Text Book Back Questions and Answers - Chapter 3 - Management By Objectives (MBO) and Management By Exception (MBE) - 12th Commerce Guide Samacheer Kalvi Solutions

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Samacheer Kalvi 12th Commerce Solutions Chapter 3 Management By Objectives (MBO) Management By Exception (MBE) - Text Book Back Questions and Answers 

I. Choose the Correct Answer

Question 1
_________ System gives full Scope to the Individual Strength and Responsibility.
(a) MBO
(b) MBE
(c) MBM
(d) MBA
Answer:
(a) MBO

Question 2.
Which is the First step in Process of MBO?
(a) Fixing Key Result Area
(b) Appraisal of Activities
(c) Matching Resources with Activities
(d) Defining Organisational Objectives
Answer:
(d) Defining Organisational Objectives

Question 3.
_________ keeps Management Alert to Opportunities and Threats by Identifying Critical Problems.
(a) MBA
(b) MBE
(c) MBM
(d) MBO
Answer:
(b) MBE

Question 4.
Delegation of Authority is Easily Done with the Help of _________
(a) MBM
(b) MBE
(c) MBO
(d) MBA
Answer:
(c) MBO

II. Very Short Answer Questions

Question 1.
Define-MBO
Answer:
“MBO is the establishment of effective standards for managerial positions and the periodic conversion of those into measurable time-bound vertical and horizontally and with future planning” – PROF. REDDIN.

Question 2.
What are the objectives of MBO?
Answer:
Management by objectives is intended primarily:

1. to measure and judge performance.

2. to relate individual performance to organisational goals.

3. to clarify both the job to be done and the expectations of accomplishment.

4. to foster the increasing competence and growth of the subordinates.

Question 3.
Bring out the meaning of MBE.
Answer:
MBE is a style of Business Management that focuses on identifying and handling cases that deviate from the norms.

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

1. Managers are involved in objectives setting at various levels of management under MBO and this commitment ensures hard work to achieve them.

2. MBO process helps the managers to understand their role in the total organisation.

Question 5.
Write any two importance of MBE.
Answer:

1. It saves the time of managers because they deal only with exceptional matters. Routine problems are left to subordinates.

2. It focuses managerial attention on major problems. As a result, there is better utilisation of managerial talents and energy.

Question 6.
What is known as KRA?
Answer:
Key Result Areas (KRA) are fixed on the basis of organisational objectives premises. KRA are arranged on a priority basis. KRA indicates the strength of an organisation.

III. Short Answer Questions

Question 1.
Write the features of MBO.
Answer:

1. An attempt is made by the management to integrate the goals of an organisation and individuals. This will lead to effective management.

2. MBO tries to combine the long run goals of organisation with short run goals.

3. Management tries to relate the organisation’s goals with society goals.

Question 2.
What are the processes involved in MBO?
Answer:

1. Defining Organisational Objectives

2. Goals of Each Section

3. Fixing Key Result Areas

4. Setting subordinate objectives or targets

5. Matching Resources with objective

6. Periodical Review meetings

7. Appraisal of Activities

8. Reappraisal of objectives

Question 3.
What are the Processes of MBE?
Answer:

1. Primarily, it is necessary to set objectives or norms with predictable or estimated results,

2. These performances are assessed and get equated to the actual performance.

3. Next, the deviation gets analysed. With an insignificant or no deviation, no action is – required and senior managers can concentrate on other matters.

Question 4.
List out any Four processes of MBO.
Answer:

1. Defining Organisational Objectives

2. Goals of Each Section

3. Fixing Key Result Areas

4. Setting subordinate objectives or targets

IV. Long Answer Questions

Question 1.
What are the major advantages of MBO?
Answer:
The advantages of MBO are explained below :

1. Managers are involved in objectives setting at various levels of management under MBO and this commitment ensures hard work to achieve them.

2. MBO process helps the managers to understand their role in the total organization.

3. The manager recognizes the need for planning and appreciates the planning.

4. MBO provides a foundation for participative management. Sub-ordinates are also involved in goal setting.

5. A department does not work at cross purpose with another department.

6. In other words, each department’s objectives are consistent with the objectives of the whole organization.

7. Systematic evaluation of performance is made with the help of MBO.

8. MBO gives the criteria of performance. It helps to take corrective action.

9. Delegation of authority is easily done with the help of MBO.

10.MBO motivates the workers by job enrichment and makes the jobs meaningful.

11.The responsibility of a worker is fixed through MBO.

Question 2.
What are the advantages of MBE?
Answer:
Management by exception provides the following advantages:

1. It saves the time of managers because they deal only with exceptional matters. Routine problems are left to subordinates.

2. It focuses managerial attention on major problems. As a result, there is better utilisation of managerial talents and energy.

3. It facilitates delegation of authority. Top management concentrates on strategic decisions
and operational decisions are left to the lower levels. There is increase in span of control. This leads to motivation and development of subordinates.

4. It is a technique of separating important information from unimportant one. It forces managers to review past history and study-related business data for identifying deviations. There is a better use of knowledge of trends, history, and available business data.

5. MBE keeps management alert to opportunities and threats by identifying critical problems. It can avoid uninformed and impulsive action.

6. Management by exception provides better yardsticks for judging results. It is helpful in objective performance appraisal.

Question 3.
Explain the various disadvantages of MBO.
Answer:

• MBO fails to explain the philosophy, most of the executives do not know what is MBO? How MBO works? Why is MBO? How participants can benefit from MBO?
• MBO is a time-consuming process.
• MBO leads to heavy expenditures and requires heavy paperwork.
• MBO considers only short-term objectives, does not consider long-term objectives.
• MBO is not possible for the status of subordination and proper objective setting.
• MBO is rigid one objective should be changed according to the changing circumstances external
  or internal. If it is done, the planned results cannot be obtained.

Question 4.
Discuss the disadvantages of MBE.
Answer:

1. MBE’s main disadvantage is only the managers have powers over really important decisions, which can be demotivating for employees at a lower level.

2. MBE takes time to pass the issues to managers managing employees who deviate from the normal procedures.

3. Because compliance failures are considered difficult to managers and typically find themselves with limited job duties and ultimately dismissed or terminated.

Additional Questions and Answers

I. A. Choose the Correct Answer

Question 1.
Which one is wrongly matched?

Answer:
(c) To stimulate the subordinates motivation (iii) Objectives of MBE

Question 2.
MBE refers to…………………….
a) Management By Exception
b) Management By Expectation
c) Management By Excitement
d) Management By Employment
Answer:
a) Management By Exception

Question 3.
Which establishes the effective standards for managerial positions?
(a) MBO
(b) MBE
(c) MBM
(d) MBA
Answer:
(a) MBO

Question 4.
Assertion (A): Key Result Areas are fixed on the basis of organisational objectives premises.
Reason (R): KRA indicates the strength of an organisation.
(a) (A) true
(b) (R) True
(c) Both are true
(d) Both are false
Answer:
(c) Both are true

Question 5.
Which one of the following is not correctly matched.
a) MBO – Management by Objective
b) MBA – Master of Business Administration
c) MBM – Master of Business Management
d) MBE – Management By Extraordinary
Answer:
d) MBE – Management By Extraordinary

Question 6.
Which one of the following is not correctly matched.
a) MBO – Management by Objective
b) MBA – Master of Business Administration
c) MBM – Master of Business Management
d) MBE – Management By Extraordinary
Answer:
d) MBE – Management By Extraordinary

B. Fill in the blanks.

1. MBO is popularised in the USA by ______

2. Initially, organisational objectives are framed by the _______ employees of an organisation.

Answers:

1. George Odium

2. top-level

II. Very Short Answer Questions.

Question 1.
Write any two importance of MBE.
Answer:

• It saves the time of managers because they deal with exceptional matters.
• It focuses managerial attention on major problems.

Case Study

Question 1.
The company gets 30% of marginal profit for every year, but not increasing the salary of the employees for last three years. The employees conduct an indefinite strike against the company. Assume you are the manager of the company. How to solve the problem by ’using MBO or MBE?
Solution:

• By MBO – The strike may be stopped because this system gives full scope to the individual strength and responsibility. MBO harmonizes the goal of an individual with the organisation’s goal.
• By MBE – MBE keeps management alert to opportunities and threats by identifying critical problems. It can avoid uninformed and impulsive action.
• By these two, the union leader can be called to discuss the issue. The workers can be promised that their financial problems will be solved.