Essentials of Management. 26 November Marking Scheme

Transcription

1 Essentials of Management 26 November 2015 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 are a business consultant and have recently been contacted by the Managing Director of a children s footwear manufacturer called Kids Clogs. The Managing Director is new in post, having recently been appointed following the Board of Directors expressing serious concerns about the performance of the company. The Board has asked him to investigate a number of aspects of the company s operations and he has requested your assistance in this exercise. The main problems that Kids Clogs have experienced are: Lack of a clear corporate-level strategy it formerly manufactured high quality children s shoes with a strong brand reputation that generated good sales levels and high margins through the ability to charge a premium price. However, more recently it has sought to compete exclusively in the cheaper, lower quality end of the market and has been largely unsuccessful as it cannot match the low production costs achieved by its competitors. This unsuccessful change in strategic direction has resulted in a loss of market share, a drop in sales and a significant reduction in profits. The indications are that the current financial performance is unsustainable and urgent action is required. If no action is taken, there is a danger that Kids Clogs could go out of business within 12 months. In addition, the quality of a number of important decisions by the management of Kids Clogs has been very poor. These have included purchasing new manufacturing equipment that was not justified, making a number of key staff redundant and losing skills and experience that has not been adequately replaced, and setting up unsuccessful sales operation in a number of new regions. The Managing Director has therefore asked you to provide assistance in the following areas: To work with the senior management of Kids Clogs in reviewing its overall corporate-level strategy and agreeing on an appropriate strategy to resolve the current problems. To provide the management with guidance and advice on how to make effective decisions in order to help ensure that the recent mistakes are not repeated. The Managing Director has asked you to keep him informed on the progress made in relation to the above activities. Page 2 of 13

3 a) Your most immediate task is to review the strategic direction of Kids Clogs. i) Briefly describe each of the following corporate strategies: 9 Growth strategy Stability strategy Turnaround strategy Growth: Seeks to increase the organisation s operations By expanding the number of products offered or markets served Growth typically achieved through concentration, integration or diversification Stability: No change - continue to serve the same clients and offer the same product or service Maintain market share May be appropriate if there are no growth opportunities Turnaround: Intended to address organisational weaknesses These are leading to decline in performance Appropriate when the organisation s problems are serious ii) 3 marks for each correct description, to a maximum of 9 marks. Identify which of the above corporate-level strategies is most appropriate for Kids Clogs, giving TWO (2) reasons for your choice. 5 The turnaround strategy is the most appropriate given the declining performance of the company A turnaround strategy is a type of renewal strategy, most suited to addressing organisational weaknesses The company is experiencing a significant decline in performance urgent action is required and the turnaround strategy is the most appropriate of the three listed Unless action is promptly taken the company may go out of business the turnaround strategy is best suited to taking such corrective action 1 marks for selecting the correct strategy, 2 marks for each appropriate reason (for 2 marks the answer has to be well applied to Kids Clogs), to a maximum of 5 marks. Page 3 of 13

4 iii) Explain why differentiation may be an appropriate competitive strategy for Kids Clogs to adopt. 5 Differentiation strategy: The company offers unique products that are widely valued by customers Products are typically of a high quality with a high brand image A premium price can be charged The differentiation approach was the one formerly adopted by Kids Clogs This approach was previously successful for the company, so it may well be a sensible option to revert to this 1 mark for each correct point, to a maximum of 5 marks. b) List SIX (6) of the main activities undertaken as part of a SWOT analysis and briefly explain why such an analysis might be helpful for Kids Clogs. 11 Award one mark for each of the activities stated up to a maximum of 6. Analyse the external environment Identify what opportunities can be exploited Identify what threats must be countered Identify what the organisation s strengths are Identify what the organisation s weaknesses are Identify the core competencies of the organisation Award up to a further 5 marks of the candidate explains why a SWOT analysis is appropriate, these should be clearly contextualised using Kids Clogs. Give credit for all reasonable points which may include: Identifying core competencies may help in deciding which market (high value or low value) the company should target Identifying weaknesses (such as inability to compete on manufacturing costs) may help to focus upon the preferred markets Identifying strengths (such as a strong brand image) may help to decide upon the type of products to be manufactured Identifying threats (such as the lower manufacturing costs of competitors) may result in changes to production aimed at lowering the costs of Kids Clogs Identifying external opportunities may highlight new fashion trends in children s shoes that could be exploited. 1 mark for each SWOT activity, plus a further 5 marks for explaining the relevance of a SWOT analysis to the company, to a maximum of 11 marks. Page 4 of 13

5 c) There is a requirement to improve the decision-making capabilities of the managers within Kids Clogs. i) Explain why a structured approach to decision-making can help to ensure more effective decisions. Award one mark for each correct strand of argument/line of development, to a maximum of 6 marks. Examples include: Structured decision-making ensures that the actual problem is identified and understood It helps to identify the main criteria upon which the decision must be based It helps to ensure that all of the possible alternatives are identified It ensures that the various alternatives are analysed It helps to ensure that the best alternative is selected, based upon all of the previous points There is a logic and consistency applied ii) Describe the main characteristics of rules and procedures and give TWO (2) benefits to Kids Clogs of these approaches in terms of improving management decision-making. Award 2 marks for each correct description, plus 1 mark for each benefit listed, to a maximum of 8 marks. Rules: An explicit statement Tells a manger what they can and cannot do Benefit simple to follow Benefit ensures consistency Procedures: Series of interrelated sequential steps Used to respond to a structured problem Benefit process for making the decision is clear Benefit ensures that all issues and considerations are fully addressed 6 8 Page 5 of 13

6 iii) Many managers within Kids Clogs have used intuition as the basis of their 6 decision-making. Define intuitive decision-making and list FOUR (4) potential problems of using this approach. Award 2 marks for correct definition, plus 1 mark for each correct problem, to a maximum of 6 marks. Intuitive decision-making means making decisions based upon experience and feelings (1 mark) and upon accumulated judgement (1 mark). Give credit for all reasonable problems, which may include: Managers may not be fully understand the problem Managers may not have all of the necessary information to hand Managers may be new in the role or new to the industry and therefore not have sufficient experience Escalation of commitment displaying a commitment to a previous decision even though it may have been wrong e.g. competing in the cheaper, lower quality end of the market Total 50 Page 6 of 13

7 Section B Answer any TWO (2) questions from this section Question 2 a) List and briefly describe the THREE (3) Informational roles as defined in Henry Mintzberg s Management Roles. Award 1 mark for each correct role, plus 1 mark for each description, to a maximum of 6 marks. 6 Monitor seeks and receives a wide variety of internal and external information Disseminator transmits information to members of the organisation Spokesperson transmits information about the organisation to outsiders b) Draw and fully label a diagram showing the motivation process. 7 1 mark for each correct box correctly labelled, together with a further mark for the correct sequence of boxes, to a maximum of 7 marks. c) List the THREE (3) needs that are included in David McClelland s Three Needs Theory of Motivation. 3 Award 1 mark for each, to a maximum of 3 marks. Need for achievement Need for power Need for affiliation Page 7 of 13

8 d) Briefly describe TWO (2) leadership challenges that might be faced by a manager 6 who is responsible for managing a virtual team. Award 3 marks for each correct challenge, to a maximum of 6 marks. Give credit for any reasonable answers, which may include: Communication may have difficulty in communicating regularly and effectively because the employee is away from their desk, or because of unreliable communications links (e.g. lack of broadband in certain parts of the region) Performance management lack of face-to-face meetings could result in difficulties defining, facilitating and encouraging work-related activities Trust inability to see the employee working may lead to doubts as to their productivity and commitment. e) Name the researchers responsible for developing the following theories of leadership: 3 Situational Leadership Theory Leader Participation Model Path-Goal Model Award 1 mark for identifying the correct researcher/s for each theory. Where there are two researchers, only award one mark for correctly identifying them both. Situational Leadership Theory Hersey and Blanchard Leader Participation Model Vroom and Yetton Path-Goal Model - House Total 25 Page 8 of 13

9 Question 3 a) Identify TWO (2) factors that are defined by the internal structure of a group. Explain how these help to shape member behaviour. 6 Allow 1 mark for each factor: Formal leadership positions Member roles Norms Conformity Status systems Group size Group cohesiveness Award a further 2 marks each for an explanation of how they help shape member behaviour within the group. b) Explain why mutual trust and unified commitment are important characteristics of effective teams. Award 3 marks for each correct explanation, to a maximum of 6 marks. 6 Mutual trust: Members need to believe in the character and ability of other team members Also need to have confidence that the other members have the required knowledge to perform their roles effectively If this trust is absent, team members will be not have the confidence in other members abilities and this will impact upon the overall performance of the team Unified commitment: All members need to be dedicated to the goals of the team Need to demonstrate the willingness to work hard in order to achieve these goals Without a commitment from all members to achieve the same goals, the team is likely to be unsuccessful Page 9 of 13

10 c) Identify the different areas of the balanced scorecard and describe how this 8 approach is used to evaluate organisational performance. It is a performance management tool that looks at four areas (award 1 mark for each area identified): Financial Customer Internal processes People/innovation/growth assets Award a further mark for each strand of explanation, for example: It considers how these areas contribute to company performance: Goals should be established in each of these areas (1 mark) and then measured to check if they are being achieved (1 mark).the approach emphasises that all of the areas are important to an organisation (1mark) and there should be a balance between them (1 mark). d) Define the term feedforward control. 2 Award 2 marks for correct definition, 1 mark for partial definition: Feedforward is a type of control that focuses on preventing anticipated problems (1 mark). It takes place in ADVANCE of the work activity (1 mark). e) Give examples of THREE (3) techniques that are used as part of the quantitative approach to improve management decision-making. Award 1 mark for each correct point, to a maximum of 3 marks. Examples include: Statistics Optimisation models Information models Computer simulations 3 Total 25 Page 10 of 13

11 Question 4 a) List FOUR (4) employee behaviours that managers may seek to control or influence through the study of Organisational Behaviour. Allow any of the following: Employee productivity Absenteeism Turnover Organisational citizenship behaviour Job satisfaction 4 1 mark for each correct behaviour identified, to a maximum of 4 marks. b) Explain why many organisations seek to maximise the organisational commitment of their employees. Award 1 mark for each relevant point (up to a maximum of 5 marks), including: Degree to which an employee identifies with their organisation The employee agrees with the goals of the organisation and displays loyalty The result is typically increased job satisfaction Job satisfaction is likely to result in a more positive and happier employee, with resultant increases in productivity and customer satisfaction Can also result in lower staff turnover which is also a significant benefit to the organisation 5 c) Compare and contrast transactional leaders and charismatic leaders. 6 1 mark for correct point, to a maximum of 6 marks. Transactional leaders: Generally do not inspire employees Instead they guide and motivate them in order to achieve established goals They do this by clarifying role and task requirements focusing upon current requirements Charismatic leaders: Personality and actions inspire employees Enthusiastic and self-confident leadership style Able to articulate a realistic and attractive vision of the future Page 11 of 13

12 d) Briefly describe how the following management theories are used in today s business world: 6 Behavioural approach Systems approach Behavioural approach: Helps to design motivating jobs Used by managers to assist in working with groups and teams Provides the foundation for current thinking on motivation, leadership, group behaviour and development Systems approach: Assists management in ensuring that independent parts of an organisation work together Helps to recognise that decisions taken in one department will impact others Emphasises the fact that organisations are not self-contained 3 marks for each correct description, to a maximum of 6 marks. e) Why is the controlling function such an important part of a manager s role? 4 Managers need to ensure that work is progressing as planned and that the agreed goals are being achieved This requires the actual performance of employees to be monitored The actual level of performance should be compared with the expected level of performance If there are any problems then corrective action can be taken without the controlling function the manager might not even be aware that such action is required 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 2, 3 Yes 2 1, 4, 5 Yes 3 1, 4, 5 Yes 4 1, 4, 5 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