Chapter 1 Management Functions

Let’s Start

(a) Does the goal state clearly what is to be achieved? Yes / No

(b) Is the goal quantifiable or expressed in numbers? Yes / No

(c) Is the goal challenging but attainable? Yes / No

(d) Is the goal relevant to the performance of the booth? Yes / No

(e) Does the goal include a time frame for achieving the goal? Yes / No

The goal mentioned by Nancy is / is not an effective goal.

Check Your Progress

P1-1 (a) T

(b) T

(c) F During the planning process, a company develops and evaluates possible plans, and chooses the
one that can achieve its objectives and goals most effectively.

(d) F Companies have to set a time frame or schedule for their plans during the planning process.

P1-2 (a) Time-based: There is no time frame for achieving the goal.

(b) Measurable: The goal is not quantifiable or expressed in numbers.

(c) Specific: It is unclear what ‘expectation’ means.

(d) Attainable: It is highly unlikely that the company can increase its market share from 10% to 80% in
a month.

P1-3 (a) front-line management

(b) top management

(c) middle management

(d) front-line management

(e) top management

(f) front-line management

P1-4 (a) F Managers under a flat structure have a wide span of control.

(b) T

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 (c) F Managers with staff authority can only help other managers make decisions, not make decisions
for them.

(d) T

P1-5 (a) Departmentalisation by location

(b) Departmentalisation by function

(c) Departmentalisation by product

P1-6 (a) Laissez-faire leadership

(b) Participative leadership

(c) Autocratic leadership

P1-7 (a) Autocratic leadership

(b) Autocratic leadership

(c) Laissez-faire leadership

(d) Participative leadership

(e) Autocratic leadership

(f) Laissez-faire leadership

(g) Participative leadership

P1-8 (a) T

(b) F The first step of controlling is to set performance standards.

Or
Measuring the actual performance of the activities to be controlled is the second step of
controlling.

(c) F Managers only have to take corrective actions if the actual performance deviates significantly
from the performance standard.

(d) F If performance standards are too high or too low, managers can revise or adjust the standards.

P1-9 (a) T

(b) T

(c) F Unity of direction only ensures that employees working on the same plan or project will have
the same goal(s). The supermarket chain may have more than one goal.

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 (d) F Managers can delegate both responsibility and authority to their subordinates.

P1-11 (a) Unity of command

(b) Division of work

(c) Unity of direction

(d) Balancing authority and responsibility

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Let’s Try
T1-1 Free answer

T1-2 Free answer

T1-3 Free answer

T1-4 Free answer

Case Study How management functions help firms increase sales

1 (a) Controlling

(b) Leading

(c) Organising

(d) Planning

2 Controlling can ensure that all activities are done as planned.

3 The steps involved in the food manufacturer’s control process include:

 Step 1: Set performance standards: The food manufacturer sets a sales target for the
exhibition.
 Step 2: Measure actual performance: The company measures actual sales revenue after
the exhibition.
 Step 3: Compare actual performance with standards: The company compares actual sales
revenue with the sales target.
 Step 4: Analyse deviations and take corrective actions: If the actual sales revenue is
unacceptable, the company would analyse the deviation to find the causes of the problem
and take corrective actions.

(Any other reasonable examples)

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Assessment

MCQ
1.1 C 1.2 C 1.3 C 1.4 A 1.5 B
1.6 D 1.7 A 1.8 D 1.9 B 1.10 B
1.11 D 1.12 D 1.13 C 1.14 D 1.15 B
1.16 D 1.17 C 1.18 D 1.19 A

Short Questions
1.20 (a) Planning is the process of establishing goals and objectives for an organisation and
determining the best ways to achieve them. 1 mark

(b) The planning process of the coffee shop chain is listed as follows:
 Step 1: Establish objectives and goals: The coffee shop chain decides what it wants
to achieve.
 Step 2: Gather useful and relevant information: The coffee shop chain analyses its
resources and searches for information which is important for achieving its
objectives and goals.
 Step 3: Evaluate alternative plans and choose the best option: The coffee shop chain
develops and evaluates possible plans, and chooses the one that can achieve its
objectives and goals most effectively.
 Step 4: Formulate the plan: The coffee shop chain sets a time frame or schedule for
actions and allocates resources.
 Step 5: Implement the plan: The coffee shop chain carries out the actual actions
according to the plan and evaluates the achievement of goals.
(1 mark for each step in the correct sequence, maximum 4 marks)

1.21 (a) Autocratic leadership 1 mark

(b) Characteristics of Rebecca’s employees:

 They are passive and inexperienced.
 They are not willing to take on job responsibilities.
 They do not possess the information needed for decision-making.
 They are likely to resist Rebecca’s decisions. Any 3

 They are only responsible for simple and repetitive tasks. 1 mark each

1.22 (a) Departmentalisation by location 1 mark

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 (b) Other forms of departmentalisation that Mr Wong’s firm can adopt include:
 Departmentalisation by function: Mr Wong’s firm may set up different departments
to take care of its human resources, finance, operations, marketing, etc. 2 marks

 Departmentalisation by product: Mr Wong’s firm may set up different departments

to take care of its different products, such as refrigerators, microwave ovens and
dishwashers. 2 marks

1.23 Characteristics of a SMART goal that is not demonstrated include:

 Specific: It is not clear what kind of wastage should be avoided. It may refer to wastage
in food ingredients or manpower wastage.
 Measurable: This goal is not quantified. It would be difficult to determine whether the
goal has been achieved. Any 2

 Time-based/Time-bound: There is no time frame for achieving the goal. 2 marks each

1.24 (a) Unity of direction 1 mark

The fitness centre has two managers in charge of the same plan and people working on
the same plan have different objectives. 1 mark

(b) Advantages of adopting unity of direction at the fitness centre:

 Achieve organisational goals effectively: The fitness centre’s organisational goals
can be achieved effectively as the efforts of all employees are directed at achieving
the same goals.
 Avoid conflicts among departments: This ensures that the fitness centre has no
conflicting goals which may act against each other. This can facilitate management
and avoid conflicts among different departments.
 Enhance team spirit: As all employees are working towards the same goals, they Any 2

have better team spirit and morale may be enhanced. 2 marks each

1.25 (a) Participative leadership 1 mark

(b) Other advantages of adopting participative leadership:

 Widen the manager’s exposure: Cherry cannot gain access to all information alone.
Ideas and suggestions from the shop assistants can widen the scope of her view.
This may help her make better decisions. 2 marks

 Enhance employees’ commitment and motivation: Involving the shop assistants in

decision-making would make them feel that Cherry values their opinions.
Therefore, they will be more committed and motivated to work for the boutique.

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 2 marks

1.26 (a) Advantages of adopting a flat structure over a tall structure:

 Faster communication: Messages can go up and down the bank quickly with little
distortion.
 More efficient and flexible: Decision-making is faster and actions can be taken
quickly.
 Higher employee motivation: Employees enjoy more autonomy and so often Any 2

have higher motivation. 2 marks each

(b) Tiger Bank’s top management may perform the following tasks:
 Decide on the bank’s vision and mission
 Formulate company policies and strategies
 Make company-wide decisions such as entering a new market and opening new Any 2

branches 1 mark each

(Any other reasonable answers)

1.27 (a) Division of work 1 mark

(b) Disadvantages of adopting division of work:

 Poor job satisfaction: As the employees have to repeat a task over and over again,
they may find their work boring. This can lead to poor job satisfaction.
 High cost of mistakes: As the production process at Smart Books is broken down
into different tasks which are dependent on each other, a mistake made in any task
(e.g., processing orders from customers) may greatly affect the operations of Smart
Books.
 Low flexibility: As the employees have specialised skills, they may not be able to
perform other tasks. The manager or owner of Smart Books may find it hard to Any 2

deploy manpower. He cannot assign employees to other jobs flexibly. 2 marks each

1.28 (a) Controlling 1 mark

(b) After comparing the departments’ actual performance with performance standards and if
the actual performance is unacceptable, Ms Siu would analyse the deviation to find the
causes of the problem and take corrective actions. 2 marks

(c) (i) Ms Siu may adopt laissez-faire leadership. 1 mark

(ii) Advantages of adopting laissez-faire leadership:

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  Greater employee motivation: As Ms Siu’s employees enjoy autonomy at
work, they gain a greater sense of challenge, commitment and satisfaction
regarding their jobs.
 Encourage innovation: As Ms Siu’s employees are allowed to decide what they
want to do and how to complete their tasks, this encourages creativity and Any 1

innovation. 2 marks

1.29 (a) Departmentalisation by function 1 mark

(b) Unity of command is being violated. 1 mark

The Purchasing Supervisor, Quality Control Supervisor and Shipping Supervisor directly
report to more than one superior, i.e., to both the Plant Manager and Operations Manager. 1 mark

(c) Problems of violating unity of command:

 Confusion to subordinates: The Purchasing Supervisor, Quality Control Supervisor
and Shipping Supervisor may get confused when they receive conflicting
instructions from the Plant Manager and Operations Manager. As a result, they
would have difficulty carrying out their jobs. 2 marks

 Conflicts among managers: As both the Plant Manager and Operations Manager are
allowed to give instructions to the Purchasing Supervisor, Quality Control
Supervisor and Shipping Supervisor directly, they may come into conflict easily.
This may adversely affect the company’s operations. 2 marks

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Past Exam Questions
1.30 B 1.31 D 1.32 C 1.33 B 1.34 D
1.35 A 1.36 A 1.37 B

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