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December, 2017



Time : 3 hours

Maximum Marks : 100

(Weightage 70%)

Note : (i)          There are two Sections : A and B.

(ii) Attempt any three questions from Section-A,

each question carries 20 marks.

(ill) Section-B is compulsory and carries 40 marks.


1. Explain the need for MBO in an organization and  the process involved in it. Briefly discuss the  benefits of having MBO in an organization.

2. Briefly describe the antecedents of organizational  change and the strategies to cope with the change.

3. Briefly discuss the factors influencing the choice  of organizational structure. Describe any two  types of structures and their advantages and  disadvantages.

4. Discuss the determinants of interpersonal  behaviour. Briefly explain how to develop

interpersonal skills.



Write short notes on any three of the following :

(a) Barriers to effective communication

(b) Gamesman model of decision-making

(c) Group cohesiveness

(d) Methods of control

(e) Prerequisites for effective delegation


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Read the following case carefully and answer the  questions given at the end :

Modern Bank Limited was established in  1938 by Vasudev Mudaliar as a private bank. The  bank grew to become a 100 crore business by  1944 and a 500 crore business by 1960. Vasudev  Mudaliar was succeeded in the business by his  sons. In 1974, an investor, Sudhakar Gupta,  bought 51% equity in the bank and assumed  charge as chairman.  The bank gradually expanded in the four  southern states and grew to be a business worth

3,200 crore by 1985. In 1987, Sudhakar Gupta  brought in Arvind Jain, a young MBA graduate,  as the MD of the bank. Arvind Jain focused his  energies on building the brand of the bank among  the traditional segments and simultaneously  focused on building brand equity among the  middle class. During this period the bank  recorded continuous business growth and by  1997, the bank's total business stood at 12,000  crore.

Arvind Jain was a fiery young man who  essentially believed in turnaround performance.

His style of leadership was autocratic and he  believed that people around him should be

committed to executing his orders rather than  wasting time on debates and discussions. He  formed a core group of top executives to strategize and monitor the implementation of action plans. Being a traditional bank where hierarchy and authority were respected, it was not long before everyone adjusted to the new style of functioning. Everybody from the branch offices, regional offices, and the head office, religiously followed the orders of the top management. The result was a stupendous success. The bank became a force to reckon with among the private sector banks in southern India. Arvind Jain emphasized the following aspects :

• recruiting top-notch professionals

re-engineering the corporate brand of the bank

emphasizing marketing and business development

• a top-down approach in the decisionmaking process

• adoption of technology for modernizing business operations.

Along with the positive developments were a few negative aspects :

• centralization of the bank's functioning

• formation of a coterie which wielded power in the bank

• emphasis on performance at any cost rather than on means

• frustration and disillusionment of the employees at large

Parallel with these developments, there were other developments too in the bank. Differences arose between the promoter Sudhakar Gupta and the MD Arvind Jain, which eventually led to the  resignation and exit of the latter from the bank.

A few of his faithful followers too exited from the  bank. The chairman, in consultation with the  board, appointed a senior banking professional,  Manoj Pillai, from an established public sector  bank, as the MD of Modern Bank.  On assuming charge, Manoj Pillai  reshuffled the top management and set up a new  team at the corporate office. It was his belief that  systems and procedures should take precedence  over individuals in the bank, and that after goals  are set, executive should be given freedom to

perform.  A few hallmarks of his leadership and  management approach in the bank were as  follows

• emphasis on streamlining systems and  procedures

• nurturing employees to strictly adhere to  laid-down norms/systems.

• training of existing employees in core areas  such as credit, audit, etc.

recruitment of young professionals, i.e.,

MBA, M.Com., etc. as management trainees  and their induction into the bank to bring

in fresh blood and enthusiasm.

• strengthening the training system for  under-taking training and induction


• posting of successful line personnel as  faculty in Staff Training Colleges to drive

home the importance of training to the  employees of the bank.

• continuing the technology upgradation

processes undertaken during earlier review.

However, the employees of the bank,  especially the top and middle management, who

were used to following the instructions of the  central command and carrying out the decisions  of centralized decision making could not adjust  to the new leadership approach. The top  executives started perceiving the new leader as  weak, due to lack of the charisma and strong drive  that they had seen in the earlier leader. Further,

the emphasis on re-engineering the systems led  to stagnation of product innovation and during

the three years Manoj Pillai was with the bank,  no product could be launched.

The bank slowly lost its market share and  recorded a negative growth during the period

1997-2000. There was an interesting development  in 1999, when the promoter offloaded a minus stake to a multinational bank. The changed  business interest of the promoter led to further  offloading of stake in favour of the multinational  bank. As a result the majority stake in the bank  stood transferred to the multinational bank.

The new management undertook a series  of measures to re-engineer and redefine the brand  and image of the bank. Some of the salient features  of these measures were :

• upgrading the technology of the bank

• gearing up the bank for various technology  initiatives such as core banking solutions,

Internet banking, call centre and help desk,  etc.

• recruitment of a new breed of professionals  at all levels and in all functional areas to

cater to the needs of the bank.

• strict implementation of the performance  planning and measurement approaches.

• implementation of Cost To Company (CTC)  approach for all the middle and top

management officials of the bank.

• voluntary retirement scheme (VRS) for employees found to be lacking in the new

set of competence.

• massive exercise of re-branding and  re-engineering the product portfolio of the


• creation of a core team of young professionals to continuously work on

re-branding and product re-engineering.

• improving the learning infrastructure by networking the IT infrastructure with the

existing training infrastructure to leverage the advantages.

During the initial transformation period, the old genre of employees were frustrated by the higher compensation given to the new recruits as well as the importance accorded to them as against the existing employees. This led to the exodus of a large number of employees through the voluntary retirement scheme. The remaining

employees were in a state of confusion about the direction the bank was heading in.

In the meantime, the new management recruited an MD, Vikrant Advani, a senior

banking professional with over 20 years of experience, to lead the bank, along with a new

set of initiatives. After assuming charge, Vikrant Advani made it a point to personally interact with all senior executives. He communicated with all employees about the transformation process and the steps undertaken by the bank for the purpose.

As a step towards implementing the knowledge management process in the bank, the

training department launched a whole set of initiatives with the help of the IT department as given below :

• setting-up of corporate Intranet for the bank with built-in features such as bulletin

boards, discussion and chat rooms, etc.

• integrating the e-learning software with the Intranet to provide learning inputs to


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• identifying resource persons area-wise and making them available online to disseminate

learning across the organization.

• collecting the critical experience of employees in various functional areas and

presenting them as case studies for employees to learn.

• providing all the information and circulars


related to various systems and procedures of the bank online to empower the

employees with information.

• tying up with learning content providers for continuously updating the learning content.

Questions :

(a) Analyse the case from the learning inputs from organizational perspective.

(b) Examine whether the technology transformation processes will lead to a

change in organizational culture.

(c) Do you feel that the bank is on the right track ? Why ?

(d) Suggest steps for improving the knowledge management processes in the bank.


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Time : 3 hours            Maximum Marks : 100

(Weightage 70%)

Note : (i)         There are two Sections - A and B.

(ii) Attempt any three questions from Section-A,

each question carries 20 marks.

(iii) Section-B is compulsory and carries 40 marks.


1. Briefly describe different responsibilities of a manager and their relevance citing examples.

2. What is meant by mission, objectives, strategy and policies ? Discuss the relevance of these from organizational context.

3. Discuss and describe different dimensions and determinants of organisational culture.

4. Discuss formal and informal organisation structures and the importance of decentralization in an organization.

5.         Write short notes on  any three  of the following :

(a) Formulating a plan

(b) Johari Window

(c) Types of power

(d) Conflict-defusion strategies

(e) Brain storming


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6.         Read the case carefully and answer the questions

given at the end.

Mr Sondhi, Chief Executive, India Gears, was sent by the Director Mr. Sen to Japan to study the ways the Japanese Industries worked, because he was highly impressed with the findings that the Japanese had stolen a march over other developed countries in the matter of industrialization.

He himself had a mind to apply some of the Japanese Techniques in his company, India Gears. During his visit to Japan, Mr Sondhi was deeply impressed by several techniques used by the Japanese such as Just in Time, Poka Yoke, Kaizen, Quality circles, Total Employee involvement, etc. He specifically noted that a Japanese employee worked for his Nation rather than just

trying to make more money. He ascribed this to homogeneous culture, religion and language which tied tim Japanese in a close emotional bond. One aspect of the Japanese way of doing business which impressed Mr. Sondhi was the way the Japanese companies did outsourcing of several components to outside small companies. According to Sondhi, this permitted the Japanese firms to focus on their core competent areas in a

better manner. In addition the vendors were able to supply the needed materials and components, just-in-time thereby reducing the inventory to manageable levels. Further the size of the plant was reduced which reduced the taxes and effort of managing the in house. Operations became simpler and more effective. One fact observed by

Mr. Sondhi was that the vendors were close relatives of the employees which further increased the ties between the company and its employees. On his return to India, Sondhi was very enthusiastic about the concept of outsourcing. He suggested to his Director about this idea of outsourcing. Mr. Sen, the Director, was also impressed with the idea and told that the sons and daughters of some managers of the company

were young and enterprising engineering and management graduates searching jobs in and around Indore.

Mr. Sen proposed that these young graduates could be helped by India Gears to start

their own ancillary units which could become vendors to their company. The attitude of Mr. Sen was to encourage young talent to start their own ventures. According to Mr. Sen, a part of the initial investment would be done by any manager whose son or daughter started the ancillary. The India Gears would be contributing some percentage of the initial investment. Both Mr. Sen and Mr. Sondhi called a meeting of their trusted Managers. Mr. Mittal from Marketing and supply chain, Mr. Desai from Industrial engineering. Mr. Jain from maintenance. Mr. Nagpal from production and

Mr. Apte from Design and quality. The topic of starting ancillaries was placed on the table, and in the end all the managers unanimously applauded the vision of their bosses. They said in chorus that they would give a thought to this highly magnanimous and collaborative proposal. Soon the ancillaries were started with pomp and show and was hailed as a milestone in the history of India Gears. The managers whose young ones were unit heads were in high spirits. They often used to sing in the praise of Mr. Sen

and Mr. Sondhi about their creative thinking when they used to meet in the afternoons for their executive lunch. They often discussed about the success story of their children with

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great enthusiasm. Mr. Sondhi also expected an increase in the organizational effectiveness of India Gears. Looking at the cheerful faces of his managers

Sondhi thought that the managers were highly motivated with the success of the ancillaries run by their sons and daughters and that this would be helpful to India Gears as well. About one year after the starting of the ancillaries the routine Annual audit of India Gears was done by their trusted Chartered Accountant, Mr. Agrawal, a

brilliant pass out of NITIE, Bombay. Agrawal was known for his honest though brash and highly

objective ways of presenting the Annual Reports. The audit report gave a shock to Mr. Sen and Mr. Sondhi. The report said that the productivity had declined by 20% and the ROI declined from 20% to 12%. The auditor passed strictures saying that

on a number of occasions certain orders were cancelled due to delay in the delivery to the

customer. There were instances of return of consignment from US and UK due to the gears

not meeting International Quality Standards QS9000 laid down by three automobile giants of US, namely, Ford, GM and Chrysler. This had never happened in the past. Seeing this sudden decline in the effectiveness in the Performance of

India Gears, Mr. Sen was in a disturbed mood. He appointed an external Management and Technical Consultant to investigate into the matter.

The consultant demanded certain documents of the company including the personal

records of the managers of the previous year and the current year to investigate into why things had gone wrong. After a detailed study of the records and interview of junior and senior personnel he discovered certain startling facts. He summarized the important points and placed them before Mr. Sondhi and Mr. Sen as under. 1. The absenteeism level of some managers had increased a great deal. These were the managers whose children had started the ancillary. Among the problems discovered

were refusal of Design to change the customer's drawings from DIN standard to

ISO standard, reduced use of the imported Carl Zeiss Measuring machine, increased

machine downtime, high levels of inventory and inventory turnover ratio, increased

scrap percent, poor housekeeping, improved inbound logistics but poor outbound

logistics. This put a question mark on their dedication and loyalty to the organization.

During the interview of the managers, it was discovered that two out of the five

managers whose children owned the ancillary were planning to leave the

organization. They wanted to focus on the growth of the ancillary.

2. One of the managers - the Purchase nager, was found to be at fault in his

record keeping upon a detailed enquiry it was found that he was making certain

purchases to gain personal benefits which were not in the interests of the company.

Because his children did not have any ancillary unit, therefore, he wanted to earn

money by dishonest practices. In a nutshell, the consultant explained

to Mr. Sen that the ancillary development shifted the direction of goals of the

managers away from the organizational goals. He explained to Mr. Sen the

behavioural model of organizational effectiveness in which organizational goals

must be reinforced by group and individual goals. Mr. Sen asked the consultant as to

why certain Japanese concepts which succeed in Japan fail when they are

practiced in some other country. The consultant replied that these concepts can

be applied in other countries after some modifications looking to the cultural

differences between Japan and the country where the change was contemplated.

Action Plan :  To prevent any further damage to India Gears, Mr. Sen decided to

terminate the services of some managers who had lost their loyalty to the company,

retrenched the dishonest Purchase manager and immediately gave an advertisement in

National newspapers for quickly recruiting and selecting new managers. He learnt a

lesson that copying the models of other countries could result in a disaster.

Questions :

(a) Which aspect of the Japanese Companies impress Mr. Sondhi ?

(b) Why did the starting of the ancillaries adversely affect the working of India

Gears ?

(c) What were the findings of the consultant ?

(d) What was the action taken by Mr. Sen ?



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