Recent Trends in Management – Business Management Ethics and Entrepreneurship Notes

“The world hates the change, yet that is the only thing that has brought progress”. ‘ – Charles Kettering
Meaning of Change end Its Causes:

it is an open system content.
Change refers to the variation in the established way of life to which people are accustomed to in the organisation.
It is a natural phenomenon.
It is necessary for the management of every enterprise to anticipate change and deal with it effectively.
Change may take place in the internal or external environment of an organisation.

It can be:
(i) natural, or
(ii) re-active

Change basically results from stimuli- both outside and inside the enterprise.
Organisational success lies in operational adjustment to the forces of change.

External Forces:
These are the forces of the external environment of the organisation.
It Includes:

Educational and Cultural forces
Economic forces
Technological forces
Political forces
Social forces.

Internal Forces:
These are the forces arising within the organisation.
It includes:

Composition and policy of top management
Changes of personnel
Change of physical facilities due to retirement, promotion and so on and aspirations.
Changes in employee attitudes
Changes fn work allocation etc.

Both the above forces are interlinked and interdependent.

Resistance to Change:
Most of the organisations and their members resist change.
Resistance can take the following forms:

overt
implicit
immediate
deferred.
Overt – Eg: Threat to go on strike
Implicit – Eg: increased errors or mistakes
Immediate – It results in immediate response to change.
Deferred – Response to the change is deferred or stockpiled for some time.
Resistance to change can also contribute to better decision making and can be a source of functional conflict.

Reasons for People’s Resistance to Change:

People find easy, to continue doing their routine jobs rather than learning anything new.
Opposed by people who are negatively affected by redistribution of power occurring due to it.
Resisted if people face failure once.
Resisted by less educated and less intelligent people because of the fear that change will expose their inefficiency.
Those who stand to lose the most by the change tends to oppose it the most.
People know that change will expose their inadequacies and inefficiency.
Types of Resistance to Change:

Logical:

Resistance arises due to time and effort required to adjust the change.
It represents the true cost borne by the employees.
It involves rational objections.
Psychological:
It is logical in relation to attitudes and feelings of individual employees about change.

Sociological:

Powerful forces of social values.
It is logical in terms of group interests and values.
Group resistance may be due to individual resistance to change.
To illustrate group resistance to change one may cite example of group norms, values and informal role prescriptions.
Management can face active resistance if the change is likely to alter the existing informal group composition.
Sources of Organisational factors lie in factors like –
Limited focus of change.
Structural inertia
Threat to established resource allocations
Power relationships.

Overcoming Resistance to Change Change Through Management Hierarchy:

Minor changes may be introduced by executives.
However, major changes should be decided and implemented by top management.
Subordinates view it as a legitimate right and thus, comply with it.
It does not pay much attention to facts like group dynamics, peoples attitude etc.
Specialised planning units are formed for this purpose.
Sometimes, outside management consultants are also preferred.
People show less resistance to change when it is recommended and managed by an outsider; rather than it is initiated & administered internally.

Lewin’s Three-Step Model:
According to Kurt Lewin, any change should follow three steps.

Unfreezing the status quo,
Movement or changeoVer to a new state,
Refreezing the new change to make it permanent.

This requires a rebalancing of the driving and restraining forces.

Action Research:
It refers to a method of scientific inquiry into the circumstances
necessitating change and action to be taken thereof.
It is based on scientific collection and data analysis.

Its process consists of five steps:

(i) diagnosis
(ii) prognosis
(iii) feedback
(iv) action
(v) evaluation

it is a problem-focused approach.
In many cases organisation changes is solution-focused.
It makes the process of change an ongoing and organization-wide exercise.

Crisis Management:
it refers to the management and coordination of an organization’s responses to an Incident that threatens to harm or has harmed that organization’s people, structures or reputation.

Thus, it is the process of responding to an event that might threaten the operations, staff, customers, reputation o the legal and financial status of an organization.

Its aim is to minimize the damage.
It was originated in 1980s.
The defining quality is the need for change.

crisis Management Vs Risk Management:

Crisis Management means dealing with threats after they have occurred.
Risk Management means assessing the potential threats and finding ways to avoid those threats.
Venette argues that crisis is a process of transformation where the old system can no longer be maintained”.

Types of Crisis:

Natural Disaster: These are Acts of God” Eg – earthquake, volcanic eruptions etc.
Technological CrIsis: These are caused due to human application of science and technology.
Eg – Chernobyl disaster.
It occurs when technology is complex and something goes wrong.
Confrontation Crisis: These are caused due to the discontented individuals and/or groups for the non-acceptance of their demands and expectations by fighting with government or other interest groups.
These are boycotts, Sit-ins, ultimatums, blockade or occupation, disobeying police.
Workplace Violence: It is caused by one employee committing violence against other employees on organisational grounds.
Crises of Organisational Misdeeds: It is caused because of the management taking actions causing harm to stakeholder’s risk without any precautions.
Rumours: Any rumour i.e. false information about the organisation or its products causes harm to its reputation.

Total Quality Management:

TOM means improving the quality of products at the best prices through better planning control management and inspection it aims at long-term loyalty towards the company.
Today, every organisation has to offer quality products to its customers at competitive prices to be successful.
Quality is the most important factor in determining the success or failure of an organisation.
Good quality generates satisfied customers.
TQM was developed in a post-war research by management consultants like Dr. Joseph Juran and W. Edward Deming.
Growth of service sector has increased the requirements of TOM.
European Economic Community collectively established a common set of quality standards known as ISO 9000.
Series ISO 9000 – ISO 9003 is a reference for external quality assurance.
ISO 9004 is a reference for internal quality management.
These standards aim at achieving TOM.

It is composed of two related systems –

management system,
technical system
It involves use of various terms like:
system
process
structure
technique.

System refers to the interrelated set of plans, policies, processes, procedures, people and technology required to meet the objectives of an organization.

Process consists of policies, procedures, steps, techniques, and personnel needed to carry out a significant segment of operations with In an organization.

tructure refers to a formal or informal organizational entity, that is developed to perform a certain process or set of task.

technique means a systematic approach, procedure and associated technology required to carry out a task.

Quality is the responsibility of everyone in the organisation, from operators on the production department to the CEO of any organisation.

TechnIcal System Involves:
1. Quality of design and performance process

Product ánd process design structure
Inspection and measurement structure.

2. Quality of conformance process

Statistical process control techniques
Sampling techniques
Statistical and sampling techniques are employed for the identification of quality problems and for controlling the quality of production process.
Economic considerations and TQM plays an important role in tying together the management and technical systems.

Principles of TQM:
TQM is an approach that organisations can use to improve their internal processes and increases customer satisfaction.

Quality can and must managed: Problem must be realised and effectively controlled.
Processes, not people, are the problem: First, processes should be corrected and then people should be trained.
Don’t treat symptoms, look for the cure: Solution for the problem has to be searched from the very source of the problem.
Every employee is responsible for quality: Every employee, from worker to the CEO has an important part to play in quality management.
Quality must be measurable: This system is effective if the results can be quantified.
Quality improvements must be continuous: It has to take place continuously for increasing the customer’s satisfaction.
Quality is a long-term investment: It provides an organisation a long- term success.

Risk Management:

It has its origin from the field of corporate insurance.
It refers to the identification of opportunities and avoiding or mitigating losses.
It helps the organisation to minimise losses and maximise opportunities.
It is considered as a structured approach in managing uncertainty related to a threat.
It is a scientific approach to deaf with pure risks by anticipating possible accidental losses and designing and implementing procedures which minimise the occurrence of loss.
Rigorous risk management occurs in the departments whose core objective is to protect the environment and public health and safety.
Each department and the executives are directly and indirectly involved in the risk management.
It refers to a process dealing with uncertainty within a public environment.
It is a systematic approach for setting the best course of action under uncertainty.

Its characteristics are:-

systematic discipline
provides a system of making choices.
way for better understanding of potential liability.
guide for responding to undesirable events.
Integral component of good management & decision making at all levels.

Objectives of Risk Management:
2. Monitors new projects, and ongoing operations, so that no problem or new risks emerge.
It provides advantages to an organisation in the form of –

Better informed decision making in assessing new opportunities
Less chance of major problems in new and present activities
Increased likelihood of achieving the corporate objectives.

Benefits of Risk Management:

Taking and managing risk is the very essence of business survival and growth. It provides clear and structured approach in identifying risks. Following are its benefits-
Makes a company more flexible and responsive to changing customer’s needs.
Companies can gain an early-mover advantage by responding to changes earlier than their rivals.
Helps the company in meeting its business objectives.
Improves the company’s credit rating.
Saves the company’s valuable resources.
Protects the reputation and public image of the organisation.
Prevents or reduces legal liability and increases the stability of operations.
Risks with the greatest loss and greatest probability of its occurrence are handled first, followed by risks with lower loss and lower probability of its occurrence.
It is often mishandled.
A new type of risk i.e. risk with 100% probability of occurring has been identified by intangible risk management but ignored due to lack of identification ability.
Relationship risk occurs due to ineffective collaboration.
Process engagement risk occurs when ineffective operational procedures are applied.
It faces difficulty in allocating resources.
Risk is unavoidable – action needs to be taken to bring it to a tolerable level. Staff should be kept aware of the relevance of risk to the achievement of their objectives.

Effective risk management helps in improving the performance objectives by contributing to:

Better service
Focus on doing things properly
Basis for strategy setting
Efficient use of resources
Reduction of management time
Improved innovation
Reduced waste and fraud
Better value for money
Achievement of competitive advantage.

Private sector focus mainly on shareholder’s return and preservation of shareholder’s value
Public sectors mainly focus on implementing programs cost-effectively in accordance with governments rules and regulations.

Scope and Applicability of Risk Management:

It should be rigorously applied where critical decisions have to be made.
It depends upon whether risk relates to long, medium or short term goals.

Strategic Decisions:

It is concerned with long term goals
Have to be reviewed on regular basis

Program and Project Level:

It is concerned with medium-term goals
Narrower in scope

Operational Level:

It emphasises on short term goals
It ensures ongoing continuity of business services
It must support long and medium-term goals.
Risks with the greatest loss and greatest probability of its occurring are handled first, followed by risks with lower loss and lower probability its occurrence.
It is often mishandled.
A new type of risk i.e. risk with 100% probability of occurring has been identified by intangible risk management but ignored due to lack of identification ability.
Relationship risk occurs due to ineffective collaboration.
Process engagement risk occurs when Ineffective operational procedures are applied.
It faces difficulty in allocating resources.
Risk is unavoidable – action needs to be taken to bring it to a tolerable level.
Staff should be kept aware of the relevance of risk to the achievement of their objectives.

Effective risk management helps in improving the performance objectives by contributing to:

Better service
Focus on doing things properly
Basis for strategy setting
Efficient use of resources
Reduction of management time
Improved innovation
Reduced waste and fraud
Better value for money
Achievement of competitive advantage.

Risk Mangement Process:

Risk identification:

All the possible risks that may affect the business, either positively or negatively, have to be identified.
Threats, vulnerabilities and the associated risks are also identified
No risk should be excluded
These risks may prevent degrade, delay or enhance the achievement’ of objectives.

Risk Assessment:

All the identified risks have to be assessed
It is required to generate awareness among the employees.
Risk measurement and analysis:

It involves determination of:

probability of occurrence of losses
impact of such losses on the financial affairs of the company.
ability to predict losses.
It helps in making decisions about committing resources to control the risks.
Under risk analysis, the level of risk and its nature is assessed.
It helps in finding out the most cost-effective risk treatment.

Features of International Business:
Large Scale Operations :

All operations are conducted on a large scale.
First, goods are sold in local market, the surplus is then exported.

Integration of Economies :

It helps in integrating the economies of various countries
It uses resources of various countries, produces in various other countries and sells in other countries.

Dominated by Developed Countries and MNCs :

Developed countries e.g. USA, Europe, Japan etc. dominate the market by producing good quality products at low cost
This is. possible because they have huge financial resources.

Benefits to Participating Countries :

Developed countries get maximum benefits.
It results in economic development of developing countries by providing rapid industrial development and more employment opportunities.

Rigorous Competition :

Developing countries have to face competition with developed countries
They both are unequal partners
Developed countries and MNC’s are always in a better position as they provide better quality goods at low prices.

Sensitive Nature :

Any change in economic policies, technology, etc. have great impact on it.
Importance of International Business

Foreign Exchange Earnings :

It helps in earning valuable foreign exchange by export of goods and services.
This strengthens the country’s economy.

Optimum Utilisation of Resources:

This is possible because goods are produced on large scale.
Finance and technology of rich countries are used while raw materials and labour of poor countries are used.

Achieving Objectives:

Its main objective is to earn high profits.
It achieves this objective by producing high-quality goods at lowest possible price.

Spreading Business Risks :

Risk of one country can be easily transferred to that of other country.
This helps in minimising risks.

Improving Organisation’s Efficiency :

They use all modern techniques to gain efficiency.
This enables them to face competition in international market.

Get benefits from Government:

It helps in bringing foreign exchange
Thus, get many financial and tax benefits from the government.

Expand and Diversify :

Its activities can be expanded because it earns high profits and also get financial help.
Increase Competitive Capacity :
It produces high-quality goods at low prices.
It also spends a lot on advertising.
This makes it more competitive.

Role of an International Manager:

It has to be responsive to foreign customers, employees and suppliers.
It has to be organised as a worldwide company with various divisions.
It has to have an open communication system where problems and grievances of employees have to be quickly heard.

Company has to go through three stages:
Pre-international Stage: It involves finding ways to export the product which requires appointing export manager and finding foreign partners.

International Division Stage: Company has to defend and expand its foreign market position by establishing its operations in more than one host countries in order to remove cost disadvantages occurring due to different laws and regulations of host country.

Global Structure Stage: A company must fulfil the following criteria-

International and domestic markets should be of some importance
Senior officials must possess both foreign and domestic experience.
International sales represent 25 to 35% of its total sales.

Staffing :

Employees should be hired and trained carefully.
Management should be familiar with the country’s national labour laws.

Directing:

Cultural differences make directing function difficult.
Language barrier creates communication difficulty.
Managers have to be * trained properly through cross-cultural management which enables them to interact with several cultures.

Controlling:

It becomes difficult due to geographical distance and language differences.
Meetings, reportings and inspections are typically part of the international control system.
Controlling is a crucial function for multinational managers.

Remote work Systems: Remote working a situation in which an employee works mainly from home and communicates with the company through technology and an internet (i.e. Gmail, hangouts etc.). A remote workforce provides access to a much broader talent pool, especially when you are looking for a specific skill set.

New work tools increase transparency: In the past, managers have typically determined how employees spend their time. These days, it is more common for managers to empower employees to self-organize, which lead to more transparency.

Retail and workplace flexibility:
Technology has helped e-commerce companies see explosive growth, while challenging traditional retail with the result being larger. More companies are using modern logistics and automation to operate their business. With the rise of new technology and trends renting out large multi-office spaces is no longer necessary. This economy of space goes hand-in-hand with cost savings for business owners.

Business Ecosystem:
Group of firms which together provide complex products and related services to meet end-to end requirements of users across the value chain. – Prof. Carlyss Y. Baldwin

The move to mobile has employees driving tech choices:
Employee empowerment lead to big change in the workplace today. trusting employees to set their goal and priorities themselves results happier employers and more productive companies.

Sustainability and Corporate Social Responsibilities:
HBS Dean Nitin Nohria feels that in the coming decade, we are likely see a lot of focus directed towards applying management principles solutions of complex social Issues such as environmental sustainability, every security, access to healthcare etc.

The study of Psychology:
Prof. Amabile feels that with more evolved tools, and access to ever-growing information databases, managers will have the power substantially improve both the practice of business and welfare society.

Nature of Management and its Process MCQ Questions

1. Change is resisted when people in the course of doing or learning a new system experience failure.
(a) True
(b) False
(c) Partly true partly false
(d) None of the above.
Answer:
(a) True

2. The three types of resistance to change are-logical, psychological and
(a) Geographical
(b) Sociological
(c) Temporary
(d) None of the above.
Answer:
(b) Sociological

3. Changes should be introduced in ……………….. .
(a) Totality
(b) Minimised way
(c) Impact lull way
(d) Stages.
Answer:
(b) Minimised way

4. …………….. training can also be used to overcome resistance to change
(a) Sociological
(b) Logical
(c) Sensitivity
(d) None of the above
Answer:
(c) Sensitivity

5. ……………. arued that successful change should f oliow three steps.
(a) Kurt Lewin
(b) Taylor
(c) Fayot
(d) George. R terry.
Answer:
(a) Kurt Lewin

6. …………….. management is the process by which an organisation deals with a major event that threatens to harm thR organisation. its stakeholders or the general public.
(a) Risk management
(b) Crisis management
(c) Total quality management
(d) None of the above.
Answer:
(b) Crisis management

7. …………………… is one which involves assessing potential threats and finding ways to avoid those threats.
(a) Crisis management
(b) Total quality management
(c) Administrative management
(d) Risk management.
Answer:
(d) Risk management.

8. crisis are caused by human applicätion of science and technology.
(a) Confrontation
(b) Organisation misdeed
(c) Technoloical
(d) Natural crisis.
Answer:
(c) Technological.

9. One of the objectives of risk management is to minimise the use of resources.
(a) True
(b) False
(c) Partly true Partly False
(d) None of the above.
Answer:
(b) False

10. Risk management is about managing risk against the
(a) Reward
(b) Decision
(c) Activity
(d) Opportunities.
Answer:
(a) Reward

11. ………………. management identities a new type of risk- a risk which iias 100 %. probability of occurring but ¡s ignored by the organisation due to each of identification ability.
(a) Relationship risk
(b) Process engagement
(c) Intangible risk
(d) None of the above.
Answer:
(c) Intangible risk.

12. ……………… is an essential ând integral step in the risk management process.
(a) Risk Treatment
(b) Risk assessment
(c) Risk identification
(d) Risk monitoring and review.
Answer:
(d) Risk monitoring and review.

13. …………………… management is the practice ot managing business operations in more than one country.
(a) Business
(b) International
(c) Risk
(d) Crisis.
Answer:
(b) International

14. Middle management provides motivating climate for employee, directs them in proper procedures and assists them in eliminating sources of error.
(a) True
(b) False
(c) Partly true partly false
(d) None of the above.
Answer:
(b) False

15. TQM As used to increase the overall customer satisfaction.
(a) True
(b) False
(c) Partly true partly false
(D) None of the above.
Answer:
(a) True

16. Who saki these lines The world hates change, yet that is the only thing that has brought progress”?
(a) Charles Darwin
(b) Chailes Kettering
(c) Philip Kotler
(d) Kohier
Answer:
(b) Charles Kettering

17. Which of the following are not the external forces which affects changE
(a) Technological forces
(b) Economic forces
(c) Ecological forces
(d) Social forces
Answer:
(c) Ecological forces

18. ……………………………. is logical in terms of group interest arid values.
(a) Logical
(b) Psychological
(c) Sociological
(d) None of the above
Answer:
(c) Sociological

19. Which of the following ¡s not the process of action research?
(a) Diagnosis
(b) Prognosis
(c) Attention
(d) Action
Answer:
(c) Attention.

20. Successful implementation of change, should íirst facilitate unlearning by increasing the .
(a) Driving force
(b) Restraining force
(c) Both (a) & (b)
(d) None of the above
Answer:
(a) Driving force

21. ……………………. difference make the directing function more difficult fo the international manager.
(a) Sociological
(b) Language
(c) Physiological
(d) Cultural
Answer:
(d) Cultural.

22. Which of the following does not complicate controlling function?
(a) Geographic Distance
(b) Legal Restrictions
(c) Geographic Dispersion
(d) No language Barrier
Answer:
(d) No language Barrier.

23. Identify the phases of structural change in organisation Senior officials in the company possess both foreign and domestic experience”
(a) Pro-international
(b) International Division
(c) Global Structure
(d) None of the above
Answer:
(c) Global Structure.

24. Which of the following key factors should not be kept in mind of international manager to develop forecast?
(a) Competition from government
(b) Currency stability
(C) Pressure from government
(d) Intense competition
Answer:
(b) Currency stability.

25. Which uf the following are not the feature of international business?
(a) Large Scale Operations
(b) Rigorous Competition
(c) Achieving Objective
(d) Sensitive Nature
Answer:
(c) Achieving Objective

26. Which of the following are not importance of International Business?
(a) Expand and diversify
(b) Foreign Exchange Earning
(c) Spreading Business Risk
(d) Integration of Economies
Answer:
(d) Integration of Economies.

27. …………………………. is the phase where the level of the risk and its nature are assessed and understood.
(a) Risk Assessment
(b) Risk Analysis
(c) Risk Measurement
(d) Risk Evaluation
Answer:
(b) Risk Analysis

28. Which of the following are not the objectives of Risk Management?
(a) Minimising of opportunities
(b) Optimising the use of resources
(c) Improved Organisational
(d) Identify and evaluate risk Efficiency
Answer:
(a) Minimising of opportunities

29. “Chernobyl disaster” is a type of which crisis?
(a) Natural disaster
(b) Technological crisis
(c) Confrontation crisis
(d) Workplace Violence
Answer:
(c) Confrontation crisis

30. “Resisting or disobeying police” is a type of which crisis
(a) Natural Disaster
(b) Technological crisis
(c) Confrontation crisis
(d) Rumours
Answer:
(c) Confrontation crisis

31. International sales represent ………………… to ……………………. percent of total sales and the technology used in the domestic division has far outstripped that of the international division
(a) 25, 35
(b) 45, 55
(c) 35, 45
(d) 55, 65
Answer:
(a) 25, 35

32. A business owner should aim to choose, …………………… and implement the most appropriate combination of treatments.
(a) Evaluate
(b) Prioritize
(c) Assertive
(d) None of the above.
Answer:
(b) Prioritize

33. Which of the following are riot the advantage of Risk Management?
(a) Better informed decision making
(b) Less chance of major problem in
(c) Increase likelihood of achieving new and ongoing activities corporate objective
(d) System of making choices
Answer:
(d) System of making choices.

34. …………….. must commit the resources and provide the leadership necessary to set the tone and carry out the requirement of an ongoing dynamic quality policy.
(a) First line supervisor
(b) Middle Management
(c) Top Management
(d) None of the above
Answer:
(c) Top Management.

35. Who said this statement crisis is a process of transformation where the old system can no longer be maintained”?
(a) Charles Kettering
(b) Kohler
(c) Kotlei
(d) Venelle
Answer:
(d) Venelle.

36. Which one of the following is not a correct principle of Total Quality Management?
(a) Quality can and must be managed
(b) People are the problems not the processes
(c) Every employee is responsible for the quality
(d) Quality must be measurable.
Answer:
(b) TQM was developed in a post war research by management consultants like. Dr. Joseph Juran and W. Edward Dening. Quality is the most important factor in determining the success or failure of an organisation.

Principles of TQM are:

Quality can and must be managed.
Processes, not people, are the problem.
Don’t treat symptoms look for the cure.
Every employee is responsible for quality.
Quality must be measurable.
Quality improvement must be continuous.
Quality is a long-term investment.

Thus, (b) option is not correct.

37. Which statement of the following is correct?
(a) Investing ₹ 5,000 @ 6% simple interest
(b) Investing ₹ 5,000 @ x% compound interest for two years
(c) Investing ₹ 5,000 @ x% simple interest for two years
(d) Investing ₹ 5,000 @ 6% compound interest for two years
Answer:
(d) Among the given options, option (d) is optimum since all the required information regarding amount, rate and the time period is given in it as compared to other options.

38. Which one of the following is not an example of confrontation crisis?
(a) Boycotts
(b) Rumours
(c) Disobeying police
(d) Picketing
Answer:
(b) Confrontation crisis are caused due to the discontented individuals and/ or groups for the non acceptance of their demands and expectations by fighting with government or other interest groups. Examples of confrontation crisis are: Boycotts, Disobeying police, picketing, etc. Thus rumours are not an example of confrontation crisis.

39. Which one of the following involves assessing potential threats and finding ways to avoid those threats?
(a) Crisis management
(b) Total quality management
(c) Administrative management
(d) Risk management
Answer:
(d) Risk Management involves potential threats and finding way to avoid those th reats risk management basically refers to identification of opportunities and avoiding or mitigating losses.

40. ……………………… is an approach that organisations use to improve their internal processes and increase customer satisfaction.
(a) Total Quality Management (TQM)
(b) Customer Management
(c) Risk Management
(d) Financial Management.
Answer:
(a) TQM is an approach that organisations use to improve their internal processes and increase customer satisfaction. When properly implemented ,lt can lead to decreased costs related to corrective or preventive maintenance, better overall performance and an increased number of satisfied and loyal customers.

41. Which type of management is considered as a structured approach in managing uncertainty related to threat?
(a) Total Quality Management
(b) Supply Chain Management
(c) Risk M9agement
(d) None of te1 above.
Answer:
(c) Risk Management refers to the identification of opportunities arid avoiding or mitigating losses. Thus, Risk Management is considered as a structured approach in managing uncertainty related to threat.

42. TQM is used to increase the overall satisfaction of customer —
(a) True
(b) False
(c) Partly True
(d) Partly False.
Answer:
(a) Total Quality Management [TQM] is an approach that organisations uses to improve their internal processes and increases the overall customer’s satisfaction. Thus, we can say that the statement given about TQM is true.

43. Lewin three step model was given by.
(a) Kurt Lewin
(b) Douglas Me’ Gregor
(c) Koontz and O’ donnell
(d) George Lewin
Answer:
(a) Kurt Lewin argued that the successful change in organisations should follow three steps.

Unfreezing the status quo.
Movement or changeover to a new state.
Refreezing the new change to make it permanent.

This model was known as Lewin three steps model.

44. What is the meaning of “status quo” ?
(a) Equilibrium state
(b) Increasing state
(c) Decreasing state
(d) None of the above
Answer:
(a) “Status quo” means Equilibrium state.

45. Which of the following is not a common reason that people resist – change ?
(a) Uncertainty
(b) Loosing comfort zone
(c) Overconfidence
(d) Concern over personal loss.
Answer:
(d) Reasons for people’s resistance to change:

Opposed by people who are negatively effected by redistribution of power occurring due to it.
Resisted if people face failure once.
Resisted by less educated and less intelligent people because of the fear that change will expose their inefficiency.
Those who stand to lose the most by the change tends to oppose it the most.

Thus, option d is correct answer i.e. people resist to change who concern over personal loss.

46. Which is the first step in Risk Management?
(a) Risk Measurement
(b) Risk Identification
(c) Risk Evaluation
(d) Risk Control.
Answer:
(b) Risk management process involves:

Risk identification
Risk assessment
Risk measurement & Analysis
Risk evaluation
Risk treatment
Risk monitoring & Review

Hence, option (b) Risk identification is first step in Risk Management Process.

47. The process of responding to an event that might threaten the operation, staff, customers, reputation or the legal and financial status of an organisation is known as:
(a) TQM
(b) Stress management
(c) MBO
(d) Crisis management.
Answer:
(b) Stress management is the process of responding to an event that might threaten the operations, staff, customers reputation on the legal and financial status of an organisation.

48. Which cause of resistance to change is most likely to occur when previous changes were not well understood or resulted in negative Consequences?
(a) Objectives
(b) Self – interest
(c) Lack of trust
(d) Loss of power.
Answer:
(d) Since change almost invariably brings with it a redistribution of power and influence it tends to be opposed by those individuals and groups who are negatively affected by it.

49. The process of responding to an event that might threaten the operation, staff, customers, reputation or the legal and financial status ot an organisation is known as:
(a) TQM
(b) Stress management
(c) MBO
(d) Crisis management.
Answer:
(a) According to Venette, crisis is a process of transformation where the old system can no longer be maintained.

50. Which cause of resistance to change is most likely to occur when previous changes were not well understood or resulted in negative Consequences?
(a) Objectives
(b) Slf – interest
(c) Lack of trust
(d) Loss of power.
Answer:
(d) Since change almost invariably brings with it a redistribution of power and influence it tends to be opposed by those individuals and groups who are negativ&y affected by it.

51. It is a process of transformabon where the oLd system can no longer be maintained:
(a) Crisis
(b) Stress Management
(c) TQM
(d) MBO
Answer:
(a) According to Venette, crisis is a process of transformation where the old system can no longer be maintained.

52. To compete with rival company X, company Y changes its management structure. This is an example of …………….. .
(a) an internal change causing another internal change
(b) an external change causing another external change
(c) an internal change causing another external change
(d) an external change causing an internal change.
Answer:
(c) To compete with rival company X, Company Y changes its management structure. This is an example of an internal change as this lie in the external environment causing an internal change which are the pressures arising from within the organisation, These forces are interhnked and react on each other.

53. ………………….. refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations.
(a) Internal Business
(b) International Business
(c) Dometic Business
(d) Foreign Licericing
Answer:
(b) International Business refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations. Transactions of economic resources include capital skills, people etc.

54. Risk mitigation can be defined as the Art and Science of risk.
(a) mediating
(b) avoiding
(c) identifying
(d) managing
Answer:
(c) It is basically concerned with identifying options for treating or controlling risk, in order to either reduce or eliminate negative consequences, or to reduce the likelihood of an adverse occurrence. Risk treatment should also aim at enhancing positive outcomes. It is often neither not possible nor cost-effective to implement all treatment strategies. Hence, risk cannot be managed until it is identified.

55. The concern with software piracy in some Asian Countries is an example of ……………………. risk.
(a) Political
(b) Economic
(c) Demographic
(d) Legal
Answer:
(d) Software Piracy is a Legal risk.

56. The Sarbanes – Oxley Act, 2002 was enacted and passed in USA to:
(a) Punish those who committed accounting frauds in the late 1990s
(b) Improve corporate profits
(c) Help laid-off employees get their jobs back
(d) Help restore confidence in Corporate America.
Answer:
(d) Sarbanes – Oxley Act, 2002 was enacted and passed in USA to help restore confidence in Corporate America.

57. Which one of the following involves assessing potential threats and finding ways to avoid those threats?
(a) Crisis management
(b) Total quality management
(c) Administrative management
(d) Risk management.
Answer:
(d) Risk management is one of the management which involves assessing potential threats and finding ways to avoid those threats.

60. MitIgation of loss is covered under:
(a) Risk Management
(b) Crisis Management
(c) Both (a) and (b)
(d) None of these.
Answer:
(b) Mitigation of loss is covered under crisis management.

61. Total quality management refers to:
(a) Offering good quality product at competitive price
(b) Offering good quality at highest price
(c) Making profit and comprise with product quality
(d) None of these
Answer:
(a) Total Quality Management: refers to offering good quality product at competitive price. It help to improve internal process of the organisation and increase customer satisfaction.

62. What is first step of Risk Management
(a) Identify the Risk
(b) Analyse the Risk
(c) Establish the Context
(d) Evaluate the Risk.
Answer:
(c) Process of Risk Management Establish the Context Identification of Risk Analysis of Risk Evaluation of Risk Treatment of Risk.

63. By which process/management we can skip a destructive and unexpected event that threatens to harm the organisation or its stakeholders.
(a) Crisis Management
(b) Organisation Process
(c) Planning Process
(d) Risk Management.
Answer:
(d) Risk Management is the process by which an organisation deals with a disruptive and unexpected event that threatens to harm the organisation or its stakeholders.

64. ……………………… is the process of adjusting future actions based upon information about past performance.
(a) Ratio Analysis
(b) Organisational Suitability
(c) Feedback
(d) Network Analysis
Answer:
(c) ‘Feedback’ is the process of adjusting future actions based upon information about past performance.

65. ……………….. is an approach that organisation use to improve their internal processes and increase customer satisfaction.
(a) Total Quality Management (TQM)
(b) Customer Management
(c) Risk Management
(d) Financial Management.
Answer:
(a) Total Quality Management‘TQM’is an approach that organisation use to improve their internal processes and increase consumer satisfaction.

66. A company operates its bank account only through –
(a) Shareholder
(b) Investors
(c) Persons authorized by the Board of Directors
(d) Company Secretary.
Answer:
(c) A company operates its bank account only through ‘Persons authorized by the Board of Directors.

64. Risk Management has its origin from
(a) Corporate Insurance
(b) Industrial Revolution
(c) Rumours
(d) All of the above
Answer:
(a) Risk management has its origin in the field of corporate insurance. Presently it is recognized as a distinct and important function of all business organizations. Although the term risk management is a recent phenomenon, yet the actual practice of risk management is as old as civilization itself.

Recent Trends in Management – Business Management Ethics and Entrepreneurship Notes

Recent Trends in Management – Business Management Ethics and Entrepreneurship Notes

CS Foundation Business Management Ethics and Entrepreneurship Notes