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IJMB Business Management Paper I Questions and Answers
The questions and Answers for the 2024/2025 IJMB Business Management session are available for complimentary access below.
Number One
(1)
Abraham Maslow proposed a psychological theory of human motivation known as the Hierarchy of Needs. According to this theory, human needs are arranged in a five-level pyramid, where individuals must satisfy the lower-level needs before progressing to higher levels. The theory shows that people are motivated to fulfill these needs in a specific order, starting from the most basic, physical survival to the highest level, personal growth and self-fulfillment.
=The Five Levels of Needs=
(i) Physiological Needs: These are the most basic and essential needs required for human survival. They include food, water, air, shelter, clothing, and sleep. If these needs are not met, the human body cannot function properly, and all other needs become secondary.
(ii) Safety Needs: Once physiological needs are fulfilled, individuals seek safety and security. These needs involve protection from physical and emotional harm, stability in daily life, personal security, financial security, health, and safety from accidents or illness.
(iii) Love and Belongingness Needs: After achieving safety, people desire social interaction and a sense of belonging. These needs include forming relationships, friendships, emotional intimacy, family connections, and being part of a group or community.
(iv) Esteem Needs: This level focuses on the need for self-esteem and the respect of others. It includes feelings of self-worth, achievement, recognition, status, and confidence. When these needs are met, individuals feel valued and respected.
(v) Self-Actualization Needs: This is the highest level of Maslow’s hierarchy. It involves realizing one’s full potential, creativity, personal growth, and the desire to become the best version of oneself. It is the need for self-fulfillment and the pursuit of meaningful goals.
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Number Two
(2)
Organizational structure refers to the formal system of authority, communication, roles, and responsibilities that defines how tasks are divided, coordinated, and supervised within a company or institution.
It determines how employees relate to one another, how information flows, and how decisions are made. A well-defined organizational structure helps improve efficiency, accountability, and coordination within the organization.
=Types of Organizational Structure=
(i) Functional Structure: In this type, the organization is divided into departments based on specific functions or roles, such as marketing, finance, production, and human resources. Each department is managed by a specialist in that area, and all employees in the department report to the same manager. Example: A manufacturing company may have departments like Production, Sales, Accounting, and Human Resources.
(ii) Divisional Structure: This structure groups activities based on products, services, markets, or geographical locations. Each division operates like a semi-autonomous unit with its own resources and objectives. Example: A large company like Unilever may have separate divisions for beauty products, food items, and cleaning agents, each with its own marketing, finance, and HR departments.
(iii) Matrix Structure: A matrix structure is a hybrid of the functional and divisional structures. Employees report to two managers, one for their functional department and another for their project or product line. It encourages collaboration across departments but can lead to confusion due to dual reporting. Example: A tech company working on multiple projects may assign engineers to both a technical department and a specific project team at the same time.
(iv) Flat Structure: This structure has few or no levels of middle management between staff and executives. It promotes open communication, faster decision-making, and employee empowerment. However, it may lead to role confusion if not well-managed. Example: A small startup with a team of 10 employees where everyone works closely with the founder without many formal ranks.
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Number Three
(3)
Change in an organization refers to the process through which an organization moves from its current state to a desired future state to improve efficiency, adapt to external forces, or meet new goals. It can involve changes in processes, technology, structure, strategy, culture, or workforce. Organizational change may be reactive responding to a crisis or market shift or proactive initiated for innovation or improvement.
=Reasons Why People Resist Change and How to Minimize Resistance=
(i) Fear of the Unknown:
Reason: Employees often feel uncertain and anxious when they are not sure what the change entails or how it will affect them. This fear stems from a lack of information or previous negative experiences with change.
How to Minimize: Clearly communicate the reasons for the change, the expected outcomes, and how it will benefit the organization and employees. Open and honest communication builds confidence and reduces fear.
(ii) Loss of Job or Status:
Reason: When organizational changes involve downsizing, restructuring, or automation, employees may fear job loss or a reduction in their role, power, or status. This perceived threat can lead to strong resistance.
How to Minimize: Involve employees in the planning and decision-making process, provide reassurances where possible, and offer retraining or redeployment opportunities. Make employees feel valued and part of the future.
(iii) Lack of Trust in Management:
Reason: If employees have had poor past experiences or feel that leadership is not transparent, they may not trust that the change is in their best interest. Distrust leads to skepticism and pushback.
How to Minimize: Build a culture of transparency, consistency, and fairness. Leaders should model the change, be approachable, and engage in two-way communication to earn trust.
(iv) Poor Communication:
Reason: When information is incomplete, unclear, or delayed, it leads to misunderstandings and rumors. Employees may fill the gaps with negative assumptions, increasing resistance.
How to Minimize: Establish effective communication channels. Keep employees informed at all stages using meetings, emails, questions and answers sessions, and feedback loops. Listen to concerns and respond promptly.
(v) Comfort with Current Practices:
Reason: Many employees prefer routines and familiar systems. Change disrupts their habits, requiring them to learn new methods, which can cause stress or reluctance.
How to Minimize: Introduce the change gradually when possible. Provide adequate training, resources, and ongoing support to ease the transition. Highlight the personal and organizational benefits of the new system.
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Number Four
(4)
(i) Emphasis on Human Relations (Mary Parker Follett): Follett introduced the concept of human relations in management, stressing that managers should understand and consider the emotions, motivations, and relationships of employees. She believed that effective management involves influencing group behavior through cooperation rather than command, which links directly to organizational behaviour.
(ii) Concept of Authority and Responsibility (Chester Barnard): Barnard redefined authority not as a top-down order, but as something that depends on employee acceptance. This idea connects the function of leading in management with behavioral dynamics, where the success of directives relies on employee motivation and willingness.
(iii) Group Influence and Conflict Resolution (Mary Parker Follett): Follett highlighted the importance of group dynamics and the constructive use of conflict in organizations. She advocated for “integration”, resolving conflict by creating Answers that satisfy all parties, linking management roles like decision-making and communication to group behavior.
(iv) Theory of Cooperative Systems (Chester Barnard): Barnard viewed organizations as cooperative systems where individuals come together to achieve common goals. He emphasized the role of communication, motivation, and shared purpose in achieving effectiveness, thus integrating managerial functions like planning and organizing with behavioral science.
(v) Participatory Leadership and Empowerment (Mary Parker Follett): Follett promoted participative management, where workers are involved in decision-making. This approach strengthens the behavioral connection by encouraging engagement, morale, and shared responsibility, aligning with the management functions of leading and motivating.
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Number Five
(5)
Leadership: Leadership is the ability to influence, guide, or direct individuals or groups to achieve common goals. It involves setting a vision, motivating others, making decisions, and managing resources effectively to reach desired outcomes.
A Leader: A leader is a person who influences or directs others to work willingly and enthusiastically toward achieving set objectives. A leader inspires, supports, and guides team members by setting an example and fostering collaboration.
=Why Trust is Essence for Leadership=
Trust is fundamental to leadership because it fosters confidence, cooperation, and commitment. When followers trust their leader, they are more likely to be open, loyal, and willing to work hard. Trust builds strong relationships, reduces conflict, and increases productivity.
=Types of Leadership=
(i) Authoritarian (Autocratic) Leadership: This type of leadership is where the leader makes all decisions alone and expects strict obedience. The leader does not seek input from team members. It is useful in situations where quick decisions are needed or when working with inexperienced teams. However, it can lead to low morale, lack of creativity, and resentment among team members.
(ii) Laissez-Faire Leadership: In this style, the leader gives team members full freedom to work as they choose with little or no interference. It works well when team members are highly skilled, motivated, and capable of working independently. However, it can cause confusion, lack of direction, and poor productivity if not well managed.
(iii) Democratic (Participative) Leadership: The leader encourages participation from all team members in decision-making. Opinions and ideas are valued, which builds trust, motivation, and teamwork. Though it promotes collaboration and high morale, it may slow down the decision-making process due to the need for consultation.
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Number Six
(6)
Motivation is the internal drive or external stimulus that stimulates and directs behavior towards achieving a specific goal. In an organizational context, motivation refers to the willingness of employees to exert effort, show commitment, and perform effectively to meet personal and organizational objectives. It is a critical factor influencing productivity, job satisfaction, and overall organizational success.
=McClelland’s Need Theory of Motivation=
(i) Helps Identify Individual Differences: McClelland’s theory emphasizes that individuals are motivated by different needs, which vary in intensity. Recognizing these differences allows managers to assign tasks and responsibilities that match employees’ personal motivations.
(ii) Enhances Employee Performance and Job Satisfaction: By aligning tasks with an individual’s dominant need, achievement, affiliation, or power, organizations can increase motivation, improve performance, and boost employee satisfaction.
(iii) Supports Effective Leadership Development: The theory helps in identifying potential leaders. For instance, individuals with a high need for power and a low need for affiliation are often more suited to leadership roles, especially in competitive or decision-making positions.
(iv) Aids in Recruitment and Team Building: Understanding candidates’ motivational needs during recruitment ensures better placement and team balance. Teams with a mix of achievement-driven, affiliation-driven, and power-driven individuals tend to be more dynamic and productive.
(v) Encourages Personalized Motivation Strategies: McClelland’s theory allows managers to tailor motivational techniques to individual employees, for example, offering challenging tasks to achievement-oriented individuals or leadership roles to those driven by power.
=Specific Motivating Needs Identified by David C. McClelland=
(i) Need for Achievement (n-Ach): People with a high need for achievement seek to excel and succeed. They prefer moderately challenging tasks, take personal responsibility for outcomes, and desire clear feedback on performance. They are motivated by setting and attaining goals.
(ii) Need for Affiliation (n-Aff): Individuals high in this need seek harmonious relationships and want to be liked and accepted by others. They prefer working in groups and are motivated by social interaction, approval, and a sense of belonging.
(iii) Need for Power (n-Pow): This need involves the desire to influence, control, or have an impact on others. People with a strong need for power are motivated by leadership roles, authority, and recognition. They can be either personal power seekers, self-serving, or institutional power seekers focused on group or organizational goals.
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Number Seven
(7)
Management refers to the process of planning, organizing, leading, and controlling the efforts of an organization’s members and the use of resources to achieve specific goals. It focuses on the execution of policies and the efficient running of day-to-day operations. While, administration, on the other hand, is concerned with determining the organization’s goals and policies. It involves setting objectives, making key decisions, and formulating the strategies and frameworks within which management operates.
=Attributes of a Successful Manager=
(i) Leadership Skills: A successful manager must be able to lead and motivate team members to achieve organizational goals.
(ii) Communication Skills: Clear and effective communication is essential for providing direction and feedback.
(iii) Decision-making Ability: Managers must make sound and timely decisions to solve problems and seize opportunities.
(iv) Problem-solving Skills: The ability to identify issues and implement appropriate Answers is crucial.
(v) Time Management: Efficient use of time ensures that tasks are completed promptly and objectives are met.
(vi) Adaptability: A successful manager adjusts to changes in the environment, market conditions, or technology.
(vii) Delegation Skills: Knowing how to delegate tasks appropriately improves team productivity and development.
(viii) Integrity and Ethics: Managers must act with honesty and uphold ethical standards to build trust.
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Number Eight
(8)
Economic Environment refers to all the external economic factors that influence a business’s operation and decision-making. This includes inflation, interest rates, economic policies, and general economic health. While, business Environment is a broader term that includes all external and internal factors affecting a business, such as political, economic, social, technological, environmental, and legal influences.
=Five Elements of Economic Environment That Influence Business Management=
(i) Inflation Rate: Affects the purchasing power of consumers and the cost of raw materials. High inflation increases costs and may reduce demand.
(ii) Interest Rates: Determine the cost of borrowing. High interest rates may discourage investment and expansion; low rates encourage them.
(iii) Exchange Rates: Affect businesses involved in international trade. A fluctuating exchange rate can impact export competitiveness and the cost of imports.
(iv) Economic Policies: Government fiscal and monetary policies influence taxation, public spending, and business incentives, directly impacting profitability.
(v) Level of Economic Growth: A growing economy offers more opportunities for expansion, while a declining economy may limit business prospects and lead to downsizing.
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