ECO 03 Solved Assignment 2022 – 23 (IGNOU)

ECO 03 Solved Assignment 2022 – 23

IGNOU B.Com Free Solved Assignment 2022 – 23

Management Theory ECO 03 Solved Assignment 2022 – 23




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ECO 03 Solved assignment 202 - 23

1. Describe organizing as a function of management. What are the characteristics of organization? Explain.    (20)

Ans: Organisation and organising: The term ‘Organisation’ can be used in different senses. It can be used as a group of person working together to as a structure of relationships or as a process of management.  When it is used to refer to a group of person working together, it means a concern, an undertaking or as enterprise.

When it is used to refer to a structure of relationships, it means the structural relationships among the positions and jobs and person (i.e., the framework of responsibility and authority) through which the enterprise functions, and it is called organisation structure.

On the other hand, Organising or Organizing in management refers to the relationship between people, work and resources used to achieve the common objectives (goals).


In the words of

Allen – “An organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.”

Mooney and Reily – “Organisation is the form of every human association for the attainment of a common purpose.”

Koontz & O’Donnel – Organising involves the establishment of an intentional structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part of it, the grouping of these activities, the assignment of such groups of activities to manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationships, horizontally and vertically in the organisation structure.

Nature or characteristics of organisation

From the study of the various definitions given by different management experts we get the following information about the characteristics or nature of organization:

1) Division of Labour: Every organisation is characterized by the division of work. The total efforts of the group are divided into different functions and each function is assigned the function for which he is observed to be suited best.

2) Co-ordination: As different persona are assigned different functions and all these functions aim at achieving organisational goals, hence necessary relationships are established between them so as to co-ordinate all the activities of all the people of the organisation.

3) Objectives: Organisations exist to achieve objectives. Without objectives organisations cannot exist for a long period.

4) Authority and Responsibility structure: In an organisation the positions are so ranked that each of them is subordinate to the one above it and is superior to the one below it.  Each position is delegated necessary authority and responsibility so as to enable it functions effectively.

5) Communication: Every organisation has its own channels or methods of communication. Effective communication is vital for success of management.

6) Organisation is a Machine of Management: Organisation is considered to be a machine of management because the efficiency of all the functions depends on an effective organisation. In the absence of organisation no function can be performed in a planned manner.

7) Organisation is a Universal Process: Organisation is needed both in business and non-business organisations. Not only this, organisation will be needed where two or mom than two people work jointly. Therefore, organisation has the quality of universality.

8) Organisation is a Dynamic Process: Organisation is related to people and the knowledge and experience of the people undergo a change. The impact of this change affects the various functions of the organisations.

2. Explain Herzberg’s two-factor theory and differentiate it from Maslow’s theory of Need Hierarchy.          (20)

Ans: Herzberg theory of Motivation

Another popular need-based approach to motivation is the dual-structure approach developed by Frederick Herzberg. This is also known as Two-factor Theory. Herzberg developed this approach after interviewing 200 accountants and engineers in Pittsburg. He asked them to recall such occasions when they had been dissatisfied and less motivated. He found that entirely different sets of factors were associated with satisfaction and dissatisfaction. For instance, an individual who identified ‘low pay’ as causing dissatisfaction did not necessarily mention ‘high pay’ as a cause of satisfaction. Instead, several other factors, such as recognition or accomplishment, were cited as causing satisfaction.

This finding suggests that satisfaction and dissatisfaction are at opposite ends of a single scale. Employees would, therefore, be satisfied, dissatisfied or somewhere in between. Herzberg argued that attitudes and motivation consists of a dual structure. One structure involves a set of factors that result in feelings ranging from satisfaction to no satisfaction. The other structure involves a set of factors that result in feelings ranging from dissatisfaction to no satisfaction.

Herzberg identified two sets of factors responsible for causing either satisfaction or dissatisfaction. The factors influencing satisfaction are called motivation factors or motivators, which are related specifically to the job itself and the factors causing dissatisfaction, are called hygiene factors, which are related to the work environment in which the job is performed.


a) Achievement

b) Recognition

c) Advancement

d) The work itself

e) The possibility of personal growth

f) Responsibility       

Hygiene or Maintenance Factors

a) Company policies

b) Technical supervision

c) Interpersonal relations with supervisor

d) Interpersonal relations with peers

e) Interpersonal relations with subordinates

f) Salary

g) Job security

h) Personal life

i) Work conditions

j) Status

Based on these findings, Herzberg recommended that managers seeking to motivate employees should first make sure that hygiene factors are taken care of and that employees are not dissatisfied with pay, security and working conditions. Once a manager has eliminated employee dissatisfaction, Hertzberg recommends focusing on a different set of factors to increase motivation, by improving opportunities for advancement, recognition, advancement and growth. Specifically, he recommends job enrichment as a means of enhancing the availability of motivation factors.


Although widely accepted by managers, Hertzberg’s dual structure approach however suffers from certain drawbacks. Other researchers who measured satisfaction and dissatisfaction based on different aspects reached very different conclusions. They have also criticized Herzberg’s theory for its inability to define the relationship between satisfaction and motivation and to pay enough attention to differences between individuals. Hence, at present Herzberg’s theory is not held in high esteem by researchers in the field of motivation. The theory, however, had a major impact on managers and has played a key role in increasing their awareness of motivation and its importance in type work place.

Difference between Maslow’s Need Hierarchy theory and Herzberg’s motivation Hygiene Theory

1. Meaning:

Maslow’s theory is based on the concept of human needs and their satisfaction.

Hertzberg’s theory is based on the use of motivators which include achievement, recognition and opportunity for growth.

2. Basis of Theory:

Maslow’s theory is based on the hierarchy of human needs. He identified five sets of human needs (on priority basis) and their satisfaction in motivating employees.

Hertzberg refers to hygiene factors and motivating factors in his theory. Hygiene factors are dissatisfies while motivating factors motivate subordinates. Hierarchical arrangement of needs is not given.

3. Nature of Theory:

Maslow’s theory is rather simple and descriptive. The theory is based long experience about human needs.

Hertzberg’s theory is more prescriptive. It suggests the motivating factors which can be used effectively. This theory is based on actual information collected by Hertzberg by interviewing 200 engineers and accountants.

4. Applicability of Theory:

Maslow’s theory is most popular and widely cited theory of motivation and has wide applicability. It is mostly applicable to poor and developing countries where money is still a big motivating factor.

Herzberg’s theory is an extension of Maslow’s theory of motivation. Its applicability is narrow. It is applicable to rich and developed countries where money is less important motivating factor.

5. Descriptive or Prescriptive

Maslow’s theory or model is descriptive in nature.

Herzberg’s theory or model is prescriptive in nature.

6. Motivators

According to Maslow’s model, any need can act as motivator provided it is not satisfied or relatively less satisfied.

In the dual factor model of Hertzberg, hygiene factors (lower level needs) do not act as motivators. Only the higher order needs (achievement, recognition, challenging work) act as motivators.

3. Write short notes on the following:         (4×5)

(a) Qualities of an effective leader.

Ans: Qualities of an effective Leader:

a)      Physical Qualities: Good physical features like height, weight, health and look of person attract an individual. Healthy and smart leader can work hard and also induce his subordinates to work hard.

b) Judgement skills: A good leader should be able to examine problems in right perspective. His judgement and decision making abilities should be superior to others.

c) Communication skills: A good leader should be able to communicate the goals and procedures of the organisation clearly, precisely and effectively to the subordinates.

d) Integrity and honesty: A leader must possess high level of integrity and honesty. He must follow ethics and values then only he can expect his subordinate to be ethical and honest.

e) Listening skills: People tend to avoid a leader who does not listen. Hence a good leader in one who can listen to other people’s problems.

f)       Initiative: A leader must take initiative to grab the opportunities. He must have courage and initiative to take bold decisions. He must take risk for the advantages of organisation.

(b) Budgetary control.

Budgetary Control: A budget is a planning and controlling device. Budgetary control is a technique of managerial control through budgets. It is the essence of financial control. Budgetary control is done for all aspects of a business such as income, expenditure, production, capital and revenue. Budgetary control is done by the budget committee.

Advantages of Budgetary Control

(i) Helpful in Attaining Organizational Objectives: Budgets are based on plans and all the departmental managers are informed about the expectations each one of them. The departmental managers put in their best efforts to achieve their target and consequently it helps in attaining the organizational objectives.

(ii) Source of Motivation for Employees: this technique prescribes the objectives for the employees. Their performance is matched with the standards. If the results are positive, they are appreciated. This motivates them.

(iii) Optimum utilization of Resources: Budgetary Control divides the resources among all the departments in an appropriate manner. This makes it possible the Optimum utilization of available Resources in the organization.

(iv) Achieving Coordination: By implementing this system, the activities of all the departments are directed towards a single goal. In this way, all the departments work for the attainment of the common goal. Consequently, coordination is established among them.

(c) Functional Organization.

Ans:  FUNCTIONAL ORGANISATION: Functional organisation is a type of organisation in which the work of the whole enterprise is divided into a number of specialized functions like production, purchasing, marketing, office management, personnel relations, etc. and each of these specialised functions is entrusted to a functional expert or specialist.

Features of Functional Organisation: Functional organisation has certain characteristic features. The main features of functional organisation are:

1) The entire work of the organisation is divided into different specialised functions.

2) Each function is put under the charge of a specialist.

3) The functional expert has authority to command person in other departments concerning his function.

4) There are two types of managers – line managers and specialist managers.

5) There is no unity of command and subordinates receive instructions from a number of functional bosses.


a) Specialisation: A functional structure leads to occupational specialization. This promotes efficiency in utilization of manpower as employee performs similar tasks within a department.

b) Efficiency: It helps in increasing managerial and operational efficiency and these results in increased profit.


a) Functional empires: A functional structure places less emphasis on overall organizational objectives than the departmental objectives.

b) Problems in coordination: Pursuing departmental interests at the cost of organizational interests can also hinder the interaction between two or more departments. It may lead to problems in coordination.

(d) PERT.

Ans: Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) techniques were developed in USA in the late 50’s. Any programme consists of various activities and sub-activities. Successful completion of any activity depends upon doing the work in a given sequence and in a given time. CPM / PERT can be used to minimise the total time or the total cost required to perform the total operations. In these techniques, the job is divided into various activities / sub-activities. From these activities, the critical activities are identified. More importance is given to completion of these critical activities. So, by controlling the time of the critical activities, the total time and cost of the job are minimised.

Steps involved in using PERT/CPM are given below:

a) The project is divided into a number of clearly identified activities.

b) These clearly identified activities are arranged in logical sequence.

c) A network diagram is prepared to show the sequence of activities.

d) Time estimates are prepared for each activity.

e) In CPM cost required to complete the project is also calculated.

f) The longest path is identified as critical path where no delay can be permitted.

4. Differentiate between the following:           (4×5)

(a) Positive and negative motivation.

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(b) Formal and informal communication.

Ans: Difference between Formal and Informal Communication Channel


Formal Communication

Informal Communication

01. Rules

In Formal communication, Organizational rules are strictly followed.

It does not generally follow the rules of organization

02. Recognition

Such communication requires official’s recognition.

In informal communication, It does not require any official’s recognition.

03. Flexibility

It is inflexible in nature as it cannot be changed when desired.

Being flexible, It can be changed easily.

04. Secrecy

Such Communication is not free and open to all. So, Secrecy is maintained here.

It is free and open to all, So it is very difficult to maintain secrecy here. i.e. Grapevine communication which spread informally. 

05. Time & Cost

It follows various rules of organization. So, It requires much time and cost.

Informal communication does not bother for the formalities of organization and therefore it requires less time and cost.

(c) Coordination and cooperation.

Ans: Difference between Coordination and Co-operation




1. Meaning

It refers to bringing together the activities of an organisation.

It refers to voluntary efforts of individuals to work together and help each other.

2. Nature

It is a conscious and deliberate effort of manager.

It is a voluntary effort of employees.

3. Scope

It includes co-operation and hence has a wider scope.

It has a narrow scope as it is towards establishing co-ordination.

4. Requirement

Co-ordination is essential for achievement of organisational goal.

Co-operation is voluntary in nature.

5. Relations

Co-ordination arises out of both formal and informal relations.

It arises out of informal relations.

(d) Policies and Objectives.

Ans: Difference between Policies and Objectives:




a) Aim

Policies are framed to achieve objectives efficiently.

Objectives determine the final goal of the enterprise.

b) Level of Management

Policies are determined by top, middle and Lower level of management.

Objectives are determined by the owners or the top level management.

c) What

Policies decide how the work is to be done.

Objectives determine what is to be done.

d) How

Policies decide the procedures to be adopted for completion of the job.

Objectives decide the way in which a specific job to be done.

5. Comment briefly on the following statement:           (4×5)

(a) Morale is an important factor which contributes to the willingness of people to work.

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(b) Contingency approach is based on the view that there is no one best way to manage.

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(c) Control is a fundamental management function that ensures worth accomplishment according to plans.

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(d) The biggest drawback from which form of organisation suffers is the conflict between line and staff.

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