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THE ASSOCIATION OF BUSINESS EXECUTIVES

ADVANCED DIPLOMA
MO

Management Organisation
morning 6 December 2005

Time allowed: 3 hours.

Answer any FOUR questions.

All questions carry 25 marks. Marks for subdivisions of questions are


shown in brackets.

No books, dictionaries, notes or any other written materials are


allowed in this examination.

Calculators are allowed providing they are not programmable and


cannot store or recall information. Electronic dictionaries and
personal organisers are NOT allowed.

Candidates who break ABE regulations, or commit any misconduct,


will be disqualified from the examinations.

Question papers must not be removed from the Examination Hall.

Answer any FOUR questions


Q1 Competitor analysis and PEST analysis are two
approaches to analysing the organisations external
business environment. Describe each approach and how
both of these might complement the other or in what
aspects they might differ.

(25 marks)

Q2 Managers who want to improve should review both their


effectiveness and their efficiency. Effectiveness is more
important than efficiency because one must be doing the
right kind of work. Only then does it matter whether the
work is being done efficiently. Luthans (1988) as quoted
by Mullins (2004).
Discuss.

(25 marks)

Q3 Often employees at shop floor level (either in commerce or


manufacturing) are more concerned with chasing output
targets (an output culture) and monetary rewards than
perhaps offering quality goods and services.
(a) Do you agree with this statement?

(12 marks)

(b) How might a knowledge of organisational culture (and


cultural theories) make it easier for managers to
understand this output culture and help them to
(13 marks)
change to a quality culture?
(Total 25 marks)

Q4 How might an organisations structure determine


organisational performance and how it responds to
business opportunities?

(25 marks)

Q5 In management theory, one approach often referred to is


The Classical Approach. What is understood by this
approach and what might be the major criticisms?

(25 marks)

Q6 Social responsibility of organisations, who needs it?


Surely organisations exist to make money for the
shareholders.
Discuss these two statements.

Q7 (a) Explain what is understood by the term


organisational development (OD).

(25 marks)

(5 marks)

(b) Describe in detail how you might implement OD in an


(20 marks)
organisation.
(Total 25 marks)

Q8 Objectives [goals] and policy are formalised within the


framework of corporate strategy which serves to describe
an organisations sense of purpose, and plans and actions
for its implementation. Mullins (2004).
Discuss the meaning and content of this quotation and
illustrate your answer with reference to an organisation of
(25 marks)
your choice.

Advanced Diploma
Management Organisation
Examiners Suggested Answers
Question 1
The examiner would be looking for descriptions of competitor and PEST
analysis approaches particularly tracking the competition through careful
monitoring of the business environment. Better students would include
external benchmarking as well as PEST analysis as a strategic tool with
detailed descriptions of each. Practical examples would help, this would be
drawn from the students reading or work experience. Challenges facing
organisations can be easily identified through monitoring of the business
environment using PEST analysis and by comparing the competitors best
practice with the organisations operations. This can help retain the competitive
edge or even help any organisation to gain competitive advantage. Competitor
and PEST analysis can address wider issues such as identifying new entrants
into the market and how to fend off their competition and determine product
differentiation.
Question 2
Definitions/discussion of effectiveness (goal achievement) and efficiency
(making best use of scarce resources) would be essential to answering this
question. Students should have fully explored the validity of the statement that
effectiveness is more important than efficiency.
The issue of managerial effectiveness v effectiveness of their staff is relevant as
the manager cannot achieve his/her objectives/goals without the efforts of the
staff. The link between the two should have been fully explored.
The importance of the inputs required for the managers job should have been
discussed, for example: objectives, planning, organisation, direction and
control. The outputs of the job too are relevant; performance levels, meeting
goals, best use of resources, profitability etc. The process of converting inputs
into outputs should have been developed as well as achieving results through
people. Better students would include some reference to management
development and being introspective.
Question 3
(a) Students could agree or disagree with the statement (output oriented v
quality oriented cultures), indeed some discussion of culture would be
useful.
Students should discuss the reasons behind chasing output targets i.e. pay
and its links to quantitative performance systems, motivation issues
(intrinsic v extrinsic motivation), quality sacrificed at the expense of pay
due to financial incentive schemes rewarding output and neglecting quality.

(b) Definition(s) of culture needed [this may have occurred in part (a)].
Definitions round the theme of shared values and beliefs would have been
acceptable. The student should have made reference to cultural theories,
the work of Charles Handy is the most likely inclusion by many students.
There needed to be some discussion of the current culture (output based)
and the need for changing that culture with practical examples of how to
change the culture of the staff by changing the reward system, changing
the work practices and procedures, education or changing the staff
themselves. Difficulties in changing a culture would have attracted further
marks.
Question 4
Definition and discussion of organisational structures essential parts of the
answer. Organisational structures are the essential building blocks of any
enterprise and are based upon the principle of division of labour to promote
efficiency and effectiveness. The type of structure depends upon the size of the
company, the deployment of technology, the culture and its strategy. Many
organisations fall into two categories: Mechanistic (or machine like) or Organic
(adaptable to the business environment). An organisation chart is useful in
elaborating on the answer. The way organisations organise and its effects on
performance needed highlighting with examples. Team structures and flat
structures always help raise performance.
Types of structures are relevant too:
Functional (based on a functional department)
Product (organised around the product)
Matrix (used on project work)
At a macro level of organising organisations can have a regional structure
based on a geographical location, for example North West Region.
Better answers would also include the influences from the business
environment, SWOT discussion too could add value to any answer, with
emphasis on the Opportunities. Influences on size, shape of an organisation
and its ability to seize a new business opportunity are relevant. Responsiveness
and flexibility issues linked to the type of structure needed discussion.
Question 5
The student should highlight the application of general management
principles/theories to managing in organisations. The importance of formal
structure, hierarchy of management, technical requirements and common
principles of organisation needed stressing when answering this question. Such
writers as Taylor, Fayol, Urwick and Brech typify this school. This is often
associated with the rational, unitarian, goal seeking approach to managing in
organisations and problem solving.
Criticisms would be that the classical approach ignores the human aspect, has
a focus on control and the directing phase from the work of Henri Fayol. It is
arguable that it has value in the present day. It has efficiency at the core and

links to scientific management principles. It is based on the assumption that


employees are motivated by money and better students could make links with
Theory X in McGregors work on leadership and motivation.
Question 6
Definition(s) of social responsibility (the responsibility of companies to
stakeholders and society that is more than the companys own interests) and
discussion are an essential start to answering this question. Students could
agree/disagree with statements and have a well thought through response
either way. Some discussion of stakeholders other than shareholders would
enhance any response (the government, competitors as indirect stakeholders,
society as a whole etc). The point that this is a short term view if profits only
are considered would enrich any answer.
Question 7
Reference to:
(a) The meaning and nature of OD needed elaborationa long term effort, led
and supported by top management, to improve an organisations visioning,
empowerment, learning, and problem solving processes, through an
on-going, collaborative management of organisational culture (Mullins,
2005).
Students would also be expected to discuss the linked topics such as
culture, climate, commitment, conflict and change.
(b) Implementation would follow the key steps of:

Survey and feedback through a questionnaire looking at attitude of


staff
T-Groups for sensitivity training
Team building to improve the overall performance of the organisation
Grid training that builds on the work of Blake and Mouton and their
management grid.

Alternatively Role Analysis, Life and Career Planning, Quality of Working


Life and Counselling provides a different approach.
Question 8
Definitions of goals should make some reference to a goal being a future
expectation or desired future state. Objectives are more specific than goals and
can be viewed as Sub-goals to help in the achievement of goals. Policies are
fundamentally statements of a companys intentions relative to their strategic
aims. A definition and reasonable discussion of corporate strategy were also
needed, differentiating between corporate, competitive and functional strategy.
The student should have stressed that goals and policy should be created to
assist and achieve strategic aims.

The role of managers (and employees) in this framework and how they assist in
planning and actions that strive towards achieving the corporate strategy were
viewed as beneficial to any answer.
The answer must have an organisation of the students choice included though
to maximise the marks.