Certificate in Accounting and Finance Stage Examinations

The Institute of 11 March 2016

Chartered Accountants 3 hours – 100 marks
of Pakistan Additional reading time – 15 minutes

Business Management and Behavioural Studies

Q.1 According to Henri Fayol managers are delegated formal authorities within the
organisational framework to enable them to perform the main functions/tasks of
management.

Discuss the management functions in a typical business organisation as enunciated by

Fayol. (10)

Q.2 (a) Consider the following scenarios:

(i) Samad, chief executive officer of Durable Paint Company, is overly concerned
with the welfare of his subordinates and believes in having congenial relations
with them. Adhering to work deadlines and achieving targets rank rather low in
his style of leadership.
(ii) Senior partners in a firm of constitutional lawyers have strong
differences/disagreements regarding points to be incorporated in the petition
relating to a case of public interest. However, the opinions of all the partners are
being considered carefully prior to the preparation of the final brief.
(iii) The arbitrator made efforts to understand the viewpoints of the stakeholders by
reading their body language, developing insight into their well-entrenched
positions and speaking only when absolutely necessary.
(iv) In a factory for manufacturing of vehicles, decision making authority vests
wholly in the CEO. The staff has accepted this authoritative set-up and looks up
to the CEO for making even the routine decisions.
(v) Basit publicly praised the marketing team and also gave them attractive financial
rewards for achieving the sales target. He believes that these gestures would
motivate the staff to put even greater efforts to achieve the ambitious sales target
set for the next year.
Match each of the above scenarios with any one of the following concepts/principles:
(i) laissez-faire style (ii) verbal communication
(iii) active listening (iv) power distance culture
(v) positive reinforcement (vi) job enrichment
(vii) country club style (viii) employee development
(ix) less-skilled work environment (x) functional/constructive conflict (05)

(b) Warren Bennis has made a distinction between managers and leaders by discussing
various characteristics of each. Link each of the following characteristics to managers
or leaders:
(i) focus on systems and structures (ii) short-range perspective
(iii) challenging the status quo (iv) reliance on control
(v) doing the right things (vi) inspire trust
(vii) transactional leadership (viii) imitate
(ix) administer (x) maintain
(xi) develop (xii) visionary (03)
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Q.3 Zenith Fertilisers Limited (ZFL) is a leading manufacturer of fertilisers in an industry

dominated by four competitors. Two rival competitors are reported to be planning to
increase their manufacturing capacities to produce fertilisers for cultivation of high yielding
crops as they anticipate substantial growth in the future. ZFL firmly believes that it must
also strengthen its capacities significantly to be able to retain its position as an important
player.

Discuss the specific areas in which ZFL must focus to meet the challenges posed by the rival
competitors. (04)

Q.4 The board of OT Limited (OTL) is currently formulating strategy for achieving its business
goals during the next four years. The board is of the opinion that the level of business
activity in the country would increase significantly and OTL should achieve a fair share of
the envisaged growth.

Explain the important matters which the board must keep in perspective while establishing
its goals. (10)

Q.5 (a) Belbin, in his team-role theory, identified the roles of individual team members as
follows:

(i) implementer (ii) shaper (iii) completer/finisher

(iv) plant (v) monitor/evaluator (vi) specialist
(vii) coordinator (viii) team worker (ix) resource investigator

Identify the strength(s) of any six of the above roles which contribute towards
achieving the objectives of the team. (06)

(b) Managers recognise that inter-group conflict is a phenomenon of group behaviour.

Briefly explain the following approaches which managers may adopt in resolving
inter-group conflicts:
(i) Collaborative
(ii) Compromising
(iii) Avoiding (06)

Q.6 (a) What is meant by the term connected stakeholders? (02)

(b) State how an astute manager should handle connected stakeholders who are in the
following positions:
(i) wield considerable power but have very little interest in the performance of the
entity
(ii) wield considerable power and also have a high degree of interest in the
performance of the entity
(iii) wield nominal power but have strong interest in the performance of the entity (03)

Q.7 (a) Identify and describe briefly the three factors which determine the strength of an
individual’s motivation as illustrated in Vroom’s Expectancy Theory. (03)

(b) Explain briefly the measures suggested by Vroom which managers should adopt to
achieve optimum levels of motivation from their employees. (04)
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Q.8 List and describe briefly the hard and soft factors as stated in the McKinsey’s 7S model of
change, which should be considered for successful implementation of strategic change. (07)

Q.9 (a) Wahid Khan is a negotiator who believes in adopting a tough stance while
conducting negotiations with the opposite parties. Briefly discuss any three techniques
that Wahid Khan may adopt and state the inherent risks involved in adopting tough
stances in such negotiations. (05)

(b) What is perceptual selectivity? List four external stimuli to which individuals tend to
pay greater attention. (04)

Q.10 (a) Briefly describe the components of an Expert system and state the advantages of such
a system. (07)

(b) Describe briefly the salient features of network analysis. (04)

Q.11 (a) What is meant by the term online processing? Give two examples of situations in
which the operations are processed online. (03)

(b) Information systems make valuable contributions by providing vital information

inputs at the strategic, tactical and operational levels. Give examples of the different
types of information that is generated for each of these levels. (04)

Q.12 (a) Discuss the salient features of a functional organisational structure and the main
advantages that are associated with it. (07)

(b) Present a chart (in basic form) of the functional organisational structure of a company
engaged in the business of manufacturing of superior quality sanitary fittings. (03)

(THE END)