh

https://en.wikipedia.org/wiki/Junagadh_district

https://en.wikipedia.org/wiki/Gujarat

https://en.wikipedia.org/wiki/Mukesh_Ambani

https://en.wikipedia.org/wiki/Anil_Ambani

https://en.wikipedia.org/wiki/Colony_of_Aden

https://en.wikipedia.org/wiki/Polyester

https://en.wikipedia.org/wiki/Masjid_Bunder

https://en.wikipedia.org/wiki/Bhuleshwar

https://en.wikipedia.org/wiki/Reliance_Industries



5ME4-05 V Sem / III Year prices did not slide an inch. Sensing an opportunity, The Bear Cartel, a group of stock

brokers from Calcutta, started to short sell the shares of Reliance. To counter this, a group of

stock brokers until recently referred to as "Friends of Reliance" started to buy the short sold

shares of Reliance Industries on the Bombay Stock Exchange.

Ans1.(c) Bill Gates- Gates was born William Henry Gates III on October 28, 1955, in Seattle,

Washington. Gates grew up in an upper-middle-class family with his older sister, Kristianne,

and younger sister, Libby. Their father, William H. Gates Sr., was a promising, if somewhat

shy, law student when he met his future wife, Mary Maxwell. She was an athletic, outgoing

student at the University of Washington, actively involved in student affairs and leadership.

The Gates family atmosphere was warm and close, and all three children were encouraged to

be competitive and strive for excellence. Gates showed early signs of competitiveness when

he coordinated family athletic games at their summer house on Puget Sound. He also relished

in playing board games (Risk was his favorite) and excelled at Monopoly. Gates had a very

close relationship with his mother, Mary, who after a brief career as a teacher devoted her

time to helping raise the children and working on civic affairs and with charities. She also

served on several corporate boards, including those of the First Interstate Bank in Seattle

(founded by her grandfather), the United Way and International Business Machines (IBM).

She would often take Gates along when she volunteered in schools and at community

organizations. Gates was a voracious reader as a child, spending many hours poring over

reference books such as the encyclopedia. Around the age of 11 or 12, Gates's parents began

to have concerns about his behavior. He was doing well in school, but he seemed bored and

withdrawn at times, and his parents worried he might become a loner.

Gates met Allen, who was two years his senior, in high school at Lakeside School. The pair

became fast friends, bonding over their common enthusiasm for computers, even though they

were very different people. Allen was more reserved and shy. Gates was feisty and at times

combative. Regardless of their differences, Allen and Gates spent much of their free time

together working on programs. Occasionally, the two disagreed and would clash over who

was right or who should run the computer lab. On one occasion, their argument escalated to

the point where Allen banned Gates from the computer lab.

At one point, Gates and Allen had their school computer privileges revoked for taking

advantage of software glitches to obtain free computer time from the company that provided

the computers. After their probation, they were allowed back in the computer lab when they

offered to debug the program. During this time, Gates developed a payroll program for the

computer company the boys had hacked into and a scheduling program for the school.

In 1975, Gates and Allen formed Micro-Soft, a blend of "micro-computer" and "software"

(they dropped the hyphen within a year). The company's first product was BASIC software

that ran on the Altair computer. At first, all was not smooth sailing. Although Microsoft‟s

BASIC software program for the Altair computer netted the company a fee and royalties, it

wasn't meeting their overhead. According to Gates' later account, only about 10 percent of the

people using BASIC in the Altair computer had actually paid for it. Microsoft's BASIC

software was popular with computer hobbyists, who obtained pre-market copies and were

https://en.wikipedia.org/wiki/Calcutta

https://en.wikipedia.org/wiki/Short_(finance)

https://en.wikipedia.org/wiki/Bombay_Stock_Exchange



5ME4-05 V Sem / III Year reproducing and distributing them for free. At this time, many personal computer enthusiasts

were not in it for the money. They felt the ease of reproduction and distribution allowed them

to share software with friends and fellow computer enthusiasts. Gates thought differently. He

saw the free distribution of software as stealing, especially when it involved software that

was created to be sold. Although the company started out on shaky footing, by 1979

Microsoft was grossing approximately $2.5 million. At the age of 23, Gates placed himself as

the head of the company. With his acumen for software development and a keen business

sense, he led the company and worked as its spokesperson. Gates personally reviewed every

line of code the company shipped, often rewriting code himself when he saw it necessary.

Ans2. Organization involves division of work among people whose efforts must be

coordinate To achieve specific objectives and to implement pre-determined strategies.

Organization is the foundation upon which the whole structure of management is built? It is

the backbone of management. After the objectives of an enterprise are determined and the

plan is Prepared, the next step in the management process is to organize the activities of the

Enterprise to execute the plan and to attain the objectives of the enterprise. The term

Organization is given a variety of interpretations. In any case, there are two broad ways in

which the term is used. In the first sense, organization is understood as a dynamic process and

a managerial activity which is necessary for bringing people together and tying them together

in the pursuit of common objectives. When used in the other sense, Organization refers to the

structure of relationships among positions and jobs which is Built up for the realizations of

common objectives. Without organizing managers cannot function as managers. Organization

is concerned with the building, developing and maintaining of a structure of working

relationships in order to accomplish the objectives of the enterprise. Organization means the

determination and assignment of duties to People, and also the establishment and the

maintenance of authority relationships among these grouped activities. It is the structural

framework within which the various efforts are coordinated and related to each other. Sound

organization contributes greatly to the Continuity and success of the enterprise. The

distinguished industrialist of America, Andrew Carnegie has shown his confidence in

organization by stating that: "Take away our factories, take away our trade, our avenues of

transportation, our money, leave nothing but our organization, and in four years we shall have

reestablished ourselves." That shows the significance of managerial skills and organization.

However, good organization structure does not by itself produce good performance. But a

poor organization structure makes good performance impossible, no matter how good the

individual may be. The term 'Organization' connotes different things to different people.

Many writers have attempted to state the nature, characteristics and principles of organization

in their own way. It can be used as a group of persons working together or as a structure of

relationships or as a process of management.

2001 witnessed one of the most marked turnarounds for an Indian automobile company in the

history of Indian automobile manufacturing on market. The company is Tata Motors and it

was the M.D. Ravikant who played a major role in the process of change. That the turnaround

process has been successful is evident in the fact that Tata Motors ranks as the fifth largest

manufacturer of medium and heavy trucks in the world. In the Indian market, Tata Motors

ranks second in the passenger vehicles segment. The company also has significant stakes in

former Soviet Republics, the Middle East South Africa, South Asia and Turkey. There also



5ME4-05 V Sem / III Year have been takeovers such as that of Daewoo‟s commercial vehicle business in South Korea

and a 21% stake in Hispano Corracera, the Spanish automobile producer. The commercial-

vehicle market in India shrank by more than 40% for Tata Motors. The 5 billion rupee loss in

2001 triggered off a rethinking within the organization. A recovery strategy was planned

upon and the path towards a better future was chalked out in three phases-each of which

would last two years. Phase one looked to stop the damage. Cost reduction was on the cards.

This was going to be a huge challenge as the company had been till then operating in seller‟s

market and used a cost-plus approach to pricing. The second phase looked at consolidating

the company‟s position in India, and the third phase would look at global markets and

international expansion.

Reliance industries limited initially founded by late Dhirubhai H. Ambani, which is one of

the largest private sector company employing thousands of people. The company‟s main

interest is in energy and material value chain. Reliance industries have got one unique

feature, which is backward vertical integration. Initially starting its business with fabric

during late 1970‟s. Reliance industries made investments in ventures such as in plastics, fiber

intermediaries, polyester fibers, petroleum refining, petrochemicals and oil and gas

exploration and extraction. Globally the company is the largest producer of polyester yarn

and being the producer of various petrochemical products. RIL made offer of shares in 1977,

that is initial public offer made. The company being biggest producer of polyester yarn and

fiber in the world and enjoying leadership in their business around the world and it is among

top ten producers in the products of petro-chemical. The founder chairperson late Dhirubhai

H. Ambani have been credited to bring equity sect in the country during late 1970‟s and have

been an icon in the country for various enterprises. Reliance industries limited is living

evidence towards his strong determination, single minded enthusiasm and remorseless

obligation towards his goals. Organizational structure of the company is multi-divisional

structure whereby every project undertaken by the company is managed by different groups

having their own management team for each project such that within multi-divisional

structure there is sub-hierarchical organizational structure for each project. Existence of

teamwork among the members and as well as in some situation there exist democratic form

of decision making. Top management level makes strategic decisions for welfare of the

business and lower level implements the decisions made. Given below is the organizational

structure of the Reliance Industries Limited.

Ans3. In the descriptions of organizations, no word is used with such varied meanings. The

word leadership is sometimes used to indicate that it is an attribute of personality; sometimes,

it is used as if it were a characteristic of certain positions, and sometimes as an attribute of

behavior. From the above definitions we can conclude that leadership is a psychological

process of influencing followers (subordinates) and providing guidance, directing and leading

the people in an organization towards attainment of the objectives of the enterprise.



5ME4-05 V Sem / III Year Ingredients of Leadership

Every group of people that performs job has same person as its head who is skilled in art of

leadership. This skill seems to be a compound at least four major ingredients.

1. Power

2. Fundamental understanding of people.

3. Ability to inspire follower

4. The ability to act in a manner

That will develop a conducive climate to responding and rousing motivations.

1. Power

The first ingredient of leadership is power. Power may be define as a strong influence on the

direction of an individual‟s behavior. There are five kind of power.

1. Legitimate Power

The official position of a person is organization is known as legitimate power.

2. Corrective Power

A person‟s ability to create fear in other individuals is known as coercive power.

3. Reward Power

This power arises from ability of some to grant reward is known as reward power.

4. Expert Power

This power comes from the expertness of a person or a group.

5. Referent power

This is the power of admiring high esteemed leader by individuals.

6. Decision Making Power

This power arises from the power of positions.

2- Fundamental Understanding of People

The second ingredient of leadership is fundamental understanding of people. A manager or

any other leader who knows the present state of motivation theory and understands the



5ME4-05 V Sem / III Year elements of motivation is more aware of the nature and strength to define and design ways

satisfaction.

3- Ability to Inspire Followers

The third ingredient of leadership is an ability to inspire followers to apply their full

capabilities to a project. Inspirations also come from group heads. They may have qualities of

charm and appeal that increase loyalty, deviation and strong desire in followers that the

leaders want. This is not a matter of need satisfaction; it is a matter of people giving unselfish

support to a chosen objective.

4- The Ability to Act in a Manner

The forth ingredient of leadership is related to style of leader and the climate he or she

develops. The strength of motivation greatly depends on expectations, perceived rewards, the

task to be done and other factors that are part of an environment as well as an organizational

climate.

Jack Welch is considered to be one of the most successful corporate leaders ever in corporate

history. He was a change agent throughout his tenure as CEO at GE. He knew all the people

who worked for the company. He devoted more than half of his time to people issues. One

unique thing that he created at the company was informality. He had a coaching style of

leadership. He actually worked as a teacher in GE. He very frequently interacted with new

employees, middle managers and senior managers.

Dhirubhai Ambani, the Founder and Chairman of the Reliance group of industries, was a

perfect combination of entrepreneurship and leadership. He started his business from a small

textile mill and through his leadership skills he helped Reliance Industries to reach new

heights. He had all the qualities of a good leader. Though he was not highly qualified, but the

leadership skills for engaging employees were inbuilt in him. He was a natural leader. He had

a great vision, mission, ambition, zeal and commitment. His sons, Mukesh Ambani and Anil

Ambani, also exhibit the same qualities.

global institute of technology, jaipur

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