ACCA | F1 - Accountant in Business Solved Past Papers [02-07]

Accountant in Business

Time allowed: 2 hours

ALL FIFTY questions are compulsory and MUST be attempted.

Do NOT open this paper until instructed by the supervisor.

This question paper must not be removed from the examination hall.

Fundamentals Pilot Paper – Knowledge module

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The Association of Chartered Certified Accountants

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ALL FIFTY questions are compulsory and MUST be attemptedPlease use the Candidate Registration Sheet provided to indicate your chosen answer to each multiple choice question.

1 An organisation which restructures through a major de-layering exercise has as a result moved to a shorter scalar chain and a narrower span of control.

Is the above statement true or false?

A True

B False (1 mark)

2 Which of the following is the main function of marketing?

A To maximise sales volume

B To identify and anticipate customer needs

C To persuade potential consumers to convert latent demand into expenditure

D To identify suitable outlets for goods and services supplied (2 marks)

3 Which one of the following has become an established best practice in corporate governance in recent years?

A An increasingly prominent role for non-executive directors

B An increase in the powers of external auditors

C Greater accountability for directors who are in breach of their fiduciary duties

D A requirement for all companies to establish an internal audit function (2 marks)

4 In a higher education teaching organisation an academic faculty is organised into courses and departments, where teaching staff report both to course programme managers and to subject specialists, depending on which course they teach and upon their particular subject specialism.

According to Charles Handy’s four cultural stereotypes, which of the following describes the above type of organisational structure?

A Role

B Task

C Power

D Person (2 marks)

5 At what stage of the planning process should a company carry out a situation analysis?

A When converting strategic objectives into tactical plans

B When formulating a mission statement

C When validating the effectiveness of plans against outcomes

D When formulating strategic objectives (2 marks)



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6 Which one of the following is potential advantage of decentralisation?

A Greater control by senior management

B Risk reduction in relation to operational decision-making

C More accountability at lower levels

D Consistency of decision-making across the organisation (2 marks)

7 Which one of the following is an example of a internal stakeholder?

A A shareholder

B An non-executive director

C A manager

D A supplier (2 marks)

8 According to Mendelow, companies must pay most attention to the needs of which group of stakeholders?

A Those with little power and little interest in the company

B Those with a high level of power but little interest in the company

C Those with little power but a high level of interest in the company

D Those with a high level of power and a high level of interest in the company (2 marks)

9 What is the responsibility of a Public Oversight Board?

A The establishment of detailed rules on internal audit procedures

B The commissioning of financial reporting standards

C The creation of legislation relating to accounting standards

D The monitoring and enforcement of legal and compliance standards (2 marks)

10 The ageing population trend in many European countries is caused by a increasing birth rate and an increasing mortality rate.

Is this statement true or false?

A True

B False (1 mark)

11 Which one of the following is consistent with a government’s policy objective to expand the level of economic activity?

A An increase in taxation

B An increase in interest rates

C An increase in personal savings

D An increase in public expenditure (2 marks)



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12 Martin is an experienced and fully trained shipbuilder, based in a western European city. Due to significant economic change in supply and demand conditions for shipbuilding in Martin’s own country, the shipyard he worked for has closed and he was made redundant. There was no other local demand for his skills within his own region and he would have to move to another country to obtain a similar employment, and could only find similar work locally through undertaking at least a year’s retraining in a related engineering field.

Which of the following describes the type of unemployment that Martin has been affected by?

A Structural unemployment

B Cyclical unemployment

C Frictional unemployment

D Marginal unemployment (2 marks)

13 When an organisation carries out an environmental scan, it analyses which of the following?

A Strengths, weaknesses, opportunities and threats

B Political, economic, social and technological factors

C Strategic options and choice

D Inbound and outbound logistics (2 marks)

14 Which of the following is data protection legislation primarily designed to protect?

A All private individuals and corporate entities on whom only regulated data is held

B All private individuals on whom only regulated data is held

C All private individuals on whom any data is held

D All private individuals and corporate entities on whom any data is held (2 marks)

15 Which of the following types of new legislation would provide greater employment opportunities in large companies?

A New laws on health and safety

B New laws to prevent discrimination in the workplace

C New laws making it more difficult to dismiss employees unfairly

D New laws on higher compensation for employer breaches of employment contracts (2 marks)

16 The total level of demand in the economy is made up of consumption, ____________, government expenditure and net gains from international trade.

Which of the following correctly completes the sentence above.

A Savings B Taxation

C Investment (1 mark)



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17 Which set of environmental factors does a lobby group intend to directly influence?

A Political

B Technological

C Demographic

D Economic (2 marks)

18 Adrian is the manager of a call centre. Consultants have advised him that by reorganising his teams to complete highly specific tasks the call centre will be able to increase the throughput of work significantly, as well as increasing the number of sales calls made to the public. The reorganisation proposals are unpopular with many workers, who feel that their jobs will become tedious and repetitive.

The proposal to reorganise the work of the call centre utilises principles put forward by which school of management thought?

A The human relations school

B The empirical school

C The scientific school

D The administrative school (2 marks)

19 The original role of the accounting function was which one of the following?

A Providing management information

B Recording financial information

C Maintaining financial control

D Managing funds efficiently (2 marks)

20 Tax avoidance is a legal activity whilst tax evasion is an illegal activity.


A True

B False (1 mark)

21 The system used by a company to record sales and purchases is an example of which of the following?

A A transaction processing system.

B A management information system

C An office automation system

D A decision support system (2 marks)



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22 The implementation of a budgetary control system in a large organisation would be the responsibility of the internal auditor.


A True

B False (1 mark)

23 Which type of organisation would have the retail prices it charges to personal consumers subject to close scrutiny by a regulator?

A A multinational corporation

B A multi-divisional conglomerate

C A national utilities company

D A financial services provider (2 marks)

24 The central bank has announced a 2% increase in interest rates.

This decision has the most impact on which department in a large company?

A Auditing

B Treasury

C Financial accounting

D Production (2 marks)

25 The major purpose of the International Accounting Standards Board (IASB) is to ensure consistency in ___________.

Which two words complete this sentence?

A Financial control

B Corporate reporting

C External auditing (1 mark)

26 Farrah, Gordon, Helene and Ian work in the finance department of X Co, which has separate financial accounting and management accounting functions. Farrah deals with payroll, the purchase ledger and sales invoicing. Gordon’s duties involve inventory valuation, budgetary control and variance analysis. Helene deals with fraud prevention and detection, and internal control. Ian carries out risk assessments, investment appraisals and assists in project planning.

Which member of the department works in the financial accounts function?

A Farrah

B Gordon

C Helene

D Ian (2 marks)



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27 In an economic environment of high price inflation, those who owe money will gain and those who are owed money will lose.


A True

B False (1 mark)

28 To whom is the internal auditor primarily accountable?

A The directors of the company

B The company as a separate entity

C The shareholders of the company

D The employees of the company (2 marks)

29 Which one of the following is a DISADVANTAGE of a computerised accounting system over a manual accounting system?

A A computerised system is more time consuming to operate

B The operating costs of a computerised system are higher

C The computerised system is more costly to implement

D A computerised system is more error prone (2 marks)

30 Calum works in the internal audit department of Z Co. His duties involve the identification, evaluation and testing of internal controls. He produces reports to senior management on these activities.

For which type of audit is Calum responsible?

A Operational audit

B Transactions audit

C Social responsibility audit

D Systems audit (2 marks)

31 What is the primary responsibility of the external auditor?

A To verify all the financial transactions and supporting documentation of the client

B To ensure that the client’s financial statements are reasonably accurate and free from bias

C To report all financial irregularities to the shareholders of the client

D To ensure that all the client’s financial statements are prepared and submitted to the relevant authorities on time

(2 marks)



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32 Which of the following are substantive tests used for in the context of external audit of financial accounts?

A To establish whether a figure is correct

B To investigate why a figure is incorrect

C To investigate whether a figure should be included

D To establish why a figure is excluded (2 marks)

33 In the context of fraud, ‘teeming and lading’ is most likely to occur in which area of operation?

A Sales

B Quality control

C Advertising and promotion

D Despatch (2 marks)

34 In order to establish an effective internal control system that will minimise the prospect of fraud, which one of the following should be considered first?

A Recruitment policy and checks on new personnel.

B Identification of areas of potential risk.

C Devising of appropriate sanctions for inappropriate behaviour.

D Segregation of duties in critical areas (2 marks)

35 The leadership style that least acknowledges the contribution that subordinates have to make is ___________. Which word correctly completes this sentence?

A Authoritarian

B Autocratic

C Assertive (1 mark)

36 Renata has attended a leadership development course in which she experienced a self-analysis exercise using the Blake and Mouton managerial grid. The course leader informed her that the results suggested that Renata demonstrated a 9.1 leadership style, which suggested that she is highly focused on achieving the objectives of the team.

What other conclusion may be drawn in relation to Renata’s leadership style?

A She maximises the involvement of her team

B She demonstrates little concern for people in the team

C She balances the needs of the team with the need to complete the task.

D She favours psychologically close managersubordinate relationships (2 marks)



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37 Jackie leads an established team of six workers. In the last month, two have left to pursue alternative jobs and one has commenced maternity leave. Three new staff members have joined Jackie’s team.

Which one of Tuckman’s group stages will now occur?

A Norming

B Forming

C Performing

D Storming (2 marks)

38 Richard is a highly enthusiastic member of his team. An extrovert by nature, he is curious and communicative. He responds to new challenges positively and has a capacity for contacting people exploring anything new. However, his attention span is short and he tends to become less involved in a task once his initial interest has passed.

According to Belbin’s team roles theory, Richard displays the characteristics of which of the following?

A Monitor-evaluator

B Plant

C Resource-investigator

D Company worker (2 marks)

39 Which one of the following statements is correct in relation to monetary rewards in accordance with Herzberg’s Two-Factor theory?

A Pay increases are a powerful long-term motivator

B Inadequate monetary rewards are a powerful dissatisfier

C Monetary rewards are more important than non-monetary rewards

D Pay can never be used as a motivator (2 marks)

40 Which one of the following is a characteristic of a team as opposed to a group?

A Members agree with other members

B Members all have equal status

C Members arrive at decisions by consensus

D Members’ work in cooperation (2 marks)

41 According to Victor Vroom: Force (or motivation) = _________ x expectancy

Which of the following words completes Vroom’s equation.

A Needs

B Valence

C Opportunity (1 mark)



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42 According to Handy’s ‘shamrock’ organisation model, which one of the following is becoming progressively less important in contemporary organisations?

A The permanent, full-time work force

B The part-time temporary work force

C The role of independent sub-contractors

D The role of technical support functions (2 marks)

43 Which pattern of communication is the quickest way to send a message?

A The circle

B The chain

C The Y

D The wheel (2 marks)

44 Poor quality lateral communication will result in which of the following?

A Lack of direction

B Lack of coordination

C Lack of delegation

D Lack of control (2 marks)

45 Role playing exercises using video recording and playback would be most effective for which type of training?

A Development of selling skills

B Regulation and compliance

C Dissemination of technical knowledge

D Introduction of new processes or procedures (2 marks)

46 In the context of marketing, the ‘four P’s’ are price, place, promotion and __________.

Which word correctly completes this sentence?

A Processes

B Production

C Product (1 mark)



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47 In relation to employee selection, which type of testing is most appropriate for assessing the depth of knowledge of a candidate and the candidate’s ability to apply that knowledge?

A Intelligence testing

B Personality testing

C Competence testing

D Psychometric testing (2 marks)

48 A company has advertised for staff who must be at least 1.88 metres tall and have been in continuous full-time employment for at least five years.

Which of the following is the legal term for this unlawful practice?

A Direct discrimination

B Indirect discrimination

C Victimisation

D Implied discrimination. (2 marks)

49 Gloria has the responsibility to work with selected management trainees in her organisation. Her objective is to help the trainees over the medium to long-term with their personal career development. Supporting and encouraging them to fulfil their potential is an integral part of her role. Gloria has no involvement in the technical content of the trainee managers’ work.

Which of the following roles does Gloria fulfil?

A Buddy

B Counsellor

C Mentor

D Instructor (2 marks)

50 Gils is conducting an appraisal interview with his assistant Jill. He initially invites Jill to talk about the job, her aspirations, expectations and problems. He adopts a non-judgmental approach and offers suggestions and guidance.

This is an example of which approach to performance appraisal?

A Tell and sell approach

B Tell and listen approach

C Problem solving approach

D 360 degree approach (2 marks)

End of Question Paper



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Answers



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Pilot Paper F1 AnswersAccountant in Business

1 B 26 A

2 B 27 A

3 A 28 A

4 B 29 C

5 D 30 D

6 C 31 B

7 C 32 A

8 D 33 A

9 D 34 B

10 B 35 B

11 D 36 B

12 C 37 B

13 B 38 C

14 B 39 B

15 B 40 C

16 C 41 B

17 A 42 A

18 C 43 D

19 B 44 B

20 A 45 A

21 A 46 C

22 B 47 C

23 C 48 B

24 B 49 C

25 B 50 B

Rationale for answers

1 B The span of control is concerned with the number of subordinates reporting directly to one person. The scalar chain concept relates to the number of levels in the management structure. Therefore delayering causes a reduction in levels of management, with each manager having more subordinates.

2 B The basic principle that underlies marketing is that it is a management process that identifies and anticipates customer needs. The other distractors in the question refer to specific activities undertaken by a marketing function.

3 A Successive reports on corporate governance (Cadbury, Higgs, etc.) have highlighted the increasingly prominent role that non-executive directors should take in large organisations. This has become an established best practice.

4 B The task culture is appropriate where organisations can accommodate the flexibility required to adjust management and team structures to address the tasks that must be fulfilled. This is very common in large consultancy firms.

5 D A situation analysis is carried out when deciding on strategic objectives. The organisation will have already decided on its mission statement and goals.



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6 C Greater accountability at lower levels will lead to greater empowerment of those taking decisions and hence greater motivation and commitment, but will lead to less control and potentially more inconsistency.

7 C A manager is employed by the organisation and is therefore a constituent part of it. All the others are known as ‘connected’ stakeholders.

8 D The organisation must constantly be aware of the needs of stakeholders with a high level of power and the ability to influence the organisation profoundly. Management decisions must therefore take most account of the needs of this group of stakeholders.

9 D The primary aim of a public oversight board is to eliminate or minimise any actual or potential breaches of legislative requirements and to ensure compliance with regulations applicable to organisations within their terms of reference.

10 B The ageing population trend is caused by decreasing birth rate and a decreasing mortality rate.

11 D An increase in public expenditure should increase the level of consumer demand and hence the level of economic activity. This would also be achieved by other measures, such as a reduction in taxation or a reduction in interest rates.

12 C Frictional unemployment arises even when there are unfilled vacancies in the economy. It is because there is never a perfect match between the types of job available and their location with the skills of those seeking work and where they live.

13 B Any environmental scan analyses the external factors that affect an organisation, often categorised as political, economic, social and technological factors.

14 B Data protection legislation is formulated to protect the interests of data subjects who are private individuals. Not all data is regulated.

15 B Diversity policies are intended to reduce recruitment and selection policies and processes that enable discrimination to arise on the basis of gender, race, lifestyle and age, therefore such policies widen access of employment.

16 C The components of effective demand in the economy are consumer spending, investment by enterprises, central and local government expenditure and the net gains from international trade.

17 A Lobby groups are primarily established to influence political decision takers, such as the government and individual lawmakers.

18 C Scientific management principles consider the ways in which the factors of production (land, labour, capital and the entrepreneurial function) can be combined to maximise efficiency in production. The founding principles are based on the work of Frederick Winslow Taylor. The reorganisation of the call centre follows these principles.

19 B The accounting function originated from the need to record transactions completely and accurately. Other requirements naturally evolved from this at a later stage.

20 A Tax avoidance enables the individual or entity to apply legitimate rules to reduce the amount of tax payable. Tax evasion is always based on a deliberate intent not to pay tax that is lawfully due.

21 A A transaction processing system enables all sales and purchase transactions to be recorded by volume and category.

22 B The implementation of a budgetary control system would be the responsibility of the financial controller in many organisations. The internal auditor is not responsible for implementing systems, but is involved in monitoring the effectiveness of these systems.

23 C Public ultilities companies often have national or local monopolies and it is therefore necessary for their pricing structures to be subject to the scrutiny of a regulatory body.

24 B An interest rate is the price of money. The output of the treasury function is directly affected by the price of funds to the organisation and the returns that can be made from surplus funds.

25 B The IASB aims to promote consistency in corporate reporting by creating financial reporting standards to which major businesses are expected to adhere.

26 A Payroll, purchase ledger and sales invoicing are core functions within the responsibility of the financial accountant.

27 A Where price inflation is high the value of money reduces consistently over time. Those who owe money (debtors) therefore pay back less capital in real terms, and interest rates seldom adjust adequately to compensate for this.

28 A The internal auditor must have the right to report and is most accountable to the highest level of management (Directors) in the organisation. They must be free of influence from any individual manager, irrespective of seniority.



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29 C A computerised system can be costly to set up, though this disadvantage is essentially a short-term issue, as the running costs should offset this over time. A computer system should also reduce transaction processing time and the incidence of errors.

30 D Systems audit is concerned with the effectiveness of the system itself and not the processes, activities or values of the organisation.

31 B The external auditor has to ensure that the financial statements of the organisation truly reflect the activities of the business in the relevant accounting period. This assessment should be independent and therefore free from subjectivity on the part of the management of the client organisation.

32 A Substantive tests verify the accuracy of the financial information.

33 A Teeming and lading involves the theft of cash and is a type of fraud that is carried out by manipulating transactions. There would be most potential for this fraud within the sales department where cash may be received and remitted.

34 B All control systems should be based on an assessment of areas of risk prior to the consideration of other factors.

35 B The Ashridge model identifies four styles: autocratic; authoritarian; consultative; laissez-faire (or participative). The first of these is the least participative.

36 B The Blake and Mouton managerial grid enables leadership styles to be categorised on a nine point scale with reference to concern for people and concern for production.

37 B With the recent departures and the new staff joining the group, it will revert to the forming stage.

38 C The words ‘curious’ and ‘explore’ confirm that the individual is a resource-investigator.

39 B According to Herzberg, money is a hygiene factor (or dissatisfier). Although it is a powerful short-term motivator, it is questionable whether each individual increase in monetary reward will have a major long-term effect. According to Herzberg, ‘A reward once given becomes a right’.

40 C Consensus implies coming to decisions that are acceptable, paying due regard to the input of all members of the team.

41 B Victor Vroom defines ‘valence’ as the individual’s preference for a given outcome.

42 A Handy’s theory suggests that full-time, permanent workers are both expensive and inflexible in comparison with other elements of the shamrock. These other elements are part-time workers and independent contractors. A fourth leaf can be getting the customer to do the work.

43 D The wheel facilitates transmission of the message directly to all receivers and therefore transmits most quickly.

44 B Lateral communication is horizontal. Therefore, poor quality communication will result in poor coordination between team members.

45 A Role playing exercises are most effectively used for skills development, including sales training. Other common business applications include effective selection interviewing and performance appraisal interviewing.

46 C Product is the fourth component of the marketing mix. This term can also relate to a service as well as tangible products.

47 C Competence testing evaluates and validates knowledge and the ability to apply these to given situations. It assesses whether the individual can actually do specified tasks.

48 B A height restriction is a form of indirect discrimination on the grounds of gender. On average, men are taller than women.

49 C A mentor has a longer-term role than buddies, counsellors or instructors.

50 B The ‘tell and listen’ approach encourages input from the individual, promoting participation the process by the appraisee.



Managing People

PART 1

MONDAY 9 DECEMBER 2002

QUESTION PAPER

Time allowed 3 hours

This paper is divided into two sections

Section A This question is compulsory and MUST beanswered

Section B FOUR questions ONLY to be answered

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Section A – This ONE question is compulsory and MUST be attempted

1 The supermarket chain ‘Food is Us’ has decided to tackle prejudice and discrimination in all its stores by establishinga policy applicable to all its stores. As part of this, it is challenging all employees, especially managers, to examinetheir attitudes towards people of a different race, sex and ability.

The reasons for introducing the policy are threefold. Plainly there is legislation on discrimination which must becomplied with if the company is to avoid the risk of legal action against it. Also, from a marketing point of view, ‘Foodis Us’ wish to be identified with its customer base by reflecting the racial diversity of the environments in which itoperates. Most positively, the company wants to develop a workforce which can reflect sufficient diversity not only toavoid risk and to maintain its current market position, but also produce the initiatives which will develop the companyin a successful and sustained manner.

During the course of the coming year, all store employees will be expected to attend an awareness-raising trainingprogramme. This programme is intended to help employees explore their own attitudes and highlight any prejudicesthat these employees might have.

The personnel director, Anne Healey, told shop operatives ‘we want to make all our front line employees who dealclosely with the members of the public aware of any subconscious prejudices that they might have.’

‘It is very difficult to quantify the benefits of such specialist training, but it is one of our corporate principles that allpeople are treated fairly by employees, whether they are customers or work colleagues,’ she added.

Initially small groups of employees will attend sessions to raise awareness. These sessions, to be held in-store, willtake place during time already set aside for staff training and development.

The new policy is to be an extension of ‘Food is Us’ current equal opportunities scheme for managers. So far morethan 1500 managers have attended one day awareness-raising courses over the past 18 months.

The same course is to be revised and updated following feedback from previous participants and will also be extendedto include senior executives for the first time.

Required:

With reference to the above scenario:

(a) Equal opportunities encompass many features. For ‘Food is Us’

(i) What would be the main features of a sex discrimination policy? (10 marks)

(ii) What would be the main characteristics of a race relations policy? (6 marks)

(b) Why should an organisation like ‘Food is Us’ have an equal pay policy? (6 marks)

(c) What are the key points of a disability discrimination policy? (8 marks)

(d) What is the difference between an equal opportunities policy and a managing diversity initiative within anorganisation? (10 marks)

(40 marks)

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Section B – FOUR questions ONLY to be attempted

2 In seeking organisational success, some managers are adopting a ‘Theory Z’ approach to managing.

Required:

(a) Describe the characteristics of an organisation which uses a ‘Theory Z’ approach. (10 marks)

(b) Are the ideas of ‘Theory Z’ universally applicable? (5 marks)

(15 marks)

3 An organisation is recruiting additional staff and has decided to compare the benefits of appointing existing internalstaff with that of appointing external candidates.

Required:

(a) Define and describe the advantages of internal promotion. (5 marks)

(b) Define and describe the advantages of external recruitment. (5 marks)

(c) Describe three factors that should be taken into account when deciding upon whether to use recruitmentconsultants. (5 marks)

(15 marks)

4 Modern business organisations require trained employees, but individuals approach learning in different ways.

Required:

(a) Briefly describe the four stages in the experiential learning cycle. (4 marks)

(b) Describe the four learning styles identified by Honey and Mumford and their implications for training programmes. (11 marks)

(15 marks)

5 Motivation is fundamental to the task of management.

Required:

(a) What is meant by the term ‘process theory’ of motivation? (5 marks)

(b) What is meant by the ‘equity theory’ of motivation? (5 marks)

(c) Briefly describe the response an individual might have to feelings of negative inequity. (5 marks)

(15 marks)

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6 A key part of an accountant’s job is communicating information to others.

Required:

(a) Explain the importance of good communication. (5 marks)

(b) List five possible barriers to good communication. (5 marks)

(c) Describe how these barriers to communication can be overcome. (5 marks)

(15 marks)




Answers





Part 1 Examination – Paper 1.3Managing People December 2002 Answers

1 OverviewOrganisations and businesses are made up of many individuals all working together. These individuals have different attitudes,perceptions and learning experiences, which together with gender and personality differences can be either a good source fordeveloping creativity within an organisation or the root of an organisation’s problems.

Managers need to be aware of the many factors that affect individual differences and their own attitudes and assumptions. Theyshould recognise individual potential and harness talent to achieve the organisational goals.

(a) Equal Opportunities is a generic term which describes the belief that there should be an equal chance for all workers in anorganisation to apply and be selected for jobs, to be trained and promoted in employment and to have that employmentterminated fairly. Employers should only discriminate according to ability, experience and potential. All employment decisionsshould be based solely on a person’s ability to do the job in question; no consideration should be taken of a person’s sex,age, racial origin, disability or marital status.

(i) A Sex Discrimination Policy would look at equality in all areas of employment. Such areas would include the selectionprocess, opportunities for training, promotion, the provision of benefits and facilities and dismissal.

This policy would deem it wrong to make any form of discrimination within employment matters because of maritalstatus or sex.

The policy should cover the three main categories of sex discrimination: direct discrimination, indirect discrimination andvictimisation.

Direct discrimination incorporates the treating of a person on sexual or marital grounds less favourably than others wouldbe treated. One act of discrimination is sufficient and must be directed against an individual. Such as a clause in theemployment contract which states that it would be terminated on marriage.

Indirect discrimination consists in applying a term or condition applicable to both sexes but which one sex hasconsiderably smaller ability to comply with it than the other. Such as all applicants for a post must be six feet tall.

Victimisation is the discrimination against an individual who has brought proceedings or given evidence in another case.Such persons should not be treated less favourably than any other individual in the same circumstances.

(ii) A race relations policy would adopt the same approach as the sex discrimination policy. However this policy would lookat ‘racial grounds’ and ‘racial groups’. These phrases refer to colour, race, nationality or other ethnic or national origins.

The same three categories of direct and indirect discrimination and victimisation can be used.

(b) An equal pay policy means that a woman is entitled to identical pay with men and vice versa in respect of ‘like work’ or ‘workthat is rated as equivalent’ or ‘equal value’ to that of a man in the same employment.

‘Like work’ means work of a broadly similar nature where differences are not of a practical nature. Work rated as equivalentrequires equal pay. This is when work has been evaluated and graded to be equivalent as other work in relation to effort, skilland decision-making. Work of equal value is that of a woman’s to that of a man’s in the same organisation.

This should apply equally to men and women.

In addition to any statutory equal pay policy and indeed social responsibility toward its workforce, ‘Food is Us’ would benefitfrom an equal pay policy in other ways. It would avoid the costs and poor publicity that might arise from legal action broughtto enforce the law would be important for a business of this size and profile. In addtion it would project a caring image to it’sdiverse customer base and in terms of good people management, attract the best employees from a wider range of sourcesand with more diverse characteristics, and help build it’s customer base to include a wider constituency.

(c) A disability discrimination policy should contain the following key points:

– a disabled person is defined as a person who has a physical or mental impairment that has a substantial and long-term,more than 12 months, adverse effect on his/her ability to carry out normal day to day activities. Severe disfigurement isincluded, as are progressive conditions such as HIV even though the current effect may not be substantial.

– the effect includes mobility, manual dexterity, physical co-ordination, and lack of ability to lift or speak, hear, see,remember, concentrate, learn or understand or to perceive the risk of physical danger.

– the policy should also make it clear that it is wrong to discriminate against disabled people in the interviewing andselection process, for promotion, transfer or training and by dismissal.

– the employer has the duty to make reasonable adjustments to the physical features of the workplace where theyconstitute a hazard to the disabled person.



(d) Equal Opportunities and Managing DiversityThere is a new generation of managers within organisations who regard the quality of their people as the distinguishing featureof a successful organisation.

People are the single sustainable source of competitive advantage. Nurturing high performance through the development ofpeople is essential if organisations are to remain viable and competitive.

The promotion of equal opportunities has made good business sense. Equal opportunities has been promoted as a keycomponent of good management as well as being legally required, socially desirable and morally right.

Managing diversity expands the horizons beyond equality issues and builds on recognised approaches to equal opportunities.It adds new impetus to the development of equal opportunities and the creation of an environment in which enhancedcontributions from all employees will work to the advantage of business, people themselves and society more generally.

It offers an opportunity for organisations to develop a workforce to meet their business goals and to improve approaches tocustomer care.

Managing diversity is about having the right person for the job regardless of sex, colour or religion. Essentially the managementof diversity is a quality assurance approach. It helps identify hidden organisational barriers which make it more difficult forpeople who are perceived as being different from the majority of their colleagues to succeed and develop careers.

It also helps to effect cultural change and to create an environment in which people from all backgrounds can work togetherharmoniously. The management of diversity combats prejudice, stereotyping, harassment and undignified behaviour.

2 OverviewIn the search for organisational success, many business organisations have sought to adopt what appear to be successful Japanesemanagement methods. The leading theorist in this field is William Ouchi, who, drawing on earlier work, has described the Japaneseapproach to management as ‘Theory Z.’

(a) William Ouchi, a Japanese American, has concerned himself with comparing Japanese management techniques withAmerican. Ouchi uses the term ‘Theory Z’ for firms which use Japanese methods adapted to the Western system. Suchorganisations display certain characteristics:

– workers and managers trust their superiors

– a much longer time horizon is the norm; the idea of short-term profit is rejected in favour of long-term growth

– there is a team approach. Departments see their position within the organisation as a whole

– a caring, paternal management unhampered by unions, demarcation or professional prejudices

– generalised training. Managers learn the business, not just parts of it

– a flexible organisation structure

– collective values and company wide rewards

– slow, but known promotion

– lifelong employment.

(b) Theory Z requires an emphasis on interpersonal skills and group and team working; decisions are based on consensus, but,unlike in Japan from where the idea originates, responsibility remains with the individual.

Trust and informal relationships are the keystone of Theory Z organisations, even though the formal hierarchy andorganisational traditional structure remain.

It is often compared to Macgregor’s Theory Y approach in that it is seen as a more caring, sensitive and effective way ofachieving organisational success.

The theory is dependent upon the demands of the organisational situation. Some organisations, as a consequence of theirproduct or service do not provide a suitable environment for the use of motivational techniques associated with Theory Z.

Its strength lies in the fact that because of improved standards of education and changed social and political values, manyemployees have wider expectations from the workplace and expect to be consulted and to participate.

The application of Theory Z will therefore depend upon:

– the organisational culture, structure and objectives

– the procedures and practices involved in the organisation

– the technology, environment and product or service

– the organisation’s history and attitude

– the level of satisfaction that already exists in an individual’s task or role.



3 OverviewRecruitment of staff, especially if large numbers are involved, may be time consuming and a drain on resources. Additionally, theexpertise may not exist within the organisation, requiring the organisation to seek suitable candidates outside.

(a) Internal promotion describes the situation where an organisation has an explicit policy to promote from within and wherethere is a clear and transparent career structure. This is typical of many management and administrative staff and of certainsectors of the economy such as the public services.

The advantages of internal promotion:

– it acts as a source of motivation and provides good general morale amongst employees

– staff seeking promotion are known to the employer

– inexpensive in terms of time and money

– training and induction costs are minimised

– further training can be product and organisational specific

– the culture of the organisation is understood by the individual

– illustrates the organisation’s commitment to encouraging the staff

– the individual will already be familiar with the other members of the organisation.

(b) External recruitment describes the situation where the organisation decides to recruit someone from outside the organisationto fill a staff vacancy.

The advantages of external recruitment:

– may be essential if particular skills or expertise are not available within the organisation

– is necessary to restore staffing levels or where an organisation urgently needs new employees

– can bring new ideas and novel approaches to the organisation and to the specific task

– provide experience and work methods from other employers.

(c) Any organisation which is considering the use of external recruitment consultants would make its decision upon the following:

– the availability, level and appropriateness of expertise available within the organisation and its likely effectiveness

– the cost of using consultants against the cost involved in using the organisation’s own staff, recognising the level of thevacancy or vacancies against the consultant’s fee

– the particular expertise of the consultants and the appropriate experience with any particular specialised aspect of therecruitment process

– the level of expertise required of potential employees and therefore the appropriate knowledge required of the consultants

– the need for impartiality; this may be of particular importance with public sector appointments, organisations withparticular needs of security or impartiality or where it is felt that an external, objective assessment is required

– the time involved in the consultants needing to learn about the organisation, its requirements and the vacancy orvacancies

– if there is a ready supply of labour then consultants may be less useful, standard vacancies may be readily filled byadvertising or similar inexpensive means

– the views of internal staff as to the likely effect of using outside consultants

– what effect the use of consultants might have on the need to develop expertise within the organisation, the use ofconsultants will not assist with developing internal organisational expertise

– the likelihood of existing staff to have misgivings about the presence of, or recommendations of, outside consultantswhich can lead to mistrust and rejection of any candidates recruited by the consultants.



4 OverviewIndividuals are often reluctant to undertake further learning, especially in the workplace. It is important therefore that managersunderstand the way in which individuals actually learn, if any training programme is to be succesful.

(a) David Kolb suggests that learning is a series of steps based on learning from experience. He suggested that classroom learningis false and that actual learning comes from real life experiences. Learning is experiential and comes from ‘doing’, this ensuresthat learners actually solve problems.

Kolb’s experiential learning cycle

⇒⇒⇒⇒⇒⇒⇒⇒concrete experiences⇒⇒⇒⇒⇒⇒⇒⇒

testing the observationimplications of and

concepts in new situation reflection

⇐⇐⇐⇐⇐⇐⇐⇐formation of abstract⇐⇐⇐⇐⇐⇐⇐⇐concepts and generalisations

The first stage (concrete experiences) is the situation where the person is learning something new.

The second stage (observation and and reflection) is so called because the experience is being reviewed.

The third stage (concepts and generalisations) is when the experience has been accepted or rejected.

The fourth stage (concepts in new situations) is when the person calculates how and when to apply that which has been learned.

(b) HONEY AND MUMFORD have identified four learning styles.

Theorists are concerned with forming principles or ‘how does this relate to that?’ They think problems through in a vertical,step by step logical way and tend to be perfectionists who do not rest easy until things are tidy and fit into a rational scheme.Theorists are usually detached, analytical and dedicated to rational objectivity rather than anything subjective or ambiguous.Often known as CONCLUDING.

For them training must be:

– programmed and structured

– designed to allow time for analysis

– provided by others who share the same preference for ideas and analysis.

Reflectors are concerned with observation and reflection or ‘I would like time to think about this.’ They like to stand back andponder experiences and observe them from many different perspectives. They collect data, both first hand and from others,and prefer to think about it thoroughly before coming to any conclusion. Thoughtful people, they prefer to take back seats inmeetings and discussions. Often known as REVIEWING.

Reflectors need an observational approach to training

– need to work at their own pace

– do not find learning easy, especially if rushed

– conclusions are carefully thought out

– slow, cautious and non-participative.

Activists are concerned with actual experience ‘What’s new? I’m game for anything.’ They involve themselves fully andwithout bias in new experiences, are open minded, not sceptical and this tends to make them enthusiastic about anythingnew. They are gregarious people constantly involving themselves with others but, in so doing, they seek to centre all activitiesaround themselves. Often known as DOING.

Activists have a practical approach to training

– prefer practical problems, a dislike of theory

– insist on having hands on training

– enjoy participation and challenge

– flexible, optimistic

– tend not to prepare

– are easily bored.

10

⇓⇓⇓⇓

⇓⇓⇓⇓

⇓⇓⇓⇓

⇓⇓⇓⇓



Pragmatists are concerned with deliberate testing or ‘How can I apply this in practice?’ They are keen on trying out ideas,theories and techniques to see if they work in practice, positively search out new ideas and take the first opportunity toexperiment with applications. They are essentially practical, down to earth people who like making practical decisions andsolving problems. Often known as PLANNING.

Pragmatists need to see a direct value and link between training and real problems.

– enjoy learning new techniques and tasks

– good at finding improved ways of doing things

– aim to do things better

– impatient if new ideas are not reflected in practical applications.

5 OverviewMotivation is fundamental to the task of management. Many different theories have been presented on how management mightmotivate employees; Adams’ equity theory is an attempt to bring a more modern approach to the topic, based on the idea ofdistributive justice.

(a) The process theory of motivation asks the question ‘How can people be motivated?’

The process theory of motivation does not emphasise the need for fulfilment through work (as in the content theory), butconcentrates upon the processes through which individuals are motivated. They attempt to explain how individuals start,sustain and direct behaviour and assume that individuals are able to select their own goals and means of achieving thosegoals through a process of calculation. Process theory emphasises the importance of rewards, often financial.

(b) Equity theory focuses on the feelings of the individual and how fairly they feel they have been treated in comparison withtreatment received by others. It is sometimes referred to as exchange theory; individuals expect certain outcomes in exchangefor certain efforts and contribution to the organisation. When an individual perceives that his or her efforts are equal to othersand the rewards are the same, then equity exists. If the perception is that the efforts and rewards of one person are unequalto others, then there is inequity.

(c) When an individual has feelings of negative inequity, he or she can

– change the amount of effort put into the task

– change the nature or amount of reward required

– change the basis of comparison

– distort the comparisons psychologically

– leave the work situation or employer.

6 OverviewThe need for clear and concise communication and the consequences of poor communication must be understood by a professionwhich exists to provide information to others. Poor communication leads to ineffective control, poor co-ordination and managementfailure.

(a) Good communication is important because:

– individuals know what is expected of them

– better co-ordination within the organisation

– improves control of the organisation’s plans, procedures and staff

– the instructions of management are understood

– encourages group and team cohesiveness

– can lead to the reduction of stress

– bias, distortion or omission can be removed

– secrecy and misunderstanding is reduced or removed

– information is received by appropriate person

– conflict in the workplace is reduced



(b) Barriers to communication include:

– the personal background of the persons communicating

– language differences

– use of jargon

– different education levels

– ‘noise’; that is the message confused by extraneous matters

– the perception of individuals

– conflict within the organisation

– overload; that is too much information being communicated at once

– problems of distance

– basic misunderstanding

– accidental or deliberate distortion of information.

(c) Barriers to communication may be overcome by:

– consideration of the needs and understanding of recipients

– careful and clear reporting at all levels

– express information clearly and concisely

– not using jargon or abbreviations

– using more than one communications system

– encouraging dialogue rather than monologue

– ensuring as few links as possible in the communication chain

– ensuring feedback.



Part 1 Examination – Paper 1.3Managing People December 2002 Marking Scheme

1 (a) (i) Description of the main features of a sex discrimination policy Up to 10 marks

(ii) Description of the main characteristics of a race relations policy Up to 6 marks(Maximum for Part (a) 16 marks)

(b) Reasons for an equal pay policy Up to 6 marks(Maximum for Part (b) 6 marks)

(c) Description of key points of policy and means of discrimination Up to 8 marks(Maximum for Part (c) 8 marks)

(d) Discussion and recognition of the differences Up to 10 marks(Maximum for Part (d) 10 marks)

(Total for Question 40 marks)

2 (a) Description of Theory Z Up to 10 marks(One mark per characteristic) (Maximum for Part (a) 10 marks)

(b) Discussion on Theory Z Up to 5 marks(Maximum for Part (b) 5 marks)


3 (a) Description of the advantages of internal recruitment Up to 5 marks(Maximum for Part (a) 5 marks)

(b) Description of the advantages of external recruitment Up to 5 marks(Maximum for Part (b) 5 marks)

(c) Description of three factors Up to 5 marks(Maximum for Part (c) 5 marks)


4 (a) Brief description of the four stages in the experiential learning cycle Up to 4 marks(Maximum for Part (a) 4 marks)

(b) Description of the learning styles and their implications for training programmes Up to 11 marks(Maximum for Part (b) 11 marks)


5 (a) Description of process theory Up to 5 marks(Maximum for Part (a) 5 marks)

(b) Description of equity theory Up to 5 marks(Maximum for Part (b) 5 marks)

(c) Description of negative inequity Up to 5 marks(Maximum for Part (c) 5 marks)




6 (a) Explanation of the importance of good communication(One mark per factor) Up to 5 marks

(Maximum for Part (a) 5 marks)

(b) List five barriers to communication(One mark per barrier) Up to 5 marks

(Maximum for Part (b) 5 marks)

(c) Description of overcoming barriers(One mark per factor) Up to 5 marks

(Maximum for Part (c) 5 marks)




Managing People

PART 1

MONDAY 9 JUNE 2003

QUESTION PAPER



Section A This question is compulsory and MUST beanswered

Section B FOUR questions ONLY to be answered Pape

r 1.3




1 Sunshine Sweets is a manufacturer of additive free, organic children’s candies. With the rise in demand for additivefree children’s products, Sunshine Sweets has expanded its production capacity to almost double what it was twoyears ago and trebled the number of employees. Until recently the board of directors, made up of the two foundersEmma Watkind and Jenna Pain, took charge of day to day business. Both have now allowed management morefreedom than before.

Despite success in the market, as the company has grown some problems have begun to arise. Phil Short, the factorymanager has been with the company since the beginning and since the expansion in the number of employees, findscontrolling and communicating with such a large workforce difficult. He has resorted to pinning notices and memosof all kinds to notice boards, circulating his own reports to colleagues who should not be receiving them and refusingto organize meetings.

The newly appointed production manager Mark Mason is an engineer and deputy to Phil. He has found that he haslittle idea of what’s going on in the factory and is finding communication channels are non existent between themanagement team, supervisors and directors. The financial controller, Debbie Purple is equally frustrated and findscommunicating with anyone in the production area of the factory to be almost impossible.

In addition, the workforce, despite being well paid and trained, is fragmented and not working together. The rapidexpansion of the company has led to poor internal communication. As a consequence workers are suffering fromabsenteeism, low morale and confusion brought about by endless rumours about the future of the company. This isbecause the line supervisors are also unaware of what is going on and consequently are unable to communicatemanagement’s plans and objectives to the workforce, or to make management aware of the concerns of the workforce.

Required:

You are a consultant brought in by the directors to advise on the current problems. They believe the currentproblems stem from poor and mis-directed communication and think that establishing committees will improvecommunication. You have been asked to:

(a) Explain the need for good communication within any organisation. (5 marks)

(b) Identify five barriers to communication that might exist in Sunshine Sweets. (5 marks)

(c) Explain how the barriers identified in (b) can be overcome and identify the alternative methods ofcommunication available to the management. (10 marks)

(d) Explain to the management of Sunshine Sweets the importance of communication, the form it takes and thedirections in which it might flow in an organisation. (10 marks)

(e) Advise on the suitability of committees as methods of communication, outlining their usefulness andshortcomings. (10 marks)

(40 marks)




2 ‘Performance Management’ is defined as a means of achieving better results by understanding and managing overallorganisational performance.

Required:

Describe the five stages typically involved in the process of performance management.

(15 marks)

3 All organisations need to recruit new employees. An important step in the process is the selection interview.

Required:

(a) Explain the purpose of the selection interview. (4 marks)

(b) Explain the advantages and the disadvantages of:

(i) the interview by one person defined as the face to face interview; (6 marks)

(ii) the interview with many people defined as the panel interview. (5 marks)

(15 marks)

4 The health and safety of employees has become increasingly a matter for management.

Required:

(a) Briefly describe three hazards to health and safety that might be found in the workplace and demonstratewhy they are hazards. (5 marks)

(b) Briefly describe general policies that an organisation might take to avoid risks in the workplace. (10 marks)

(15 marks)

5 An organisation has decided to create a team oriented approach to business.

Required:

Describe Tuckman’s stages of team development.

(15 marks)



6 Your manager has been called upon to provide advice, guidance and counselling to employees.

Required:

(a) Explain what is meant by ‘counselling’ in the work place. (2 marks)

(b) Describe the skills a manager would require to fulfil the role of the counsellor. (7 marks)

(c) Briefly describe three advantages of counselling for the organisation. (6 marks)

(15 marks)




Answers





Part 1 Examination – Paper 1.3Managing People June 2003 Answers

1 Communication is a core activity of management and the accounting profession. It is the process of transmitting information fromone person to another, or from one organisation to another, or a combination of both.

Communication can be described as ‘the process by which ideas and information are transmitted to others for the purpose ofeffecting a desired result.’ Ideas and information are the content of the message communicated.

(a) The function of communication is to ensure that every member of the organisation knows what is expected of them and toallow an opportunity for feedback. Good communication in an organisation is critical in ensuring coordination and control ofindividuals, groups and departments.

The management of Sunshine Sweets need to understand that good communication ensures individuals know what isexpected of them, the correct information is received by the appropriate person and consequently there is co-ordination withinthe organisation. Good communication ensures that there is control of the organisation’s plans, procedures and theinstructions to staff by management are understood. Group and team cohesiveness is encouraged and stress can be reduced.

Many problems such as bias, distortion and omission can be reduced and removed, as can secrecy, rumour and innuendo,resulting in a reduction of conflict.

(b) The need for clear and concise communication and the consequences of poor communication should be understood by themanagement of Sunshine Sweets. Poor communication leads to ineffective control, poor co-ordination and managementfailure. Very often barriers to communication are not recognised as such. In Sunshine Sweets the directors, managers andstaff are using different phrases and expressions.

Barriers to communication are many; the personal background of the persons communicating, including language differences,the use of jargon, especially by different professions and different education levels as is often the case in factories and is thecase here. The concept of organisational ‘noise’ is often an issue. The message is confused by matters unrelated to the matterin hand, or there is overload, where too much information is being communicated. The different perception of individuals canlead to conflict within the organisation and thus to a communication barrier. The distance between those individualscommunicating with each other is often overlooked in the business environment. This often leads to distortion of informationand thus to misunderstanding between departments and individuals.

(c) Communication cannot take place if there are barriers to the communication process. These must be recognised and removed.

Barriers to communication can be overcome by a consideration of the needs and understanding of the message recipientswith careful and clear reporting. Information should be expressed clearly, avoiding jargon or abbreviations. The use of morethan one communications system can assist, as does the encouragement of dialogue rather than monologue and ensuringthat there are as few links as possible in the communication chain.

Communication can often be improved by identifying appropriate written, verbal or electronic methods. Meetings, interviewsand video conferencing involve personal, face to face communication.

Telephone, email, faxing and public address systems can be used where personal communication methods are difficult.Written communication is often the most suitable and clearest means of communication. This takes the form of memoranda,internal and external reports, forms, notices, house journals, rules and procedures, standard documentation, manuals andjob descriptions.

Visual communication is a powerful communication media. Charts, files, slides, videos or films provide an immediate andclear message.

Electronic means of communication are increasingly becoming more relevant. Electronic mail, document imaging, telex, fax,internet and email are instantaneous and provide clear communication possibilities.

(d) Communication is vital in all organisations and the communication process may take many forms. It is important thatmanagers and supervisors recognise the nature of channels of communication.

There are many forms of communication within an organisation, both formal and informal, but in the main, communicatedinformation often flows through quite clear channels and in defined directions. The direction of the three main informationflows are downwards, upwards and lateral.

Downwards communication (or superior-subordinate communication)

This form of communication is often the one most easily recognised. Its purpose is to give specific directives, provideinformation about procedures and practices or provide information about the task in hand. Control of subordinates andinformation about their performance is an important use of downward communication, as is the provision of information onorganisational and departmental objectives.

Upwards communication (or subordinate initiated communication) tends to be non directive in nature and generally takestwo forms, personal problems or suggestions or technical feedback as part of the organisation’s control system.

Lateral or horizontal communication is increasingly important and necessary in modern organisations, especially astraditional communication theory assumes only vertical communication. It can take the form of task co-ordination, such asdepartmental managers or supervisors meeting regularly, problem solving through departmental meetings to resolve an issue,and sharing ideas with other departments. Properly understood, this form of communication can resolve conflict andinterdepartmental friction.



(e) One traditional and well tried formal communication method is the establishment of a committee. Properly structured andunderstood, they are a useful method of communication. They can however be wasteful and time consuming if not structuredand managed effectively.

A committee is a group of people who meet for a particular purpose. Committees differ from other forms of communication,notably teams, because they are often a permanent part of the organisation’s structure and communication mechanism.

Committees make formal recommendations and are able to make decisions, or if need be, have the authority to delaydecisions if insufficient information is available. Committees provide inter departmental co-ordination, can relay decisions inthe form of briefings, represent different people, departments and disciplines and through their membership provideinformation and feedback to others.

Committees are often used as a task force or working party to solve problems by consultation, through synergy bybrainstorming in an effort to arrive at different or difficult decisions that cannot or will not be made by an individual.

If the workforce is fragmented, committees can be useful to bring co-ordination and the sharing of information and viewpoints.

2 Accountants as managers should develop and understand the process that links employee performance with organisational goalsand organisational success. However, before the process of performance management begins the organisation must itself havedeveloped a clear, planned strategy.

The process of performance management typically involves five stages:

Stage One – identify and describe the essential job functions and competencies and relate them to the objectives of the organisationas laid out in the corporate plan.

Stage Two – develop realistic and appropriate performance standards which will form the basis of a performance agreement.

This defines the expectations of the individual or team and includes the establishment of performance standards and indicators,together with the skills and competencies needed.

Stage Three – draw up an individually agreed performance and development plan. This details the action needed to improveperformance and involves identification of areas in need of development, agreement on performance and development and trainingrequirements.

Stage Four – performance is evaluated throughout the year, counselling and guidance is given as appropriate. Activity requirementsare updated and control action taken. Communicating constructive performance evaluation is important as is the giving andreceiving of feedback about performance.

Stage Five – the performance review. At an agreed time during the year, actual performance is measured against the agreedperformance plan. The meaningful part of stage five is the planning and providing of education and development opportunities tobuild upon and improve employee performance in the future.

3 Interviews are extensively used for the recruitment of new employees, but have been criticised for failing to identify appropriatecandidates suitable for the organisation. It is essential that professional accountants recognise both the problems and opportunitiesthat formal selection interviews present.

(a) The purpose of the selection interview is to find the best possible person for the position and who will fit into the organisation.Those conducting the interview must also ensure that the candidate clearly understands the job on offer, the associated careerprospects and that he or she feels that fair treatment has been provided throughout the selection process.

In addition, the interview also provides the opportunity to provide a good impression of the organisation, whether thecandidate has been successful or not.

(b) (i) The face to face interview is the most common form of interview. In this situation the candidate is interviewed by asingle representative of the employing organisation.

The advantages of such interviews are that they establish an understanding between the participants, are very costeffective for the organisation (as compared with panel interviews) and, because of the more personal nature, ensure thatcandidates feel comfortable.

The disadvantages however are that the selection relies on the views and impression of a single interviewer which canbe both subjective and biased. In addition, the interviewer may be selective in questioning and it is easier for thecandidate to hide weaknesses or lack of ability.

(ii) Panel interviews are often used for senior appointments and consist of two or more interviewers.

The advantages of such interviews are that they allow opinion and views to be shared amongst the panel. They havethe authority to reach immediate decisions and provide a more complete picture, hence the problems or any biasinherent in face to face interviews can be removed.

The disadvantages however are that they can be difficult to control. Interviewers may deviate or ask irrelevant questionsand they can be easily dominated by a strong personality who is able unduly to influence others. In addition, suchinterviews can often result in disagreement amongst the panel members.



4 Health and safety is an issue for all organisations. It is something that has only recently become a responsibility for management.Few managers and employees take safety seriously or indeed recognise the dangers in the workplace.

(a) All places of work contain hazards, including the accounts’ or finance office. Work and office based hazards can includeslippery and wet floors, especially after cleaning. Torn and worn floor coverings can lead to slips or falls.

In many offices, computer, telephone and electrical leads are left to hang loose over which employees may trip, as they coulddo over obstacles in corridors or stairways used for storage.

Poor lighting and unlit areas, especially corridors and stairs can also lead to trips, falls or collision with other objects.

Unmarked glass doors are particularly dangerous since not only could employees collide with them, but sufficient force couldcause breakages and significant injury. Filing cabinets which are top heavy, or left open can fall on to employees whilst thelifting of heavy items, papers and files can often lead to physical injury to the back. Perhaps the most dangerous of all is thedeliberate removal of safety guards or screens from machines or machines being operated by untrained staff, which can leadto very serious injury.

Other, less obvious physical hazards to employees are the danger from staff using drugs or abusing alcohol, for which theorganisation must have a disciplinary procedure. Computer screens and repetitive strain injury are other, less obvious dangersbut can be alleviated by screen covers, careful use of computers, breaks and exercise.

(b) Management should be aware that appropriate preventative action can reduce the risks in the workplace. These include:

Consultative participation – The most important and involves formal participation between management and employees (ortheir representatives) such that health and safety rules are relevant, understood, accepted and followed.

Safety rules and instructions – Should be formalised, issued to all employees and form part of any training programme.

Encourage safety consciousness – Ensures that safety forms a part of the culture, practice and duties of all the workforce, thatpride is taken in maintaining a good record of safety.

Materials handling – A major cause of accident and injury, even in an office environment. Management should ensure thatmaterials handling is minimised or designed for safe working and operation and that appropriate training and equipment isprovided.

Satisfactory safety standards –- Should be adopted so that everyone is aware of the standards required to maintain a safeworkplace and against which safety measures can be measured.

Adoption of an ongoing maintenance programme – So that temporary measures to keep equipment working do not prejudicesafety.

5 Much has been written about the need for teams and team working; they have to develop, mature and often eventually terminate.It is possible to identify distinct stages of development through which teams pass.

B W Tuckman has described these stages as:

Forming – the members meet and decide upon the purpose of the team and how it will operate. At this stage the team is no morethan a collection of individuals, finding out about one another and about the task, although objectives may be unclear. This stageis wasteful and time consuming, although essential since the prospective team members are not at this stage comfortable witheach other.

Storming – the phrase ‘storming’ is a deliberate reference to this stage which is characterised by conflict. Previous ideas, ideals,norms, attitudes and behaviour is challenged and often rejected. There is competition for the roles within the team. This is aconstructive and often fruitful stage with trust developing. If the individuals come successfully through this stage then a strongerteam will result.

Norming – the norms under which the team will operate are established. The team is settling down, members investigate ideasand test the reactions of the team as a whole and consequently, norms are established. In addition, it is at this stage that the teamestablishes patterns of behaviour, levels of trust and the methods by which decisions will be taken.

Performing – the team is now complete and able to perform to its full potential. Difficulties with team roles, individual conflictsand problems of adjustment have been resolved.

Dorming – has been suggested as a final and fifth stage. This is when the team becomes complacent, has lost interest in the taskand exists only for self preservation.

(Some students may refer to this final phase as ‘adjourning’ or ‘mourning.’)



6 Situations can arise in the workplace which require particular and careful people-centred skills. In such circumstances, professionalaccountants as managers may be called upon to act as counsellors. What constitutes counselling and the sensitive skills requiredin this process is often misunderstood.

(a) Counselling can be defined as ‘when a person agrees explicitly to offer time, advice, guidance and support to another person(or persons) temporarily in the role of client; in the organisational context, the client being a fellow employee or subordinate.’It may be used in giving career development advice and in coaching and mentoring staff.

(b) In assuming the role of the counsellor, the manager should be able to:

– help others to identify problems, issues and possible solutions to problems– adopt a passive role and avoid leading or suggesting– encourage reflection and discussion of past issues– allow the employee to lead and talk around issues– use open questions to help the employee explore ideas and feelings– maintain active listening and not interrupt the employee– speak only to clarify issues and elicit answers when appropriate

(c) For the organisation, the advantages of counselling are that:

– it provides a confidential service to the employee to discuss problems– allows human resources policy to be developed based upon an understanding of individual problems– provides a service to external agencies to assist with personal problems if appropriate– prevents under performance and increases commitment– demonstrates organisational commitment to the employees– demonstrates commitment for particular matters such as career development, redundancy or retirement



Part 1 Examination – Paper 1.3Managing People June 2003 Marking Scheme

1 (a) Brief description of those factors that ensure good communication Up to 5 marks(one mark each)


(b) Identification of five barriers Up to 5 marks(one mark each)


(c) Explanation of how communication barriers can be overcome Up to 5 marksIdentification of alternative communication methods Up to 5 marks


(d) Explanation of different channels Up to 10 marks(Maximum for Part (d) 10 marks)

(e) Outline of the usefulness of committees Up to 10 marks(Maximum for Part (e) 10 marks)


2 (a) Description of the five stages in ‘performance management’ Up to 15 marks(Three marks awarded for description of each of the five stages)


3 (a) Explanation of the purpose of the selection interview Up to 4 marks(Maximum for Part (a) 4 marks)

(b) Explanation of, and the advantages and the disadvantages

(i) the face to face interview Up to 6 marks

(ii) the panel interview Up to 5 marks(Maximum for Part (b) 11 marks)


4 (a) Brief description of any three hazards that might be found in the workplace Up to 5 marks(Maximum for Part (a) 5 marks)

(b) Brief description of preventative action Up to 10 marks(Maximum for Part (b) 10 marks)


5 Description of the five steps in team development Up to 15 marks(Three marks for each step, including ‘dorming’)




6 (a) Explanation of the term ‘counselling’ in the workplace Up to 2 marks(Maximum for Part (a) 2 marks)

(b) Explanation of the role of the manager as counsellor Up to 7 marks(Maximum for Part (b) 7 marks)

(c) Brief description of three advantages of counselling for the organisation Up to 6 marks)(Two marks for each of the advantages described) (Maximum for Part (c) 6 marks)




Managing People

PART 1


QUESTION PAPER



Section A This ONE question is compulsory and MUST beanswered


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1 A management consultancy has been employed by Swandiff Local Authority to examine the problems junior staffappear to be having in reaching the performance expected of all staff. The authority employs 8,500 staff in total with25 senior managers, 123 middle managers and some 2,560 employed at junior management level, mainlysupervisors. The authority has evolved into a traditional, bureaucratic, formal governmental type of organisationalstructure.

The management consultants decided to hold a series of meetings with all levels of management. Initially they foundthat the junior managers were unhappy with and sceptical about the value of the meetings; ‘we’ve seen it all before’was the main response. After the meetings, the consultants produced a report which identified three main problemareas.

Firstly, it became apparent that the level of morale for all staff was low. Lack of facilities, pressure of work andparticularly reductions in available funds appeared to be the main grievance. There appeared however to be a deeperproblem, that of mistrust between the staff as a whole and senior management. The mistrust appeared to be moreapparent between the senior management and supervisors. The reason for this was unclear.

The second problem appeared to be that the staff as a whole regarded the supervisors as a level of management poorat managing their sections, disregarding or ignoring work practices and performance standards. In response, thesupervisors said that their position in general was unclear; there were no clear lines of authority, command orresponsibility which allowed them to make decisions for their departments. Some supervisors simply regardedthemselves as menial and unrecognised, referring to funding shortages, unrealistic targets, little recognition of theirposition, no job descriptions and lack of training.

Job security was the third issue. Financial cutbacks and changes in service levels had led to rumours of substantialcutbacks in staff. Rumours were especially strong amongst the junior management. New, younger staff would bebetter trained to replace supervisors, more adaptable and better able to use computer systems and the latest availablesoftware packages.

In all, the problems had shown themselves in high labour turnover, which in addition to the problems already outlined,were blamed on low salaries, little opportunity for personal advancement and poor working conditions.

Required:

(a) Using Herzberg’s theory of motivation, explain the attitude of the supervisors. (15 marks)

(b) What aspects of organisational structure and culture could explain the supervisors’ attitude at Swandiff LocalAuthority? (10 marks)

(c) How could re-training supervisors overcome the problems identified in (a) and (b)? (15 marks)

(40 marks)




2 All managers need to understand which activities contribute to organisational success.

Required:

Briefly describe and discuss Tom Peters’ characteristics of successful business.

(15 marks)

3 You have been asked to provide guidelines on the structure and content of an advertisement to be used for the futurerecruitment of new staff.

Required:

(a) What factors need to be taken into account when preparing a recruitment advertisement? (5 marks)

(b) Briefly describe five factors which will influence the choice of advertising media. (10 marks)

(15 marks)

4 Training and development programmes form an important part of improving employee skills.

(a) Briefly explain what is meant by the following different types of training and development:

(i) Coaching; (5 marks)

(ii) Mentoring. (5 marks)

(b) Explain five criteria against which the effectiveness of training might generally be evaluated. (5 marks)

(15 marks)

5 All managers and supervisors need to understand the concept of motivation in the workplace.

Required:

(a) Explain the ‘content theory’ of motivation. (5 marks)

(b) Explain what is meant by MacGregor’s (5 marks)

(i) Theory X;

(ii) Theory Y. (5 marks)

(15 marks)



6 Communication is vital in all organisations but requires an understanding of appropriate structures andcommunication channels and patterns.

Required:

(a) Briefly explain the main purposes of the three main formal communication channels in an organisation:

(i) Downwards; (3 marks)

(ii) Upwards; (3 marks)

(iii) Lateral or horizontal. (3 marks)

(b) Briefly explain the characteristics and effectiveness of ANY THREE of the following communication patterns:

(i) The Circle;

(ii) The ‘Y’;

(iii) The Wheel;

(iv) The All Channel. (6 marks)

(15 marks)




Answers




1 (a) The case illustrates Herzberg’s motivation theory, one of the content theories of motivation. These attempt to explain thosefactors which motivate the individual by identifying and satisfying the individual’s needs, desires and the goals pursued tosatisfy these desires.

This theory of motivation is a two factor, content theory. It is based upon the idea that motivation factors can be separatedinto hygiene factors and motivation factors and is therefore often referred to as a ‘two need system.’ These two separate‘needs’ are the need to avoid unpleasantness and discomfort and, at the other end of the motivational scale, the need forpersonal development.

A shortage of those factors which positively encourage employees (motivating factors) will cause those employees to focus onother, non job related factors, the so called ‘hygiene’ factors. These are illustrated in the case with the attitude of thesupervisors to senior management and their concerns for example with shortages, targets, recognition and training and ‘we’veseen it all before’.

The most important part of this theory of motivation is that the main motivating factors are not in the environment but in theintrinsic value and satisfaction gained from the job itself. It follows therefore that the job itself must have challenge, scope forenrichment and be of interest to the job holder. This is not the case in the scenario; there appears to be little or no intrinsicsatisfaction from the supervisor’s work, illustrated by the supervisors regarding themselves and their role as menial andunrecognised and their lack of responsibility and decision making powers within their own departments.

Motivators (or ‘satisfiers’) are those factors directly concerned with the satisfaction gained from the job itself, the sense ofachievement, level of recognition, the intrinsic value felt of the job itself, level of responsibility, opportunities for advancementand the status provided by the job. Motivators lead to satisfaction because of the need for growth and a sense of selfachievement. Clearly, none of this applies to the supervisors at Swandiff.

A lack of motivators leads to over concentration on hygiene factors; that is those negative factors which can be seen andtherefore form the basis of complaint and concern.

Hygiene (or maintenance) factors lead to job dissatisfaction because of the need to avoid unpleasantness. They are so calledbecause they can in turn be avoided by the use of ‘hygienic’ methods i.e. they can be prevented. Attention to these hygienefactors prevents dissatisfaction but does not on its own provide motivation. Hygiene factors (or ‘dissatisfiers’) are concernedwith those factors associated with, but not directly a part of, the job itself. These can be detected in the scenario; salary andthe perceived differences with others, job security, working conditions, the quality of management, organisational policy andadministration and interpersonal relations.

Understanding Herzberg’s theory identifies the nature of intrinsic satisfaction that can be obtained from the work itself, drawsattention to job design and makes managers aware that problems of motivation may not necessarily be directly associatedwith the work.

(b) Organisations such as Swandiff Local Authority can be described by Handy’s Role Culture and the structure may also bedepicted as Mintzberg’s machine bureaucracy.

This is the traditional organisational structure and culture based on rules, regulations, rationality, logic and predictability andis invariably associated with government organisations. This structure is illustrated by the Greek temple, the roles andfunctions are the pillars with the management at the top. The organisation is efficient, its activities and culture are based onformality and procedures, employees are process and rule oriented, have clear roles and are not required to be innovative orimaginative. The environment is stable, predictable; this kind of organisation is slow to adapt or respond to change.

The structural and cultural implications of the scenario suggest that this organisation is in fact an inefficient bureaucracy. Itis poorly designed with a lack of job descriptions, unclear lines of authority, responsibilities and role definition within whichthe supervisors undertake their duties. In addition there is a lack of training and skill development appropriate to supervisors.The organisation is – paradoxically – insufficiently bureaucratic; the clarity of roles, procedures and position required for suchan organisation to operate do not exist. This lies at the heart of the organisation’s problems.

(c) The benefits for the supervisors can be identified by increased motivation accompanied by greater job satisfaction andimproved organisational performance. A matching of individual goals with those of the organisation, coupled with enhancedskills and abilities could in turn lead to enhanced promotion opportunities for the supervisors. Individual supervisors wouldfeel that he or she is of value to the organisation and acquire new skills which may be useful in the future.

Part of the training could lead to improved work methods, improved social skills and opportunities, the increasing of employeeknowledge and, in the longer term, increase the value of the organisation’s human assets. Most importantly from the scenario,it could lead to greater staff commitment, understanding and loyalty.



2 Success is a basic requirement of all business organisations. Although there are different approaches, the American writer ThomasJ Peters has suggested that successful businesses demonstrate eight particular cultural and organisational characteristics.

Peters focused on the process of organising and ignored many of the standard tools of management such as budgets and plans.He rejects ideas based on detailed forecasting and control, because these encourage a culture that rejects mistakes andconcentrates on negative measures.

He emphasises the importance of culture and values to organisational success and the desirability of developing a strong, commonorganisational culture, capable of motivating employees to unusual performance levels.

He suggested that successful (‘excellent’) businesses displayed particular characteristics.

A BIAS FOR ACTION. The encouragement of an informal, innovative, task oriented culture not based on formal systems. A systemof ‘management by wandering around’.

CLOSE TO THE CUSTOMER. A culture of listening to customers, being obsessed with customer service.

AUTONOMY AND ENTREPRENEURSHIP. The fostering of innovation and the use of product champions when practical risk takingby the organisation’s members is encouraged. An organic system of management is developed.

PRODUCTIVITY THROUGH PEOPLE. People in the organisation are seen as the basic source of quality. Staff are encouraged andpraised, a team approach is developed based on mutual trust.

HANDS ON, VALUE DRIVEN. The values of the business and its objectives are shared by all the organisation’s members.Management is involved at all levels and there is encouragement for doing the job well.

STICK TO THE KNITTING. The organisation grows through internally generated diversification. There is no movement into marketsor products outside the core business.

SIMPLE FORM, LEAN STAFF. There are no complicated organisational and management structures, simple product divisionalforms are used.

SIMULTANEOUS LOOSE-TIGHT PROPERTIES. Autonomy and responsibility is pushed down the organisation. However, corevalues such as the control of quality are centralised.

Such successful businesses understand the basics; thinking is encouraged, things are kept simple and chaos is tolerated in returnfor results. The firm’s core values are prized.

3 Organisations need to recruit the best possible individuals and a common means of recruitment is to place an advertisement. Thepurpose of the advertisement is to attract potential employees and act as a means of pre-selection.

(a) Writing a recruitment advertisement that is attractive and informative is no easy task. If it is poorly constructed then theappropriate potential employees will not be reached.

Preparing an advertisement requires:

Skill and attention to fulfil the objective of attraction and pre-selection and must be concise yet contain enough informationabout the job, rewards and specifications.

It must be constructed in such a way as to be attractive to the maximum potential employees and at the same time theadvertisement must present the organisation in a positive way.

It must be honest and not contain claims that are exaggerated and its contents must be relevant and appropriate.

(b) The types of organisation. Different vacancies will be advertised in different ways. Local businesses may advertise onlythrough local outlets while large international businesses may well look at a wider employment market.

The type of job. An organisation seeking a financial director may advertise in a professional journal or national newspaper.Advertisements for skilled factory workers would appear in the local press.

The cost. Advertising must be seen to be cost effective because advertising in any media is expensive. Government sponsoredemployment organisations are the cheapest way of advertising. Local newspapers are a useful medium and inexpensive.However, for senior appointments, the expense of trade and professional journals or international newspapers may be seento be worthwhile.

The readership, circulation and suitability of the chosen medium. The advertiser should strike a balance between advertisingto a large audience and yet reaching the target market of suitable candidates. For example, accountants read nationalnewspapers but would look for job advertisements in their own professional journals or magazines.

The frequency with which the organisation needs to recruit staff.



4 There are many forms of training, ranging from external courses to internal training, which in turn take many forms. Managersmust understand the different internal methods and be able to evaluate the effectiveness of training, something that can beexpensive and time consuming.

(a) (i) Coaching is where the trainee is supervised by an experienced individual who gives instruction on the task to beundertaken. It is a specialised form of training often which occurs when an employee has to have skills improved anddeepened quickly due to new technology, techniques or to replace other individuals. This form of training must beplanned, monitored and feedback provided to the trainee but is however expensive in terms of time. It may well beundertaken by the line manager of the person and will focus on special skills.

(ii) Mentoring is the use of an especially trained individual, or one with particular skills to provide guidance and directionto the trainee, who is often a new recruit possibly at a management level. This form of training also requires carefulplanning and feedback. It is usually not performed by the line manager of the subject and is more developmental andbroadly based than coaching.

(b) Evaluation of training is often seen as satisfying five criteria, which are:

Trainees’ reaction is the most important measure. Trainees must be asked whether they thought the training to be useful andrelevant. Although such questions and answers are likely to be ambiguous, they provide an instant response.

Trainee Learning measures the depth of the trainees’ learning through some form of test or method of evaluation of thetraining.

Change in job behaviour and application post-training is based on the study of the trainees after the completion of thetraining to measure and ensure that the training has had a beneficial effect on work practices.

Organisational changes due to learning requires an examination of whether the practices, behaviour and attitude of otherswho did not benefit from the training has changed.

Training and the impact on organisational objectives requires investigation as to whether the training provided has assistedwith the achievement of the organisation’s objectives. This is the ultimate test of the value of training.

(Students may recognise the evaluation criteria is based partly on the work of Hamblin)

5 The way in which managers’ duties are undertaken can significantly influence the satisfaction that employees derive from theirwork. An understanding of human relations skills are required in motivating people.

(a) Content theories ask the question ‘What are the things that motivate people?’

Content theories are sometimes called need theories and assume that human beings have a set of needs or desired outcomes,and that these needs can be satisfied through work. They focus on what arouses, sustains and regulates good, directedbehaviour, and what particular personal forces motivate people. Content theories assume that everyone responds tomotivating factors in the same way and that therefore there is one, best way to motivate everybody.

(b) Douglas MacGregor has suggested that the individual’s attitude to work can generally be divided into two categories, whichhe called Theory X and Theory Y. The style of management adopted will stem from the view taken as to how subordinatesbehave.

These two typologies are not discrete, they represent the two ends of a continuum.

(i) Theory X is based on traditional organisational thinking. It assumes that the average person is basically indolent andhas an inherent dislike of work which should be avoided at all costs. The individual lacks ambition, shuns responsibility,has no ambition and is resistant to change. This theory holds that the individual seeks only security and is driven solelyby self interest. It follows that because of this dislike of work, most have to be directed, controlled, organised or coerced.Management is based on fear and punishment and will have an exploitive or authoritarian style.

(ii) Theory Y is at the opposite end of the continuum and is in keeping with more modern thinking on motivation. It is basedon the idea that the goals of the individual and the organisation can be integrated. It holds that personal satisfaction canbe achieved through the workplace.

It assumes that for most people, work is as natural as rest or play and that individuals will exercise self discipline andself direction in helping to achieve the organisation’s objectives. For the average human being, physical and mental effortin work is perfectly natural and work is actively sought as a source of satisfaction. In addition, the average human beingwill seek and accept responsibility. Creativity and innovative thinking is widely distributed amongst the population as awhole and should be encouraged in the work situation. The intellectual ability of the average person is only partly usedand should therefore be encouraged as individuals are motivated by seeking self-achievement.

Control and punishment are not required and management therefore has to encourage and develop the individual.However, the operation of Theory Y is not easy, it can be frustrating, time consuming and sometimes regarded withsuspicion.



6 There are many forms of communication within an organisation, both formal and informal. In the main, communicated informationoften flows in quite clear directions. The direction of the three main information flows can be said to be downwards, upwards andlateral.

(a) Communicated information flows in three main directions.

Downwards. This form of communication is often the one most easily recognised. Its purpose is to give specific directives, toprovide information about procedures and practices and to provide information about the job. It also serves to tell subordinatesabout their performance and to provide information on organisation and departmental objectives.

Upwards communication tends to be non directive in nature and generally takes two forms: personal problems or suggestionsand/or technical feedback as part of the organisation’s control system.

Lateral or horizontal. Although traditional communication theory assumes only vertical communication, horizontalcommunications is becoming increasingly important and necessary. It takes the form of task co-ordination, such asdepartmental managers or supervisors meeting regularly, or problem solving where departmental members meet to resolvean issue and information sharing. It also describes inter-departmental sharing of ideas, or conflict resolution and to resolveinter-departmental friction. This corresponds to Foyol’s gang plank.

(b) Structural characteristics can limit group performance in the accomplishment of a task.

The Circle. Each member of the group communicates only with the person next to them. This method of communication isthe slowest, lacks co-ordination and proves slow in problem solving. Participants’ satisfaction is the lowest.

In the ‘Y,’ each member of the group communicates only through the central position of the network. The central figure obtainsthe greatest satisfaction although the remainder do not.

The Wheel. As with the ‘Y,’ members of the group communicate only through the central figure. This configuration solvesproblems the quickest, although this depends on the ability of the central figure, who obtains the greatest satisfaction. Thereis a mixed response from the remainder of the participants.

The All Channel allows communication in all directions. This is the best for solving complex problems with a high degree ofsatisfaction obtained by the participants. However, it becomes a wheel or disintegrates under pressure.

(Students may wish to illustrate these patterns with appropriate diagrams)




1 (a) Explanation of Herzberg’s Theory and relevance to the scenario. Up to 5 marks

Description of hygiene and motivator factors and relevance to the scenario. Up to 10 marks


(b) Recognition and description of role culture and structure.(5 marks for recognition and description of role culture and 5 marks for description of inefficient bureaucracy)

Up to 10 marks


(c) Advantages of training and relevance to the scenario. Up to 15 marks



2 Brief description of the thinking behind the characteristics (3 marks)

Description of any six individual characteristicsUp to 2 marks each to a maximum of 12 (12 marks)


3 (a) Description of factors Up to 5 marks


(b) Brief description of factors(2 marks for each of the five factors) Up to 10 marks



4 (a) (i) Brief description and understanding of coaching Up to 5 marks

(ii) Brief description and understanding of mentoring Up to 5 marks


(b) Explanation of evaluation(1 mark for each evaluation factor) Up to 5 marks



5 (a) Explanation of content theory Up to 5 marks


(b) (i) Explanation of Theory X Up to 5 marks

(ii) Explanation of Theory Y Up to 5 marks





6 (a) Description of the three communication flows(3 marks for each flow) Up to 9 marks


(b) Brief description of any three

(i) Brief description of the circle

(ii) Brief description of the ‘Y’

(iii) Brief description of the wheel

(iv) Brief description of all channel (2 marks each)





Managing People

PART 1

MONDAY 14 JUNE 2004

QUESTION PAPER





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1 Watkin Williams is a small accountancy practice based in a small British town. The two partners, Reg Watkin andOscar Williams are supported by a small team of qualified and part qualified accountants, technicians and supportstaff. The staff consists of five account managers who look after the main clients, a customer liaison manager (whoserole it is to look for new clients), four account managers who maintain contact with smaller and newer clients and asupport staff of five technicians and four secretaries. The practice is regarded as outgoing and constantly seekingexpansion.

The two partners feel that the practice has grown so much that it can no longer be managed in an informal way. RegWatkin has been studying management in his spare time and suggested to his partner that a staff appraisal schemeshould be introduced. He believes that rewards should be related to performance and wants to use the appraisalscheme as the basis for salary increases, annual bonuses and other incentives. Despite the office being very busy andthere being substantial demands on staff, the scheme has been active for the last six months, with appraisal interviewsbeing fitted in as time has become available.

The two partners are soon to discuss strategy and amongst other things, intend to discuss the salaries budget for thecoming year. However, feedback from the staff has identified a number of problems with the appraisal system. It hasbeen alleged that nobody on the staff knows what appraisals are for, whether they are simply a discussion or a sessionto ask for more money. Some members of staff regard appraisals as a waste of time and resources since their ownperformance depends on others’ work, how well they perform and the time they are given. The partners are rarelyavailable in the office and are therefore seen as out of touch. Staff members feel that appraisal interviews are a lowpriority for the partners, who hold them only at short notice when convenient to them. As a consequence, some staffsay nothing, others complain and in reality, there has been no follow up to the interviews. The staff now feel that aninformal system should be introduced since the formal system has failed because, in their view, it is inappropriate tothe organisation.

The partners are concerned about the views of the staff and have commissioned you to report on performanceappraisal systems.

Required:

(a) Briefly describe the three main components of an appraisal system. (3 marks)

(b) Outline the potential benefits of the appraisal from the viewpoint of:

(i) The employees at Watkin Williams; (5 marks)

(ii) The employer – Watkin Williams. (5 marks)

(c) Describe five main barriers to an effective appraisal system at Watkin Williams. (5 marks)

(d) Describe the documentation that should be prepared BEFORE an appraisal interview. (8 marks)

(e) Describe three approaches the partners of Watkin Williams might use for conducting the appraisal interviewand explain which method you think might be most beneficial and why. (9 marks)

(f) Explain what actions should be taken after the appraisal has been completed. (5 marks)

(40 marks)




2 Your manager has decided to introduce a system of Management by Objectives but is uncertain how to set about it.You have been asked to advise.

Required:

Describe the seven key stages that should be followed in a Management by Objectives programme.

(15 marks)

3 Selection testing has become a common method of seeking information about potential employees. Such testshowever are subject to some limitations.

Required:

(a) Briefly describe the purposes of:

(i) Intelligence Tests; (2 marks)

(ii) Aptitude Tests; (2 marks)

(iii) Competence Tests; (2 marks)

(iv) Personality Tests. (2 marks)

(b) Briefly outline four limitations of selection tests. (7 marks)

(15 marks)

4 Training programmes play an important part in improving employee skills and organisational performance.

Required:

(a) Briefly explain the advantages of training for the organisation. (5 marks)

(b) Briefly explain the advantages of training for the individual. (4 marks)

(c) Briefly explain what is meant by the following different types of training:

(i) Computer based; (2 marks)

(ii) Job rotation; (2 marks)

(iii) Work shadowing. (2 marks)

(15 marks)



5 Your manager has heard of Action Centred Leadership and wishes to involve the department in this idea. You havebeen asked to explain the idea to your colleagues.

Required:

(a) Briefly outline three skills a leader might possess. (6 marks)

(b) Briefly explain the term ‘action centred leadership’. (3 marks)

(c) Describe the three major goals of action centred leadership. (6 marks)

(15 marks)

6 The accounts manager does not understand what is meant by discipline within the employment context. You havebeen asked to explain.

Required:

(a) What do you understand is meant by the term ‘discipline’ in the employment context? (3 marks)

(b) Explain what is meant by the terms:

(i) positive discipline; (2 marks)

(ii) negative discipline. (2 marks)

(c) Provide four examples of situations where disciplinary action may be required. (8 marks)

(15 marks)




Answers






1 Appraisal systems are often misunderstood and mismanaged, as in this scenario. Appraisals are central to human resource andperformance management and understanding their role, objectives, benefits and purpose is extremely important. Carefulpreparation and understanding are required if the appraisal process is to be successful and worthwhile.

(a) Appraisal systems exist to improve organisational efficiency by ensuring that individuals perform to the best of their ability,develop their potential and earn appropriate reward. This leads in turn to improved organisational performance.

To successfully implement a performance appraisal system, the partners need to understand the basic and inter-linkedpurposes of an appraisal system, which are threefold:

To measure the extent to which an individual may be awarded a salary or pay increase compared with his or her peers; theReward review component. The staff at Watkin Williams believe that this is why they should have appraisals.

To identify training needs and plan follow up training and development to enable the individual better to assist the organisationto achieve its objectives; the Performance review component. This is the view of the partner Reg Watkin who wants to useappraisal to link salaries with performance.

To aid the individual’s career development and succession by attempting to predict the type and level of work that theindividual is likely to be capable of in the future; the Potential review component. This approach needs some thought atWatkin Williams, with the apparent unclear understanding by all concerned at Watkin Williams of the wider purpose ofappraisals.

(b) (i) Each employee at Watkin Williams could benefit by establishing what he or she has to do to further the objectives of theorganisation and thus feel more involved. The appraisal establishes key results which the individual needs to achievewithin a set period of time whilst also comparing the individual’s performance against a set and established standard.The original reason for introducing appraisals at Watkin Williams was to provide a basis for remuneration whilst alsoidentifying training and development needs. Both are essential in an expanding and changing organisation.

(ii) For Watkin Williams, the employer, the benefits are the identification of candidates for promotion and areas for individualimprovement. It will provide a basis for human resource planning, monitoring human resource selection processesagainst results and perhaps most importantly from the case details, improve communication.

(c) The appraisal system should be a well constructed scheme which is fair to both the individual and the organisation. Thescenario highlights a number of barriers which exist at the moment within Watkin Williams.

Chat – the appraisal interview is seen as an informal, loosely constructed and badly managed dialogue without purpose. Itis this that some of the staff wish to introduce, but it is as much of a danger to the appraisal process as any of the others.This has been the approach at Watkin Williams and goes some way to explaining the misunderstanding and mistrust of theappraisal scheme.

Bureaucracy – a system based on forms devised solely to satisfy the employer. Thus its main purpose, that of identifyingindividual and organisation performance and improvement, is forgotten. This is not the case at Watkin Williams at themoment, but is seen by some staff members as a reason to reject appraisals.

Confrontation due to lack of agreement on performance, badly explained or subjective feedback, performance based on recentevents or disagreement on longer term activities. In an expanding organisation such as Watkin Williams where performancecriteria are unclear, this is a serious barrier.

Judgement – the appraisal is seen as a one sided process based entirely on the manager’s or owner’s perspective. This is adanger at Watkin Williams, some staff members are concerned that their appraisals will be based partly on the activities ofothers.

Unfinished Business – the appraisal is not seen as part of a continuing process of performance management. Without clearperformance criteria at Watkin Williams, this threatens to be yet another barrier.

An Annual Event – the appraisal is seen as simply an event which sets targets annually that quickly become out of date.Appraisals are best held more frequently. This again could be viewed negatively by the staff at Watkin Williams.

(d) A formal appraisal interview is an integral part of appraisal and performance management. The appraiser should be theimmediate supervisor but in the case of the scenario it is one of the partners. Prior to the appraisal interview, the appraiserundertaking the interview should have prepared the following documentation.

The required documents for an appraisal are the job description, a statement of performance or appraisal form and a recordbook highlighting the employee’s performance. In addition, peer assessment and if appropriate, comments from clients andcustomers (as might well be the case in the scenario) and the self assessment form issued to the employee prior to theinterview (which apparently is not the case in the scenario) might be useful. Finally, the human resources file on the employeewhich should contain notes on the employee’s general personal attitude, including discipline issues such as timekeeping andattendance should be available to the appraiser.



(e) The partner’s interview might be based on one of three approaches: The Tell and Sell Method. The partner explains to theappraisee (the staff member) how the assessment is to be undertaken. The next step is to gain acceptance from the appraiseeof the evaluation and improvement plan. Human resource skills are important with this approach in order for the partner tobe able to provide constructive criticism and to motivate the appraisee. This has been the way the partners have approachedthe appraisal interview thus far.

The Tell and Listen Method. The partner invites the appraisee to respond to the way that the interview is to be conducted.This approach requires counselling skills and encouragement to allow the appraisee fully to participate in the interview. Aparticular feature of this approach is feedback from the appraisee and with the current misunderstanding and mistrust, mightbe an appropriate approach.

The Problem Solving Method. Here the partner takes a more helpful approach and concentrates on the work problems of theappraisee. The appraisee is encouraged to think through his or her problems and to provide their own intrinsic motivation.This might be the more appropriate approach in the current atmosphere at Watkin Williams.

(f) After the interview, the partner and appraisee should agree on actions to be undertaken.

There needs to be an agreement between the partner and appraisee on the results of the appraisal and an agreed action planon improvement of the appraisee. This has not happened to date. There will have to be assistance and monitoring of theappraisee in the future with arrangements for feedback on future progress.

2 Setting objectives for individual managers and departments can be difficult, the more so when individual and departmentalobjectives must correspond with and follow the overall objectives of the organisation.

A Management by Objectives programme follows a logical and coherent structure:

Stage 1. Define the main areas of responsibility and performance for each individual and department as appropriate. This isoften laid out as targets or schedules and is based on a measure of efficiency. Secondary targets are also included.

Stage 2. Define and agree principal areas of activity where failure to succeed would damage the organisation’s overallobjectives.

Stage 3. Define and agree means of measurement. This stage involves two separate issues. The first is to establish the criteriaby which performance will be measured. The second establishes the point at which the measurement of objectivesconstitutes effective performance for which reward may be received.

Stage 4. Define and agree some key result areas. These are normally no more than one or two critical areas.

Stage 5. Decide upon an action plan and appropriate review periods. This will be itemised and contain details of actionrequired by the individual, the department and the management. Barriers will be identified and actions planned toremove them.

Stage 6. The annual performance review will be established at which time results will be compared to the principal areas notedat step one and success in achieving objectives assessed.

Stage 7. Objectives are revised and a new sequence of objectives begins.

3 The selection of the correct employee is fundamental to the success of an organisation. In the first instance, the application formobtains information about a potential employee simply and in a number of different ways. However, the application form is oftenpoorly constructed, asks the wrong questions or fails in its function to assist managers and supervisors. These shortcomings canbe overcome through the use of selection tests.

(a) Intelligence Tests are constructed to test a candidates general intellectual ability, his or her individual memory capability,speed of thought and to test problem solving skills, sometimes through setting of a specific, time limited test.

Aptitude Tests are designed to measure an individual’s potential, measure mechanical ability, understanding and dexterity,clerical ability and assess physical dexterity.

Competence Tests have one real aim, to measure the depth of knowledge learned by the individual in the past.

Personality Tests are designed to assess the skill of the individual in dealing with people, the individual’s leadership skills,personal emotional stability and the individual’s ambition and motivation.

(b) Despite the claims of the supporters of such tests, they are not foolproof and are subject to severe limitations. It is almostimpossible to exclude bias from such tests, different genders and cultures may for example, perform better in some aspectsthan others. Despite claims that tests have in-built checks, it is possible for some candidates to guess at least some of theanswers. The test conditions are by definition artificial and there can often be no direct relationship between a person’s ability,the test results and the ability to do the job required of the individual. It is possible to do well in such tests through coachingand practice. They are non predictive and are expensive to administer. Interpretation of test results is a skilled task and thisadds to the cost and overall expense of recruitment.



4 There are many forms of training, ranging from detailed, expensive external courses, to internal, relatively inexpensive forms oftraining. Accountants as managers need to understand the benefits of training and to have an understanding of different internaltraining methods.

(a) The organisational benefits can be identified in a number of ways. The most important is the establishment of an appropriatelytrained workforce, increasing employee knowledge whilst at the same time lowering waste and scrap costs and increasingproductivity. In addition, training can improve upon those skills which already exist, leading to improved job performance andproviding a pool of skills upon which the organisation can draw. Further benefits include greater staff commitment, which inturn should require less need for detailed supervision whilst also increasing the value of the organisation’s human resources.Finally, training can aid recruitment and selection planning.

(b) For the individual, the benefits can be identified by increased motivation – the individual feels that he or she is of value tothe organisation – greater job satisfaction, enhanced promotion opportunities and an opportunity to increase remuneration.Training leads to improved work methods and thus enhanced skills and abilities can be a means of matching individual goalswith those of the organisation. Improved social skills and opportunities can also benefit the individual and such newlyacquired skills could be useful in the long term.

(c) (i) Computer based training (CBT) sometimes referred to as Computer Assisted Learning (CAL) is a user friendly, hands onself learning system that allows the trainee to learn at his or her own pace sometimes without direct supervision. Thistype of training often involves the use of interactive pre-set programmes.

(ii) Job rotation is aimed at developing employees’ wider experience and skills within the organisation. The trainee is movedin succession from one job to another, thus broadening experience and making him or her aware of the range of skillsrequired within the organisation.

(iii) Work shadowing is often used to encourage employees with potential for promotion and is a straightforward, inexpensivetraining method. It involves one employee ‘shadowing’ or assisting another – often a senior – to learn the skills involvedat a higher level.

5 A contemporary approach to leadership is to regard it as being made up of a number of different skills. This has been extended toan approach known as ‘action centred leadership.’ This recognises that leadership occurs within three inter-related variables: thetask, the group and individual needs.

(a) Leadership requires a number of different skills, including the ability to inspire confidence and trust, an understanding of thetask in hand and the ability to employ employees’ abilities and skills but also to recognise weaknesses. Clear and concisecommunication skills are important, as is the ability to make and explain decisions. Fundamental to communication skills isthe ability to motivate both the individual and the team or group as a whole and perhaps most important of all, to create andsustain a sense of encouragement and direction to meet the objectives of the organisation.

(b) Action centred leadership is a process made up of three inter-related variables: the needs of the task, the needs of the groupand the needs of the individual. The leader needs to balance the relative importance of all three variables, however thesituation requires that relative importance be given to identifying and acting upon the immediate priority.

(c) Action centred leadership requires recognition of three variables: task, group and individual needs.

Task needs are setting objectives for the team or group, planning and initiating the task or tasks, allocating responsibilities,setting and verifying performance standards and establishing a control system.

Group needs involve team building so that mutual support and understanding is achieved, developing appropriateindependence within the group, setting agreed standards, providing training as required and appropriate and, mostimportantly, establishing communication and information channels.

The leader needs to recognise the development of individual needs and achievement, motivation by recognition, theencouragement of creativity, the delegation as far as possible of authority to encourage group support and to attend to anyproblems or grievances.



6 Understanding the problems of discipline in the employment situation are important management skills. Whilst it is important thataccountants as managers have a knowledge of motivation techniques, it is equally important that they are also able to recognisethe other side of motivation, that of discipline.

(a) Discipline may be defined as a condition in the organisation in which there is orderliness, and in which organisationalmembers behave sensibly and conduct themselves in accordance with standards of behaviour acceptable to the organisation’smembers, goals and objectives.

(b) (i) Discipline may be positive in that the employee is encouraged to conform to good practices and acceptable behaviourby being given training, and by the presence and consistent application of rules and procedures.

(ii) Discipline may, on the other hand, be negative. This is the situation where actions may be taken to ensure that theorganisation’s members behave in an appropriate way. Such actions include punishment, deterrent or reformativemeasures.

(c) There are many occasions in the workplace when disciplinary situations arise. Management research indicates that some aremore frequent than others.

A disciplinary situation arises when absenteeism is seen as excessive and taken without good cause. Poor timekeeping interms of start or finish at work or at breaks is a common disciplinary issue, as is poor work performance such as high errorrates and inferior work, customer complaints or inaccuracy; especially important issues in the accounting context. At a morepersonal level, negative attitudes toward work which influence the individual’s own work or the attitude or work of others,such as noncompliance or deliberate violation of procedures, rules and regulations are another cause for concern.Inappropriate appearance or behaviour is a special issue in accounting as is disregard of safety procedures and, moreprofoundly, insubordination.

Increasingly, managers are faced with disciplinary problems which do not occur within the workplace. This is a difficult matter,but if conduct away from the workplace impacts upon the employee’s conduct in work, then management must deal with theproblem within organisational disciplinary procedures.




1 (a) Brief description of the three main components of an appraisal system.(One mark each) up to 3 marks

(Maximum for part (a) 3 marks)

(b) Outline of the benefits of the appraisal from the viewpoint of:

(i) The employees at Watkin Williams up to 5 marks

(ii) The employer – Watkin Williams up to 5 marks(Maximum for part (b) 10 marks)

(c) Description of five main barriers to an effective appraisal up to 5 marks(One mark each)

(Maximum for part (c) 5 marks)

(d) Description of the documentation up to 8 marks(One mark each)

(Maximum for part (d) 8 marks)

(e) Description of three approaches to take in conducting the appraisal interview up to 9 marks(Three marks each)

(Maximum for part (e) 9 marks)

(f) Explanation of follow up action up to 5 marks(Maximum for part (f) 5 marks)


2 Description of seven stages in a Management by Objectives programme. up to 15 marks(Two marks per stage with one available for using examples)

(15 marks)


3 (a) Brief description of:

(i) Intelligence Tests up to 2 marks

(ii) Aptitude Tests up to 2 marks

(iii) Competence Tests up to 2 marks

(iv) Personality Tests up to 2 marks(One mark for each characteristic)


(b) Brief outline of limitations of tests up to 7 marks(One mark for each limitation)

(Maximum for part (b) 7 marks)


4 (a) Brief explanation of the advantages for the organisation up to 5 marks(Maximum for part (a) 5 marks)

(b) Brief explanation of the advantages for the individual up to 4 marks(Maximum for part (b) 4 marks)

(c) Brief explanation of types of training

(i) Computer based up to 2 marks

(ii) Job rotation up to 2 marks

(iii) Work shadowing up to 2 marks(Maximum for part (c) 6 marks)




5 (a) Brief outline of three skills of a leader (Two marks each) up to 6 marks


(b) Brief explanation of action centred leadership(One mark each) up to 3 marks


(c) Description of the three major goals up to 6 marks(Two marks each)



6 (a) Description of ‘discipline’ up to 3 marks(Maximum for part (a) 3 marks)

(b) (i) Description of positive discipline up to 2 marks

(ii) Description of negative discipline up to 2 marks(Maximum for part (b) 4 marks)

(c) Examples of disciplinary situations up to 8 marks(Two marks for each example)





Managing People

PART 1


QUESTION PAPER





Do not open this paper until instructed by the supervisor

This question paper must not be removed from the examinationhall


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1 ‘Rockers’ is a small recording studio established four years ago which is owned and operated by a group of twelvepeople. The group has been working together amicably and successfully for a considerable time.

Neville has been in charge since the beginning and his leadership is valued by all the team’s members and the supportgiven to him by Olivia, the second in command. Outgoing and extrovert, she often elaborates on Neville’s instructionsand deals on his behalf with group members’ queries, especially when he is away on business.

Much of the success of the group has been due to Peter, who is creative at problem solving, and Rosalind, who hasan encyclopedic knowledge of sources of supply and information. Another group member, Quentin, is an expert oncharts and records and Suki is invaluable at sorting out disagreements and keeping everyone cheerful. The remainingmembers of the group also fulfil roles which are acceptable to themselves and others.

Recently, Olivia resigned for family reasons. As the workload has been increasing, Neville took it upon himself torecruit four new people to the group. Neville now finds that various members of the original group complain to himabout what they are expected to do and about other people’s failings. Peter and Rosalind have been particularly helpfulto Neville, but have had several serious arguments between themselves and with others.

Required:

(a) Describe Tuckman’s stages of group development and explain the stage the group was at before and afterOlivia’s departure. (15 marks)

(b) Until the changes, the group worked well together as a team with each member fulfilling a role as identifiedby Belbin.

(i) What role did Olivia play and what are its characteristics? (5 marks)

(ii) Name and describe the team roles fulfilled by Neville, Peter, Rosalind, Quentin and Suki. (10 marks)

(iii) What problems might arise as a consequence of Olivia’s departure and consequently the team role sheplayed? (5 marks)

(c) Recommend how Neville should ensure that the group reverts to its former cohesiveness. (5 marks)

(40 marks)




2 All organisations develop a culture which influences the way an organisation’s employees behave.

Required:

(a) Define and describe what is meant by the term ‘culture’ in the organisational context. (3 marks)

(b) Describe Handy’s four cultural types. (12 marks)

(15 marks)

3 You have been asked to carry out a job analysis of the employees in the accounts department.

Required:

(a) Briefly explain what is meant by the term ‘job analysis’. (3 marks)

(b) Briefly explain the four stages involved in carrying out a job analysis. (4 marks)

(c) Identify and briefly explain the information you would expect to collect during the job analysis investigation.(8 marks)

(15 marks)

4 Your employer has realised that a formal recruitment and selection process is required. You have been asked to advise.

Required:

Identify and explain the stages involved in recruitment and selection.

(15 marks)

5 There is often confusion between the meanings of ‘job enrichment’, ‘job enlargement’ and ‘job rotation’.

Required:

(a) Define and explain the term ‘job enrichment’. (5 marks)

(b) Define and explain the term ‘job enlargement’. (5 marks)

(c) Define and explain the term ‘job rotation’. (5 marks)

(15 marks)



6 Employee discipline is important in achieving organisational success.

Required:

(a) What is meant by the term ‘discipline’ in the organisational context? (3 marks)

(b) Describe in the correct order, the six steps involved in a formal disciplinary procedure. (12 marks)

(15 marks)




Answers






1 (a) Teams have to develop, mature and often eventually terminate. According to Tuckman, it is possible to identify distinct stagesof development through which teams pass. There are five distinct stages.

The Forming stage is when the members meet and decide upon the purpose of the team and how it will operate. At this stagethe team is no more than a collection of individuals, finding out about one another and about the task even though theobjectives may be unclear. This stage is wasteful and time consuming, although essential since the prospective team membersare not at this stage comfortable with each other.

The second stage is Storming. The phrase ‘storming’ is a deliberate reference to a stage of development characterised byconflict. Previous ideas, ideals, norms, attitudes and behaviours are challenged and often rejected. There is competition forthe roles within the team. This is a constructive and often fruitful stage with trust developing. If the individuals comesuccessfully through this stage then a stronger team will result.

The Norming stage is when the routines under which the team will operate are established. The team is settling down,members investigate ideas and test the reactions of the team as a whole and consequently, norms are established. In addition,it is at this stage that the team establishes patterns of behaviour, levels of trust and the methods by which decisions will betaken.

By the time the Performing stage is reached, the team is now complete and able to perform to its full potential. Difficultieswith team roles, individual conflicts and problems of adjustment have been resolved.

In practice, many teams reach the Dorming stage, which has been suggested as a final and fifth stage, when the teambecomes complacent, has lost interest in the task and exists only for self preservation.

The group of people who established ‘Rockers’ would by now have gone through the development stages, the scenario clearlysuggesting that each group member had settled into and fulfilled their roles with the group having reached the performingstage. However, with Olivia’s departure and the recruitment of four new members – which represents a substantial expansionin numbers – the group would have been taken back to the forming and storming stage; a collection of individuals needingto resolve uncertainties and conflict.

(b) (i) Olivia was the Shaper. The scenario describes a dominant, extrovert personality. Task driven to the point of passion; aforce for action, her role is central and will be missed.

(ii) Neville is the Coordinator. He provides the leadership, coordination and is good at working with others. A balanced anddisciplined person.

Peter is the Monitor Evaluator/Innovator, not creative but analytical in approach, examines ideas and finds errors andflaws. However, he may be tactless and aloof.

Rosalind is the Resource Investigator. Popular, social, extrovert and relaxed, she is a useful source of new contacts butnot ideas. She needs to be used.

Quentin is the Company Worker. The administrator and organiser who turns ideas into jobs and tasks. He is efficient,trustworthy but unexcitable.

Suki is the Team Worker. The ‘silent’ member. Concerned with the maintenance of the team, supportive and popularwith the team but noticed only when absent.

(iii) All team members are a matter of balance. Belbin suggests that all team members have a dual role; the primary role isthat of the skill or function, usually the individual’s professional role. The secondary role is the team role based on theindividual’s preferred behaviour pattern.

Olivia was the Shaper, thus the team role which involves driving the team and ensuring that action takes place ismissing. Her departure might well have a damaging effect on the group and the success of ‘Rockers’.

In addition, the scenario does not describe remaining roles, the Plant (the introvert, intellectually gifted and imaginativeindividual who acts as a source of ideas) and the Completer/Finisher who pushes the team to meet targets, sees urgencyand follow through as important and enjoys details. The person who fulfils this role is not popular with the team. Theseroles were probably secondary (Belbin suggests that it is possible to have more than one team role) but suggest, alongwith Olivia’s departure and the recruitment of four new members, that roles will need to be re-addressed.

(c) Neville will need to re-build the team, identify and fill the vacant team roles and allow the team to develop through the stagesof team development. He needs to understand that all team roles are required for a successful team in addition to the teammembers bringing their own disciplines and skills. It is possible that all will have more than one team role skill, although onewill be greater. The team role itself may change, depending on the task and the number of team members otherwise there isthe danger of team imbalance. Often the supposed benefits of teamwork do not materialise due to incompatible personalitiesor too many individuals with the same views and backgrounds. Teams can be destructive if not properly constructed.



2 Organisational culture reflects deep set beliefs about the way that work should be organised, authority exercised and the degree offormality, rules and procedures which are appropriate.

(a) Mullins describes organisational culture as

‘the collection of traditions, values, policies, beliefs and attitudes that constitute a pervasive context for everything we do andthink in an organisation.’

Schwartz and Davies describe organisational culture as

‘a pattern of beliefs and expectations shared by the organisation’s members and which produce norms which powerfully shapethe behaviour of individuals and groups in the organisation.’

Many other writers describe culture simply as

‘the way we do things around here.’

(b) Charles Handy has suggested that organisations can, in general terms, be described in terms of the relationship between theirstructure and culture. Students should recognise that the descriptions of Handy are of the organisational structure and therelationship with culture.

The Power/Club Culture:In this culture, power and influence come from the centre of the structure, often drawn as a web. Decisions are made by thecentre and radiated outwards, the further from the centre of the organisation, the weaker the power and influence. Thisorganisation is not rigidly structured, is capable of rapid change but relies very much on the influence and ability of the centre.

Typical of small or new organisations, employees need to be adaptable, understand each other and the organisation’sobjectives; personal contact and like minded individuals typifies this culture.

The Role Culture:This is the traditional and typical organisational structure and culture based on rules, regulations, rationality, logic andpredictability. This structure is illustrated by a Greek temple. The roles and functions are the pillars with the management atthe top. The organisation is efficient, its activities and therefore culture are based on formality and procedures. Employees areprocess oriented, have clear roles and are not required to be innovative or imaginative. The environment is stable, predictable;this kind of organisation is slow to adapt or respond to change.

The Task Culture:The task culture is often illustrated as a matrix or net structure. The culture is task and team based. The objective for theorganisation and its members is clear, to complete the task. There is no leader. The individuals employed are experts orspecialists formed together to fulfil a results based task. Job satisfaction is high, there is strong group identity and theseorganisations are flexible, changing and expensive.

The Person or Existentialist Culture:This structure is illustrated as a bounded cluster. This type of structure is totally different from the others. It exists to fulfil theneeds and ambitions of the individuals within it, rather than driven by any external task. These organisations exhibitinterdepence and collaboration. Management is difficult because of individual expertise and the nature of rewards.

3 Job analysis is an important component of the descriptive documents that relate to the job itself. Before any other job related taskssuch as a job description or performance measures can be undertaken, the job must be carefully analysed and described. Jobanalysis precedes a number of other people management issues.

(a) Job analysis is

‘the process of collecting, analysing and setting out information about the content of jobs in order to provide the basis for ajob description and data for recruitment, training, job evaluation and performance management. Job analysis concentrateson what job holders are expected to do.’

(b) A job analysis must be carried out systematically in order to obtain the facts about the job and consists of four stages.

Stage One is when all the necessary relevant and appropriate documentation is obtained.

Stage Two involves asking managers about the purpose and more general aspects of the job, its main activities and theresponsibilities involved.

Stage Three asks the same questions of the job holders as perceptions may differ between individuals.

Stage Four is the final stage and requires observation of the job holders at work.

(c) The information collected during a job analysis investigation is made up of eight items.

The Purpose is the reason for the activity. Access to and provision of information has to be seen within the context of thewhole organisation.

The Content identifies the tasks that are expected to be undertaken.



The Accountabilities are the results for which the job holder is responsible, much as in the same way as the task.

The Performance Criteria are the measurements by which the job holder is judged and may be based on task related matterssuch as work accuracy.

The Responsibility item indicates the importance of the job and may be measured in terms of decision making responsibility,accountability, discretion and programmed or unpredictable routines.

The Organisational factors which are taken into account identify how the job holder reports and whether by line managementor function.

The Developmental factors include promotion and career prospects of the job whilst the Environmental factors examine theworking conditions, security and safety needs and requirements.

4 Recruitment of suitable staff is fundamental to organisational success. Too often the recruitment and selection of staff is treated asa secondary, unimportant activity. It is important therefore that a formal procedure exists to ensure that recruitment and selectionis successful.

Recruitment and SelectionThis needs to be an organised and systematic process aimed at matching the correct candidate to the post. It begins with therecognition of a vacancy or vacancies and should be based upon the requirements detailed in the human resource plan.

Recruitment and selection must follow a logical process.

A Job DescriptionThis specifies the job content and the relevance of the vacancy to other posts. It must include the main duties and responsibilitiesof the post holder, the major tasks and limits to authority. It also details the job title, location and relationships with others in theorganisation.

The Person SpecificationThis is often overlooked during the recruitment process, the assumption being that the job description suffices. The personspecification identifies personal characteristics such as physical attributes, aptitude, team approach, aspirations, intelligence,communication skills, personal disposition, experience and generally ‘fitting in’ to the organisation.

A Job AdvertisementMost organisations place an advertisement in an appropriate newspaper, professional journal or job centre. It is important torecognise that this advertisement must be targeted effectively and be attractive to a potential employee. It should includeinformation about the vacancy (salary, work details, qualifications) and the organisation.

An Application FormThis is an effective and efficient way of gathering information about candidates and a mechanism for comparison. The form hasto be designed to be completed in a logical manner so that the correct information is provided. It must include questions on age,qualifications and experience. It must also reflect the vacancy and the culture of the organisation. For example, if the vacancy isin the caring professions, then questions might be asked about social interests and family background. Space should always beprovided for the candidate to write about his or herself and the reasons why he or she is attracted to the vacancy. The applicationform allows early screening of candidates and should result in the compiling of a short list of potential employees to be called forinterview.

The InterviewThis follows the screening of the application forms. It is the most important stage in the process. It provides an opportunity toassess the candidate and for the candidate to learn more about the organisation. The interview process must have clear goals. Itshould aim to find the best person for the job, allow the candidate to understand what is expected of him or her and ensure thatthe candidate feels that he or she has been fairly and equitably treated.

The interview should be structured so that all candidates are put at ease, are asked the same questions and allowed the sameopportunities to ask questions. A scoring system is sometimes adopted to ensure that some form of rational comparison isundertaken.

Selection TestingThis is a scientific method for assessing a candidate’s ability. The techniques of selection testing are widely used throughoutbusiness and industry and may include tests on intelligence, aptitude, proficiency and personality. They are, however, expensiveto administer and may only be used for senior appointments.

Offer ProcedureIf an offer is to be made to the successful candidate, references are taken up and an offer letter prepared together with therequirement of acceptance by the successful candidate. Upon acceptance, a formal contract is prepared by the employer.Unsuccessful candidates should also be notified and thanked for their interest.



5 Motivation can take many forms. Widening and deepening interest in the organisation and its many tasks and departments is atried and tested method for motivating employees.

(a) Job enrichment (sometimes referred to as ‘vertical job enlargement’) is a planned, deliberate action to build greaterresponsibility, breadth and challenge into the work of the individual. The emphasis is on the individual rather than theorganisation, team or group.

It provides the job holder with the responsibility for decision making of a higher order and provides greater freedom to decidehow the job or task should be undertaken. It encourages participation in planning procedures, allows for regular feedbackbetween the employee and management, whilst improving the individual’s understanding of the whole process.

(b) Job enlargement (sometimes referred to as ‘horizontal job enlargement’) is aimed at widening the content of jobs by increasingthe number of operations in which the job holder is involved.

It reduces the level of repetition and dullness whilst providing a horizontal extension to the job. In addition, it reduces bothmonotony and boredom through the provision of a greater level of challenge and incentive.

(c) Job rotation is the planned rotation of staff between jobs and tasks to reduce monotony and boredom and provide freshopportunities and challenges. It takes two forms.

The first is where job rotation takes the form of a transfer to another job after some time in an existing job and the introductionof another individual to the job being vacated.

Alternatively, it can be used as a form of training where individuals are moved through different jobs to learn new skills. Thesemoves are regular and the employee is invariably regarded as a trainee.

6 Professional accountants require a knowledge of motivation techniques. However, it is equally important to recognise the other sideof motivation, that of discipline and of the need for formal procedures when dealing with disciplinary issues.

(a) Discipline is achieved when the organisation’s members behave and conduct themselves in accordance with standards ofbehaviour acceptable to the organisation‘s rules, goals and objectives.

Discipline may be positive. The employee is encouraged to conform to good practices and acceptable behaviour throughtraining and by the presence and consistent application of rules and procedures.

Discipline may also be negative. This is the situation where actions may be taken to ensure that the organisation’s membersbehave in an appropriate way. Such actions include punishment, deterrent or reformative measures.

(b) Proper disciplinary procedures are essential for harmonious relationships between management and staff and are increasinglya legal requirement.

A six step approach to disciplinary actions is recommended.

The Informal TalkIf the disciplinary matter is of a minor nature and the individual has had until this occasion a good record, then an informalmeeting can often resolve the issue.

Reprimand or Oral WarningHere the manager draws the attention of the employee to unsatisfactory behaviour, a repeat of which could lead to formaldisciplinary proceedings.

Official or Written WarningA written warning is a serious matter. It draws the attention of the offending employee to a serious breach of conduct andremains a recorded document on the employee’s employment history.

Such written documents can be used as evidence if further action is taken, including dismissal.

Suspension or Lay-offIf an offence is of a serious enough nature, if the employee has repeated an earlier offence, or if there have been repeatedproblems then an employee may be suspended from work for a period of time without pay.

DemotionThis is a situation where an employee is demoted to a lower salary or position level within an organisation. This is a veryserious step to take and can be regarded as a form of internal dismissal. This course of action can have negative repercussionsbecause the employee concerned will feel dissatisfied and such feelings can affect their own work and that of others.

DismissalThis is the ultimate disciplinary measure and should be used only in the most extreme cases. As with demotion, the dismissalof a staff member can lead to wider dissatisfaction amongst the employees.

Although a procedure is a legal requirement in some circumstances, this procedure may vary in detail between organisationsand countries.

Candidates may also note that such formal procedures are required by law in the UK and other countries.




1 (a) Description of Tuckman’s stages of group development and explanation of the group stages.(Two marks per development stage;two marks for identifying the team stage prior to Olivia’s departure;three marks for identifying the stages the group reverted to after her departure– forming and storming)

(Up to a maximum for part (a) 15 marks)

(b) (i) Olivia’s role and its characteristics. (Up to 5 marks)

(ii) Description of the team roles.(Two marks each) (Up to 10 marks)

(iii) Description of problems after Olivia’s departure. (Up to 5 marks)(Maximum for part (b) 20 marks)

(c) Recommendation on reversion to former cohesiveness. (Up to 5 marks)(Maximum for part (c) 5 marks)

(Total for question 40 marks)

2 (a) Explanation of what is meant by the term ‘culture’ in the organisational context.(Maximum for part (a) 3 marks)

(b) Description of Handy’s four cultural types.(Up to four marks for each)

(Maximum for part (b) 12 marks)(Total for question 15 marks)

3 (a) Brief description of the term ‘job analysis’.(Maximum for part (a) 3 marks)

(b) Brief description and discussion of the four stages.(One mark per stage)


(c) Description and discussion on the information expected.(One mark per item for the eight items)

(Maximum for part (c) 8 marks)(Total for question 15 marks)

4 The seven stages in recruitment and selection are:

A Job Description(Up to three marks)

The Person Specification(Up to three marks)

The Job Advertisement(Up to three marks)

The Application Form(Up to three marks)

The Interview(Up to three marks)

Selection Testing(Up to three marks)

Offer Procedure(Up to three marks)

Up to three marks possible for each stage up to a maximum for the entire quesition of 15 marks.(Total for question 15 marks)



5 (a) Definition and explanation of the term ‘job enrichment’.(Maximum for part (a) 5 marks)

(b) Definition and explanation of the term ‘job enlargement’.(Maximum for part (b) 5 marks)

(c) Definition and explanation of the term ‘job rotation’.(Maximum for part (c) 5 marks)


6 (a) Definition of discipline.(One mark)

Recognition and description of positive discipline.(One mark)

Recognition and decription of negative discipline.(One mark)


(b) Description in correct order, of the six steps involved in a formal disciplinary procedure.(Up to two marks per step, one for the correct position in the order and one for thedescription)

(Maximum for part (b) 12 marks)(Total for question 15 marks)



Managing People

PART 1


QUESTION PAPER








Pape

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1 At Williams, Watkins and McDonald investment fund managers, there is a strong emphasis on democraticmanagement. The employees are grouped into teams with a team leader. The team is given sales targets to meet butis allowed to decide how it will go about meeting those targets. The team decides how it will organise work in its ownarea (i.e. the physical layout of the area). Alongside each team area there are meeting areas with chairs grouped ina circle. In this area are charts showing the performance of each team. The teams meet to discuss what is going welland what is going badly and to suggest ideas for improvement. The team then has the responsibility for putting theirideas into practice.

Dean Thomas is responsible for the blue team. He is the most recently recruited team leader in the organisation. Theblue team has an average age of 26 years. Dean Thomas enjoys bringing his team together every morning for a dailybriefing. He gives out the tasks for the day and allows his team to pick and choose their tasks and to discuss anyproblems with each other before they actually settle down to begin work. Dean tends to be more concerned withmaintaining good relations with his team than sometimes with achieving targets. The blue team like Dean’s approach,where they can make their own decisions, work on their own and are one of the most cohesive teams in theorganisation if not as successful as they should be.

Lee Allen is the green team leader. He is the most experienced team leader. His team of eight members have all beenat Williams, Watkins and McDonald for many years. Lee Allen knows that the company policy strongly prefers a morerelaxed style of leadership. However, Lee comes from a disciplined background and quite often needs to give ordersand demand results when deadlines need to be met or the team appears likely to fail to meet its target. The greenteam has the best success rate but also the highest absentee rate of all six teams working for Williams, Watkins andMcDonald.

Emma Jenkins, a green team member, has complained about Lee Allen’s style of leadership and has asked to bemoved to the blue team. She feels that she has less input into decision making than she would like.

Required:

(a) (i) Identify the four broad styles of leadership described in Tannenbaum and Schmidt’s continuum ofmanagement style. (12 marks)

(ii) Briefly describe the four factors upon which the appropriate management style depends. (4 marks)

(b) Using the Tannenbaum and Schmidt model and appropriate evidence from the scenario, identify which ofthe broad styles of leadership Dean Thomas and Lee Allen demonstrate at Williams, Watkins and McDonald.

(8 marks)

(c) Explain action centred leadership and justify why Lee Allen’s approach can be described as action centred.(8 marks)

(d) Using Feidler’s contingency theory of leadership, explain the possible reasons for Emma Jenkins’dissatisfaction as a green team member and her desire to become a blue team member. (8 marks)

(40 marks)




2 Research has shown that management involves more than simply giving orders or commands.

Required:

(a) Briefly describe Mintzberg’s view of the process of management. (3 marks)

(b) From Mintzberg’s research, identify and describe the three key roles which management appears to fulfil.(12 marks)

(15 marks)

3 Recruitment and selection of potential employees involves a number of different steps, one of which may be thecompletion of an application form.

Required:

(a) Describe the purpose of the application form. (5 marks)

(b) Describe the kind of information that the application form should obtain. (10 marks)

(15 marks)

4 You have been asked to prepare a personal development plan for new employees.

Required:

Explain the three steps involved in the preparation of a personal development plan.

(15 marks)

5 Reward systems should involve more than assuming that financial rewards are appropriate in all circumstances.

Required:

(a) Explain what is meant by ‘intrinsic’ rewards. (3 marks)

(b) Explain what is meant by ‘extrinsic’ rewards. (3 marks)

(c) Describe any six types of extrinsic reward. (9 marks)

(15 marks)



6 Conflict in the workplace is a common feature of organisational and business life.

Required:

(a) Under what circumstances can a conflict be constructive? (5 marks)

(b) Under what circumstances can a conflict be destructive? (5 marks)

(c) Briefly describe five causes of conflict. (5 marks)

(15 marks)




Answers






1 Leaders accept responsibility for the outcomes of the groups or teams they lead. While leaders have to exercise authority, the wayin which this is done (the style of leadership) might vary. It is generally accepted that a leader’s style of leading can affect themotivation, efficiency and effectiveness of the employees. Some leadership theories present two basic choices – a task centred onone hand and an employee centred on the other. Tannenbaum and Schmidt suggest that leadership style is best described as acontinuum, the appropriate style depending on the characteristics of the leader, the subordinates and of the situation. Adair looksat three basic needs that result in differing leadership styles. Known as action centred leadership, it is a process made up of threeinter-related variables, the needs of the task, the group and the individual. The leader needs to balance the relative importance ofall three variables. However the situation requires that emphasis is given to identifying and acting upon the immediate priority.

(a) (i) Tannenbaum and Schmidt leadership theory is based on a continuum that suggests a range of styles between autocraticand democratic, but without any suggestion that one style is right or wrong.

DICTATORIALThe manager makes decisions and enforces them – TELLS

The manager sells his decisions to subordinates – TELLS AND SELLS

AUTOCRATICThe manager suggests own ideas and asks for comments – TELLS AND TALKS

The manager suggests sketched ideas, asks for comments and amends the ideas as a result – CONSULTS

DEMOCRATICThe manager presents a problem, asks for ideas, makes a decision from ideas – INVOLVES

The manager allows subordinates to discuss and decides – DELEGATES

LAISSEZ-FAIREThe manager allows the subordinates to act as they wish within specified limits – ABDICATES

(ii) Tannenbaum and Schmidt’s continuum recognises that the appropriate style depends upon four factors:

the leaderpersonality, values, natural style

the subordinatestheir knowledge, experience, attitude

the situationforces such as the organisational culture, time pressures, levels of authority and responsibility

the environmentecology pressures, education changes, union power base

(b) Dean Thomas is democratic to laissez-faire. He presents tasks, allows discussion and room for ideas from his team members.He involves them and gives them relative freedom to carry out their tasks. He fluctuates along the Tannenbaum and Schmidtcontinuum.

Lee Allen is group orientated at times, but the need of the task takes priority and then he becomes dictatorial. He obviouslyconsiders the situation and his management style differs depending on the highest priority, how he perceives the capabilityof his subordinates, and the environmental pressure he faces.

(c) A contemporary approach to leadership is to regard it as being made up of a number of different skills. This has been extendedto the approach known as ‘action centred leadership’. This recognises that leadership occurs within three inter-relatedvariables: the task, group and individual needs.

Action centred leadership is a process made up of three inter-related variables, the needs of the task, the group and theindividual. The leader needs to balance the relative importance of all three variables; however the situation requires thatemphasis be given to identifying and acting upon the immediate priority.

Task needs are setting objectives for the team or group, planning and initiating the task or tasks, allocating responsibilities,setting and verifying performance standards and establishing a control system.

Group needs involve team building so that mutual support and understanding is achieved, developing appropriateindependence within the group, setting of agreed standards, provision of training as required and appropriate and, mostimportantly, establishing communication and information channels.

The individual needs recognise the development of individual needs and achievement, motivation by recognition, theencouragement of creativity, the delegation as far as possible of authority to encourage group support and to attend to anyproblems or grievances.

Lee Allen displays some of the characteristics of action centred leadership, although he is clearly more task driven especiallywhen deadlines have to be met. He needs to develop greater skills in group and individual needs to address the absenteeproblem.



(d) Feidler suggests that there is a relationship between styles of leadership and team or group effectiveness. He distinguishesbetween two types of leader: psychologically close or psychologically distant managers.

Psychologically close managers prefer informal relationships with staff, are often over concerned with good human relationsand favour informal contacts rather than formal meetings. Feidler also described this approach as relationship oriented. It isclear from the scenario that this is Dean Thomas’s approach.

Psychologically distant managers prefer formal relationships, tend to be reserved in their personal relationships with staff(although conversely often have good inter-personal skills) and prefer formal meetings. This approach Feidler also called taskoriented. This is Lee Allen’s approach.

Emma Jenkins is uncomfortable with the formal, distant approach taken by Lee Allen. She would be more comfortable andproductive in the more informal approach taken by Dean Thomas.

2 The management task is not straightforward, nor as prescriptive, as much management teaching suggests. The work of HenryMintzberg is particularly interesting because it points to the fractious nature of the task.

(a) Henry Mintzberg was concerned with what managers actually do, rather than what the long accepted theory suggested theydo.

He showed that there is a difference between what they say they do and what they actually do, and observes that the taskis fragmented.

(b) He noted three basic management roles, grouped into three areas:

INTERPERSONAL role ‘leading’.This role arises from the manager’s formal position within the organisation and the consequent authority which arises fromit.

He suggests three categories:

Figurehead:Because of the formal authority and position in the organisation, the manager acts as a focus both internally and externally,but this is not necessarily a formal leadership role. Often in reality the manager is simply a figurehead.

Leader:Brings together organisational and individual goals and needs, especially through motivation, hiring and firing.

Liaison:Maintains a network of relationships within and especially outside the organisation. A substantial amount of managementtime is spent fulfilling this role.

INFORMATIONAL role ‘administrating’.This role arises because managers have access to and contact with all staff and many contacts outside the organisation.

Monitor:The manager ‘monitors’ the environment by receiving information (internal and external) and transmitting it to others. A greatdeal of information may be of an informal nature.

Disseminator:Passes on factual and value information to the department.

Spokesman:Acts as the spokesman for the organisation by providing information about the organisation, both internally but especiallyexternally.

DECISIONAL role ‘fixing’.This role is the most crucial and arises from the manager’s position of formal authority, which means that he or she hasunique access to information. Consequently, the manager is the only person able to take decisions which arise from and affectthe department.

Entrepreneur:The manager makes decisions about changing what happens within the organisation or department by initiating action andencouraging change, especially in a changed environment.

Disturbance Handler:Has to make decisions about events because these events are often outside his or her control. Has to react to unpredictablesituations. Thus it is important to be able to react as well as plan.

Resource Allocator:Central to the organisation, the manager has to take control of the allocation of scarce resources and determine the directionof the organisation.



Negotiator:Negotiates inside and outside the organisation and at the same time commit resources. A great time user.

These three basic management roles are not all embracing and change depending upon the manager’s position in theorganisation.

3 The selection of a suitable employee is fundamental to the success of an organisation. In the first instance, the application formobtains information about a potential employee simply and in a number of different ways. However, the application form is oftenpoorly constructed, asks the wrong questions or fails in its function to assist management.

(a) The main purpose of the application form is to identify candidates closest to the existing or previously prepared personspecification. In addition, it can eliminate unsuitable candidates and act as a preliminary to interview. It can also form thebasis of future human resources by establishing a record keeping system for future reference.

(b) The application form should be able to provide information on personal details on age, address and family background. It alsoprovides information about the candidate’s education and employment experience, present employment terms, experienceand leisure interests. It is particularly useful in assessing the candidate’s effectiveness in writing, self expression and ambitionand character.

In addition, the application form should contain a general section allowing the applicant to express career ambitions andaspirations in his or her own words.

4 A personal development plan is a clear progressive action plan for an individual which incorporates a wide set of developmentalopportunities including formal training. The concept of the personal development plan is one which enables employees to link theirdevelopment needs with those of the organisation and thus to motivate them and to improve morale.

Preparation of a personal development plan:

STEP 1 – Analyse the current position/job analysis:

Identifying the skills required for future work and the current skills of each of the job holders. A manual skills analysis can beconducted where the hand, finger and body movements are recorded in great detail. This can lead to a faults analysis where theanalyst produces a specification showing what typically causes frequently occurring faults and how to identify and resolve them.

Analysis of the required skills can also be achieved through a personal SWOT (Strengths, Weaknesses, Opportunities and Threats)Analysis. The manager has an input into this by identifying the skills required of the employee on a simple grid:

THE INDIVIDUAL SKILL SWOT ANALYSISPerformance

High Low

High Like and do well Like but don’t do wellLiking ofSkills Low Dislike but do well Dislike and don’t do well

The outcome of this exercise is to include more of the employees’ individual interests into their actual role. The analysis of thecurrent knowledge and skills of the job-holder can be found from appraisals and observations.

STEP 2 – Set goals to cover performance in the existing job:

An outline of the individual development needs is found from the skills analysis. Identify deficiencies in the current skills of jobholders and outline the necessary development needs.

Forecast future changes in the current role and identify goals. A deficiency list is produced which is used to formulate an individualtraining plan. As far as reasonably possible all objectives should be SMART (Specific, Measurable, Attainable, Realistic and Timely).

This is then used to identify the training required.

STEP 3 – Draw up the action plan:

All the different development needs are collated from the sources outlined in the first two steps and are entered into an action planwith the most important training identified first.

5 It is often believed that employment rewards are based simply on payment. However, as individuals become more discerning, theyseek more from employment than monetary reward alone.

It is important for managers to understand that monetary rewards are in many ways less important in the modern economy thanpreviously thought, especially in services and the professions.

(a) Intrinsic rewards are within the control of the individual and include feelings of personal satisfaction, status, recognition,responsibility and pride in the work.



(b) Extrinsic rewards are those forms of reward which are not in the control of the individual but at the disposal of others; usuallythe individual’s superior. Extrinsic rewards can be ‘seen’ and include wages and salaries and also ‘perks’ such as bonuses,prizes and working conditions.

(c) Common types of extrinsic reward include most importantly basic pay and conditions, often added to by bonuses andincentive schemes. Performance related pay has entered many service activities where traditional ‘bonuses’ do not readilyapply. In addition, share option schemes have become popular as have car usage or loans and other schemes of varioustypes, such as holidays as a form of extra bonus. Some organisations offer payment benefits beyond those required by law;pension scheme generosity often based on non-contributory arrangements or other forms of enhanced pension schemes.Private health care insurance and other insurance, including life, disability and sickness are offered beyond those required bylaw or tradition. Crèches and other facilities aimed at family employees are popular, as are subsidised loans for purchase ofgoods other than those of the employer and medical facilities or subsidised payments to private health schemes.

6 Any organisation which employs individuals will at times be the subject of conflict of some sort. Conflict is not necessarily a signof problems, but nevertheless managers need to recognise and control it as appropriate.

(a) Conflict which is constructive can lead to outcomes which can be seen as beneficial to the organisation because it oftenchallenges existing business practices and ideas. It can introduce different ideas, solutions to problems and define power,authority and responsibility limits. It can also encourage creativity, innovation and change and is capable of bringing problemsinto the open.

(b) Destructive conflict can lead to outcomes which can be seen as damaging to the organisation overall. It can underminepersonal relationships, distract attention from the task, dislocate group cohesion and alienate individuals and groups fromanother.

(c) The causes of conflict include departmentalisation and specialisation, the nature of the work involved and formal objectivesdiverging from the objectives actually being pursued by management or individual departments or where objectives areconcealed by management. In addition, conflict can occur when individual roles are poorly specified, departmental andindividual boundaries overlap or contractual relationships are unclear. Other causes include issues where individuals areundertaking simultaneous roles, or there are differences in perception as to an individual’s position in the organisation or theindividual’s effort and output in comparison to others. Differences can also arise through the individual’s perceived authorityand importance, often leading to personality differences and clashes.




1 (a) (i) Identification and description of the four broad leadership styles describedby Tannenbaum and Schmidt.(Three marks per style) (Up to 12 marks)

(ii) Brief description of the four factors.(One mark each) (Up to 4 marks)


(b) The Tannenbaum and Schmidt leadership style which best describes

(i) Dean Thomas (Up to 4 marks)(ii) Lee Allen (Up to 4 marks)


(c) Explanation of action centred leadership and justification of Lee Allen’s approach. (Up to 8 marks)(Maximum for part (c) 8 marks)

(d) Description of Feidler’s two approaches and appreciation of Emma Jenkin’s position. (Up to 8 marks)(Maximum for part (d) 8 marks)


2 (a) Brief description of Mintzberg’s view of the management process. (Up to 3 marks)(Maximum for part (a) 3 marks)

(b) Description and discussion of the three management roles

Interpersonal role– Figurehead– Leader– Liaison (Up to 4 marks)

Informational role– Monitor– Disseminator– Spokesman (Up to 4 marks)

Decision role– Entrepreneur– Disturbance handler– Resource allocator– Negotiator (Up to 4 marks)



3 (a) Description of the application form’s purpose. (One mark per item up to 5 marks)

(b) Description of the information obtained by the application form. (One mark per item up to 10 marks)


4 Explanation of the three steps in the preparation of a personal development plan.

Step 1 – Analyse the current position (Up to 5 marks)

Step 2 – Set goals to cover performance of the existing job (Up to 5 marks)

Step 3 – Draw up action plan (Up to 5 marks)




5 (a) Explanation of ‘intrinsic’ rewards. (Up to 3 marks)

(b) Explanation of ‘extrinsic’ rewards. (Up to 3 marks)

(c) Decription of any six extrinsic rewards. (One and a half marks per reward up to 9 marks)


6 (a) Explanation of constructive conflict. (Up to 5 marks)

(b) Explanation of destructive conflict. (Up to 5 marks)

(c) Brief description of any five causes of conflict.(One mark per cause) (Up to 5 marks)




Managing People

PART 1

MONDAY 13 JUNE 2005

QUESTION PAPER








Pape

r 1.3




1 Oliver Hoppe has been working at Hoopers and Henderson accountancy practice for eighteen months. He feels thathe fits in well, especially with his colleagues and has learnt a lot from them. However, he feels that the rules andregulations governing everyday activities and time keeping are not clear.

Oliver does not get on well with his line manager, David Morgan. There appears to be a clash of personalities andreluctance on David Morgan’s part to deal with the icy atmosphere between them after David was asked by one ofthe accounting partners to give Oliver a job. For the past three months Oliver has gone to lunch with his fellow workersand always returned to work with them or before them. In fact they all have returned to work about ten minutes lateon several previous occasions. After the third time, Oliver was called into David Morgan’s office and given an oralwarning about his time keeping.

Oliver was not permitted to argue his case and none of the other staff who returned late were disciplined in this way.On the next occasion the group was late returning from lunch, David Morgan presented Oliver with a written warningabout his time keeping.

Yesterday, Oliver was five minutes late returning to work. His colleagues returned after him. David Morgan gave Olivernotice and told him to work until the end of the week and then collect his salary, the necessary paperwork and toleave the practice.

There is a partner responsible for human resources. Oliver has come to see the partner to discuss the grievanceprocedures against David Morgan for his treatment and about what Oliver regards as unfair dismissal.

Required:

(a) Describe the six stages of a formal disciplinary procedure that an organisation such as Hoopers andHenderson should have in place. (12 marks)

(b) Explain why Oliver might legitimately feel he has a grievance against his manager and identify which aspectsof the formal disciplinary procedure David Morgan did not follow or allow in this case. (9 marks)

(c) Describe the main stages of a formal grievance procedure that Oliver should now pursue. (10 marks)

(d) Describe the three stages of a formal grievance interview that Oliver might seek with the appropriate partnerat Hoopers and Henderson following the formal procedure. (9 marks)

(40 marks)




2 An important part of management is understanding the style of leadership.

Required:

(a) Explain what Blake and Mouton’s Managerial Grid measures. (5 marks)

(b) Briefly describe the five extreme scores identified by Blake and Mouton. (5 marks)

(c) Discuss the usefulness of the managerial grid in assessing the attributes of managers. (5 marks)

(15 marks)

3 The ‘person specification’ is derived from the job description.

Required:

(a) Explain what is meant by the terms:

(i) ‘person specification’; (4 marks)

(ii) ‘job description’. (4 marks)

(b) Briefly describe the way in which a ‘person specification’ differs from a ‘job description’. (3 marks)

(c) Describe the purposes for which a person specification might be used. (4 marks)

(15 marks)

4 In addition to the application form and interview, references provide further confidential information about theprospective employee.

Required:

(a) Define the purpose of a reference. (3 marks)

(b) Describe the content of a reference. (5 marks)

(c) Outline the problems with references. (7 marks)

(15 marks)

5 An organisation’s goals can only be achieved through the efforts of motivated individuals.

Required:

Explain what is meant by the following terms:

(a) Hygiene factors. (8 marks)

(b) Motivators. (7 marks)

(15 marks)



6 The accountant communicates information to others in reports and statements. Understanding the nature andimportance of communication is therefore an important part of the accountant’s role.

Required:


(b) Describe five major barriers to good communication. (10 marks)

(15 marks)




Answers






1 Overview

A grievance occurs when an individual thinks that he or she has been wrongly treated by colleagues or management, especiallyin disciplinary matters. An unresolved feeling of grievance can often lead to further problems for the organisation. The purpose ofprocedures is to resolve disciplinary and grievance issues to the satisfaction of all concerned and as early as possible.

If a grievance perceived by an employee is not resolved, then conflict and discontent can arise that will affect the work of theindividual and the organisation. Accountants as managers need to be aware of the need to resolve grievances satisfactorily andprofessionally.

The fundamental basis of organisational disciplinary and grievance procedures is that they must be explicitly clear and accessibleto all.

Part (a):

An official and correctly applied disciplinary procedure has six steps which should be followed in the correct order and appliedequitably.

The Informal Talk.

This is the first step. If the disciplinary matter is of a minor nature and the individual has had until this occasion a good record,then an informal meeting can often resolve the issue.

Reprimand or Oral Warning.

Here the manager draws the attention of the employee to unsatisfactory behaviour, a repeat of which could lead to formaldisciplinary proceedings.

Official or Written Warning.

A written warning is a serious matter. It draws the attention of the offending employee to a serious breach of conduct and remainsa recorded document on the employee’s employment history.

Such written documents can be used as evidence if further action is taken, especially dismissal.

Suspension or Lay-off.

If an offence is of a serious nature, if the employee has repeated an earlier offence or if there have been repeated problems thenan employee may be suspended from work for a period of time without pay.

Demotion.

This is a situation where an employee is demoted to a lower salary or position within an organisation. This is a very serious stepto take and can be regarded as a form of internal dismissal. This course of action can have negative repercussions because theemployee concerned will feel dissatisfied and such feelings can affect their own work and that of others.

Dismissal.

This is the ultimate disciplinary measure and should be used only in the most extreme cases. As with demotion, the dismissal ofa staff member can lead to wider dissatisfaction amongst the employees.

The employee may nominate a representative at any stage of the procedure, especially at the more serious stages.

Part (b):

Oliver may feel he has a grievance as a consequence of treatment which he perceives as unfair. Proper disciplinary procedures areessential for harmonious relationships between management and all staff. Oliver may feel that he has been singled out and thatDavid Morgan does not understand the need for equity in invoking disciplinary procedures.

David Morgan did not follow this procedure. No informal talk took place which might have resolved the problem, preferring todeliver an oral warning, then moving to a written warning and dismissal. Oliver was not represented and his dismissal is likely tolead to dissatisfaction with Oliver’s peers.

Oliver must now invoke the correct grievance procedure.

Part (c):

Grievance procedures must be accessible to all employees of Hoopers and Henderson at any level of the organisation andregardless of their status. Managers must have suitable training in procedures and be provided with background as to howgrievances can occur in the first place. Grievance procedures must be regarded as beneficial and not threatening.



If an employee has a grievance, he or she should be able to pursue it and have the problem which has led to the grievance resolved.

A formal grievance procedure must be available, set out in writing and accessible to all employees. The procedure should consistof five formal stages.

The first stage states the grade of employee or employees and their rights for each type of grievance.

The second stage details the actual procedures for pursuing a grievance, and is in four parts:

– The employee must discuss the grievance with his or her immediate supervisor or line manager.

– If the grievance can not be resolved at the first level, then the employee’s manager must become involved.

– The interview between the employee and manager takes place with the employee being allowed a representative if desired.

– If the grievance remains unresolved then the matter must be referred to a higher manager.

The third stage (referral to a higher manager) requires that the Human Resources Department or, in the case of Hoopers andHenderson the partner responsible, must be informed.

The fourth stage is that written records must be kept and be available to all employees.

Finally, the procedure must be time limited.

Allowance must be made for the involvement of a trade union, staff association or individual support (if desired) at an appropriatestage in the procedure.

At Hoopers and Henderson, Oliver has attempted to discuss the issue with his immediate manager (David Morgan) but withoutsuccess. He has therefore followed the procedure, but to continue correctly, Oliver must have taken up his grievance with themanager next in seniority to David Morgan, who in this case is the partner responsible for human resources.

Part (d):

Oliver should arrange a formal grievance interview with the appropriate partner. Both Oliver and the partner need to be aware thatthe grievance interview follows three steps in a particular and logical order. The meeting between Oliver and the partner responsiblefor human resources must be in a formal atmosphere.

The first stage is exploration. The manager or supervisor – in this case the partner responsible for human resources – must gatheras much information as possible. No solution must be offered at this stage. The need is to establish what is actually the problem;the background to the problem (in this case the icy relationship between Oliver and David Morgan) and the facts and causes ofthe problem – in this case the resentment felt by David Morgan over Oliver’s appointment.

The second stage is the consideration stage. This is undertaken by the appropriate manager or partner here, who must firstly checkthe facts, analyse the causes of the complaint and evaluate possible solutions. The meeting may be adjourned if at this stage thepartner requires more time to fulfil this step.

The final stage is the reply. This will be carried out by the partner after he or she has reached and reviewed a conclusion. It isimportant that the outcome is recorded in writing; the meeting and therefore the interview and procedure is only successful whenan agreement is reached.

If no agreement is reached then the procedure should be taken to a higher level of management.

2 Overview:

The accountant is frequently the manager or group leader. An understanding of leadership theory and practice is therefore animportant part of an accountant’s training.

Part (a):

Robert Blake and Jane Mouton in their Ohio State Leadership Studies, observed two basic leadership dimensions that wereapparent from their studies; concern for the task and concern for people.

They recognised that it was possible for concern for the task to be independent of concern for people. It was therefore possible fora leader to be strong on one and weak on the other, strong on both, weak on both or any variation in between.

They devised a series of questions, the answers to which enabled them to plot these two basic leadership dimensions. These twodimensions were placed as the axes on a grid structure now known as the Managerial Grid. A person who scores 7 on ‘concernfor production’ (the x axis) and 5 on ‘concern for people’ (the y axis) is known as a 7,5 leader.



Part (b):

Blake and Mouton analysed the extreme scores as:

1,1 – Impoverished Managementlow concern for production and low concern for people.This manager only makes the minimum effort in either area and will make the smallest possible effort required to getthe job done.

1,9 – Country Club Managementlow concern for production and high concern for people.This manager is thoughtful and attentive to the need of the people, which leads to a comfortable friendly organisationatmosphere but very little ‘work’ is actually achieved.

9,1 – Task Managementhigh concern for production and low concern for people.This manager is only concerned with production and arranges work in such a way that people interference is minimised.

5,5 – Middle of the Road Managementreasonable concern for both dimensions.This manager is able to balance the task in hand and motivate the people to achieve these tasks.

9,9 – Team ManagementHigh concern for production and high concern for people.This manager integrates the two areas to foster working together and high production to produce true team leadership.

(Candidates may wish to draw the grid and describe these scores).

Part (c):

This all assumes that leadership styles can be categorised into the two dimensions and that the results can be plotted on the grid.The position of team management is accepted as the best form of leadership. This may not be practical or indeed advisable. Inmany industries, concern for the task may be more important than concern for people, and vice versa. It will always depend onthe individual situation; behaving in a way which is alien to one’s attitudes will be seen as inconsistent and confusing.

However, if the grid has relevance to leadership skills, it can provide the basis for training and for management development. Oneway in which it could be useful is (for example) to support a 9,1 leader with a 1,9 subordinate.

The managerial grid also links in to the motivational ideas of Douglas Macgregor. Theory X assumes that the average person hasan inherent dislike of work. The approach is likely to be task driven, and thus managers will have a high score on the x axis.

Theory Y is based on the idea that the goals of the individual and the organisation can be integrated. In this case, the approachis likely to be concerned with the individual and thus managers will have a high score on the y axis.

3 Overview:

A traditional job description can only list or outline the tangible elements of a job. As work becomes more challenging, moreinformation is required about the skills needed to perform that job. A person specification is of greater value in the professionalsector, where it is inappropriate to assume repetition and where there is a greater degree of discretion in performing the task.

Part (a):

(i) A person specification - also referred to as a personnel specification – provides the organisation with a profile of the kind ofperson that would match the needs of the post. It sets out in written detail the education, qualifications, training, experience,personal attributes and competencies a post holder must possess to perform the task to the satisfaction of the organisation.It describes the person needed to fulfil the task.

(ii) On the other hand, the job description is based on information gathered from a job analysis and defines the position and rolethat has to be fulfilled. It is a statement of the component tasks, duties, objectives and standards. It describes the purposeand relationships of the specific job together with the physical, social and economic factors which affect it. Fundamentally, itdescribes the job to be done.

Part (b):

The difference between a person specification and a job description is that a person specification sets out the qualities of an idealcandidate whereas a job description defines the duties and responsibilities of the job.



10

Part (c):

The person specification might be used for a number of purposes:

In recruitment, to provide an illustration of the type of candidate sought prior to the selection stage.

In selection, the most obvious and popular use of this document, is to assess whether an individual’s personality, abilities andexperience match the organisation’s requirements.

For promotion, to evaluate whether an individual has the necessary ability and personality to move within the organisation.

In evaluation of performance to assess whether the person has demonstrated the necessary skills to do the job effectively.

In disciplinary procedures through demonstrating that the person specification required to do a particular job for which some onewas appointed are not evident or being applied. For example, where an employee required to be discrete is discovered to havedisclosed confidential information to third parties.

4 Overview:

References are used by most employers as a key part of their selection process, but mainly to verify facts about the candidate ratherthan as an aid to decision making. The reference check is usually the last stage in the selection process and referees should becontacted only after permission has been given by the applicant. Good referees are almost certain to know more about theapplicant than the selector and it would be foolish not to seek their advice or treat the reference check as a mere formality.

Part (a)

References provide further confidential information about the prospective employee. This may be of varying value, as the reliabilityof all but the most factual information must be in question.

The purpose of a reference is to obtain straightforward factual information confirming the nature of the applicant’s previous job(s),the period of employment, current pay and the circumstances for wishing to leave the present employment and to seek opinionsabout the applicant’s personality and other attributes. However, allowance must be made for prejudice and charity.

Part (b)

A simple standard form to be completed by the referee is acceptable to provide all the required details. A standard form shouldask about the existing job title, the main duties and responsibilities of the current job, period of employment, present pay or salaryand the attendance record.

Part (c)

There can be significant problems with references, these include the fact that most referees are well known to the applicant andhesitate to say anything critical. However, the more skilful reference reader learns to look for what is conspicuous by omissionalthough there is always the risk that the writer merely forgot.

Often there are glowing tributes designed to aid the candidate on their way and some can be too ambiguous to be useful.

It is also important to note that references are poor predictors of future performance, are time consuming for the referee and thesubsequent reader. A particular problem is that employers who want to rid themselves of unsatisfactory employees could write anenthusiastic reference, or at best one which leaves a lot unsaid.

However, care should be taken when providing references. Potentially, there can be legal consequences if a reference is misleadingor misrepresents the person for whom the reference is provided.

In addition, problems can arise when references are sought too early in the recruitment process and therefore breach confidentiality.

5 Overview

Understanding what motivates people is necessary at all levels of management. It is important that professional accountantsunderstand the relevance of individual motivation. Unless individuals are well managed and motivated they are unlikely to co-operate to achieve the organisation’s objectives.

Part (a):

(a) Hygiene (or maintenance) factors lead to job dissatisfaction because of the need to avoid unpleasantness. They are so calledbecause they can in turn be avoided by the use of ‘hygienic’ methods, that is, they can be prevented. Attention to thesehygiene factors prevents dissatisfaction but does not on its own provide motivation.

Hygiene factors (or ‘dissatisfiers’) are concerned with those factors associated with, but not directly a part of, the job itself.Herzberg suggested that these are mainly salary and the perceived differences with others’ salaries, job security, workingconditions, the level and quality of supervision, organisational policy and administration and the nature of interpersonalrelationships. Resolution of hygiene factors, however, is short term, longer term resolution requires motivator factors.



(b) Motivators (or ‘satisfiers’) are those factors directly concerned with the satisfaction gained from the job itself. Herzbergsuggested that these included a sense of achievement, the level of recognition of the employee, the intrinsic value felt at thejob itself, level of responsibility, opportunities for advancement and the status both inside and outside provided by the job orposition held.

Motivators lead to satisfaction because of the need for growth and a sense of self achievement

A lack of motivators leads to over concentration on hygiene factors; that is those negative factors which can be seen andtherefore form the basis of complaint and concern.

6 Overview:

The need for clear and concise communication and the consequences of poor communication must be understood by a professionwhich exists to provide information to others. Poor communication leads to ineffective control, poor co-ordination and managementfailure.

Part (a):

Good communication ensures that individuals know what is expected of them. Co-ordination takes place within the organisationand there is control of the organisation’s plans, procedures and staff. Instructions of management need to be clearly understood inassisting group and team cohesiveness and reducing stress from misunderstood instructions. Bias, distortion and omission isremoved with clear communication, as is secrecy, innuendo and rumour. Good communication ensures that the right informationis received by the correct person and thus acted upon, reducing conflict within and between different parts of the organisation.

Part (b):

Barriers to communication include the personal background of the people communicating, including language differences betweenstaff, management and customers. The use of jargon, especially by professional and technical staff, differences in education levelscan be a substantial barrier throughout the organisation. Communication ‘noise’ is a barrier not always recognised. This is wherethe message is confused by extraneous matters not relevant to that particular communication. Different levels of education andexperience can lead to different perception of individuals, leading to conflict within the organisation, between individuals andbetween departments. Similarly, another barrier often not recognised is communication overload; too much information beingcommunicated at one time leading to confusion. Distances involved and the subsequent use of different communication facilitiesis a barrier, leading to misunderstandings based on problems noted above. Finally, and perhaps most importantly, distortion of theinformation transmitted.






1 Part (a)

Description of the six steps in the procedure(Two marks per step); (up to 12 marks)


Part (b)

Explanation of grievance(up to 9 marks)


Part (c)

Description of the main stages of a formal grievance procedure.(Two marks per step); (up to 10 marks)


Part (d)

Description of the three stages of a grievance interview.(Three marks per stage); (up to 9 marks)


(Maximum for Question One 40 marks)

2 Part (a)

Description of the Management Grid(up to 5 marks)


Part (b)

Examples of ‘scores’(One mark per ‘score’)

(up to 5 marks)


Part (c)

Discussion of the usefulness of the grid (up to 5 marks)





3 Part (a)

(i) Description and understanding of person specification (up to 4 marks)

(ii) Description and understanding of job description (up to 4 marks)


Part (b)

Recognition of differences (up to 3 marks)


Part (c)

Description of purposes (up to 4 marks)



4 Part (a)

Description of the purpose of references (up to 3 marks)


Part (b)

Description of the contents of a reference (up to 5 marks)


Part (c)

Outline the problems with references (up to 7 marks)



5 Part (a)

Description of hygiene factors (up to 8 marks)


Part (b)

Description of motivators (up to 7 marks)





6 Part (a)

Explanation of the importance of good communication (up to 5 marks)


Part (b)

Description of five barriers (up to 10 marks)(Two marks per barrier, one for identification, one for description)





Answers



7

Part 1 Examination – Paper 1.3 June 2006 Answers

Managing People

1 All organisations of whatever size need to understand and address the issues of the relationship between various levels ofmanagement, especially the nature, source and limitations of authority, responsibility and delegation. Understanding responsibility,delegation and authority is fundamental to the practice of management. Professional accountants should be able to show anunderstanding of the problems and challenges associated with these concepts of management. Students are not expected toremember definitions verbatim, but they are expected to show an understanding of the inherent logic contained in these concepts,and to demonstrate a clear distinction between the two main concepts of authority and responsibility.

(a) There are many explanations of what managers do. The most widely understood approach is that of Henri Fayol, who saidthat managers perform five duties, to forecast and plan, to organise, to command, co-ordinate and control. Managers areultimately responsible for the efficient use of the organisation’s resources and are accountable to the organisation’s owners.At Flavours Fine Foods, the owners (the Jones brothers) must recognise this reality and allow the managers to manage.

It used to be said that a manager did his or her job by getting others to do theirs. In many ways this sums up the role of thesupervisor. However, management must ensure that supervisors understand organisational objectives and must make clearthe powers and limits of the supervisors’ authority. Supervision is an important and integral part of the task and process ofmanagement.

The role of the supervisor is critical because of direct contact with and responsibility directly for the work of others. Thesupervisor is unique; he or she is the interface between management and the workforce and is the direct link between thetwo, being in direct physical contact with non-managers on a frequent basis. Supervisors are in the front line of managementand see that others fulfil their duties, resolve problems first hand and often quickly, direct the work of others and enforcediscipline. In addition, they often must have direct knowledge of health, safety and employment legislation and have authorityfor negotiation and industrial relations within the department.

(b) (i) RESPONSIBILITY is the liability of a person to be called to account for their actions and results, and is therefore anobligation to take some action to discharge that responsibility. Unlike authority, responsibility cannot be delegated. Thereis however some discussion on the extent to which this statement is true: the idea that responsibility cannot be delegatedis too simplistic. Any task contains an element of responsibility. It is the idea of accountability and the direction ofresponsibility that is the relevant concept and is the problem at Flavours Fine Foods; ultimate responsibility resides withthe owners. It is self evident that it is impossible to exercise authority without responsibility because this could lead toproblems of control and therefore undesirable outcomes for the organisation. However, the superior (the owner) is alwaysultimately responsible for the actions of his or her subordinates. The key element here is the recognition of discretion byvirtue of the person’s position. This underlines the doctrine of absolute responsibility; the superior is always ultimatelyaccountable.

(ii) AUTHORITY is the scope and amount of discretion given to a person to make decisions by virtue of the position heldwithin the organisation. The authority and power structure of an organisation defines the part each member of theorganisation is expected to perform and the relationship between the organisation’s members so that its efforts areeffective. The source of authority may be top down (as in formal organisations) or bottom up (as in social organisationsand politics). In the scenario, authority is from the top and should be delegated downwards.

(iii) DELEGATION is giving a subordinate the discretion to make decisions within a certain, defined sphere of influence.Therefore the superior must possess the authority to delegate. The key element here is discretion and the level ofauthority within a specific sphere which is behind the problems at Flavours Fine Foods. Authority should be clearlydelegated as appropriate to the managers and, through them, to the supervisors.

(c) (i) Without delegation, formal organisations could not exist. Without allocation of authority, responsibility and delegation, aformal organisation cannot be effective. They are critical aspects. Managers must delegate because of the size andcomplexity of the organisation (certainly an issue for Flavours Fine Foods). Delegation can help overcome the physicaland mental limitations of staff, managers and supervisors and it allows management to attend to other matters sinceroutine tasks and decision making can be passed down. However, superiors must call subordinates to account and co-ordinate their activities.

(ii) Effective delegation can be achieved by assigning agreed tasks to the subordinate, ensuring that resources are allocatedand by specifying expected performance levels and ensuring that they are understood. In addition, it is necessary toensure that the subordinate has the ability and experience to undertake the tasks by maintaining frequent contact andensuring that the subordinate has authority to do the job. Sufficient authority must be delegated to fulfil the task. Thisauthority in turn may be specific or general; the scenario suggests that the authority of the managers and supervisors isspecific. The subordinate should not refer decisions upwards, and the superior should not expect this. In addition thereshould be no doubts over boundaries; they must be clearly defined as to who holds what authority and who accountsto whom. Therefore there must be clarity as to departmental functions and individual authority, which is at the root ofthe problem at Flavours Fine Foods.



(iii) Problems with delegation are threefold. Firstly, reluctance from managers who are afraid of losing control, who fear thatsubordinates may carry out the work badly and who are resentful of subordinate development. Secondly, there is theproblem of lack of confidence, lack of self confidence in the manager and often a lack of confidence in the subordinates.Thirdly, there are problems of trust; that is the amount of trust the superior has in the subordinate and the trust that thesubordinate feels the superior has in him or her.

(iv) Problems with delegation can be overcome by careful selection and training, an open communication system, theestablishment of an appropriate control system and a system that rewards effective delegation.

2 All organisations of whatever size have to work in a co-ordinated way to ensure that the objectives laid down are achieved.However, for effective co-ordination to take place, the structure must be correct and understood. Very often, managers know thestructure but cannot explain its significance or appropriateness.

(a) The structure of an organisation is often depicted as a chart. The structure explains the communication pattern, the linkingmechanism between departments, tasks and individuals, the co-ordinating mechanism that ensures the entire organisationis working toward the same objective, and who is in control of the organisation’s activities and at what level in theorganisation.

(b) The strategic apex is the highest level of the organisation and is therefore the highest level of management. This part ensuresthat the organisation’s mission is followed and manages the relationship with the environment.

The operating core is the part that represents the productive activity of the organisation, gathering inputs and, throughconversion, turns them into outputs.

The middle line represents that part of the organisation where the middle managers operate. The role of this part is to turnthe instructions of the strategic apex into activities for the operating core.

The technostructure includes the staff who provide a technical or supportive activity but which are not a part of the coreactivities. This part of the organisation includes the engineering, accounting and human resource departments.

The support staff carry out the ancillary activities that are neither part of the core nor the technostructure. Support staff haveno role in the direct activities of the organisation: these activities include catering and public relations.(Students may draw the appropriate diagram)

3 The interview is extensively used for the selection of new employees and in many cases is the only method of selection. However,interviews have been criticised for failing to identify appropriate candidates suitable for the organisation. It is essential thereforethat professional accountants recognise both the problems and opportunities that the formal selection interview presents.

(a) The purpose of the selection interview is to find the best possible person for the position who will fit into the organisation.Those conducting the interview must also ensure that the candidate clearly understands the job on offer, career prospects andthat all candidates feel that fair treatment has been provided through the selection process.

In addition, the interview also gives the opportunity to convey a good impression of the organisation, whether the candidatehas been successful or not.

(b) (i) The face to face interview is the most common form of interview. In this situation the candidate is interviewed by asingle representative of the employing organisation.

The advantages of such interviews are that they establish an understanding between the participants, are cost effectivefor the organisation (only one member of the organisation’s staff is involved) and, because of the more personal nature,ensure that candidates feel comfortable.

The disadvantages are that the selection interview relies on the views and impression of a single interviewer that canbe both subjective and biased. In addition, the interviewer may be selective in questioning and it is easier for thecandidate to hide weaknesses or lack of ability.

(ii) Panel interviews are often used for senior appointments and consist of two or more interviewers.

The advantages of such interviews are that they allow opinion and views to be shared amongst the panel. They providea more complete and coherent approach, hence problems of bias inherent in face to face interviews can be reduced.They may also be appropriate where an individual with specialist or technical skills has to support the interviewer inrelation to assessing the technical competencies of the interviewee.

The disadvantages are that panel interviews can be difficult to control, interviewers may deviate or ask irrelevantquestions and they can be easily dominated by a strong personality who is able unduly to influence others. In addition,such interviews can often result in disagreement amongst the panel members.

8



4 All organisations need appropriately trained employees. Due to the nature of modern business, especially the professions, much ofthis training is internal and often on a one to one basis. Accountants as managers should therefore be able to understand thedifferent approaches to training and which of them is the most appropriate and cost effective for the training requirements of theorganisation.

(a) Computer based training can be inexpensive and is based upon user friendly interactive computer programs designed toenable trainees to train on their own and at their own pace.

(b) Coaching involves the trainee being assisted by another, experienced employee. It is a specialised, systematic learningprogramme based on communication, defined targets and continuous learning. It encourages constructive feedback betweenthe trainee and trainer.

(c) Mentoring, not to be confused with coaching, involves training on a wider range of activities, often aimed at careerdevelopment of employees at supervisory or management level. The trainee is provided with a development programme andis under close supervision. The mentor should not be the trainee’s immediate supervisor or manager.

(d) Job rotation is an important training method and is often also seen as a means of motivation. It involves moving the traineefrom one job to another and is therefore more suitable for lower level employees. The trainee is required to do different jobsin logical succession, thus broadening experience and gaining a picture of the organisation’s wider activities.

(e) Job instruction is a one to one method of training through which the trainee is shown how to fulfill a task and then allowedto get on with that task. It is a systematic approach to training involving immediate supervision and by allowing the traineeto complete the task is a cost effective way of training.

5 The way in which managers’ duties are undertaken can significantly influence the satisfaction that employees derive from theirwork. Abraham Maslow suggested that individuals have a hierarchy of personal needs which are identifiable, universally applicableand can be satisfied in the workplace. Understanding this concept provides guidance to management as to the appropriateness ofmotivational techniques.

(a) Maslow’s theory of motivation is a content theory. Its basic idea is that each individual has a set of needs which have to besatisfied in a set order of priority.

Maslow suggested that individuals have five needs:

Self-actualisation(or self fulfilment)

Esteem needs(or ego)

Social needs

Safety needs

Physiological needs

These needs are arranged in a hierarchy of importance and movement is upwards, from physiological needs to self-actualisation. Any individual will always want more; each need must be satisfied before the next is sought. However – andcritically so far as motivation in the workplace is concerned – a satisfied need is no longer a motivator.

The theory is usually presented in the shape of a triangle, with physiological needs at its base and self-actualisation at itsapex. The triangle shape has a clear significance. As an individual moves up toward the apex, the needs thin out, that isphysiological needs are far greater than self-actualisation needs. For many individuals, reaching social needs is often thehighest need to be satisfied. The theory is sometimes presented as a staircase; again with self-actualisation at the top. Thissecond diagrammatic form reflects the application of the theory to more modern situations, where it can reasonably beassumed that those within the organisation have already achieved physiological and safety needs. For such individuals, socialand esteem needs may well be greater.

Physiological needs are the basic survival needs which, although part of the theory, probably have less relevance today. Theseneeds are usually seen as food, shelter (which is sometimes noted as a safety need), warmth and clothing.

Safety needs are the desire for security, order, certainty and predictability in life and freedom from threat.

The above two so-called ‘lower order needs’ dominate until satisfied.

Social needs are the gregarious needs of mankind, the need for friendship, relationships and affection. This is often seen asthe desire to be part of a family.

Esteem needs are the desire for recognition and respect, often associated with status, especially in the modern world.

Self-actualisation (self fulfilment) is the ultimate goal. Once this state is achieved the individual has fulfilled personalpotential.

9



However, later work by Maslow has suggested that there are two additional needs; freedom of enquiry (free speech andjustice) and knowledge (the need to explore and learn). These additional needs are a further development of social needs andrecognise the changing nature of modern life.

(b) This theory is based on the idea that the goals of the individual and the organisation can be integrated and that personalsatisfaction can be achieved through the workplace. It also assumes that individuals will achieve self-actualisation throughtheir role in assisting the organisation to achieve its objectives. It follows therefore that work is the principal source ofsatisfaction.

The theory’s practical application is that managers should recognise that subordinates’ needs are always evolving andincreasing, so continued attention to increasing the employees’ personal development, opportunities for advancement andrecognition of achievement are essential to keep them motivated.

6 To get the best out of people, managers need to have effective communication skills. Professional accountants as managers needto understand the difference between aggressive and assertive behaviour. Often an exchange of communication can be interpretedas a belligerent response from an employee. However, a slight difference in approach can communicate different feelings andachieve a more positive result.

(a) Aggressive behaviour is competitive and directed at defeating someone else. It is standing up for oneself at the expense ofother people. It is defending one’s rights but doing so in such a way that violates the rights of other people. Aggressivebehaviour ignores or dismisses the needs, wants, opinions, feelings or beliefs of others.

Characteristics of aggressive behaviour include excessive ‘I’ statements, boastfulness, and the individual’s opinions expressedas fact, threatening questions or postures from the individual, sarcasm and other throw-away remarks and a constant blamingof others.

Aggressive behaviour can be self defeating. It may cause such antagonism in the others in the organisation that they willrefuse to co-operate or work with the person showing aggressive behaviour.

(b) Assertive behaviour on the other hand is based on equality and co-operation. It involves standing up for one’s own rightsand needs but also respects the rights and needs of others. It is not overbearing or aggressive but can be described as clear,honest and direct communication.

Assertive individuals defend their rights in a way that does not violate another individual’s rights. They express their needs,wants, opinions, feelings and beliefs in direct and appropriate ways.

Characteristics of assertive behaviour include statements that are short, clear and to the point, distinctions made between factand opinion, suggestions weighted with advice and evidence. Constructive criticism is the norm and offered without blameor assumptions. Questions to establish the wishes, opinions and thoughts of others are used as ways of getting aroundproblems. There are no ‘ought’ or ‘should’ conditions, the first statement is often held, the individual’s own feelings areexpressed and not those of others. Assertive behaviour can be successful if it displays a willingness to deliver a mutualcompromise as an aid to achieving a clear objective.

10



Part 1 Examination – Paper 1.3 June 2006 Marking Scheme

Managing People

1 (a) Explanation of the differences between the manager and supervisorFive marks for the manager Eight marks for the supervisor(One mark for a specific reference to the interface role) Up to 13 marks


(b) Explanation of: (i) responsibility Up to 4 marks(ii) authority Up to 3 marks(iii) delegation Up to 3 marks


(c) Explanation of: (i) the need for delegation Up to 3 marks(ii) achieving effective delegation Up to 6 marks(iii) problems with delegation Up to 4 marks(iv) how to overcome problems Up to 4 marks



2 (a) Description of the term ‘organisational structure.’ (One mark per factor identified) Up to 5 marks


(b) Explanation of Mintzberg’s five organisational components.(Two marks per component) Up to 10 marks



3 (a) Explanation of the purpose of the selection interview(One mark per factor identified) Up to 4 marks


(b) Explanation of the advantages and disadvantages: (i) The face to face interview Up to 6 marks(ii) The panel interview Up to 5 marks(in each case, one mark per factor)



11



4 (a) Explanation of computer based training Up to 3 marks


(b) Explanation of coaching Up to 3 marks


(c) Explanation of mentoring Up to 3 marks


(d) Explanation of job rotation Up to 3 marks


(e) Explanation of job instruction Up to 3 marks

(Maximum for part (e) 3 marks)


5 (a) Explanation of Maslow’s theory Up to 10 marks(Two marks per step)


(b) Application of the theory Up to 5 marks



6 (a) Explanation and examples of aggressive behaviour Up to 8 marks


(b) Explanation and examples of assertive behaviour Up to 7 marks



12



Managing People

PART 1

MONDAY 12 JUNE 2006

QUESTION PAPER






This question paper must not be removed from the examination

hall


Pape

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1 Flavours Fine Foods is a leading producer for the food industry, supplying many of Europe’s leading restaurants.Started just five years ago by brothers Lee and Alan Jones, the organisation has grown from a small companyemploying five people to a multi-divisional organisation employing 120 people.

The organisation’s production facility is divided into three separate departments. Each department has a singlemanager with supervisors assisting on the production lines. The managers and supervisors, all of whom are aware oftheir roles, work well together. However, although the organisation has grown, the owners continue to involvethemselves in day to day activities and this has led to friction between the owners, managers and supervisors.

As a result a problem arose last week. Alan Jones instructed a supervisor to repair a machine on the shop floor, whichhe refused to do without confirmation and instruction from his departmental manager. The supervisor’s manager,Dean Watkins, became involved and was annoyed at what he saw as interference in his department’s activities. Deantold Alan Jones that he “should have come to me first” because although the responsibility for the overall organisationwas a matter for the brothers, action taken in the factory was his through powers that had been delegated to him andthrough his authority, as manager. In the argument that followed, Alan Jones was accused of failing to understandthe way that the hierarchy in such a large organisation operates and that interference with operational decisions bysenior management was not helpful.

As a consequence of this, Alan Jones has asked you to explain to him and his brother the issues behind the disputeto clarify the roles of managers and supervisors and to indicate how and why successful delegation might be achieved.

Required:

(a) Explain to Alan Jones the main differences between the work of a manager and that of a supervisor.

(13 marks)

(b) Explain in the context of Flavours Fine Foods, what is meant by:

(i) responsibility; (4 marks)

(ii) authority; (3 marks)

(iii) delegation. (3 marks)

(c) To correct the problems at Flavours Fine Foods, explain to Alan Jones:

(i) the need for delegation; (3 marks)

(ii) how effective delegation might be achieved; (6 marks)

(iii) problems with delegation; (4 marks)

(iv) how these problems might be overcome. (4 marks)

(40 marks)

2




2 The activities of an organisation have to be managed and co-ordinated to ensure that its objectives are met. Theorganisation’s structure is designed to support this.

Required:

(a) What is meant by the term ‘organisational structure,’ often shown as an organisation chart? (5 marks)

(b) Explain Mintzberg’s five organisational components. (10 marks)

(15 marks)

3 Organisations need to recruit new employees. An important step in the process is the selection interview.

Required:



(i) the face to face interview between two people; (6 marks)

(ii) the panel interview with more than one interviewer. (5 marks)

(15 marks)

4 All organisations require trained employees. However, training can take many forms, some of which are internal tothe organisation.

Required:

Explain what is meant by the terms:

(a) Computer based training. (3 marks)

(b) Coaching. (3 marks)

(c) Mentoring. (3 marks)

(d) Job rotation. (3 marks)

(e) Job instruction. (3 marks)

(15 marks)

3 [P.T.O.



5 Your manager has heard of Maslow’s hierarchy of needs theory and how it has some relevance to motivationaltechniques.

Required:

(a) Explain Maslow’s hierarchy of needs theory. (10 marks)

(b) How can Maslow’s theory be applied to the motivation of staff? (5 marks)

(15 marks)

6 An important part of managing people in a professional organisation is to be able to distinguish betweenaggressiveness and assertiveness in an employee.

Required:

(a) Explain and give examples of aggressive behaviour. (8 marks)

(b) Explain and give examples of assertive behaviour. (7 marks)

(15 marks)


4



Managing People

PART 1


QUESTION PAPER








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1 Bailey’s is a large toy manufacturer based in a traditional industrial region. Established in the 1970s, it has facedmany changes in the market and survived. This has been due in part to employing a largely unskilled low paid staff,and maintaining its main advantage, that of low production costs based on low pay. Most of the production involvesrepetitive and boring work with little challenge and opportunity for innovation. Although many of the employees havebeen with the company for some time, there has been a high level of employee turnover.

However, an unhappy atmosphere has been apparent for some time. There has been a number of instances ofarguments between the staff, friction between different departments, disturbance, low morale, poor production andgeneral unrest, made worse recently by a decline in business which may lead to staff reduction and redundancy. Poorpay is leading to family problems that are affecting the commitment and motivation of the employees.

The business was recently sold to the new owner, Rebecca Stonewall. She is concerned that the negative atmosphereshe has found will harm the prospects of the business and is determined to address the issues that have becomeapparent.

She has therefore decided that it is time to take account of opinions and views of the employees in an attempt bothto identify the problems and to resolve them. She has appointed external counsellors since she thinks that aprogramme of individual counselling might be appropriate and is also of the opinion that some form of different orimproved approach to motivation might be the answer to the problems at Bailey’s.

Required:

(a) Define the role that the external counsellor must fulfil at Bailey’s. (3 marks)

(b) Describe the skills that a counsellor should possess. (14 marks)

(c) Briefly describe three advantages to Bailey’s of counselling. (3 marks)

(d) Explain to the management of Bailey’s why consideration should be given to resolving the problems through:

(i) job rotation; (5 marks)

(ii) job enlargement; (5 marks)

(iii) job enrichment. (5 marks)

(e) Briefly provide five reasons to the management of Bailey’s why financial rewards could be considered toimprove motivation. (5 marks)

(40 marks)

2




2 Traditionally, the only objective of a business was to make a profit. However, some writers have suggested that thisidea is simplistic and that profitability is only one objective amongst many.

Required:

State and explain Drucker’s eight classifications of objectives.

(15 marks)

3 An organisation has decided to compare the benefits of promoting existing staff with those of appointing externalcandidates and to assess whether the use of external recruitment consultants is appropriate.

Required:

(a) Describe the advantages of internal promotion. (5 marks)

(b) Describe the advantages of external recruitment. (5 marks)

(c) Briefly describe five factors to be taken into account when deciding whether to use recruitment consultants.(5 marks)

(15 marks)

4 A properly conducted appraisal interview is fundamental in ensuring the success of an organisation’s performanceappraisal system.

Required:

(a) Describe three approaches to conducting the appraisal interview. (5 marks)

(b) Describe five main barriers to an effective appraisal interview. (10 marks)

(15 marks)

5 All managers need to understand the importance of motivation in the workplace.

Required:

(a) Explain the ‘content theory’ of motivation. (5 marks)

(b) Explain what is meant by McGregor’s

(i) Theory X; (5 marks)

(ii) Theory Y. (5 marks)

(15 marks)

3 [P.T.O.



6 Communication is important for all organisations and requires an understanding of communication flows andchannels.

Required:

(a) Briefly explain the main purposes of the three main formal communication channels in an organisation:

(i) Downwards; (3 marks)

(ii) Upwards; (3 marks)

(iii) Lateral or horizontal. (3 marks)

(b) Briefly explain the two types of informal communication known as the grapevine and rumour. (6 marks)

(15 marks)


4



Answers




1 One of the many skills that managers are called upon to use is counselling. Situations often arise in the workplace where particularand careful people-centred skills are required. It is important that managers understand exactly what counselling involves and thedelicate skills involved. In addition, many problems identified by counselling can be resolved through appropriate methods ofmotivation. Widening and deepening interest in the organisation and its many tasks and departments is a tried and tested methodfor motivating employees. However, financial rewards remain a strong and important motivator.

(a) The external counsellor’s role must be as ‘a person who takes on the role of counsellor and agrees explicitly to offer time,attention, advice, guidance and support to another person (or persons) temporarily in the role of client’.

(b) It is clear that many of the problems at Bailey’s that have led to the unhappy atmosphere lend themselves to resolutionthrough the neutral and non-judgemental approach offered by the appointment of external counsellors. The counsellor mustbe in a position to help the individual employee to identify problems, issues and possible solutions to the kind of problemsthat have manifested themselves at Bailey’s: poor production, unrest, low morale and significantly, the long tradition of poorpay that is leading to employee family problems outside the factory. There is always the danger of leading the employee, sothe counsellor must adopt a passive role, show interest and encourage reflection whilst allowing the employee to lead andtalk around the issues. Open questions must be used to help the employee explore ideas and feelings. The counsellor mustbe an active listener, speaking only to clarify issues and elicit answers when appropriate. Above all, the counsellor must beimpartial and this is why Bailey’s has appointed outside counsellors.

Counselling skills require the ability to establish rapport with the employee, to clarify and summarise as appropriate, to asknon-specific questions, use a non-directive approach, to listen and be able to discern what is meant by what the employeesays. In addition, the counsellor must allow the employee to be silent if he or she wishes to be, to allow any meeting to takeplace at the speed of the employee and anticipate the employee’s views on the causes, which at Bailey’s are many, and toallow solutions to the problems.

(c) For Bailey’s the advantages of counselling as a means of understanding and addressing the problems are that it provides aconfidential service to the employee to discuss problems away from and not involving management or supervision. There isno obvious human resources policy at Bailey’s and counselling provides an opportunity to develop an appropriate policy fromunderstanding individual problems.

This in turn will demonstrate organisational commitment to the employees that has been lacking in the past at Bailey’s andbegin the process of better performance and increase in commitment.

At another level, counselling can provide a link to other external agencies to assist with personal problems that may bedeemed too specific for resolution within Bailey’s.

(d) (i) Job rotation is the planned rotation of staff between jobs and tasks to reduce monotony and boredom and provide freshopportunities and challenges. This could be a useful way of encouraging employees at Bailey’s alongside enrichmentand enlargement. Rotation would encourage better understanding between employees at Bailey’s. It takes two forms,the transfer to another job after some time in an existing job and the introduction of another individual to the job beingvacated, or as a form of training where individuals are moved through different jobs to learn new skills.

(ii) Job enlargement is often referred to as ‘horizontal job enlargement’ and is aimed at widening the content of jobs byincreasing the number of operations in which the job holder is involved and is another method by which employees atBailey’s might become more involved. It reduces the level of repetition and dullness by providing a horizontal extensionto activity, reducing monotony and boredom inherent in the operations at Bailey’s.

(iii) Job enrichment, which is often referred to as ‘vertical job enlargement’, is a planned, deliberate action to build greaterresponsibility, breadth and challenge into the work of the individual. The emphasis is on the individual rather than theorganisation, team or group. This may be a way forward for some of Bailey’s employees since it provides the individualemployee with the responsibility for decision making of a higher order, provides greater freedom to decide how the jobor task should be undertaken, improves understanding of the entire process, encourages participation in the planningand production procedures and provides regular feedback to management – urgently needed at Bailey’s.

(e) There are issues at Bailey’s as a consequence of poor pay. Although non-financial motivation has an important role to playin encouraging commitment, the fact remains that financial rewards act as a strong motivating factor, especially in what hasbeen a low pay business. Financial rewards are all encompassing and apply to all employees at all levels, are universallyapplicable, able to satisfy all types of need and simple to apply and understand. At Bailey’s, financial rewards have a greatereffect because they can provide recognition and prestige if pay is improved, are seen as the most important hygiene factor(especially in a business with a history of low pay and low morale) and are a measure of achievement against goals, especiallyif some form of bonus or performance related pay is introduced by the new management at Bailey’s. In addition, financialrewards are a basis for satisfaction and are often used as a form of professional or social comparison outside the organisation.

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2 For the complex, modern business, the view that the single objective of business is to make a profit is regarded by many writersas simplistic. Peter Drucker has argued that for a business to be successful, it must address a number of objectives.

Drucker was one of the first writers to identify the dangers of the single objective of profit maximisation. Concentrating on a singleobjective (invariably profit) is not only unproductive but potentially harmful to the organisation and can endanger the survival ofthe business and seriously undermine its future. He argues that business organisations have in fact eight objectives, all of whichmust be addressed concurrently. These eight objectives are particularly relevant to management, bringing together as they do theneed to address all the issues with which the organisation is concerned.

Market standing is the need to identify and maintain market share and to ensure the development of new products to maintainshare. Without market standing, no organisation can succeed.

Innovation is the need to develop and find new products and processes; no business can survive on providing the same productor service over the long term. Innovation is fundamental to understanding growth; organisations grow by developing innovativedifferences to their competitors.

Productivity and ‘contributed value’ recognises the need for efficiency and the efficient use of business resources.

Physical and financial resources is a recognition of the need to use the correct and appropriate financial resources.

Profitability. The word ‘profit’ does not appear, but ‘profitability’. Here there are three important determinants, profitability as ameasure of effectiveness (many businesses make a profit which in fact is a poor return on the effort produced), the need for profitso that the business can be self-financing and the need to attract new capital.

Manager performance and development is the explicit recognition that the business requires objectives and that managementactivity can be linked directly to those objectives.

Worker performance and attitude is recognition that it is vital to measure the performance of the workforce by such means aslabour turnover. However, worker attitude is more difficult to measure, but should be attempted.

Public responsibility has become an issue in the twenty-first century. Any business needs to be aware that it is a part of thecommunity within which it operates and is therefore part of a wider social system.

3 All organisations rely upon their staff for success. However, recruitment of staff can be time consuming; a drain on resources andthe necessary expertise may not exist within the organisation.

(a) Internal promotion describes the situation where an organisation has an explicit policy to promote from within and wherethere is a clear and transparent career structure. This is typical of many professional bodies, large organisations and publicservices.

The advantages of internal promotion are that it acts as a source of motivation, provides good general morale amongstemployees and illustrates the organisation’s commitment to encouraging advancement. Recruitment is expensive and internalpromotion is relatively inexpensive in terms of time, money and induction costs and since staff seeking promotion are knownto the employer, training costs are minimised. Finally, the culture of the organisation is better understood by the individual.

(b) External recruitment describes the situation where the organisation decides to fill a staff vacancy and recruit from outside theorganisation.

It may be essential if particular skills or expertise are not already available within the organisation and is necessary to restoredepleted staffing levels or when for some reason the organisation urgently needs new employees. New staff members bringnew ideas and novel approaches to the organisation and to the specific task, often providing experience and work methodsfrom other employers.

(c) An organisation considering the use of external recruitment consultants would make its decision upon the availability, leveland appropriateness of expertise available within the host organisation and its likely effectiveness, together with the cost ofusing consultants set against the cost of using the organisation’s own staff. The organisation should consider the level ofexpertise required of potential employees and therefore the appropriate knowledge required of the consultants and the needfor impartiality or security which may be of particular importance for some organisations. In addition, the views of internalstaff as to the likely effect of using outside consultants must be considered, as is the effect the use of consultants might haveon the need to develop expertise within the organisation.

4 Appraisal systems are central to human resource management and understanding the difficulties of such schemes and the correctapproach to them is necessary if the appraisal process is to be successful and worthwhile.

(a) The manager conducting the interview might base it on one of three approaches.

The Tell and Sell Method. The manager explains to the employee being appraised how the appraisal assessment is to beundertaken and gains acceptance of the evaluation and improvement plan from the employee. Human resource skills areimportant with this approach in order for the manager to be able to provide constructive criticism and to motivate theemployee.

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The Tell and Listen Method. The manager invites the employee to respond to the way that the interview is to be conducted.This approach requires counselling skills and encouragement to allow the employee to participate fully in the interview. Aparticular feature of this approach is the encouragment of feedback from the employee.

The Problem Solving Method. With this method the manager takes a more helpful approach and concentrates on the workproblems of the employee, who is encouraged to think through his or her problems and to provide their own intrinsicmotivation.

(b) The appraisal system should be well constructed and fair to both the individual and the organisation. However, there are anumber of barriers, often because employees see the appraisal as one or more of the following:

Confrontation due to lack of agreement on performance, badly explained or subjective feedback, performance based on recentevents or disagreement on longer term activities.

Judgement, the appraisal is seen as a one sided process based entirely on the manager’s perspective.

Chat is the worst of all worlds. The appraisal interview is seen as an informal, loosely constructed and badly managedconversation without purpose.

Unfinished business is when the appraisal is not seen as part of a continuing process of performance management.

An annual event when the appraisal is seen as largely irrelevant and simply an event to set annual targets that quickly becomeout of date.

A system of bureaucracy based on forms devised solely to satisfy the organisation’s human resources department so that itsmain purpose, that of identifying individual and organisation performance and improvement, is forgotten.

5 The way in which managers treat their employees can significantly influence the satisfaction that the employees derive from theirwork and thus the overall success of the organisation. Understanding the importance of motivation is therefore an importantmanagement skill.

(a) Content theories address the question ‘What are the things that motivate people?’

Content theories are also called need theories (because they concentrate on the needs fulfilled by work) and are based on thenotion that all human beings have a set of needs or required outcomes, and according to this theory, these needs can besatisfied through work. The theory focuses on what arouses, maintains and regulates good, directed behaviour and whatspecific individual forces motivate people. However, content theories assume that everyone responds to motivating factors inthe same way and that consequently there is one, best way to motivate everybody.

(b) Douglas McGregor has suggested that the managers’ view of the individuals’ attitude to work can be divided into twocategories, which he called Theory X and Theory Y. The style of management adopted will stem from the view taken as tohow subordinates behave. However, these two typologies are not distinct; they do in fact represent the two ends of acontinuum.

(i) Theory X is based on traditional organisational thinking. It assumes that the average person is basically indolent and hasan inherent dislike of work which should be avoided at all costs. The individual lacks ambition, shuns responsibility, hasno ambition and is resistant to change. This theory holds that the individual seeks only security and is driven solely byself-interest. It follows that because of this dislike of work, most have to be directed, controlled, organised or coerced.Management is based on fear and punishment and will have an exploitative or authoritarian style. This reflects thethinking of the classical school of management, based on a scientific approach, specialisation, standardisation andobedience to superiors.

(ii) Theory Y is at the opposite end of the continuum and reflects a contemporary approach to motivation, reflecting growthin professional and service employment. It is based on the idea that the goals of the individual and the organsiation can– indeed should – be integrated and that personal fulfilment can be achieved through the workplace. It assumes that formost people, work is as natural as rest or play and employees will exercise self-discipline and self-direction in helpingto achieve the organisation’s objectives. Physical and mental effort at work is perfectly natural and is actively sought asa source of personal satisfaction.

In addition, the average employee seeks and accepts responsibilty and creativity. Innovative thinking is widely distributedamongst the whole population and should therefore be encouraged in the work situation.

The intellectual ability of the average person is only partly used and should be encouraged and thus individuals aremotivated by seeking self-achievement. Since control and punishment are not required, management therefore has toencourage and develop the individual. However, the operation of a Theory Y approach can be difficult and frustrating,time consuming and sometimes regarded with suspicion.

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6 There are many forms of communication within an organisation, both formal and informal. Formally communicated informationoften flows in one of three main directions: downwards, upwards and lateral. However, all organisations also have informalcommunication channels and management must understand their importance.

(a) Formal communicated information flows in three main directions.

(i) Downwards. This form of communication is often the one most easily recognised and understood. The purpose ofdownward communication is to give specific directives, to provide information about procedures and practices and toprovide information about work practices. It also serves to tell employees about their performance and providesinformation on organisational and departmental objectives.

(ii) Upwards communication is generally non-directive in nature and often takes two forms: personal problems orsuggestions and/or technical feedback as part of the organisation’s control system.

(iii) Lateral or horizontal. Traditional communication assumes a hierarchical structure with only vertical communication,however horizontal communication has become important and necessary in less formal organisations. It takes the formof coordination with departmental managers or supervisors meeting regularly, problem solving with department membersmeeting to resolve an issue or information sharing and it also describes interdepartmental sharing of ideas or conflictresolution where there is a need to resolve interdepartmental friction.

(b) The grapevine and rumour are the two main types of informal communication.

The grapevine is probably the best known type of informal communication. All organisations have a grapevine and it willthrive if there is lack of information and consequently employees will make assumptions about events. In addition, insecurity,gossip about issues and fellow employees, personal animosity between employees or managers or new information that hasnot yet reached the formal communication system, will all drive the grapevine.

Rumours are the other main informal means of communication and are often active if there is a lack of formal communication.A rumour is inevitably a communication not based on verified facts and may therefore be true or false. Rumours travel quickly(often quicker than both the formal system and the grapevine) and can influence those who hear them and cause confusion,especially if bad news is the basis of the rumour. Managers must ensure that the formal communication system is such thatrumours can be stopped, especially since they can have a serious negative effect on employees.

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1 (a) Definition of the role of the external counsellor. (Up to 3 marks)(Maximum for part (a) 3 marks)

(b) Description of the role and skills of the external counsellor. (Up to 14 marks)(Maximum for part (b) 14 marks)

(c) Brief description of three advantages to Bailey’s of counselling (one mark each). (Up to 3 marks)(Maximum for part (c) 3 marks)

(d) Explanation and usefulness of:

(i) job rotation (Up to 5 marks)

(ii) job enlargement (Up to 5 marks)

(iii) job enrichment (Up to 5 marks)(Maximum for part (d) 15 marks)

(e) Five reasons why financial rewards could be considered to improve motivation (one mark each). (Up to 5 marks)(Maximum for part (e) 5 marks)


2 Explanation of the eight classifications of objectives. (Up to 15 marks)


3 (a) Description of the advantages of internal recruitment (one mark for each relevant point). (Up to 5 marks)(Maximum for part (a) 5 marks)

(b) Description of the advantages of external recruitment (one mark for each relevant point). (Up to 5 marks)(Maximum for part (b) 5 marks)

(c) Description of five factors (one mark each). (Up to 5 marks)(Maximum for part (c) 5 marks)


4 (a) Description of the three interview approaches. (Up to 5 marks)(Maximum for part (a) 5 marks)

(b) Description of the five main barriers (two marks per barrier). (Up to 10 marks)(Maximum for part (b) 10 marks)


5 (a) Explanation of content theory. (Up to 5 marks)(Maximum for part (a) 5 marks)

(b) (i) Explanation of Theory X. (Up to 5 marks)

(ii) Explanation of Theory Y. (Up to 5 marks)(Maximum for part (b) 10 marks)


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6 (a) Brief explanation of the main purposes of the three main formal communication channels:

(i) Downwards (Up to 3 marks)

(ii) Upwards (Up to 3 marks)

(iii) Lateral or horizontal (Up to 3 marks)(Maximum for part (a) 9 marks)

(b) Brief explanation of the two types of informal communication (up to 3 marks each) (Up to 6 marks)(Maximum for part (b) 6 marks)


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Managing People

PART 1

MONDAY 11 JUNE 2007

QUESTION PAPER








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1 The Darby Motor Company manufactures toy cars and was established at the beginning of the twentieth century byDavid Darby, whose grandson John Darby still owns the company. The company has grown to employ a total of 2,500staff with five senior managers and 20 supervisors, each of whom has responsibility for a separate department. A longestablished business with a traditional product range, the Darby Motor Company has evolved into a traditional,bureaucratic, formal type of organisational structure based on rules, procedures and standardisation.

The company has recently experienced problems. Production levels are low and attempts to improve production levelshave been made in all departments, but their supervisors are having problems reaching the expected performancelevels. John Darby has decided to hold a series of meetings with both levels of management. Initially he found thatthe supervisors were unhappy with and sceptical about the value of the meetings.

It became apparent that the level of morale of all staff was low. Lack of facilities, pressure of work and uncertainprocedures were the main grievances. There appeared however to be a deeper problem, that of mistrust between thestaff as a whole and senior management. The mistrust was more apparent between the senior management andsupervisors. The reason for this was unclear. In addition, the workforce as a whole regard the supervisors as poor atmanaging their departments, disregarding new work practices and required performance standards. The supervisorssaid that their position in general was unclear, despite the size of the organisation. There were no clear lines ofauthority, command or responsibility which allowed them to make decisions for their departments. Some supervisorssimply regarded themselves as menial and unrecognised, referring to funding shortages, unrealistic targets, littlerecognition of their position, no job descriptions and lack of training, all of which are required to meet the newproduction levels.

Job security has also become an issue. The changes in production and hoped for improved production levels haveled to rumours of eventual cutbacks in staff. Rumours are especially strong amongst the supervisors. They worry thatthey might be replaced by new, younger staff that would be better trained, more adaptable and better able to usemodern production equipment.

The problems have manifested themselves in high labour turnover, in addition to the problems already outlined, wasblamed on low salaries, lack of opportunity for personal advancement and working conditions, which were worse forsome employees than others.

The owners have asked you to examine the problems the supervisors are having in reaching the performance expectedof all staff.

Required:

(a) Explain how Herzberg’s theory of motivation might help to explain the attitude of the supervisors.(10 marks)

(b) Which of Handy’s classifications describes the organisational culture? (5 marks)

(c) How well does Darby Motor Company fit Mintzberg’s machine bureaucracy? (15 marks)

(d) Explain how training the supervisors could overcome the problems identified in the company. (10 marks)

(40 marks)

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2 Many writers suggest that organisational success can be predicted.

Required:

Briefly describe the characteristics that according to Peters and Waterman, are common to successfulorganisations.

(15 marks)

3 The selection interview remains the primary means through which organisations recruit new employees.

Required:



(i) the face to face interview; (6 marks)

(ii) the panel interview. (5 marks)

(15 marks)

4 All business organisations need trained employees, yet individuals learn in different ways.

Required:

(a) Briefly describe the four stages in Kolb’s experiential learning cycle. (4 marks)

(b) Describe the four learning styles identified by Honey and Mumford and their implications for trainingprogrammes. (11 marks)

(15 marks)

5 Motivation is fundamental to the task of management.

Required:

(a) What is meant by a ‘content’ theory of motivation? (5 marks)

(b) What is meant by a ‘process’ theory of motivation? (5 marks)

(c) What is meant by an ‘equity’ theory of motivation? (5 marks)

(15 marks)

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6 Fundamental to the task of people management is communicating information to others.

Required:


(b) Explain five barriers to good communication. (5 marks)

(c) Describe how the barriers to communication identified in (b) can be overcome. (5 marks)

(15 marks)


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Answers




1 (a) The scenario demonstrates Herzberg’s motivation theory which explains the factors that motivate the individual by identifyingand satisfying individual needs, desires and goals. It is based on the idea that factors affecting people at work can beseparated into hygiene factors and motivation factors and is therefore often referred to as a ‘two need system’ or ‘two factortheory.’ These two separate ‘needs’ are the need to avoid unpleasantness and discomfort and, at the other end of themotivational scale, the need for personal development. A shortage of those factors which positively encourage employees(motivating factors) will cause those employees to focus on other, non-job related factors. These are the so-called ‘hygiene’factors, illustrated in the scenario – the supervisors’ concern with lack of facilities, work pressures, funding shortages, poorrecognition and lack of training. The most important part of this motivation theory is that the main motivating factors are notin the environment but in the intrinsic value and satisfaction gained from the job itself. It follows therefore that the job itselfmust have challenge, scope for enrichment and be of interest to the job holder. This is not the case in the scenario, wherethere appears to be little or no intrinsic satisfaction from the supervisors’ work.

Hygiene (or maintenance) factors lead to job dissatisfaction because of the need to avoid unpleasantness. They are so calledbecause they can be avoided by the use of ‘hygienic’ methods, that is, they can be prevented. Attention to these hygienefactors prevents dissatisfaction but does not on its own provide motivation except in the short term. Hygiene factors areconcerned with those factors associated with, but not directly a part of, the job itself. These are mainly salary and theperceived differences with others, job security, working conditions, the quality of management, organisational policy andadministration and interpersonal relations.

Motivators (or ‘satisfiers’) are those factors directly concerned with the satisfaction gained from the job itself, the sense ofachievement, level of recognition, the intrinsic value of the job itself, the level of responsibility, opportunities for advancementand the status provided by the job.

Motivators lead to satisfaction because of the need for growth and a sense of self achievement. A lack of motivators leads toover concentration on hygiene factors; that is those negative factors which can be seen and therefore form the basis ofcomplaint and concern. Understanding Herzberg’s theory identifies the nature of intrinsic satisfaction that can be obtainedfrom the work itself, draws attention to job design and makes managers aware that problems of motivation may notnecessarily be directly associated with the work. Problems may often be ‘external’ to the work itself.

(b) The organisation could be described by Handy’s role culture. This culture (and structure) is often illustrated by the Greektemple: the roles and functions are the pillars with the management at the top. This is the traditional organisational culturebased on rules, regulations, rationality, logic and predictability often associated with medium to large manufacturing concernsof long standing in relatively stable environments. In this culture, people describe their job by its duties, not its purpose.

(c) The structure may also be depicted as Mintzberg’s machine bureaucracy. Such an organisation should be efficient, withactivities and culture based on formality and procedures, employees are process and rules oriented, have clear roles and arenot required to be innovative or imaginative. The environment is stable, predictable; this kind of organisation is slow to adaptor respond to change and that in turn explains some of the problems at Darby Motor Company.

The structure and culture at Darby Motor Company suggest that the organisation is an inefficient bureaucracy, poorlydesigned, with a lack of job descriptions, unclear lines of authority, responsibilities and role definitions within which thesupervisors undertake their duties. In addition there is a lack of training and skill development appropriate to supervisors,especially during times of change. The organisation is paradoxically insufficiently bureaucratic; the clarity of roles, proceduresand position required for such an organisation to operate does not exist. This lies at the heart of the organisation’s problems.

(d) The benefits of training for the supervisors will be improved motivation accompanied by greater job satisfaction and improvedorganisational performance. A matching of individual goals with those of the organisation and enhanced skills and abilitiesshould lead to enhanced satisfaction for the supervisors. Individual supervisors would feel valued by the organisation andacquire new skills which will be useful in the future. The training should increase the knowledge and skills of employees,thereby increasing opportunities and increasing the value of the organisation’s human resources. Importantly from thescenario, it could lead to greater staff commitment, understanding and loyalty.

2 Although there are different approaches to predicting success, Peters and Waterman suggest that successful business organisationsdisplay common characteristics.

They focus on the process of organising and reject the standard tools of management such as budgets, plans and detailedforecasting and control, because these encourage a system that concentrates on negative measures. They emphasise theimportance of values to organisational success and the importance of a strong, common organisational culture, capable ofmotivating employees to outstanding performance levels.

They suggest that successful businesses display eight characteristics.

A BIAS FOR ACTION. This describes the encouragement of an informal, innovative, task oriented culture that is not based onformal systems, a system they describe as ‘management by wandering around’.

CLOSE TO THE CUSTOMER. An organisational culture based on listening to customers and being ‘obsessed’ with customerservice.

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AUTONOMY AND ENTREPRENEURSHIP. This is the encouragement and fostering of innovation, the use of product championsand practical risk taking by the organisation’s members. An organic system of management is developed and the associatedorganisational structure is developed.

PRODUCTIVITY THROUGH PEOPLE. Peters and Waterman see people in the organisation as the basic source of quality andoverall success. The staff is encouraged and praised and a team approach is developed based on mutual trust and appropriatemotivation.

HANDS ON, VALUE DRIVEN. The values of the organisation and its objectives are known and shared by all the organisation’smembers. The management is involved at all levels and they encourage a system based on doing a job well.

‘STICK TO THE KNITTING’. Peters and Waterman point to successful organisations remaining in markets and products of theircore business. The organisation grows through internally, rather than externally, generated diversification.

SIMPLE FORM, LEAN STAFF. There are no complicated organisational and management structures; organic structures and simpleproduct divisional forms are used.

SIMULTANEOUS LOOSE-TIGHT PROPERTIES. As far as possible, autonomy and responsibility are pushed down the organisation,although core values such as the control of quality remain at the centre of the organisation.

These successful organisations understand the basics; thinking at all levels is encouraged, things are kept simple and ‘chaos’ istolerated in return for results. The organisation’s core values are known by all and prized by all .

3 Interviews remain the main source of recruitment of new employees, even though they are regarded as unscientific and often failto identify suitable candidates. Proper understanding of the purpose and structure of selection interviews can alleviate many of theproblems associated with this practice.

(a) The purpose of the selection interview is clear; that is to ascertain the best possible person for the position and who will alsofit into the organisation. The individuals who conduct interviews should also ensure that the candidate clearly understandsthe position on offer, the potential career prospects and that fair treatment has been provided throughout the selection process.The interview must provide a good impression of the organisation, whether the candidate is successful or not.

(b) (i) The face to face interview is the most common form of interview. The candidate is interviewed by a single representativeof the employing organisation.

The advantages of such interviews are that they establish an understanding between the participants, are cost effective(compared with panel interviews) and because of the more personal nature, ensure that candidates feel comfortable.

The disadvantages are that the selection relies on the views and impression of a single interviewer which can besubjective and biased. In addition, the interviewer may be selective in questioning and it is easier for the candidate tohide weaknesses or lack of ability.

(ii) The panel interview is commonly used for senior appointments and consists of two or more interviewers.

The advantage of such interviews is that they allow opinion and views to be developed and shared amongst the panelmembers and so a more complete picture of the candidate can be developed. Thus problems or bias inherent in face toface interviews can be removed. In addition, the panel often has the authority to reach immediate decisions and sospeed up the selection process.

The disadvantages are that panels can be difficult to control; panel members may deviate from the issues or askirrelevant questions. Panels can often be dominated by a strong personality who is able unduly to influence others. Thereis a particular danger that panel interviews can result in disagreement amongst the panel members.

4 If training programmes are to be successful, managers need to understand that individuals learn in different ways and that learningcan be based on previous experience and be affected by the style with which individuals learn.

(a) David Kolb suggests that learning is a series of steps based on experience and argues that classroom based learning isinefficient. Actual learning comes from real life experiences, is experiential and comes from 'doing,' this then ensures thatlearners actually solve problems.

Kolb’s experiential learning cycle

⇒⇒ experience ⇒⇒⇑ ⇓⇑ ⇓

active observationexperimentation and

reflection⇑ ⇓⇑ ⇓⇐⇐⇐ abstract ⇐⇐⇐

concepts and generalisations

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The first stage (experience) is the situation where the person is learning something new. This may be planned learning or‘accidental’.

The second stage (observation and reflection) is where the significance of the experience is reviewed.

The third stage (abstract concepts and generalisations) is where the experience is reviewed and applied to other situations.

The fourth stage (active experimentation) is where the person applies the learning in similar situations, it involves creativity,decision making and problem solving and is the creative and main developmental stage of the cycle.

(b) Honey and Mumford classify learners into four styles.

Theorists are concerned with forming principles and take an intellectual view. They think problems through in a vertical, stepby step, logical way and tend to be perfectionists who do not rest easy until things are tidy and fit into a rational scheme.Theorists are usually detached, analytical and dedicated to rational objectivity rather than anything subjective or ambiguous.For them training must be programmed and structured, designed to allow time for analysis and provided by others who sharethe same preference for ideas and analysis.

Reflectors are concerned with observation and reflection. They stand back and ponder experiences and observe them frommany different perspectives. They collect data, both first hand and from others, and prefer to think about it thoroughly beforecoming to any conclusion. Thoughtful people, they prefer to take back seats in meetings and discussions. They need anobservational approach to training, need to work at their own pace and do not find learning easy, especially if rushed.Conclusions are carefully thought out and are slow, cautious and non-participative.

Activists are concerned with actual experience. They involve themselves fully in new experiences, are open minded, notsceptical and tend to be enthusiastic about anything new. Gregarious and constantly involving themselves with others, theyseek to centre all activities around themselves. They have a practical approach to training, preferring practical problems, adislike of theory, insist on having hands-on training, enjoy participation and challenge, and are flexible, optimistic but easilybored.

Pragmatists are concerned with deliberate testing. They are keen on trying out ideas, theories and techniques to see if theywork in practice, search out new ideas and take the opportunity to experiment with applications. They are essentiallypractical, down to earth people who like making practical decisions and solving problems. They need to see a direct valueand link between training and real problems, enjoy learning new techniques and tasks, are good at finding improved ways ofdoing things and aim to do things better. But they get impatient if new ideas are not reflected in practical applications.

5 Understanding motivation is fundamental to managing people. Many different theories have been presented on how managementmight motivate employees. There are many different approaches and management must understand the appropriateness of each.

(a) Content theories present the question ‘What are the things that motivate people?’ Content theories are also called need theories(because they concentrate on the needs fulfilled through work) and are based on the notion that all human beings have a setof needs or required outcomes that can be satisfied through work. The theory focuses on what arouses, maintains andregulates good, directed behaviour and what specific individual forces motivate people. However, content theories assumethat all individuals respond to motivating factors in the same way and that consequently there is one, best way to motivateeverybody.

(b) A process theory of motivation asks the question ‘How can people be motivated?’ A process theory of motivation does notemphasise the need for fulfilment through work (as in content theory), but concentrates upon the processes through whichindividuals are motivated. The theory attempts to explain how individuals start, sustain and direct behaviour and assumesthat individuals are able to select their own goals and means of achieving those goals through a process of calculation. Processtheory emphasises the importance of rewards, which are often financial in nature.

(c) Equity theory focuses on the feelings of the individual and how fairly they feel they have been treated in comparison withtreatment received by others. It is sometimes referred to as exchange theory; individuals expect certain outcomes in exchangefor certain efforts and contribution to the organisation. When an individual perceives that his or her efforts are equal to othersand the rewards are the same, then equity exists. If the perception is that the efforts and rewards of one person are unequalto others, then there is inequity which develops into other issues.

6 Clear and concise communication and the consequences of poor communication need to be understood by management. Poorcommunication can lead to ineffective control, poor co-ordination and often organisational failure.

(a) Good communication is important because it ensures that individuals know what is expected of them. In addition, it leads toco-ordination within the organisation, improves control of the organisation’s plans, procedures and staff and ensures that theinstructions of management are understood. Team and group cohesiveness is encouraged and good communication can leadto the reduction of stress, remove bias and distortion. Secrecy and misunderstanding are reduced or removed, information isreceived by appropriate persons and conflict in the workplace is reduced.

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(b) Barriers to communication are many, but the main barriers include the personal background of the persons communicating,language differences, different education levels and the use of jargon. ‘Noise’ in communication (that is the message confusedby extraneous matters) is often a serious but understated communication barrier as is the perception of individuals. Conflictwithin the organisation, communication overload (too much information being communicated at once), problems of distanceand simple basic misunderstanding or accidental or deliberate distortion of information can all act as communication barriers.

(c) Communication barriers can be overcome by consideration of the needs and understanding of recipients, careful and clearreporting at all levels and expressing information clearly and concisely. Avoiding the use of jargon, professional terms orabbreviations is important, as is using more than one communications system if appropriate. The encouraging of dialoguerather than monologue reduces barriers, as does ensuring that there are as few links as possible in the communication chain.Above all, ensuring feedback will assist with overcoming communication barriers.

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Marks1 (a) Explanation of Herzberg’s Theory and relevance to the scenario. Up to 10 marks


(b) Description of Handy’s organisational culture (Role). Up to 5 marks


(c) Description of Mintzberg’s machine bureaucracy and recognition of the inappropriate structure and culture that explain thesupervisors’ attitude. Up to 15 marks


(d) Explanation of ways to resolve the problems. Up to 10 marks



2 Brief description of the characteristics. Up to 15 marks


3 (a) Explanation of the purpose of the selection interview. Up to 4 marks


(b) Advantages and disadvantages of:

(i) the face to face interview. Up to 6 marks

(ii) the panel interview. Up to 5 marks



4 (a) Brief description of the four stages in the experiential learning cycle. Up to 4 marks


(b) Description of the learning style and their implications for training programmes. Up to 11 marks



5 (a) Meaning of ‘content’ theory. Up to 5 marks


(b) Meaning of ‘process’ theory. Up to 5 marks


(c) Meaning of ‘equity’ theory. Up to 5 marks



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Marks6 (a) Brief explanation of the importance of good communication. Up to 5 marks


(b) Brief explanation of five barriers to communication.(One mark per point) Up to 5 marks


(c) Brief description of overcoming barriers. Up to 5 marks



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ACCA | F1 - Accountant in Business Solved Past Papers [02-07]

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