THE KERICHO NATIONAL

POLYTECHNIC

DIPLOMA IN INFORMATION COMMUNICATION TECHNOLOGY

MODULE 3

PRINCIPLES AND PRACTICE OF MANAGEMENT

REVISION QUESTIONS

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1. Same organizations may at times fail to plan. Explain the factors that may lead to
such failure.
-Lack of adequate money. Planning is expensive in terms of money
-Inadequate time. Planning is time consuming
-Lack of trained personnel. The personnel may not have the knowledge in planning.
-Planning requires same change in the current setup. Resistance to change makes
planning difficult.
-Top level management support. If planning is not supported by the top management, it
has high chance of failure.
-Planning may fail due to external force/environment that may negatively affect it.
Government regulations, natural calamities, economic downturns etc may make
managers fail to plan

2. A control system should posses certain attributes. Outline five such attributes
-Suitability
A good control system should be able to suit the activity that is being controlled. It
should be related to the objectives of the organization.
-Flexibility
The control system must be adaptable to changing environment in business operations. It
should remain workable even when the plans change.
-Economy
The system adopted should be cost effective. The benefit of the system should be higher
than the costs incurred. Same of the costs incurred are installation and maintenance costs.
-Simplicity
The control system should be simple to operate. It should be easy to understand by those
operating the system. Complex systems should not be encouraged.
-Suggestive
A good system should suggest the remedial action to be taken. The system should
Should be able to indicate where the problem is and the possible action to take.
-Objectivity
Control should be based on objectivity. A control system should be objective, verifiable
and specific. The system should not be influenced by the personality of the superior. It
should not be subjective.
-Promptness
A good control system should report deviations as quickly as possible. Prompt reporting
leads to quick decision making.
-Forward looking
A good control system helps the management to think ahead and plan for the future. It
should have the element of being proactive other than reactive.

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3. Explain five limitations of using the scientific management approach in
improving efficiency in an organization.
-It is limited in scope. It does not cover every aspect in the organization.
-It could not handle the complex problem in the organization
-it involves a lot of measurements that may sometimes not give the expected results
-It is time consuming. This time can be used to do more work
-It is costly to implement. Organizations may consume more than the benefits that they
get.

4. Explain the reasons that may lead to the reluctance by an organization to

participate in Corporate Social Responsibility (CSR).
-It reduces the profit of the business. The activities affect the returns to the consumers
-It dilutes business purpose. It diverts from the main objective of starting the business ie
profit maximization
-Social responsibility promotes laziness. People wait for the assistance. It erodes work
ethics.
-Leads to increase in price of goods and services. The cost of the activities is passed on to
the consumers.
-Sometimes the community may take the assistance as a right. The community may
become hostile if the assistance is withdrawn.
-It is the responsibility of the government to provide the services in CSR. The
organizations obligation is only to pay taxes.

5. Explain the circumstances under which a manager may find it appropriate to

adopt the autocratic style of leadership.
-Emergency. This is where something has to be done with speed.
-Indiscipline. It appropriate where workers have habitually lack discipline
-Uneducated employees. Those who are not self controlled and motivated.
-Disorganized groups who want to depend on the leader
-It reduces a lot of time used in consultation. Appropriate where a decision must be made
quickly

6. Outline the indicators of low employee’s morale in an organization.

-Morale is an indicator of the attitude of employees towards their work, environment, and
management. It is a composite term reflecting the feelings and reactions.
-High rate of absenteeism
-High rate of labor turnover
-many complaints and grievances
-Frustration and frictions among the employees e.g. fights abusive language etc.
-Unnecessary resistance to change.
-Poor performance in work
-Lack of creativity and innovativeness.

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7. Explain the benefits that accrue to an organization that undertakes manpower
planning.
-It leads to effective and efficient use of human resources. The productivity of an
organization depends on human resource.
-It leads to better decisions in recruitment, selection, training, remuneration, etc.
-Development of employees is enhanced. There is better chance of developing careers of
the employees.
-Assists to avoid labor crisis. Organizations that carry human resource planning are able
to meet their future needs.
-Human resource planning helps the organization to achieve its objectives.

8. Blue light Company limited has had its operations decentralized for some years
but intends to centralize them. Explain the reasons that may have lead to such a
move.
-In a decentralized organization coordination may be difficult. Hence to achieve
efficiency it may be appropriate to centralize activities. Centralization leads to integration
of individual efforts.
-Decentralization is costly. It involves cost in terms of staff. More workers need to be
hired in a decentralized system of operations. A good example is the devolved
government in Kenya.
-The decision may have been arrived at due to lack of able managers. It may have been
difficult to find people who can learn a decentralized system well.
-Centralization may be adopted to achieve uniformity of action. Same areas require
uniformity such as personnel purchasing, advertising etc.
-Centralization may have been adopted so as to handle emergencies. Quick decisions are
needed in an environment of high competition, economic and political changes.

9. Explain the limitations of using committees in decision making

-Time consuming. Committees consume a lot of time in deliberations and consultations.
-Committee decision making is expensive. This may be in terms of salaries, allowances,
refreshments, etc
-The committee comes up with a compromise decision. This decision made may not be
the best. A good idea may be rejected just to conform to the line of least resistance.
-There is lack of accountability in the decision. It is difficult to apportion the blame when
a decision backfires
-A committee may be formed with the sole intention of delaying decision making.

10. Explain the benefits that may accrue to an organization that uses Management
by Objectives (MBO)
-Management by objectives involves participative decision making. It hence assists in
planning. It makes people to set achievable and specific goals.
-Management by objectives assists in coordination. It leads to harmony and a common
direction in the whole organization.
-Management by objectives increases the motivation of workers. This is because the set
objectives are achievable. Hence the workers became happy and satisfied.

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-Management by objectives leads to high commitment on the side of workers and
managers. They are committed to the objectives because they have been involved in the
setting of the objective.
-Management by objectives assists in organization change and development. It makes
managers to initiate and manage change when problems are noted in the current structure.

11. Explain five factors that may influence the span of control in an organization.
-The span is affected by the competence of the superior. Managers who are more
competent can supervise more people than those who are less competent.
-the intelligence level of the subordinates affects the span. Where the subordinates are
professionals, the span can be wider than where the subordinates are not trained.
-the nature of work also affects the span. Routine and simple work involves a narrow
span as compared to complex work
-in a situation where operations are decentralized, the executive needs a narrow span due
to the challenge of distance.
-span of control can also be affected by effectiveness of communication. If
communication is effective, there can be a wider span.

12. Explain five reasons that make coordination necessary in an organization.

-Coordination is necessary where there is high number and complexity in operations.
Need for coordination arises where operations are many and complex.
-Specialization leads to diversity and lack of uniformity in operations. The diversity
hence requires effective coordination.
-Coordination helps to reduce conflict between individual and organizational goals. It
brings a sense of harmony between the two different types of goals.
-There is need for coordination because of the interdependence between the different
units in an organization. The output of one unit may be the input of another unit.
- Different people have their own ways of doing things in terms of speed, approach, etc. it
is appropriate to reconcile all this through coordination
13. Explain five ways in which an organization may address the challenges faced by
women employees with young children
-Flexi time.
-Providing kindergarten facilities within the organization. The employees can came with
the child if she does not have a house help.
- Placement and allocating the employee less taxing jobs
-Use of modern technology to assist workers to work from their homes eg internet
facilities
-Extending maternity leave

14. Explain five ways in which induction training can be made effective
-Proper planning must be done before the training. This will assist in creating a positive
image to the new employee.
-Assigning the training to a senior member of staff
-it should cover all the areas of importance to the employees.
-it should be conducted in a friendly atmosphere

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-induction training should be given adequate time depending on the size of the
organization

15. Outline five roles that a manager may undertake in the day today running of an
organization
-Giving directions to the employees
-solving the problems affecting the stakeholders. He deals with the complaints,
suggestions, grievances etc
-Plan day to day operations as per the goals of the organization
-Assign jobs to the employees.
-Control the workers and maintain personal contact with them

16. Management by Objectives (MBO) is one of the strategies that may be adopted
by the organizations in order to achieve effectiveness. Explain five benefits of this
strategy to an organization
-Management by objectives involves participative decision making. It hence assists in
planning. It makes people to set achievable and specific goals.
-Management by objectives assists in coordination. It leads to harmony and a common
direction in the whole organization.
-Management by objectives increases the motivation of workers. This is because the set
objectives are achievable. Hence the workers became happy and satisfied.
-Management by objectives leads to high commitment on the side of workers and
managers. They are committed to the objectives because they have been involved in the
setting of the objective.
-Management by objectives assists in organization change and development. It makes
managers to initiate and manage change when problems are noted in the current structure.

17 Highlight five limitations of group decision making in an organization

-Time consuming. Committees consume a lot of time in deliberations and consultations.
-Committee decision making is expensive. This may be in terms of salaries, allowances,
refreshments, etc
-The committee comes up with a compromise decision. This decision made may not be
the best. A good idea may be rejected just to conform with the line of least resistance.
-There is lack of accountability in the decision. It is difficult to apportion the blame when
a decision backfires
-A committee may be formed with the sole intention of delaying decision making.

18. Outline five ways in which effective coordination may be achieved in an

organization
-Coordination can be achieved through sound planning. Good planning is the beginning
of effective coordination. There should be clear cut objectives and harmonized policies.
-Coordination can be achieved through simplification of the systems in the organization.
Lines of authority and responsibility should be well defined from the top to the bottom.
This reduces confusion.
-Coordination can be achieved through effective communication. Communication should
be regular and open. Communication promotes unity in different departments and units.

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-Coordination can be achieved through effective supervision and leadership. Leadership
gives the right direction.
-Coordination can be achieved through a proper chain of command. Coordination can be
achieved by putting related units to be under one boss.

19. Explain five factors that should be considered when designing a management
control system in an organization
- Nature of activity
A good control system should be able to suit the activity that is being controlled. It
should be related to the objectives of the organization.
-Flexibility
The control system must be adaptable to changing environment in business operations. It
should remain workable even when the plans change.
-Economy
The system adopted should be cost effective. The benefit of the system should be higher
than the costs incurred. Same of the costs incurred are installation and maintenance costs.
-Simplicity
The control system should be simple to operate. It should be easy to understand by those
operating the system. Complex systems should not be encouraged.
-Suggestive
A good system should suggest the remedial action to be taken. The system should
Should be able to indicate where the problem is and the possible action to take.
-Objectivity
Control should be based on objectivity. A control system should be objective, verifiable
and specific. The system should not be influenced by the personality of the superior. It
should not be subjective.

20. Explain the benefits that an organization may obtain from carrying out human
resource planning.
-It leads to effective and efficient use of human resources. The productivity of an
organization depends on human resource.
-It leads to better decisions in recruitment, selection, training, remuneration, etc.
-Development of employees is enhanced. There is better chance of developing careers of
the employees.
-Assists to avoid labor crisis. Organizations that carry human resource planning are able
to meet their future needs.
-Human resource planning helps the organization to achieve its objectives.

21. Explain the benefits of adopting participative style of leadership in an

organization
-It improves job satisfaction
-Improves motivation
-Reduces resistance to change
-It helps in winning the loyalty of the workers
-Leads to creativity and initiative

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22. The assumptions of theory Y as advocated by Douglas McGregor can be applied
towards the motivation of employees in an organization. Outline five of these
assumptions.
-An average person does not hate work. The worker looks at work as a source of
satisfaction
-Control and threats are not the only means of making the employees achieve the
organizational goals. People exercise self direction and self control in their work.
-People are committed to objectives as a result of the rewards associated with their
achievements
-An average person accepts responsibility and can even seek for responsibility.
-People have high ability to exercise imagination and creativity in problem solving etc
-Under the conditions of modern industrial life, the intellectual potentialities of the
people are only partially utilized.
23. Explain five reasons that may contribute to reluctance by subordinate to take up
delegated tasks in an organization.
-fear of criticism affects delegation. The subordinates fear that any mistake they make
may lead to unnecessary criticism and probably dismissal.
-subordinate may feel insecure. They are afraid to take risks and responsibilities. They
may be comfortable where the superior makes all the decisions.
-they may also have the feeling that information and resources will not be availed so that
they implement the decisions.
-subordinates may also lack the confidence in their capability to carry out the new
responsibilities.
-where the new responsibilities are not accompanied with adequate incentives,
subordinates will be reluctant to accept responsibility. They will not be motivated to
accept the delegation willingly.

24 Outline five external economic factors that may positively influence the
operations of an organization
-Lower interest rates. This makes borrowing easy. Money can be used for investment.
-High incomes to the workers. This may lead to higher disposable income.
-lower inflation implies lower costs of living. Consumers can therefore by more products.
-Improvement in infrastructure leads to more benefits. Transport and communication
becomes possible.
-High growth rate leads to better opportunities. This can lead to growth and expansion of
the organization

25. For effective planning in an organization, managers should adhere to certain

principles. Explain five such principles.
-1) Contribution to objectives.
All plans are aimed at attainment of the desired objectives.
2) Efficiency
Planning should be geared toward efficiency. It should aim at doing more with less.
Planning process should not consume more than benefits it brings. There should be value
for money

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3) Planning premise
Planning should take into account the different limitations and boundaries. There may be
limitations of time, money and other resources
4) Selecting of alternatives
Planning is based on selecting from different alternatives. There can be no planning
without an alternative. The best alternative should be selected. Planning therefore
involves decision making
5) Primacy of planning
Planning is the basic function of all managers. It is the first step towards performing all
the other functions

26. The budget is a popular control tool in an organization today. Outline five
factors that accounts for this popularity.
-Assist in planning
Annual budgets help in planning. It also encourages managers to anticipate problems be
they arise. This assists to avoid management by crisis.
-Assist in coordination
Budgeting brings different parts of the organization together. A good budgeting system
helps to coordinate the various activities and to ensure that all the parts in the
organization work in harmony. This avoids a situation were each manager acts alone.
This encourages team work and team spirit.
-Communication
Budgeting helps to increase communication effectiveness in the enterprise. The different
sections are kept informed about the plans and policies of the enterprise.
-Motivation
Budgeting can be used to influence managerial behavior. It makes the managers to
operate in line with the organizational objectives.
-Control
Budgeting can be used as a tool for control. This is because managers are responsible for
control of the enterprise operations.

27. Explain five challenges that organizations may face in their effort to achieve
coordination
-competition between departments where each department looks at itself as autonomous.
-lack of adequate resources that leads to complaints and conflicts.
-poor leadership in the organization
-lack of team work in the organization
-where the various units are distance apart there may be a problem of distance.
-challenge of superiority complex. Same departments think they are more superior to
others.

28. Business organizations have developed new and innovative forms of employment
in organizations in order to lower the cost of labor. Highlight these forms of
employment.
-Outsourcing: hire a private firm to carry out a routine activity such as cleaning, security,
etc.

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-Contract: employing people on contract means that they can be done away with when
the contract is over.
-Part-time: this implies employing people only when they are needed. There is no long
term commitment.
-Temporary
-Employing young graduates from universities and colleges

29. Mwanganza, a newly recruited middle level manager intends to use a democratic
leadership style in his new job. Explain the challenges he is likely to face from the
application of this leadership style.
-Time consuming. Democratic leadership consume a lot of time in deliberations and
consultations.
-Democratic leadership is expensive. This may be in terms of salaries, allowances,
refreshments, etc used during consultation
-The style may come up with a compromise decision. This decision made may not be the
best. A good idea may be rejected just to conform to the line of least resistance.
-There is lack of accountability in the decision. It is difficult to apportion the blame when
a decision backfires
-This style can be used with the sole intention of delaying action.

30. The management of Kwoma limited has noticed a drastic reduction in the
morale of employees in the organization. Outline the factors that may have lead to
this drop in the morale of the employees.
-Poor working conditions where the workers even lack the basic tools
-Poor remuneration even when the organization is performing well
-Poor supervision where there is autocratic leadership
-Lack of recognition even when an employee has done exceptionally in his work
-Lack of adequate rewards for quality and quantity of work
-Added responsibilities without corresponding compensation
-Some employees being favored as compared to others

31. Herzberg’s Two Factor Theory of motivation stipulates certain factors that an
organization can use in order to enhance motivation of workers. Describe these
factors.
-Supervision
There should be effective supervision. It should not be dictatorial. There should be good
relation between the supervisor and the workers
-Working conditions
There should be good working conditions provided. The employees should feel secure
when working. They should also be provided with the tool and equipment needed to
perform the work.
-Status and security
-Interpersonal relations
-Company policies
-Achievement

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32. Highlight the limitations of using Management by Objectives (MBO) as a
strategy for managing change in an organization.
-MBO assumes a stable environment where objectives once determined will hold good
until they are achieved. However, many unforeseen changes might occur that may make
the objectives not achievable or irrelevant.
-Worker at lower levels in the organization do not have total freedom to set their
objectives. In reality MBO operates from the top.
-There is a lot of documentation and paper work. This then increases the cost
-There is lack of total support of MBO philosophy throughout the organization
-A lot of time is used in training and preparation before the implementation of the
program
-MBO implies consultative objective setting between the senior and the subordinate.
However this relationship is based on status that may prove to be a hindrance to free
communication between the two parties.

33. Highlight the features of a bureaucratic organization according to Marx Weber.

-Division of labor. This is through functional specialization.
-A well defined hierarchy of authority. This relates to the chain of command.
-Professional employees. He put a lot of weight on the recruitment of professionals
-There is a system of impersonal rules, regulations and procedures. These should be put
in place and be followed by everybody.
-Autonomous decisions. One should make his own decision at his level without being
influenced.

34. Explain five principles that a manager should consider when organizing work
activities.
1) Flexibility and continuity: the managers must be prepared to adopt to change. This is
because change is permanent in an organization.
2) Coordination
There should be an orderly arrangement of group effort. Coordination achieves team
work. This is due to the fact that the organization aims at achieving the same objective
regardless the individual or group activities.
3) Unity of direction
There should be one plan and one head for a number of different activities directed
towards the same objective
4) Unity of command
Each person should receive orders from one superior only. This erases the problem of
confusion and conflicts as far as instructions are concerned.
5) Exceptional principle
Every manager should make decisions within the scope of his authority and
responsibility. Only difficult decisions will be referred to the higher level manager.
6) Delegation
Delegation enables decision to be made to be made at the point of action. Adequate
delegation must be given to the delegatee so that he can be able to achieve the results
expected.

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35. Outline five objectives of budgeting in an organization
-To assist in planning
Annual budgets help in planning. It also encourages managers to anticipate problems be
they arise. This assists to avoid management by crisis.
-To assist in coordination
Budgeting brings different parts of the organization together. A good budgeting system
helps to coordinate the various activities and to ensure that all the parts in the
organization work in harmony. This avoids a situation where each manager acts on his
own. This encourages team work and team spirit.
-To assist communication
Budgeting helps to increase communication effectiveness in the enterprise. The different
sections are kept informed about the plans and policies of the enterprise.
-To motivate the workers
Budgeting can be used to influence managerial behavior. It makes the managers to
operate in line with the organizational objectives.
-To act as a control measure
Budgeting can be used as a tool for control. This is because managers are responsible for
control of the enterprise operations. Managers can determine the cost that does not
conform to the budget. This because a budget is a standard of performance. This assist
the organization to operate a system called Management by Exception. (MBE)
-To assist in performance evaluation
Through budgeting, it is possible to monitor and evaluate the performance on regular
basis. It is possible to note those who perform well and rank them.

36. Highlight five factors that determine the degree of decentralization of authority
in an organization
-The size of the organization in terms of employees and the products sold
-The type of subordinates in terms of their training
-The level of training of the managers in relation to decision making
-The capability of the organization to cater for the cost involved
-The policy of the top management
-The geographical spread of the organization

37. Describe five types of operational plans in a business organization.

-Programs: These are intermediate types of plans that encompass a wide set of activities
with a common purpose e.g. the decision to build a new type of airplane is a major
program.
-Projects: this is a subdivision of a program.
-Budget: a budget is a plan to allocate resources and expenses for a given period of time
normally one year.
-Policy: a broadly stated plan that provides general principles or guidelines for making
decisions in many situations.
-Rule: A specific plan that either condones or prohibits certain kinds of behavior
-Procedures: step by step description that details the action that firms and individuals
undertake to carry out standing plans

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38. Highlight the measures that an organization should take in order to cope with
challenges posed by technological changes.
-Train all the employees on the new technology in the market
-Scan the environment for any new development in technology
-The management should set aside funds to militate against the challenge of rapid
technological changes.
-should look at what the competitors are doing so that the organization is not left behind
-
39. Outline five benefits that an organization would derive from effective
coordination of operations between the purchasing and the production department.
-The organization is able to purchase the right quality of materials and the production
department can produce high quality products.
-T he organization is in a position to have continuous flow of supplies. Hence there is no
stoppage in production
-The organization is able to produce at the lowest price and hence the goods produced
can be sold at the lowest price. This makes the company to be competitive.
-Effective coordination between the two department leads to improvement of the
corporate image of the organization
-

40. Explain five circumstances under which an organization may find it appropriate
to use a private employment agency to recruit manpower resources
-Where the organization wants to use experts in recruitment
-Where the company wants to appear not biased in the recruitment
-Where the company has outsourced the service of recruitment
-Where the organization does not have trained employees to carryout the recruitment

41. Explain the reasons for using interviews in the process of recruiting employees
-Reduces subjective and biased judgment
-Possible to clarify issues highlighted in the application form
-Creates a rapport between the interviewer and interviewee
-Not very expensive
-The characteristics of the potential employee can be noted at this point in terms of
emotions, honesty, humility etc.

42. A manager may be described as a person who gets work done through others.
Outline five ways in which manager may achieve this objective.
-Team work
A manager should encourage team spirit in an organization. He makes sure that people
pool in the same direction
-communication
He should be able to communicate effectively with the employees. This implies that the
instructions are well understood
-motivation through rewards
Good performance must be rewarded through gifts, bonuses, etc
-Recognition

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This should be done in public so that others can see
-Good working conditions
Workers must be provided with what is required to perform their work well.
-proper coordination of activities
This is because all the activities lead to the achievement of the same objective
-
43) Explain the limitations of using a committee to make decisions in an
organization
-Time consuming. Committees consume a lot of time in deliberations and consultations.
- Committee decision making is expensive. This may be in terms of salaries, allowances,
refreshments, etc
-The committee comes up with a compromise decision. This decision made may not be
the best. A good idea may be rejected just to conform with the line of least resistance.
-There is lack of accountability in the decision. It is difficult to apportion the blame when
a decision backfires
-A committee may be formed with the sole intention of delaying decision making.

44) Highlight four benefits that a new employee may obtain from undergoing
induction training in an organization
-it helps to build a channel of communication between the management and the employee
-it facilitates team work and informal relationships with the organization
-it assists in integrating the employee into the organization and develop a sense of
belonging
-it proves that the organization is taking interests of employees seriously
-it reduces labor turnover, absenteeism, and employee grievances

45) Explain six guidelines that a manager may follow in order to ensure effective
delegation of authority in an organization
-Delegation should give proper amount of authority. This is the principle of parity. This
means that responsibility should not be less than the authority delegated. Enough
authority should always be delegated to achieve the desired objectives
-The delegator must define the results expected. This is due to the reason that the basic
purpose of delegation is to achieve the stated objectives.
-The abilities of the subordinates must be considered. Authority and responsibility should
be delegated to only those who are capable and willing to accept the delegation.
-Make sure that the authority is clearly stated. Authority relationships should be clearly
stated not only to the subordinates but all other concerned as well.
-The authority should be modified whenever necessary. Managers must maintain a
flexible attitude of what kind and how much authority to delegate. This because the
environment is always changing. Authority may need to be changed from time to time.

46) Outline five ways in which an organization can benefit from adopting a
bureaucratic system of administration
-It puts emphasis on division of labor. This is through functional specialization. This
leads to efficiency

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-A well defined hierarchy of authority. This relates to the chain of command. It makes the
structure clear.
-There is a system of impersonal rules, regulations and procedures. This applies to all
members of the organization. There is no discrimination.
-Autonomous decisions. One should make his own decision at his level without being
influenced. This leads to faster decision making.
-Merit based employee’s selection. People should be recruited on merit not on any other
factor such as gender, religion etc’
-Maintaining written records. This will assist in resolving issue arising in the process of
production
-Communication. Once something comes up, there must be a way of communicating.
Good communication leads to better delivery services

47) Explain five reasons that make coordination an important function of

management.
-Effective coordination leads to reduction of costs in terms of time and money
-Due to the increase in size of modern organization
-The need to increase out put through specialization
-Effective coordination minimizes conflicts in among individuals and departments.
-Effective coordination between departments leads to improvement of the corporate
image of the organization. The leads to more customers

48) Highlight five measures that the management of an organization should take to
in order to ensure that planning is successfully carried out
-Involvement of all those to be affected by the plan. This will lead to ownership of the
plan.
-Resources should be availed so that the plans are successfully carried out.
-There should be continuous control of the plans. This will ensure that the plans are
carried out well.
-Planning should focus on objectives and results. Each plan should be geared towards
attainment of a specific objective.
-Decentralization in making planning successful. Each department should be given
freedom to carry out it plans.

49) Explain five internal factors that may affect the operations of an organization
-Policies
-Rules and regulations
-Plans and objectives
-level of motivation of personnel
-Size of the organization
-Types of employees and their academic qualifications and training

50) Explain six reasons that may make some organizations reluctant to adopt the
Management By Objectives (MBO) approach to management
-Inflexibility
-Time consuming

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-Expensive
-Self defeating
-Emphasis on short term goals
-Lack of motivation

51) Describe the steps that should be followed when implementing a control process
in an organization
-Establishing standards of performance
The standards needs to be verifiable and clearly stated e.g. in units of production, volume
of sales etc. Where the standards are qualitative other than quantitative, it is better to
express them as end result rather than the method. Budgets can be used to express
quantifiable results.
-Measure the performance
Measurement depend more on the relevance, adequacy, and timeliness of the information.
Deviations should be disclosed as early as possible.
Measurement of performance against standards should be done on a forward looking
basis. This will make the behavior to be noted in advance of the occurrence. Action can
then be taken quickly to avoid the occurrence.
- Compare the actual performance with the standard.
Most organizations recommend that action be taken when the deviation is significant.
When there is insignificant deviation, then no action should be taken.
-Take correction action where required
Control should not only be used to identify progress but also to put right what has gone
wrong. Therefore control action should lead to implementation of the appropriate action.
Standard of performance plans actual performance comparison with standard
deviation/no deviation noted take corrective action in event of a deviation

52) Explain five ways in which modern technology may positively affect the work of
managers in organizations today
-Quality in production and provision of services is enhanced. It leads to improvement of
quality.
-There is increase in output. This is because there is mass production
-Increase in efficiency. It is possible to produce at the lowest possible cost. Errors are
also minimized
-Speed in the process of production of goods and services
-Improves the image of the organization to outsiders. This leads to better confidence with
the customers.

53) Explain the features that an effective organizational control system should
posses
a) Suitability
A good control system should be able to suit the activity that is being controlled. It
should be related to the objectives of the organization.
b) Flexibility
The control system must be adaptable to changing environment in business operations. It
should remain workable even when the plans change.

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c) Economy
The system adopted should be cost effective. The benefit of the system should be higher
than the costs incurred. Same of the costs incurred are installation and maintenance costs.
d) Simplicity
The control system should be simple to operate. It should be easy to understand by those
operating the system. Complex systems should not be encouraged.
e) Suggestive
A good system should suggest the remedial action to be taken. The system should
Should be able to indicate where the problem is and the possible action to take.
f) Objectivity
Control should be based on objectivity. A control system should be objective, verifiable
and specific. The system should not be influenced by the personality of the superior. It
should not be subjective.
g) Promptness
A good control system should report deviations as quickly as possible. Prompt reporting
leads to quick decision making.
e) Forward looking
A good control system helps the management to think ahead and plan for the future. It
should have the element of being proactive other than reactive.

54) Highlight six measures that should be taken by managers to ensure that job
selection interviews are conducted effectively
-A venue of the interview to be away from noise
-Adequate preparation before the interview
-A qualified selection panel should be appointed
-Only the right number of interviewees should be invited
-

55) According to Herzberg’s two factor theory of motivation, employees can be

motivated by certain satisfiers within their jobs. Outline four such satisfiers
-Achievement
-Recognition
-Increased responsibilities
-Challenging work
-Growth and development opportunities

56) Explain the characteristics of decision making

-The need for decision making arises only when there is more than one alternative. This
is because decision making is based on choice between alternatives
-The reason for decision making is to find out the best course of action. It is therefore
rational and purposeful activity. It is aimed at attaining the objective. A decision not to
decide is also a decision.
-It is an intellectual process. It involves deliberation and consultation. It is a thoughtful
process that takes into account the factors that affects a decision. It is the end product of
reasoning and judgment.

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-A decision leads to commitment of the resources to implement the decision. This may be
a short term or a long term commitment.
-Decision making takes into consideration the environment. Every decision influences or
is influenced by the decision made. All the factors in the environment should therefore be
taken into account as the decision is made.
57) Explain the different types of decisions that can be made in an organization
-Organizational decisions
These are decisions made by the executive in his official capacity and on behalf of the
organization. The person making the decision must have the authority to do so. Decision
on transfer, promotion, sacking etc are organizational decisions.
-Personal decisions
These are decision made by an individual in his personal capacity. They are not made on
behalf of the firm. They influence the personal life of the decision maker. However some
personal decision like a decision to leave the organization may affect the entire
organization.
-Routine decision
These relate to the day to day operation of an enterprise. They are also referred to as
tactical decisions. They are taken at the lower levels of management. They involve little
risk and uncertainty.
-Strategic decision
These are decisions that involve long term commitments. They require careful analysis
and considerable deliberations. Location of plant, selection of a distribution channel,
opening a new branch etc are examples of strategic decisions.
-Policy decision
These are decisions affecting the entire organization. They are taken by the top
management. They give the direction that the organization should take. They are
published as policy manuals to guide the lower level executives.

58) Highlight the steps in the decision making process

Define the problem
The problem should be identified and clearly defined. Accurate diagnosis leads to finding
the actual solution. It is crucial to differentiate a problem and a symptom. An overall
view of the problem should be taken when solving a problem.
Analyze the problem
Once the problem is defined, it should be analyzed in terms of nature, impact, futurity,
periodicity etc of the decision. The major obstacles in achieving the results should be
analyzed. Information should be gathered to assist in solving the problem. A decision is
as good as the information used to arrive at that decision.
Data collected must be analyzed and classified carefully.
Generate alternatives
In making the right decision, it is appropriate to look for all the possible alternatives. A
reasonable number of alternatives must be generated. Due to time and cost limitations, it
might not be possible to deal with all the alternatives. However an attempt must be made
to weigh the alternatives and reach a decision.

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It is important to search for alternatives that are not so apparent. This may be the most
profitable decision.
To be effective at this stage, imagination, thinking, reasoning, experience and judgment is
required.
Brainstorming is one of the methods that can be used to generate alternatives.
Evaluate alternatives
The alternatives must be evaluated in terms of cost, time, feasibility and contribution to
objectives. Cost benefit analysis is important in determining the alternatives. All the
limiting factors should be evaluated. The merits and demerits of the different alternatives
should be evaluated.
Select the best alternative
The relative worth of each alternative should be done. The alternative with the highest
possible benefit should be selected. Selection is the point of final decision making.
Implement the decision
A decision made should be implemented. Implementation means that resources must be
committed. There is no need to make a decision that will not be put into action.
Execution of the decision implies development of plans, communication of the decision
and gaining acceptance of the decision.
Monitoring the implementation
The implemented decision needs to be monitored. This will show whether the
implemented decision is on course. Monitoring also involves the development of controls
to ensure that the decision is being carried out properly.
If the evaluation produces unsatisfactory results, the decision needs to be modified.
Feedback
The decision making is a process that has a feedback mechanism. The feedback system
implies that information is gathered from the external and internal environment. The
information makes the decision to fit the current situation. It may also lead to a change in
the decision to make it better.

59) Highlight the factors that affect decision making

-Intuition
Intuition means immediately understanding that something is the case, seemingly without
the use of any reasoning process or conscious analysis. This is what is in the lay mans
language is referred to as the ‘gut feeling’. It is a flash of insight that something is right.
You hear people say, ‘I feel like I want to do this or that’. This is intuition.
-Emotion and stress
Decision making involves an element of risk. This leads to anxiety which leads to stress.
Stress may make managers not follow a reasonable course of action. All managers, as
human beings are susceptible to letting emotions interfere with their ability for rational
decision making. Emotional effects such as guilt, anxiety and embarrassment
-Framing
-Escalation and commitment
-Confidence and risk propensity
Influence

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-Time and costs involved

60) Explain five benefits that an organization may derive from having an effective
control system
-Efficiency in operations. Managers are in a position to know how many units of inputs
are being used to produce a unit of output. There is reduction of costs.
-Control makes the managers know how they are performing. With this knowledge the
managers can improve their performance
-Improvement of the quality of goods and services. Customers normally buy products
depending on their quality. Control gives feed back on the quality of a product.
-Control makes managers to be more responsive to their customers. If the employees
know that their conduct is being monitored, they are more careful when dealing with their
customers.
-Monitoring employee’s behavior can help managers find ways to improve an
Employee’s performance. It can assist to identify areas where the employees require
training.
-Facilitates decision making. When taking the corrective action decision has to be made
on what action to take. This may even lead to change in policy.
-Control also assists in coordination.

61) Highlight five difficulties that may be faced by modern day manager in carrying
out the staffing functions
-Lack of qualified personnel in the labour market
-Applicants may demand more than the organization can afford
-Trade unions demands
-high costs of recruitment and selection
-policies issued by the government
-Corruption where senior members may influence the recruitment and selection

62) Outline four circumstances under which the autocratic leadership style may be
the most appropriate to apply in an organization
-Emergency that requires immediate action
-Where there is high indiscipline of the staff members
-When the majority of the staff are not well educated or trained.
-Disorganized groups who want to depend on the leader
-When there limited time for consultation and a quick decision has to be made.

63) Outline five ways in which managers can improve their leadership abilities
-Training and development
-Net working with others to learn more from their experiences
-thorough delegation to others so that they can have more time to think about major
issues in the organization
-seeking advice from other managers on how they have dealt with different issues in their
own organizations
-reading and writing in search of new ideas and insights

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-Bench marking with successful institutions and managers

64) Explain six reasons that make it necessary for managers to carry out the
planning function in organization
-To make the managers focus on objectives. All the efforts will hence be aimed at
achieving the set objectives
-To provide a sense of direction. The manager will not be beating about the bush. The
destination will is clear.
-To reduces uncertainty. We operate in an ever changing environment.
-To encourage innovation and creativity. It is possible to come up with new ideas,
products, services etc with good planning
-To assist in decision making. This is because many alternatives are generated and the
best alternative taken
-To bring efficiency. Planning aims at doing more with less.

65) Outline five challenges that may be faced by an organization that decentralizes it
authority
-It may be difficult get capable managers who are well motivated to be responsible for
handling additional responsibility
-Effective communication is interfered with due to services being offered at different
points.
-It is difficult to exercise effective control and coordination of activities
-I t increases the costs due to increase in the number of managers.
-It is a challenge in dealing with emergency issues due to bureaucracy
-It becomes difficult to attain uniformity in performance in the different units.

66) Describe the steps that should be followed in the planning process
1) Perception of opportunities
Opportunities are the possible circumstances that can be taken advantage of by an
organization or individual. It assists in solving a given problem. Acknowledgment of
opportunities enables the planner to know where the organization stands depending on its
strength and weaknesses.
2) Establishment of objectives
Objectives provide a good reason for undertaking various activities as they indicate the
direction of effort. They are set as per the opportunities identified.
3) Establishment of planning premises
These are the under laying assumptions that provide a framework under which forecasts
and objectives are established. The managers are able to know the premises based on the
internal and external environment.
4) Identification of alternatives
This is the formulation of different alternatives to deal with the identified opportunities.
The alternatives are based on the analysis of the planning premises.
5) Evaluation of alternatives
The alternatives are analyzed to find out how they can assist in achieving the objectives.
This depends on the available resources. It requires the planner to do a cost benefit
analysis and the overall viability test.

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67) According to Abraham Maslow’s Theory, safety is one of the key needs that
motivates employee to work. Outline four ways through which a manager may
satisfy this need for employees in an organization
-offering the employee job security
-through giving the employees insurance cover
-Safe working conditions
-coming up with attractive pension plans for the employees
-collective agreements that are honored
-following the safety laws

68) Highlight four ways in which economic factors affect the profitability of a
business organization
-Increase in Gross Domestic Product
-inflation
-good infrastructure
-interest rates
-level of income
-level of employment
-
69) Kendo Limited prefers to fill vacant positions from internal sources. Explain
four benefits that may accrue to the organization from using this source recruitment
-It is less costly. This because it does not involve activities like advertising for the
position, interviewing, orientation etc
-When a new employee joins the organization, production is negatively affected. The new
employee will take time to be orientated and trained in the new position
-The new employee may fail to adjust to the organization culture. The person may not
have a common understanding of the original objective
-This may lead to conflicts between the old employees and new employee. This is
because the old employee may have the notion that the position should have gone to
them. This creates discomfort in the organization. The existing employees may fail to
cooperate hence affecting the new employee’s performance.

70) Outline six non-financial incentives that an organization may offer to its
employees
-Recognition in public
-Added responsibilities
-More challenging assignments. Most workers dislike monotonous activities.
-Giving a certificate of good performance
-Free transport, training, tea, food, newspaper
-Status. Managers are status conscious. Organizations cannot exist without status
differentiations. Employees are given more status to make them happy. To the middle
and higher level managers

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71) Explain four criticisms that some management specialists have leveled against
the principles of management as an approach towards understanding of
management
-They are based on unrealistic premises
-They represent common sense and are too obvious
-Many of them are contradictory.
-They may not stand the test of time
-They may not be applicable in to solve a similar problem in a different situation
-They are too broad to be of help in the management of organizations in practice

72) Explain the importance of following set procedures in the daily operations of an
organization
-Procedures make the work simpler through elimination of unnecessary steps
-Procedures lead to consistency in operations. This eliminates confusion, chaos and
random activity
-Procedures indicate a standard way of performing work. This leads to uniformity in
performing similar activities
-Makes it easier to make decisions by giving the path to follow.
-procedures facilitate coordination between various units in the organization
-procedures provide a standard for the appraisal of employees

73) Explain five factors that may limit a manager in recruiting the right candidates
for a job position
-Where the manager is influenced in making a decision by other forces like ethnicity,
nepotism etc
-Cost of recruitment and selection is very high
-If there is an emergency in terms of the position required. This will make the manager to
hurry the process.
-If there is lack of the right candidates in the labour market.
-The manager may be provided with the wrong information. Hence the decision made
will be wrong.

74) Leaders require authority in order to effectively play their role in organizations.
Highlight the characteristics of such authority.
-It is a right to the person who posses it. The subordinates will not question his authority
due to this right.
-It involves decision making and action. The manager will make decision and take
appropriate action within the parameter given.
-It is granted in order to achieve organizational goals
-It is positional. It is attached to a given position
-Authority is from one source e.g. the president gets authority from the voters
-It must be accepted by the subjects
-It is associated with formal organizations
-It flows from the top to the bottom. Authority is never upwards.
-Authority can be delegated

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5) Motivation plays an important role in the management of an organization.
Outline five such roles
-leads to production of quality products and services
-It leads to an increase in the number of products produced
-leads to efficiency and effectiveness in the production of goods and services
-Reduces labour turnover hence reduction of cost in recruitment and selection
-Reduction in accidents and error in provision of goods and services

76) Explain five initiatives that a business organization may take in order to
contribute towards the conservation of the environment
-Planting of trees to increase the forest cover
-Controlling emissions if in the manufacturing industry to avoid pollution of the
environment
-Organizing clean up exercise like garbage collection, cleaning rivers etc
-Sensitizing and creating awareness to the public on the benefits of conserving the
environment

77) Outline five circumstances under which a matrix structure may be appropriate
in an organization
-Where a large number of small projects have to be completed.
-Appropriate to projects such as building activities, weapon development and other high
technology projects
-Applicable in highly diversified multinational firms like Unilever
-Where there is need for a faster product development that requires tight coordination in
R/D, Production and Marketing
-Where the company wants to achieve economies of scale through consolidation of
manufacturing facilities.

78) Outline five limitations that may be faced as a result of implementing budgetary
control in an organization
-Resistance from employees because human being naturally do not accept change.
-Budgeting may be used to hide inefficiencies as past precedents usually become
evidence for the future.
-Rigidity in budgetary control discourages initiative and creativity. It inhibits generation
of new ideas to improve performance in the organization
-Budgets are estimates. They can never be 100% accurate
- Management may become a slave to the budget. The management may take budgets as
the panacea for all problems in the organization. However managers should not be slaves
to the budget. Budgeting is just a tool for efficient management and not a substitute for it.
-Budgeting is time consuming and involves a lot of expenses. When the costs are more
than the benefits, control becomes counter productive.

79) Explain five objectives that an employee orientation programme should set out
to achieve in an organization

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-To give the employee the necessary information eg the location of the canteen, store,
salaries section, sanitation facilities etc
-To build the confidence of to the new employee in the organization
-To ensure that the new employee does not form a negative attitude towards an
organization
-It assists to reduce labour turnover and absenteeism
-To develop a sense of belonging and loyalty to the organization

80) Outline five functions that are performed by middle level managers in an
organization
-They are responsible for supervising the 1st line managers.
-They are responsible for the implementation of policies set by the top management.
They therefore interpret and explain the policies of the top management
-They also focus on coordination of tasks to achieve the objective of the organization.
-They give instructions and guidelines related to operations
-They initiate cooperation among the different departments
-They motivate the supervisory personnel for better operations
-They are in charge of training of the supervisory and operative workers to increase
efficiency and effectiveness

81) Outline five circumstances under which a matrix structure may be appropriate
in an organization
-Where a large number of small projects have to be completed.
-Appropriate to projects such as building activities, weapon development and other high
technology projects
-Applicable in highly diversified multinational firms like Unilever
-Where there is need for a faster product development that requires tight coordination in
R/D, Production and Marketing
-Where the company wants to achieve economies of scale through consolidation of
manufacturing facilities.
82) Explain five characteristics of Transformational leaders
Transformative leaders are agents of strategic and organizational change. They reenergize
organizations that are in trouble. They push the organization in new strategic directions
and engineers wholesale change in operational processes, organizational structure and
culture. They change the above to fit with the surrounding environment.
Transformational leaders’ posses the following behaviors/characteristics:
-Envision a different future for the organization
This new vision often embraces change in strategy, organizational culture, organizational
structure etc.
-Communicates the new vision to employees.
The leader takes ever opportunity to state what the vision is and what values employees
must have to achieve the vision. Transformative leader use massages that appeal to that
grand purpose and emotions that captures the employees and other stakeholders. They
communicate their vision through symbols, metaphors, stories, and others methods that
go beyond plain language.

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-Transformative leaders behaves like role models
They know that to be successful, they must be an example to others. They leave by the
same values they preach. They make the subordinates to take them seriously.
-Empowers the employees.
The employees have to be empowered to implement the strategic vision adopted. This
can be done through bonus pay, sharing of benefits, implementing improvement
suggestions given by employees etc.
-Transformative leaders make meaningful changes.
The change affects the activities and structure of the organization. They move with speed
to make the necessary changes such as changing the structure, controls and incentive
systems to promote the behavior they want.
-They promote integrity
They are aware that people can not follow a leader they do not trust. They lead also
through fairness. Employees like people who talk the truth and who behave ethically.
-Transformative leader creates enduring organization.
The leave an organization that runs efficiently and effectively long after they have gone.
The do not lead through personality but creates a system that transcends them.

83) Outline five ways through which management may achieve effective
coordination in an organization
-Communication should be made timely and clear.
The communication should be regular and open. This will lead to exchange of opinions
and ideas. Communication enhances understanding and hence minimizes conflicts in
different departments and individuals.
-Encouraging cooperation and team work. In an organization, actions of one person affect
another person. People should pull in the same direction.
-It is advocated that coordination should be incorporated in planning and policy
formulation. Plans and policies must be a product of discussion and consultation. This
early involvement of the people concerned makes coordination more effective.
- Coordination should be made a continuous activity. It is a conscious effort by the
management.
-Goals of the organization must be clearly defined and explained. Coordination should be
made part of planning.

84) Highlight five control standards that may be used in an organization

-Physical standards
-Cost standards
-Revenue standards

85) Outline five measures that may be taken in order to ensure the effectiveness of
committees in an organization
-The committee should have the right number of members
-The committee should be given clear terms of reference
-It should be provided with adequate financial resources and other facilities

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-The chairperson should be selected taking into account his leadership qualities
-members should be given specific roles and duties to perform
-Each member should be given adequate time to contribute in discussions

86) Explain six techniques that may be used to achieve coordination in an

organization
-Sound planning
-Leadership
-Simplified organization
-Communication
-Chain of command
-Voluntary coordination

87) Highlight six characteristics of a formal organization structure

-It can be represented in an organizational chart
-It has the lines of authority and other relations in the organization
-It has formal communication channels that should be adhered to when communicating.
-
-
88) Explain five leadership qualities that a leader should possess in order to be
effective
-He must be a strategist. He must take a position and be clear about where he wants to
steer the company to.
-He must demonstrate the accountability, discipline, and the ability to execute work and
ensure that things are done well. Hence a leader must be an executor.
c) The leader must be a talent manager. This is because a leader by definition works with
people. The leader must have the skills for engaging with the team. He facilitates the
movement towards the achievement of organizational goals.
-An effective leader must be a human capital developer. He must be able to build the next
generation. He must be able to build the next generation. He should ask himself a simple
question: who takes over when we are gone? This leads to the need for a succession
plan in the organization.
-Intelligence: a leader should be of above average intelligence. He should be able to think
logically, analyze situations accurately, and interpret problems.
-Should have sound judgment and conceptual clarity

89) Explain five benefits that may accrue to an organization from applying
bureaucratic principles advocated by Max Weber
-It puts emphasis on division of labor. This is through functional specialization. This
leads to efficiency
-A well-defined hierarchy of authority. This relates to the chain of command. It makes
the structure clear.
-There is a system of impersonal rules, regulations and procedures. This applies to all
members of the organization. There is no discrimination.
-Autonomous decisions. One should make his own decision at his level without being
influenced. This leads to faster decision making.

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-Merit based employee’s selection. People should be recruited on merit not on any other
factor such as gender, religion etc’
-Maintaining written records. This will assist in resolving issue arising in the process of
production
-Communication. Once something comes up, there must be a way of communicating.
Good communication leads to better delivery services

90) Outline five demerits of adopting management by objectives (MBO) in an

organization
-Inflexibility
-Time consuming
-Expensive
-Self defeating
-Emphasis on short term goals and gains
-Lack of motivation

91) Explain five functions of a supervisor in an organization

-To generally control the day to day operations in the department/section
-Arranging work, assigning tasks, and defining responsibilities
-Issue orders and instructions
-Explain management plans to the subordinates
-Establish methods and procedures to attain efficiency in operations
-Ensure that rules and regulations are strictly followed

92) Explain five factors that may negatively affect downward communication in an
organization
-Size of the organization. In a huge organization, distortion of information may come as
the message moves from one level to the next
-managers assumption that the employees do not need to know much about what is going
on
-Status issue. This is the relative position of the superior and subordinates in the
organization
-Level of training of employees at the lower levels. This affects both written and oral
communication
-
93) Explain five benefits that accrue to a firm from continuous training of its
employees
-Reduction in accidents in the workplace
-Reduces machine breakdown and maintenance costs
-Reduction in supervision burden
-Reduction in wastes and spoilage
-Increase in the rate of production and profitability
94) Outline five requirements of an effective control system
=Suitability
A good control system should be able to suit the activity that is being controlled. It
should be related to the objectives of the organization.

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=Flexibility
The control system must be adaptable to changing environment in business operations. It
should remain workable even when the plans change.
=Economy
The system adopted should be cost effective. The benefit of the system should be higher
than the costs incurred. Same of the costs incurred are installation and maintenance costs.
=Simplicity
The control system should be simple to operate. It should be easy to understand by those
operating the system. Complex systems should not be encouraged.
=Suggestive
A good system should suggest the remedial action to be taken. The system should
Should be able to indicate where the problem is and the possible action to take.
=Objectivity
Control should be based on objectivity. A control system should be objective, verifiable
and specific. The system should not be influenced by the personality of the superior. It
should not be subjective.

95) Explain five ways in which cultural differences may negatively influence the
performance of a manager in a foreign country
-Gender issues
-Eating habits
-Time perception-eg there is no hurry in Africa
-Communication barriers due to differences in Language
96) Outline nine non-financial incentives that may be used to motivate employees in
an organization (refer to question 70)
97) Explain five ways in which a business may demonstrate social responsibility to
the consumers of its products
-Sell the product at a fair price
-Provide quality products/services
-Constant supply of products/availability
-Advice/ training on how to use the products
-Availability of spare parts where applicable
-Make the product available at the right time and in the right place

98) Explain five limitations of using committees to make decisions in an

organization
1) It consumes a lot of time. Group consume a lot of time in deliberations and
consultations.
2) Group decision making is expensive. This may be in terms of salaries, allowances,
refreshments, etc
3) The group comes up with a compromise decision. This decision made may not be the
best. A good idea may be rejected just to conform to the line of least resistance.
4) There is lack of accountability in the decision. It is difficult to apportion the blame
when a decision backfires
5) Group may be formed with the sole intention of delaying decision making.
99) Explain five benefits that an organization may derive from planning its activities

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-Forces managers to focus their attention on objectives and results. Planning concentrates
attention on the dominant goals and objectives of the organisation
-Reduces risks and uncertainty. With sound planning an organization can predict future
events and prepare how to deal with them.
-Gives a sense of direction. Planning assists us to know where we are and where we want
to go
-Encourages innovation and creativity. Planning requires continuous monitoring of
environment for new ideas and developments
-Helps in coordination. Sound planning interrelates all the activities and organizational
resources.
100) Outline five merits of using internal sources of recruitment in an organization
(refer to question 69)
101) Describe five steps that should be followed when implementing strategic
management in an organization
-Identify mission and goals. This is done by the top management and they address broad
issues.
-Carrying out a SWOT analysis, this assists in identifying the internal strengths and
weaknesses and external opportunities and threats. This ensures that the fit between a
firm and its environment is of great importance and the firms strategy should be build
around this match.
-Strategy formulation. This is done by the top management with input from the lower
level managers. The strategies must be formulated at all levels-corporate, business unit
and functional level
-Implementing the strategic plan. All the activities must be directed towards the
implementation of the firm’s strategy. Strategy implementation is the actual process of
executing the strategy.
-Evaluation. This is the process the results of implementation are compared with the
strategic goals and objectives.

102) Highlight five types of information that may be contained in a strategic plan of
an organization
=Vision, and Mission and core values
=Introduction which highlights the issues to do with historical background, structure etc
=situational analysis: deals with the SWOT and PESTEL analysis
=Strategic focus: deals with strategic issues, objectives and strategies
=Financial and resource mobilization
=Monitoring and evaluation: to follow the implementation of the plan,
103) Explain five types of financial ratios that may be used for control purposes in
an organization
Ratio analysis is a method used by managers to take information from the balance sheet
and income statements in order to measure a company’s efficiency, profitability and
sources of finance relative to those of other organizations.

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=Return on investment. Profit earned in relation to the capital employed is an important
control device. It enables the forecasting of future profits in case a substantial change in
the resource position is anticipated.
Return on investment equals net operating profit divided by the capital employed.
=liquidity ratios. Indicates the organization’s ability to meet its short term obligations as
and when they fall due. These are the obligations that run for at most one year.
=solvency ratios. Indicates the ability of the organization to meet its long term obligations

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