Essentials of Management. Marking Scheme

Transcription

1 Essentials of Management Marking Scheme This marking scheme has been prepared as a guide only to markers. This is not a set of model answers, or the exclusive answers to the questions, and there will frequently be alternative responses which will provide a valid answer. Markers are advised that, unless a question specifies that an answer be provided in a particular form, then an answer that is correct (factually or in practical terms) must be given the available marks. If there is doubt as to the correctness of an answer, the relevant NCC Education materials should be the first authority. Throughout the marking, please credit any valid alternative point. Where markers award half marks in any part of a question, they should ensure that the total mark recorded for the question is rounded up to a whole mark.

2 Question 1 Section A You must answer this question You have recently been appointed as the Production Manager for a business that manufactures a range of glassware for the drinks industry, including bottles for water, soft drinks, beer and wine, and a variety of drinking glasses, jugs and pitchers. The company has recently started to offer personalised glasses and bottles which can be produced for customers who require a minimum of 1,000 units. These have proved very popular for use in marketing campaigns and product launches. The glass production industry is extremely competitive and, as a result, the profit margins are extremely tight as customers are in a position to force down prices. However, the new personalised offerings enable the business to generate higher margins and are therefore attractive to the management of the company. Currently sales of the personalised glassware account for just 5% of the annual turnover of the company, but the plan is to increase this to 40% of the turnover over the next five years. You have been appointed to address a number of problems that the business has been experiencing recently. Specifically these are: The Directors are concerned that the company does not achieve the same levels of output, in terms of both quality and quantity as its competitors and is therefore struggling to attract new customers. The supervisors involved in the manufacturing processes have been failing to meet their agreed targets, particularly for the new range of personalised glassware. This is because problems with the short production runs have frequently resulted in poor quality outputs and excessive wastage, which has resulted in higher production costs and thus lower margins. In addition, many of the problems were not spotted until the personalised glassware was actually delivered, resulting in a number of customer complaints and resultant rework. The employees are unhappy about the introduction of the new personalised glassware as it is a change in the way that they usually work and they are concerned that staffing levels may be cut as a result. These concerns have also resulted in many members of staff displaying a general lack of motivation and the Directors are concerned about their overall commitment to ensuring the long term success of the company. The Board of Directors of the company have asked how you intend to address these specific issues. Page 2 of 13

3 a) You have decided that implementing appropriate controls is an essential first step in ensuring that the organisational goals are met and the concerns of the Directors are resolved. i) Draw and label a diagram that describes the steps in the control process. 5 2 marks for correctly drawing the diagram, clearly showing the flow of the steps, plus 1 mark for correctly labelling each step, to a maximum of 5 marks. ii) List and briefly describe the THREE (3) different management controls that you could potentially implement and give your recommendation for which one you believe should be selected to address the company s current manufacturing problems. 12 Feedforward control focuses on preventing anticipated problems as it takes place in advance of the actual work activity Concurrent control takes place when the work is being performed so that problems can be corrected before they become too costly or problematic Feedback control takes place after an activity has been undertaken and can be used to review performance There is no correct recommendation. However, it could be argued that the control should take place either before or during the manufacturing activity as there have been problems with quality and waste, and feedforward or concurrent would help to avoid this. Feedback control would allow any variance between standard and actual performance to be noted and could be used for motivational purposes. The key is that the answer demonstrates an understanding of the potential benefits that the selected approach could deliver in addressing current problems. Page 3 of 13

4 1 mark for each type of control, plus 2 marks for a correct description, plus a further 3 marks for a well-reasoned choice of the most appropriate control, to a maximum of 12 marks. iii) Explain how you plan to identify why the company does not achieve the same levels of output, in terms of both quality and quantity as its competitors. 4 Benchmarking is the likely approach you will adopt Benchmarking is the search for best practices amongst both competitors and non-competitors Intention is to find out why these companies outperform your own Key is to identify what enables them to outperform you from a quality and/or quality perspective and look to learn from and perhaps replicate this 1 mark for each correct point, to a maximum of 4 marks. b) Gaining the trust of the employees will be essential. List the FIVE (5) dimensions that make up the concept of trust and, for each, explain why this will be important with many of the employees currently disillusioned with their jobs. 10 Integrity Competence Consistency Loyalty Openness Give credit for any reasonable explanation of why each dimension will be important. Examples might include: Integrity to demonstrate that you are honest and truthful in your dealings with employees (perhaps in discussing the current problems and seeking appropriate solutions) Competence to demonstrate to the employees that you have the right mix of skills and experience in terms of the manufacturing processes being used Consistency you can be relied upon to make good judgements (perhaps in terms of their own futures) Loyalty to demonstrate you will stand up for them and protect their interests Openness to demonstrate you are willing to share ideas and information freely (perhaps on the future plans of the company) 1 mark for each correct dimension, plus 1 mark for each correct reason, to a maximum of 10 marks. Page 4 of 13

5 c) A lack of both employee motivation and commitment to the organisation have been identified as major concerns by the Directors of the company. i) Define the term motivation. 2 The processes that account for an individual s willingness to exert high levels of effort to reach organisational goals Conditioned by the effort s ability to satisfy some individual need. (or something similar). 2 marks for correct definition, 1 mark for partial definition. ii) List and describe THREE types of reward programmes that can be used to motivate employee behaviour. Allow any of the following: Open-book management the company s financial statements are shared with all employees so that there are no secrets and staff understand the implications of what they do Employee recognition programmes a means of expressing approval and appreciation for a job well done, viewed as a powerful workplace motivator Pay-for-performance programmes some form of payment to employees based on performance, for example incentives, profit sharing or bonuses Stocks and shares options an agreement that gives employees the right to purchase shares in the company at an agreed price 1 mark each for naming the programme, plus a further 2 marks each for correct description, to a maximum of 9 marks. 9 Page 5 of 13

6 iii) You need to consider how to improve organisational commitment of the company s employees by addressing the following points: 8 Define what is meant by organisational commitment List THREE (3) benefits to the company of improving the organisational commitment of employees List THREE (3) actions you could take that you believe would result in an improvement to organisational commitment Definition: Degree to which an employee identifies with their organisation Employee agrees with the goals of the organisation and displays loyalty Benefits - give credit for all appropriate answers which may include the following: Increased job satisfaction Lower staff turnover Increased productivity Actions give credit for all appropriate answers which may include the following: Hold regular staff meetings to update employees on latest organisational developments Link individual and group performance to rewards Improve communication links between employees and management/directors 2 marks for correct definition, plus 1 mark for each correct benefit, plus 1 mark for each correct action, to a maximum of 8 marks. Total 50 Page 6 of 13

7 Section B Answer any TWO (2) questions from this section Question 2 a) Describe Frederick W. Taylor s Four Principles of Management and give TWO (2) examples of how these principles are used in organisations today. Develop a science for each element of an individual s work Select, train, teach and develop the worker Ensure that work is done in accordance with the principles of the science that has been developed Divide work and responsibility almost equally between management and workers Give credit for any reasonable use which may include: Using time and motion studies to eliminate wasted motions Designing basic incentive schemes based on output 10 2 marks for each correct Principle, plus 1 mark for each example, to a maximum of 10 marks. b) Give the full names of TWO (2) of the researchers who were early advocates of the organisational behaviour (OB) approach to management. Allow any of the following: Robert Owen Hugo Munsterberg Mary Parker Follett Chester Barnard 2 1 mark for each correct full name (half mark for surname only), to a maximum of 2 marks. c) List the EIGHT (8) steps in the decision making process in the correct order. Identify a problem Identify decision criteria Allocate weights to the criteria Develop alternatives Analyse alternatives Select an alternative Implement the alternative Evaluate effectiveness of decision 5 Half a mark for each step, plus 1 mark for the fully correct order, to a maximum of 5 marks. Page 7 of 13

8 d) How can the five whys improve decision making? 4 It encourages decision makers to think more broadly and deeply about the issues when faced with a problem Encourages the decision maker to ask why five times Avoids a superficial analysis Forces the decision maker to probe more deeply into the causes of the problem and the possible solutions 1 mark for each correct point, to a maximum of 4 marks. e) Why is it important that the Strategic Management Process concludes with an evaluation of the results? 4 Important to reflect on how effective the strategy has been Take a view on what adjustments, if any, are necessary Identify what can be learnt for future strategy development It is then possible to communicate these results to interested parties so that mistakes are not repeated and what works well is reinforced 1 mark for each correct point, to a maximum of 4 marks. Total 25 Page 8 of 13

9 Question 3 a) List the FOUR (4) managerial decisional roles that were identified by Henry Mintzberg. 4 Entrepreneur Disturbance handler Resource allocator Negotiator 1 mark for each correct point, to a maximum of 4 marks b) Compare and contrast programmed and non-programmed decisions. 8 Programmed: A repetitive decision that can be handled by a routine approach The decision will be used again in the future Decision is made in response to structured problems that are straightforward, familiar and easily defined Three types of programmed decisions procedures, rules and policies Non-programmed: A unique decision The decision/solution may never be required again in future Decision is made in response to unstructured problems that are new and unusual, with ambiguous or incomplete information It provides a custom-made solution 1 mark for each correct point, to a maximum of 8 marks. c) Two of the characteristics of effective decision making are to be logical and consistent. Briefly explain why these characteristics are important and the problems that may arise if these are lacking. Logical means thinking through the problem and identifying the possible alternatives and the preferred solution in a coherent and well-organised manner so that no key points are missed Consistent means arriving at the same conclusion for any common problems so that there is a logic to the decision and it can be defended if necessary Failure to be logical could mean that a decision is taken in haste or all of the problems are not understood, or all of the possible alternatives not adequately investigated, which can lead to faulty decision making Failure to be consistent may lead to different decisions being taken for similar problems, which in turn can result in a range of issues or concerns, e.g. staff issues in a disciplinary process, or customer issues in a dispute resolution case 1 mark for each point, to a maximum of 4 marks. 4 1 mark for each point, to a maximum of 4 marks. Page 9 of 13

10 d) List the FIVE (5) competitive forces that were identified by Michael Porter in his Five Forces Model. 5 Threat of new entrants Threat of substitutes Bargaining power of buyers Bargaining power of suppliers Current/competitive rivalry 1 mark for each correct point, to a maximum of 5 marks. e) Competitive advantage plays a key role in the development of business-level strategies. Briefly explain why this is the case. 4 A business-level strategy determines how an organisation should compete in each of its businesses Competitive advantage is what gives the organisation its edge over competitors These are its core competencies those things it does better than anyone else If the organisation does not understand or recognise what it does better than its competitors then it is in no position to put together a business-level strategy, as it will have no clear vision of how to compete 1 mark for each correct point, to a maximum of 4 marks. Total 25 Page 10 of 13

11 Question 4 a) Max Weber developed a theory describing the ideal type of organisation, which he called a bureaucracy. List the FIVE (5) main characteristics of Weber s bureaucracy. Division of labour A clearly defined hierarchy Formal rules and regulations Impersonal relationships Career orientation 5 1 mark for each correct characteristic, to a maximum of 5 marks. b) Why are human skills essential for a successful manager? 5 Human skills are all about working effectively with individuals and groups Managers constantly deal directly with people Good human skills are required by managers to get the best out of their staff They must be able to communicate effectively Managers are expected to motivate and lead their staff and they would be unable to do so if they didn t have excellent human skills They are also required to gain the trust of their staff and once again human skills play an important role in this 1 mark for each correct point, 5 marks in total. c) Briefly explain why an organisation would adopt a cost leadership strategy and list THREE (3) common organisational requirements of such a strategy. 6 The organisation aims to be the lowest-cost producer in its industry Intention is to under-cut its rivals or offer best value to customers Despite the low cost it is important that the products are not viewed as sub-standard they must be the same quality as those from competitors Requirements give credit for any appropriate answer which may include: Tight cost control Efficiencies in key areas such as production and marketing Overheads kept to a minimum Frequent, detailed cost reports Incentives based on meeting strict targets 3 marks for correct explanation, plus 1 mark for each requirement, to a maximum of 6 marks. Page 11 of 13

12 d) Briefly explain why an organisation would adopt a renewal strategy and list the TWO (2) main types of such a strategy. 5 Organisation is failing to meet its goals or its overall performance is declining Renewal strategy is a type of corporate level strategy Strategy is aimed at addressing the organisational weaknesses that are leading to declining performances Two main types: Retrenchment Turnaround 3 marks for correct explanation, plus 1 mark for each correct type, to a maximum of 5 marks. e) What is an escalation of commitment and why can it pose problems for decision makers? 4 It is an increased commitment to a previous decision Despite the fact that evidence suggests the decision may have been wrong It can pose problems because some decision makers may be unwilling to accept that they were wrong the first time around Consequently they make the same decision again and the initial bad decision is magnified 1 mark for each correct answer, to a maximum of 4 marks. Total 25 End of paper Page 12 of 13

13 Learning Outcomes matrix Question Learning Outcomes assessed 1 4, 5 Yes 2 1, 2, 3 Yes 3 1, 2, 3 Yes 4 1, 2, 3 Yes Grade descriptors Marker can differentiate between varying levels of achievement Learning Outcome Analyse the function of management Examine the management decision-making process Assess the use of management and organisational strategies Analyse how management can influence individual and group performance Examine theories of leadership and control Pass Merit Distinction Demonstrate adequate ability to analyse Provide examination of the subject with some suitable examples and references Demonstrate an adequate awareness of issues associated with the subject and make some appropriate judgements Demonstrate adequate ability to analyse Provide examination of the subject with some suitable examples and references Demonstrate ability to provide detailed and coherent analysis Provide detailed examination of the subject with adequate use of appropriate references and examples Demonstrate a sound awareness of issues associated with the subject and make consistently appropriate judgements Demonstrate ability to provide detailed and coherent analysis Provide detailed examination of the subject with adequate use of appropriate references and examples Demonstrate ability to provide comprehensive, lucid analysis Provide consistently critical and detailed examination of the subject with innovative use of highly appropriate references Demonstrate a detailed awareness of the complexity of issues associated with the subject and make highly appropriate judgements Demonstrate ability to provide comprehensive, lucid analysis Provide consistently critical and detailed examination of the subject with innovative use of highly appropriate references Page 13 of 13