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December, 2011

MS-43 : Management Control Systems

1. Briefly explain the nature and purpose of management control systems and discuss the various critical components of management control systems.

2. Explain the concept of 'Radical Performance Improvement' (RPI) and discuss the application of this frame work in the formulation of corporate strategy.

3. Explain the concept of Responsibility Accounting. Discuss the application of this concept in creating and designing various responsibility centres.

4.  What is an investment base ? Explain the various asset valuation alternatives used for the purpose of calculating investment base.

5.  What do you understand by Transfer Pricing? Explain the Various categories of Inter Company Transfers in the context of transfer pricing.

6.  Explain the following :

(a) Value added analysis

(b) Activity based costing

7.  Explain the distinguishing features of cash flows of insurance companies.  What are the implications of these characteristics on Management Control Systems of insurance  companies ? Discuss.

8.  What are 'development organisations'? Explain the main elements of Management Control Systems for development organisations. 

December, 2012

Ms-43 : Management Control Systems

1. What are Business Unit Strategies? Explain the application of BCG Model and General Electric (GE) planning model in the formulation of business unit strategies.

2. Explain the concept of responsibility Accounting and describe its benefits? Briefly explain various types of responsibility centres.

3. What do you understand by Transfer Pricing? Discuss the various categories of inter-company transfer transactions.

4. What is 'investment centre'? Explain the concept of 'Return on Investment' (ROI) in the context of performance measurement of an investment centre.

5. Elaborate on the constituent parts of the performance measurement system and discuss the requirement for a performance measurement system.

6. Explain the characteristics of incentive compensation plans and discuss the various short term incentive plans.

7. Explain the general characteristics of banks and discuss how can management control systems contain risks faced by banks?

8. What are Developmental organisations? Discuss the main elements of control systems for these organisations. 

June, 2013

MS-43 : Management Control Systems

1. Define the concept of strategy. Explain the Boston Consulting Group (BCG) model, General Electric (GE) planning model and highlight their usefulness in formulating business unit level strategies.

2. Explain the following:

(a) Just In Time (JIT) and Management Control System

(b) Benchmarking and Management Control System

3. What is a 'Responsibility Centre'? Why are they established? Explain the different types of Responsibility Centres.

4. What is Arm's Length Principle ? Explain the traditional transaction methods used for determination of transfer price.

5. What do you understand by Performance Measurement ? Explain in detail the G.E. performance measurement frame-work.

6. What are the objectives of Reward and Compensation plan. Discuss the various types of long term incentive plans.

7. Explain the following :

(a) Business Process Re-engineering (BPR)

(b) Enterprise Resource Planning

8. Discuss the special characteristics of Non Profit Organisations and explain the focus areas of Management Control Systems for such Organisations. 

December, 2012

MS-42 : CAPITAL INVESTMENT AND FINANCING DECISIONS

 1. The existing capital structure of ABC Ltd. is as follows :

Company earns a return of 12% and the tax rate on its income is 50%. Company wants to raise Rs. 25,00,000 for its expansion project for which it is considering following alternatives :

(a) Issue of 20,000 equity shares at a premium of Rs. 25 per share

(b) Issue of 10% preference shares and

(c) Issue of 9% debentures.

 It is Projected that the company's P/E ratios in the case of equity, preference and debentures financing are 20,17 and 16 respectively. Which alternative would you consider to be the best. Give reasons for your choice.

 2. A company is considering raising of additional funds of Rs. 100 lakhs by one of the two alternative, methods, viz. 14% institutional term loan and 13% non convertible debentures. The term loan option would attract no major incidental cost. The debentures would have to be issued at a discount of 2.5% and would involve floatation cost of Rs. 1 lakh. Advise the company as to the better option based on the effective cost of capital in each case. Assume a tax rate of 50%.

 3. What do you understand by Economic Appraisal of a project ? Discuss the various aspects of economic appraisal and explain their significance.

 4. What is Certainty Equivalent ? Explain the relationship between certainty equivalent and risk adjusted discount rate.

 5. List the various instruments through which corporates can procure finance and discuss the circumstances under which they are used to procure finance.

 6. Write short notes on the following :

(a) Asset securitisation

(b) Venture Capital

(c) Sensitivity analysis

(d) Internal rate return method of capital budgeting

 7. What are the different payout methods of dividends ? Explain the Modigliani-Miller hypothesis regarding dividend policy.

 8. What is Financial Engineering ? Explain the factors which motivate the finance managers to undertake financial engineering.

June, 2013

MS-42 : CAPITAL INVESTMENT AND FINANCING DECISIONS

1. What do you understand by Financial Reconstruction ? How does it differ from reorganisation of Capital ? Discuss the steps involved in the formulation of Reconstruction Plan for a company.

 2. What do you understand by Securitisation of Assets ? Discuss the procedure involved in Securitisation and point out its advantages to the parties concerned.

 3. Distinguish between :

(a) Global Depository Receipts and Euro -Bonds.

(b) Commercial Paper and Convertible Debentures

(c) Collateral Security and Contract of Guarantee

(d) Factoring and Discounting of Bills.

4. (a) What do you understand by Earned Value Chart ? For what purpose is it used ? Explain with a diagram.

(b) Discuss the three main types of control systems used in controlling a project.

 5. What do you understand by Venture Capital ? What are its special features ? Discuss the stages at which a Venture Capitalist provides finance to a project. In what form is Venture Capital provided ?

 6. Write notes on :

(a) Accounting Rate of Return and Internal rate of Return

(b) Leveraged Buyout

(c) Corporate Governance

(d) Supplier's Credit

7. S. Co. Ltd, has the following capital structure on 31^st March 2012 :

The share of the Co. sells for Rs. 20/- . It is expected that the Co. will pay next year a

dividend of Rs. 2 per share, which will grow at 7% forever. Assume a 50% tax rate.

You are required to :

(a) Compute weighted average cost of Capital based on existing capital structure.

(b) Compute new weighted average cost of capital if the Co. raises an additional Rs. 20 lakh debt by issuing 15% debentures. This would result in increasing the expected dividend to Rs. 3 and leave the growth rate unchanged, but the price of the shares will fall to Rs. 15 per share.

(c) Compute the cost of capital if in (b) above the growth rate increases to 10%

8. M.C. Ltd. requires Rs. 25,00,000 for a new plant. This plant is expected to yield earnings before interest and taxes of Rs. 5,00,000. While deciding about the financial plan, the company considers the objective of maximising earnings per share. It has three alternatives to finance the project - by raising debt of Rs. 2, 50, 000 or Rs. 10, 00, 000 or

Rs. 15, 00, 000 and the balance, in each case, by raising equity shares. The company's share is currently selling at Rs. 150, but is expected to decline to Rs. 125 in case the funds are borrowed in excess of Rs. 10,00,000. Funds can be borrowed at the rate of 10% upto Rs. 2,50,000, at 15% over Rs. 2,50,000 and upto Rs. 10,00,000 at 20% over 10,00,000. The tax rate applicable to the company is 50%. Which form of financing should the company choose ?

June, 2013

MS-41 : WORKING CAPITAL MANAGEMENT

 1. Explain the concept of working capital and mention the important objectives of working capital management. Discuss the impact of inflation on working capital.

 2. Explain the walker's approach to investment in working capital. Explain the profitability -solvency tangle in the current asset holding.

 3. Household Appliances Ltd. deals with consumer durables having an annual turnover of

Rs.80 lakhs, 75% of which are credit sales effected through a large number of dealers, while the balance sales are made through show rooms on cash basis. Normal credit allowed is 30 days. The company proposes to expand its business substantially and there is good demand as well. The finance manager proposes the following two plans for a change in the credit policy :

The product yields an average contribution of 25% on sales. Fixed costs amount of Rs. 5 lakhs per annum. The company expects a pre-tax return of 20% on capital employed. The finance manager has also recommended increasing the provision for bad debts from the current 1% to 1.5% for Plan I and to 2% for Plan II. Evaluate the merits of the new proposals and recommend the best proposal.

4. Explain the Baumol's model and Miller - orr cash management models.

5. Write short notes on the following :

(a) Prudential norms for credit exposure limit for banks.

(b) Discounting of bills

(c) Syndication of credit

(d) Bridge loans

6. (a) What is meant by Commercial Paper ? Explain the guidelines issued by Reserve

Bank of India for the issuance of commercial paper by companies.

(b) What is factoring of Receivables ? Explain its mechanism and importance.

 7. Explain the cost of liquidity and illiquidity. What is the impact of these costs on the level of the current assets ?

 8. Discuss the types and determinants of trade credit. What are the costs involved in taking credit ?

June, 2013

MS-28 : LABOUR LAWS

SECTION-A

1. Discuss the sources of Industrial jurisprudence in India. Briefly describe the genesis, objectives and classification of the labour legislation in India.

2. Describe the historical development of the Factories Act, 1948. Explain the provisions relating to hazardous process under the Act.

3. Define and discuss the objectives of the Industrial Disputes Act, 1947. Explain the provisions regarding Lay-off, Retrenchment and closure under the Act.

4. Describe the scope and coverage of the Minimum Wages Act, 1948. Explain the powers which the government can exercise under the Act.

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

(a) Act of misconduct

(b) Natural justice

(c) Res judicata

(d) The Employee's Provident Fund Scheme, 1952.

(e) Domestic enquiry.

SECTION - B

6. Read the following case and answer the questions given at the end.

Lakshmi Manufacturing Company is a registered factory employing 600 people. It

produces spare parts for cars and scooters. Its security staff at the gate are very rigid in checking people/vehicles going out of the works to prevent any theft of the company's material. On June 20, 1995, Ramesh, material chaser, services department, went to the stores department to draw 10 new GEC electric switches (15 amps each) for some urgent breakdown job. Ramesh drew the material at about 11 A.M. and kept the same in his hand bag and put it on the cycle handle. Thereafter, he came to the Cooperative Credit Society office to enquire about his loan application. He suddenly remembered at 11.30 A.M. his urgent work at the post office (which is situated just outside the works gate), so

that he could write and post an urgent letter and thereafter go to his department which is situated at a distance of about one km from the stores department. The distance between the stores department and the works gate is about 50 metres. Ramesh works in general shift, i.e. from 7 A.M. to 11.30 A.M. and 12.30 P.M. to 4 P.M. The lunch-break is from 11.30 A.M. to 12.30 P.M. and during this period, workers are allowed to go out of the works. Ramesh, like many others, arranged with a person to get his tiffin-carrier from home to his department every day at 11-45 A.M. on payment of a nominal amount every month. On June 20 also, his tiffin-carrier had come with his lunch as usual. At 11.35 A.M., there was telephone call to Mahesh Kumar, Manager Service Department from the security inspector Ramanand that Ramesh, T. No. 321 has been caught red-handed at the works gate while trying to go out of the works with 10 new GEC electric switches belonging to the company. The two security staff who detected the attempted theft were Ramadhin and Trilochan. The materials were kept in a bag hanging from the cycle handle of Ramesh. After the incident, a preliminary enquiry was held, when Ramesh confessed in writing that by mistake he was carrying the switches as he intended to come back to his department after his urgent work at the post office. As per procedure for drawing materials in the services department, on the basis of a written instruction in the Log Book from the supervisor, material chaser is supposed to prepare the material requisition after

entering the details himself in the Materials Requisition Register. After getting the Requisition signed by the supervisor and the departmental head, he is supposed to go to the stores department to draw the material. If the materials are heavy, he has to arrange for a transport. For small items like switch, fuse, etc. Ramesh himself carried the same to the department. Thereafter, he is supposed to hand over the material to the supervisor and obtain his signature in the Materials Requisition Register. On checking up the entries in the Log Book as well as in the Materials Requisition Register after the incident, it was found that Ramesh had correctly entered ten pieces GEC electric switches (15 amps each).

As per Standing Order No. 17 (iii) of the Company's Certified Standing Orders, "Theft, fraud or dishonesty in connection with company's business or property" is a misconduct warranting dismissal as per Standing Order No. 18. The rules also provide that the manager can issue a charge-sheet and also punish with dismissal any employee of his department who is alleged to have committed an act of misconduct.

Questions:

(a) Advise the Manager, Services Department on the steps required to be taken in this case.

(b) Assuming that a domestic enquiry is to be held, suggest various steps of enquiry, in

detail.

(c) Suggest what positive measures are to be taken by the company for maintaining and

promoting sound industrial discipline.

June, 2013

MS-27 : WAGE AND SALARY ADMINISTRATION

SECTION - A

1. Explain the role of Compensation and its structure in framing the corporates policy of an organization.

2. Explain the constitutional perspective on wages including the norms for fixation of wages. Discuss the role played by the International Labour organisation on protection of wages.

3. Define and differentiate between bonus and fringe benefits, how are they linked to social security. What are the components of pay packet ?

4. What is performance reward system ? Describe the various steps involved in designing a performance - linked reward system.

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

(a) Tax planning

(b) Voluntary Retirement Scheme (VRS)

(c) Equal pay for equal work

(d) ESOP

(e) Minimum wage

SECTION-B

6. Read the case given below and answer the questions given at the end of the case.

The Indian Electric Company is a city based manufacturer of welding machines and motors. When Mr. Nirad Shah established the company in 1970, he was keenly aware of the importance of a highly motivated workforce, and how the company's success, in fact, depended on it. Therefore, Mr. Shah had to ensure that each employee would work as diligently as possible for the good of the organisation. Mr. Shah realised that the best way to motivate employees would be to link the company's reward and recognition system to its goals. To establish this connection, Shah developed and implemented an incentive system. Its aim was to improve the company's overall performance by allowing contributing workers to share in the proceeds. The plan rewards employees for turning out quality products efficiently while controlling costs. The system includes the following components : Paying by the piece rate : Production workers are paid according to the number of "pieces" or product units they produce that are not defective. If a customer sends a defective part back to the company, the employee who produced it must repair it on his or her own time. Providing year-end Bonus : To reward workers further for their efforts, Shah introduced a year-end bonus system that gives all workers opportunity to nearly double their base wages. Workers get the bonus if the company's annual profit increases. Providing Stock Options : Shah also provided his employees with the option of buying company's stock at a low cost. Employees are also given shares of the company's stock based on annual profits. All the above financial incentive payments enabled the employees to earn more and helped to improve their morale and motivation.

Questions :

(a) Identify the salient issues of this case in general.

(b) What are the additional financial incentive schemes you suggest for sustaining the

morale and motivation of the employees ?

(c) Suggest suitable non-financial incentives for further improving the morale and motivation of the employees of Indian Electric Company.

June, 2013

MS-26 : ORGANISATIONAL DYNAMICS

SECTION-A

1. Discuss the process and stages for formation of groups in an organisation. Why is cohesiveness important for group effectiveness ? Explain with reason.

2. Analyse decentralisation as a structured mechanism of empowerment. Discuss the need

of integrating mechanisms with decentralisation. Explain with suitable examples.

3. Define 'Burnout' and discuss the main reasons of Burnout. Identifying various stages of Burnout, describe how does an individual reach the 'Hitting the wall' stage. Cite examples.

4. Define and discuss the nature and forms of strategic Alliances. Briefly describe the tenets of strategic Alliances, with relevant examples.

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

(a) Compliance

(b) Dimensions of Diversity

(c) Transformational leadership

(d) Role systems

(e) Social Responsibility of Organisations.

SECTION-B

6. Please read the case given below and answer the questions given at the end.

On 15 March 1949, Merry Joseph came in to see Mr. John, the plant personnel director, to talk over a problem that was troubling her. Merry was a hand assembly production worker in a modern 600-employee branch plant located in a large eastern city. After Merry told Mr. John her story, he asked her to write out a description of the situation. Her statement is reproduced here. Reconsider this case not unusual nor typical, but as having happened to me and to a few others. As I am not equipped to do the work, it offers little or no solution to the problem at hand. I would not be writing this report if I had not remembered the advice given by Mr. John of Personnel. He told a group that should we have a problem, to please consult him before walking out. However, I will mention here that I have seen a few very conscientious workers walk out without "fighting the case". When I was first hired, Mr. Nair, the foreman, introduced me to the young lady who taught me the process of soldering lead wires. I asked her how much production I would be expected to turn in daily, and she secured this information for me from the other girls. This seemed at the moment like a fantastic sum, but she assured me that after a few days I would become quite efficient, which I soon did. I am not one to "bite the hand that feeds me", so I began working and finally developed the system into a sort of game. A few weeks later, one of the girls asked me how I was doing, and I told her that I was doing fine. She looked at my production sheet and swore. She was astonished to see how much I was producing each hour. She bitterly reminded me that girls that had been here for several months or even years were not producing what I had accomplished in a few weeks ! I laughed that off as somewhat of a compliment. That was my big mistake as far as co-operating with the company or satisfying my gregarious tendencies was concerned. I was immediately and severely ostracized. During the weeks that ensued, I noticed I was not completely alone; there were a few others who were also "friendless". However, it was soon apparent that ostracism was not satisfying the desires of their fiendish little plan. Threats were to follow and they did follow. Having worked in the "violent ward" of a psychopathic hospital, I was not the least bit nervous because of these threats but others were. I noticed a few things about the character, temperament and education of those who were apparently "bossing". They were usually the old-timers and loafers __ girls with great deal of confidence and little reason for it. Sometimes, their reasons for fighting the enormous business organisation which represents their security, were quite convincing: "Your work is never appreciated," "They'll always want more and more", "You haven't got a chance to get a merit wage increase unless you go out with the boss..." After this general talking to, the poor girls began to wonder; some of them stayed a few days and then didn't turn up for work. The clique had scored again. I sat and wondered as I worked. What to do ? I was assured I had the bosses on my side, but the... The long dead silence and the vulgar, stupid remarks of the other girls soon began to get under my skin. I worked quite a while at the psychopathic hospital, and "they" never bothered me, but these stupid little people and their moronic remarks soon began to annoy me terribly. Because my production was high, I was asked to work Saturdays. This brought a violent counter thrust from the rebels. Soon their campaign began to affect me exactly as they had planned. (Or am I giving them too much credit ?) My production was dropping. The assistant foreman, Bert, asked me if I was ill. When I told him my troubles, he advised me to see Mr. Nair, which I did. Mr. Nair listened attentively and asked the names of the rebels, which I readily gave, not feeling at all like an informer. He then assured me, though stammering, that justice would prevail. I noticed little change. The little minds had other desires than to keep their jobs secure; they wanted to jeopardize the position of their immediate superiors. Philip, who had advised me to talk to Mr. Nair, commonly held the reputation of being a communist, nailed on him by "my rebels". I have always maintained in my philosophy that if one cannot become great by one's own methods of accomplishment, then one will probably pull everyone else down below him, until by comparison he is above the mob, hence great. This is commonly known as "scapegoatism". These girls carried this farther than I ever dreamed would be done. Scapegoating is a common activity of the uneducated. Education of the population while

not the solution, will greatly aid in the eventual solution of this problem. However, back to the practical aspects of the problem at hand. I had convinced myself that most of the girls were not the kind I would care to associate with, anyway, so my scope of activity was not ruptured too severely, As they ignored me, I ignored them. However, something

happened that I had not counted on. I became physically ill from the entire situation. Having had a few lectures on psychosomatic diseases, I knew I had not incorrectly diagnosed the case. My relief came in the form of a temporary transfer to another department. I know it would take some time before the girls would become acquainted with my case, and the rest was welcome. I was shocked to find that no one was interested in my "reputation". I was further shocked when I began to notice that harmony, tranquility, and cooperation prevailed in this department. It is my opinion that part of the cause for such cooperation in this department may be attributed to the fact of one boss and a capable, understanding man, at that. Then, I was told to return to my former department, where I was greeted by my boss with: "Enjoy your vacation". This does not strike me as being very complimentary to one who has been conscientious from the beginning. I had been taught to report all inferior-grade materials, and this particular morning I found the wire defective. After reeling yards of red tape from a few of my bosses, I finally was sent to Mr. Nair. Again, Mr. Nair was glad to see me, "I want you to get back to your machine, sit down, and mind your own business. Your production is falling. Why ?" This I was told before I had a chance to speak. Here, I explained about the strain I was under and about the inferior materials. He then told me to work as best I could with the inferior materials, as he didn't want to send any of the girls home. I then told him I had thought of leaving. He sarcastically mentioned that perhaps it was for the best. This shock drove me to Mr. John of Personnel, and to standing here in my living room dictating this to my husband, the typist of the family.

Questions :

(a) What is the case issue in the case ? Explain.

(b) Critically evaluate the work culture and climate of the organisation.

(c) How do you see the act and record of Merry vis-a-vis her colleagues in this case ? Explain with reasons.

(d) What would be your recommendations to the management ? Justify.

MS-25 : MANAGING CHANGE IN ORGANISATIONS

June 2013

SECTION – A

1. Bring out the differences between Transactional and Transformational Leadership and explain how a leader plays an important role to bring change in an organisation

2. Briefly discuss the need for indigenous Management and the complexity of anagement of change through indegenization.

3. Describe any two models of diagnosis of organisational change.

4. Describe Total Quality Management (TQM). How it could be used as an approach to bring change in an organisation.

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

(a) Down Sizing

(b) Managing Resistance

(c) Action Research

(d) Type of change

(e) Cluster organisation

SECTION – B

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

The story of the restructuring of the Mahut Group (name disguised) in India is illustrative of the need for supporting any structure change with the relevant culture change. The Mahut Group, a family-owned business located in western India, is a US$350 million multinational, multi-activity enterprise group operating in four continents, with a diversified portfolio and employee strength of 15000.

The group has two cement plants-the US$51 million Heera Cement and the US$39 million Moti Cement (names disguised) - each with a production capacity of 1.2 million tonnes of cement per annum. The plants use 'dry process precalcination technology, which conforms to international standards. Both plants had been operating at more than 100 percent capacity and were among the most cost-effective cement plants in India, but had been making losses since the deregulation of the cement industry in India in the late 1980s. Prior to deregulation, the cement companies operated under governmental capacity, production, distribution and price controls to ensure fair prices and availability to priority sectors and small users. Because capacity was controlled, there were severe shortages and obviously no competition, and all cement companies were making good money despite price control.

Deregulation led to huge increases in the capacity of the cement industry in India, which also included foreign players. Heera and Moti now found themselves in competition not only with other companies but with each other. The competition between the sister companies was particularly damaging because their executives had private knowledge of each other's strategies. Mahut Group's management realised the problem and wanted to develop synergies rather than competition between the two companies. In order to facilitate this change, Mahut appointed an American consultant in 1998 to study the problem and submit a report.

The consultant found that the solution lay in structurally integrating the marketing functions of the two plants, and recommended: merging their sales and marketing; creating a new division called 'brands' to promote, position and build the brands together; creating two new positions, director-technical services, irector-market research; changing the structure to support the new arrangements, especially by creating new roles and redefining old ones; and redeploying redundant people rather than retrenching them.

Mahut Group decided to implement the ecommendations. Although the implementation process was fraught with intense politicking, especially for the top positions in the restructured company, the company culture was such that this

phenomenon was not perceived an unusual. It was natural for the owners to give the coveted positions and perquisites to those who were close to them. In the restructured company the managing director was appointed from Moti; senior joint president-sales (in change of sales in the state where the company was located) was appointed from Moti, superseding a more senior executive from Heera; senior joint president-marketing (in charge of sales outside the state, where volumes were extremely low) was appointed from Heera; general manager (brands) was appointed from Heera.

Commenting on the cultural practices and processes that came in the way of performance, employees pointed out several issues. Decisions in the organisation were highly centralised. Almost all decisions were made by the managing director, because of which they were a lot of delays. Salaries and perks were arbitary and based on a person's closeness to the power centres. For example, one of the senior joint presidents was given two semi-luxury cars, the other was given a single old-fashioned car. There were wide

Questions.

(a) How would you describe the organisational culture of the Mahut Group ? Explain your answer citing decisions that illustrate the nature of the culture.

(b) Would it be possible that the decision to restructure the organisation was largely influenced by the culture of the organisation ?

(c) Comment on the way the restructuring proposals were implemented. Explain the

influence of the organisational culture, if any, on the implementation process.

(d) How do you explain the decline in employee morale and performance after the

restructuring ? Why were the expected synergies not realised ?