What is Management? Is Management Art or Science? What is Future Value of Money?

Question: What is management?

Answer: Management is a process of utilizing business resources to achieve the organizational goals effectively and efficiently. It consists of human, financial, physical, and information resources.

Question: Is management art or science?

Answer: Management is both art and science. There are several principles to prove management as art and science.

Management as Science

Management behaves as Science in several parameters that contain general facts which explain a phenomenon. Moreover, management principles developed through the scientific method of observation and verification through testing.

The identical features of management and science are:

1. Universally acceptance principles: Management principles can be applied universally.
2. Experimentation & Observation: The principles are based on logics.
3. Cause & Effect Relationship: It can have “cause and effect” relationship between various variables.
4. Test of Validity & Predictability: The principles can be tested several times.

Management as Art

Management acts as an Art by application of knowledge & skill to trying about desired results. The definition of art is the application of general theoretical principles to attain optimum results.

The identical features of management and art are:

1. Practical Knowledge: There is practical application of theoretical principles.
2. Personal Skill: Each one has its own style of work.
3. Creativity: It is a combination of human & non-human resources to obtain optimum results.
4. Perfection through practice: Application of management principles can train managers to become perfect in their jobs.
5. Goal-Oriented: Accomplishment of desired goals through various resources.
6. Work by effectively: Handle every problem of organization in every environment.

Management as Art & Science

Yes, management indeed beholds the characteristics of both art and science. There is an old saying: “Managers are born”, which is regarded as outdated as a new expression has come into existence: “Managers are Made”. Many management scholars admit that management is the oldest of art and the youngest of science.

Question: Explain forecasting with help of an example?

Answer: Forecasting is a technique used to generate predictions from the past and present data for the future. Everyone uses forecasting according to their requirements. Several businesses use it to set a limit for budgets and anticipated expenses to incur in the future. Forecasting acts as a relevant benchmark for businesses, which need a long-term perspective of operations. Furthermore, investors utilize it to check several events surrounding a company; for example, how much sales would this company make? What are the expansion plans of this company? So, forecasting assists the investor in deciding whether they want to stay invested in the company or not.

Example of forecasting

Forecasting is helpful when a manufacturer decides the appropriate time to purchase raw material for the production team. The manufacturer has two choices in this situation: he can buy the raw material and store it, or buy the raw material when there is an actual requirement of it.

Forecasting has two approaches:

Qualitative Models: These models are for short-term predictions, where the scope of the forecast has a limit. This approach requires precision as it is based on the market with an informed consensus, so it is developed by experts. It assists in generating predictive results for the short-term of companies, products, and services. The main setback of this approach is its reliance on opinion over measurable data.

Qualitative models include:

1. Market Research
2. Delphi Method

Quantitative Models: These models do not include expert opinions; and are used for long term planning, such as months or years. It is majorly used in predicting variables such as sales, gross domestic product, housing prices, and share price, etc.

Quantitative models include:

1. The Indicator Approach
2. Econometric Modelling
3. Time Series

Question: Time Value of Money with example

The time value of money dictates that money received today has more value than money received in the future due to its potential earning capacity. Furthermore, this concept holds that provided money can earn interest; any amount of money is worth more the sooner it is received. In simpler terms, your yesterday money was more valuable than today, and your today money is more valuable than tomorrow.

Quick Fact: The other name of Time Value of Money is Present Discounted Value.

For example, you have two options with you. The first option is to receive Rs 10,000 now and the other option is to receive Rs 10,000 in two years. A rational mind would go with receiving Rs 10,000 now, because it has more value, and you can earn more interest on it by investing it.

Question: Future Value of Money with example

Future Value of Money is a projection of the value of an asset at a particular date. It is based on an assumed rate of growth. It is relevant for investors and financial planners as they are pertinent stakeholders in the company. They want to know the real value of the asset at a specified date. And then make sound investment decisions based on their anticipated requirements. However, inflation can adversely deteriorate the future value of the asset by eroding its value.

For example, the money accumulated in a savings account with a fixed interest rate enables to calculate the future value accurately. However, money invested in share prices with the volatile rate of return can present greater difficulty.

AIMA Strategic Management & Ethics (GM14)

AIMA Online Assignments

Strategic Management & Ethics (GM14)

NOTE: The answers are boldly marked.

Question 1:- Strategy formulation was not as important 50 years back as the environment during the pre-liberalization era was more:          

a)   Flexible                       

b)   Stable and Predictable                       

c)   Cyclical                       

d)   Dynamic, Unstable and turbulent                       

Question 2:- Business Strategy should be formulated keeping in a mind a time horizon of:           

a)   3 - 5 years                       

b)   3 -6 months                        

c)   less than one year                       

d)   None of these                       

Question 3:- Business Success hinges on the capability of a firm to           

a)   formulate and execute action plans                       

b)   Craft Internal plans                       

c)   Allocate Resources efficiently                       

d)   predict the internal environment                       

Question 4:- Mergers and Acquisitions is an integral portion of what level of strategy     

a)   Corporate level                       

b)   Operational Level                       

c)   Business Level                       

d)   Functional Level                       

Question 5:- Which of the following is NOT part of the micro environment           

a)   Technology                       

b)   Competitors                       

c)   Customers                       

d)   Publics                       

Question 6:- The strategy of TATA Motors and TCS would be classified as:            

a)   Business Strategy                       

b)   Corporate Strategy                       

c)   Operational Strategy                       

d)   Process Level                       

Question 7:- Growth, retrenchment and stability are examples of           

a)   Corporate level Strategy                       

b)   SBU Strategy                       

c)   Integration Strategy                       

d)   All of These                       

Question 8:- Porter's Generic strategies comprises of:   

a)   Cost leadership, differentiation and scope                       

b)   Product and Market Focus                       

c)   Integrated approach                       

d)   Hyper competition                       

Question 9:- Typically, profits are highest in which stage of the industry life-cycle             

a)   Growth                       

b)   Introductory                       

c)   Stagnation                       

d)   Decline                       

Question 10:- Which of the following industries is least likely to follow the conventional stable life-cycle model 

a)   Computer software                       

b)   Coal Mining                       

c)   Insurance Broking                       

d)   Saloon                       

Question 11:- Strengths and weaknesses are important ingredients of: 

a)   The industry                       

b)   The Organization and the competitors                       

c)   The Market                       

d)   The firm                       

Question 12:- Opportunities and threats are posed by the           

a)   Internal resources                       

b)   External environment                       

c)   Firm level competencies                       

d)   Government policies only                       

Question 13:- Reputation' in the context of an organization's resources can provide competitive advantage because:     

a)   It is implicit                       

b)   It is difficult to copy                       

c)   It is a resource                       

d)   It leads to easy word of mouth publicity                       

Question 14:- Which of these is not a reason why some firms do not have strategic planning      

a)   Laziness                       

b)   Competitive Leadership                       

c)   Differences in opinion                       

d)   Poor reward structures                       

Question 15:- Which one of these is NOT a __________ part of Porter's competitive forces in industry analysis

a)   Bargaining power of consumers                       

b)   Development of substitutes                       

c)   Competitive Rivalry                       

d)   Threat of new entrants                       

Question 16:- In which matrix of the BCG growth share matrix should a firm consider to diversify             

a)   Problem Child                       

b)   Cash Cow                       

c)   Star                       

d)   None of these                       

Question 17:- In which stage of the product life cycle should a firm consider investing heavily in advertising         

a)   Maturity Phase                       

b)   Introductory and emergent phase                       

c)   Growth Phase                       

d)   Research Phase                       

Question 18:- One of the features of strategy is that it should be:            

a)   focused on survival of the firm                       

b)   Flexible and altered frequently                       

c)   Robust and long term                       

d)   Short term                       

Question 19:- Which one of the following is not a component of the internal environment          

a)   Tangible Resources                       

b)   Brand reputation                       

c)   Laws and Regulations                       

d)   Physical Assets                       

Question 20:- In the case where an organization acquires its supplier, this is an example of          

a)   Horizontal Integration                       

b)   Forward Integration                       

c)   Backward Vertical Integration                       

d)   Value Chain Dynamics                       

Question 21:- Firms having superior value chain capabilities have a competitive …………………….. over rivals             

a)   disadvantage                       

b)   environment                       

c)   advantage and edge                       

d)   battle                       

Question 22:- The _________ answers the question "What do we want to become?" whereas _________answers the question "What is our business?"            

a)   Short term objectives; long term objectives                       

b)   Short term plans; long term plans                       

c)   Vision Statement; Mission Statement                       

d)   Objectives; Strategies                       

Question 23:- __________ is based on the assumption that the future will be just like the past.               

a)   Delphi Forecasts                       

b)   Econometric forecasts                       

c)   Linear Regression                       

d)   Scenario Planning                       

Question 24:- In terms of the PESTLE analysis, the changes in the tariff structures and regimes could go in which section               

a)   Demographics                       

b)   Political                       

c)   Legal                       

d)   Eco-systems                        

Question 25:- A strategy can be defined as:        

a)   Operational plans                       

b)   Line and direction followed by a firm                       

c)   Plans designed irrespective of the environmental conditions                       

d)   Integrated Broad set of action plans cutting across all business functions                       

Question 26:- Which one of the following is not a component of the external environment         

a)   Technology                       

b)   Political                        

c)   Socio- Cultural                       

d)   Business Processes                       

Question 27:- Cultural values would be part of which of the following factor in macro environment         

a)   Economic                       

b)   Natural                       

c)   Ecological                       

d)   Social                       

Question 28:- The word tactic is most likely to be associated with             

a)   Functional; Level                       

b)   Business Level                        

c)   Unstructured planning                       

d)   Operational Level Strategy                       

Question 29:- Adding new, unrelated products or services for present customers is a phenomenon known as:  

a)   Horizontal Diversification                        

b)   Concentric Diversification                       

c)   Product Development                       

d)   Conglomerate Diversification                       

Question 30:- An industry characterized by irregular patterns of stability, rapid technological change, high uncertainty and global competition can be described as 

a)   Irregular                       

b)   Inconsistent                       

c)   Hyperactive                       

d)   Hypercompetitive

AIMA Assignment Strategic Management & Ethics (GM14)

AIMA Fourth Semester Assignments

Strategic Management & Ethics (GM14)

Question 1:- A significant change in strategy calls for a complete overhaul of the              

a)   Organization resources                       

b)   Organization structure, systems, processes, resources                       

c)   Business activities                       

d)   None of these                       

Question 2:- Change management is essential for strategy execution following the:       

a)   Drastic change in environmental and competitive conditions                        

b)   need for resource allocation                       

c)   reduction in barriers to change                       

d)   business imperatives                       

Question 3:- The critical 7 S model was developed and created by reputed consulting firm:          

a)   Mckinsey                       

b)   Bain & Co                       

c)   A T Kearney                       

d)   Accenture                       

Question 4:- A ………………...Top Management team may infuse desired changes for spearheading successful strategic change

a)   Heterogeneous                       

b)   Homogenous                       

c)   Aggressive                       

d)   Motivated                       

Question 5:- Change in culture, attitude, and mindset calls for:  

a)   engagement, involvement and motivation of employees                       

b)   Rigorous performance appraisal                       

c)   Performance benchmarking                       

d)   Organization design change                       

Question 6:- If change management initiatives are successful then the firm may               

a)   Measure results and reinforce the same                       

b)   Reorganize resources                       

c)   Bring about rapid change always                        

d)   explore expansion options                       

Question 7:- Partnership with firm like NIKE and VISA are typical examples of which form of collaboration            

a)   Strategic Alliance                       

b)   100% FDI                       

c)   Network arrangements                       

d)   All of these                       

Question 8:- Under International Level Strategy - the distribution of Wrigley's chewing gum using EID Parry channel network is a typical example      

a)   Piggybacking                        

b)   60:60 Joint Venture                       

c)   Licensing                       

d)   Export Management                       

Question 9:- Strategic leadership facilitates strategy execution through

a)   Exploitation of core competencies                       

b)   elimination of non-core competencies                       

c)   non cohesive functioning                       

d)   business integration                       

Question 10:- Business ethics suggests that business should be run profitably without causing: 

a)   Unnecessary environmental damage                       

b)   Depletion of resources                       

c)   Insider trading                       

d)   All of these                       

Question 11:- The Balanced Scorecard Model was a model first developed by:   

a)   Johnson & Scholes                       

b)   NORTON & KAPLAN                       

c)   Mintzberg                       

d)   Michael Porter                       

Question 12:- The difference between strategy formulation and strategy implementation is that:            

a)   Strategy is developed by Top Management Team and implemented by Managers                       

b)   Strategy is created by a few but implemented by all                        

c)   Strategy is customer centric and implementation is operations centric                       

d)   All of these                       

Question 13:- A functional organization structure created for implementing cost leadership strategy will emphasize more on:        

a)   Marketing                       

b)   Technology and process efficiency                       

c)   Human Resource Intervention                       

d)   Corporate Finance                       

Question 14:- A functional organization structure created for implementing differentiation related strategies will emphasize more on:            

a)   Cutting Unwarranted costs                       

b)   Marketing and New Product Development Initiatives                       

c)   Legal and Administrative efficiency                       

d)   Recruiting Productive Manpower                       

Question 15:- Contingency planning is a scenario where a firm has in place          

a)   Identical strategy to be executed irrespective of environmental changes                       

b)   Different strategy alternatives available for different environmental scenarios                       

c)   Combination strategies only                       

d)   Expansion and diversification strategies only                       

Question 16:- An international structure in which local operations imitate those of the home country, and which is dominated by home-nation personnel is an ________approach              

a)   Polycentric                       

b)   Ethnocentric                       

c)   Regiocentric                       

d)   Transnational                       

Question 17:- Recognizing and admiring employees for their contribution in the workplace is indicative of            

a)   Feel good factor                       

b)   Non-Monetary Motivation strategy                       

c)   Nondiscrimination of employees                       

d)   Equal Opportunity for all                       

Question 18:- Which one of the following is not a part of the Critical 7S model    

a)   Strategy                       

b)   Style                       

c)   Settings                       

d)   Staff                       

Question 19:- Which one of the following is not a part of Business Ethics               

a)   Equal Opportunity employer                       

b)   Marketing quality goods at most competitive prices                       

c)   Window dressing of balance sheet                       

d)   Avoiding insider trading                       

Question 20:- Change in style of functioning of organization calls for significant modification in   

a)   Organization response                       

b)   Decision Making                       

c)   Organization Culture and approach                       

d)   None of these                       

Question 21:- Which of the following is not PART of the Balanced Scorecard Model         

a)   Financial Perspective                       

b)   Customer Perspective                       

c)   Internal audit                       

d)   Innovation and Learning                       

Question 22:- Strategy audit is performed to identify:    

a)   Critical gaps between targets and achievements                        

b)   Chalk out corrective actions                       

c)   Both A and B                       

d)  A only                       

Question 23:- When a firm seeks the benefits of global integration and local adaptation, it is best described as which type of strategy              

a)   Multinational                       

b)   Global                       

c)   Multi-Domestic                       

d)   Transnational                       

Question 24:- Democratic leadership is a phenomenon which implies     

a)   Junior Employees have no say                       

b)   Senior officials are empowered                       

c)   Involvement and consultation with all employees prior to business decision-making                       

d)   All employees are empowered                       

Question 25:- Under 7S framework Systems imply which of the following            

a)   Recruitment Policy                       

b)   IT up gradation                       

c)   Innovative work ethics                       

d)   Set of standardized procedures                       

Question 26:- Which of the following is an example of Lack of Corporate Governance    

a)   Satyam-Maytas financial irregularities                       

b)   Inappropriate organization structure                        

c)   Failure of Enron project in India                       

d)   Both options A and C                       

Question 27:- Effective strategy execution calls for Business Process Reengineering with a view to          

a)   achieve cost and process efficiency                       

b)   Outsource non-core activities                       

c)   Automate systems and avoid duplication of tasks                       

d)   All of these                       

Question 28:- Audit and review are done periodically and continuously on the basis of performance related to     

a)   Sales and Marketing                       

b)   Business Operations                       

c)   Finance                       

d)   All Business functions                        

Question 29:- Firms forming a cartel is a typical example of          

a)   Non-Collusive oligopoly                       

b)   Aggressive actions                       

c)   Undercutting competitors                       

d)   Collusive oligopoly                        

Question 30:- Corporate Governance is a tool for ensuring strategy execution in line with objectives by putting in place

a)   Suitable organization processes                       

b)   optimal utilization of resources                        

c)   proper system of planning                       

d)   Transparency, accountability and disclosure of information