TN Board 12th Commerce Important Questions Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

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TN State Board 12th Commerce Important Questions Chapter 3 Management By Objectives (MBO) and Management By Exception (MBE)

Very short answer questions

Question 1.
State a few features of MBO.
Answer:

1. An attempt is made by the management to integrate the goals of an organization and individuals.
2. It increases the organizational capability of achieving goals at all levels.
3. MBO tries to combine the long-run goals or organization with short-run goals.

Question 2.
What are the objectives framed in matching resources?
Answer:

1. The objectives are framed on the basis of the availability of resources.
2. If certain resources are not adequately available the objectives of an organization are changes accordingly. So there is a need for matching resources with objectives.

Question 3.
How do solve the problems to MBO?
Answer:

1. The superior should take corrective action.
2. The superior should identify the reasons for the failure of achieving objectives.
3. The problems faced by the subordinates should be identified and steps should be taken to tackle such problems.

Question 4.
Mention any two advantages of MBE.
Answer:

1. It focuses managerial attention on major problems. As a result, there is a better utilization of managerial talents and energy.
2. Management by exception provides better yardsticks for judging results. It is helpful in objective performance appraisal.

Short answer questions

Question 1.
Write a short note on setting subordinate objectives or targets?
Answer:

1. The objectives of each subordinate or individual are fixed.
2. There should be a free and frank discussion between the superior and his subordinates.
3. Subordinates are induced to set standards themselves by giving an opportunity.
4. If the subordinates are allowed to do so, they may set high standards and the chances of their accomplishment are higher.

Question 2.
Explain about periodical review meeting.
Answer:

1. The superior and subordinates should hold meetings periodically in which they discuss the progress in the accomplishment of objectives.
2. The fixed standards may be changed in the light of progress. But the basic conditions do not change.
3. The periodical review meeting is held during the period set for achieving the objectives.

Long answer questions

Question 1.
Explain the difference between MBO and MBE.
Answer:
Management by Objectives (MBO):

1. MBO is a management system in which each member of the organization effectively participates and involves himself.
2. This system gives full scope to individual strength and responsibility.
3. MBO is to relate individual performance to organizational goals.
4. MBO is to enhance communications between superiors and subordinates.
5. MBO is to serve as a device for organizational control and integration.
6. MBO recognizes the participation of employees in goal-setting process.
7. MBO tries to relate the organizational goal with social goals.

Management by Exception (MBE):

1. Management by exception is an important principle of managerial control. It is managed by exception is business management that focuses on identifying and handling cases that deviate from the norm.
2. It is necessary to set objectives or norms with predictable or estimated results.
3. If actual performance and deviates significantly the issue needs to be passed to the senior managers as an “Exception has occurred”. Finally, the aim to solve this exception immediately.
4. It focuses managerial attention on major problems. As a result, there is a better utilization of managerial talents and energy.
5. It saves the time of managers because they deal only with exceptional matters.
6. MBE keeps management alert to opportunities and threats by identifying critical problems.
7. MBE provides better yardsticks for judging results. It is helpful in objective performance appraisal.

Question 2.
Explain briefly the benefits of Management by Objectives (MBO).
Answer:
Benefits of MBO:
MBO is intended primarily to measure and judge performance. An attempt is made by the management to integrate the goals of an organization and individuals.

1. To clarify both the job to be done and expectations of accomplishment.
2. Motivation: To stimulate the subordinate’s motivation. MBO tries to combine the long-run goals of the organization with short-run goals. It is not only on goals but also on effective performance.
3. The participation of employees in the goal-setting process.
4. Objectives for each section, department or division are framed on the basis of the overall objectives of the organization. The objectives should be achieved within a fixed period.
5. There should be a free and frank discussion between the superior and his subordinates.
6. The periodical review meeting is held during the period set for achieving the objectives.
7. To top management executive should review the organization’s objectives to frame the objectives according to the changing situation.
8. Objectives can be set at all levels and for all functions with future planning.

Multiple-choice questions

1. Which system creates self-control and motivates the manager?
(a) MBO
(b) Business organization
(c) MBE
(d) None
Answer:
(a) MBO

2. MBO tries to combine the goals of the organization.
(a) Long run
(b) Short-run
(c) Both (a) and (b)
(d) motivation
Answer:
(c) Both (a) and (b)

3 indicates the strength of an organization.
(a) Trust
(b) Goodwill
(c) Resources
(d) Key result areas
Answer:
(d) Key result areas

4. Give examples of (KRA) Key Result Areas.
(a) Profitability
(b) Market standing
(c) Innovation
(d) All the above
Answer:
(d) All the above

5. In process of MBO the objectives of each subordinate or individual are:
(a) changed
(b) constant
(c) fixed
(d) static
Answer:
(c) fixed

6. When is a need for matching resources with objectives?
(a) resources are not adequate
(b) available resources
(c) utilized resources
(d) none
Answer:
(a) resources are not adequate

7. In which process superior should take corrective action?
(a) Appraisal of activities
(b) KRA
(c) Matching resource
(d) Goal of each section
Answer:
(a) Appraisal of activities

8. Who is a part of the dynamic world?
(a) Management
(b) An organization
(c) Both (a) and (b)
(d) Subordinates
Answer:
(b) An organization

9. MBO motivates the:
(a) workers
(b) manager
(c) subordinates
(d) none
Answer:
(a) workers

10. MBO is a consuming process.
(a) market
(b) time
(e) strength
(d) business
Answer:
(b) time

11. In which process is better to use knowledge of trends, history, and available business data?
(a)MBO
(b)MBE
(c) Business organization
(d) Business management
Answer:
(b)MBE

12. In what way the managers save time?
(a) Deal only with exceptional matter
(b) Routine problems
(c) Job duties
(d) None
Answer:
(a) Deal only with exceptional matter

13. This lead to motivation and development of subordinates:
(a) Span of control
(b) Authority
(c) Manager
(d) All the above
Answer:
(a) Span of control

14. Systematic evaluation of performance is made with the help of:
(a) MBE
(b) MBO
(c) Both (a) and (b)
(d) None
Answer:
(b) MBO

15. MBO motivates the workers by:
(a) planning
(b) job
(c) objectives
(d) Business
Answer:
(b) job