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7/21/2019 CAT II-EMG 2512 IndustrialManagement-marking Scheme
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Multimedia University of Kenya
University Examinations: Second Semester, Fifth year December, 20!
"#$ %% & EM' 2!2 %(DUS$)%#* M#(#'EME($
Instructions to Candidates: Answer all Questions
Q1. a) Discuss the key aspects that influence consumer behavior.
b) State the M a sl ow' s hier ar ch y of need s.
c) Describe five mains phases of a project life cycle.
a+ Key asects that influence consumer behavior:
Cultural :
i) Culture - Culture is the most basic determinant of a person’s wants and behavior
ii) Sub-culture - Subcultures are groups of people with shared value systems based on common
life experiences and situationsiii) Social class - Social classes are relatively permanent and ordered divisions in a society
whose members share similar values, interests, and behaviors Social factors:
i) Reference groups - n individual’s attitudes and behavior are influenced by many smallgroups
ii) !amily - !amily is the most important consumer-buying organi"ation in society
iii) Roles and status - Social roles and status are the groups, family, clubs, and organi"ations to
which a person belongs that can define role and social status ersonal factors!
i) ge and life cycle stage -
ii) #ccupation - #ccupation affects the goods and services bought by consumers
iii) $conomic circumstances - $conomic situation includes trends in: %ersonal income,
Savings, &nterest rates
iv) 'ife style - a person’s pattern of living as expressed in his or her activities, interests, andopinions
v) %ersonality - -ersonality is a person’s distinguishing psychological characteristics that lead
to relatively consistent and lasting responses to his or her environmentvi) Self-concept - Self&"oncet is the complex mental pictures people have of themselves, also
(nown as self-image sycholo"ical factors:
i) otivation - aslow’s *heory of otivation sought to explain why people are driven by particular needs at particular times+ er"berg’s *heory - two-two factor theory that
distinguishes dissatisfiers factors that cause dissatisfaction) and satisfiers factors that cause
satisfaction)ii) %erception - Selective ttention Consumers are constantly bombarded with information and
will screen out stimuli)+ Selective .istortion essages to do not always come across in the
same way the sender indented)+ Selective Retention %eople will forget much that they learn butwill tend to retain information that supports their attitudes and beliefs)
iii) 'earning - *earnin. describes changes in an individual’s behavior arising from experience
iv) /eliefs 0 belief is a descriptive thought that a person holds about something
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v) ttitudes - n attitude describes a person’s relatively consistent evaluations, feelings, and
tendencies toward an ob1ect or an idea
/!mars+
b+ Maslo1s 3ierarchy of (eeds
aslow wanted to understand what motivates people2 e believed that people possess a set of
motivation systems unrelated to rewards or unconscious desires2 aslow 3456) stated that people aremotivated to achieve certain needs2 7hen one need is fulfilled a person see(s to fulfill the next one,
and so on2 *he earliest and most widespread version of aslow8s 3456, 3495) hierarchy of
needs includes five motivational needs, often depicted as hierarchical levels within a pyramid2 *hisfive stage model can be divided into basic or deficiency) needs e2g2 physiological, safety, love, and
esteem) and growth needs self-actuali"ation)2
$he ori.inal hierarchy of needs five&sta.e model includes:
32 #iolo"ical and hysiolo"ical needs - air, food, drin(, shelter, warmth, sex, sleep2
2 Safety needs - protection from elements, security, order, law, stability, freedom from fear2
62 $ove and belon"in"ness needs - friendship, intimacy, affection and love, - from wor( group,
family, friends, romantic relationships252 %steem needs - achievement, mastery, independence, status, dominance, prestige, self-respect,
and respect from others292 Self&Actuali'ation needs - reali"ing personal potential, self-fulfillment, see(ing personal growth
and pea( experiences2
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c+ Mains hases of a ro4ect life cycle
*he si"e, length, and scope of pro1ects vary widely according to the nature and purpose of the pro1ect2
;evertheless, all pro1ects have something in common: *hey go through a life cycle, which typicallyconsists of five phases2
i) Concept( at which point the organi"ation recogni"es the need for a pro1ect or responds to a
re<uest for a proposal from a potential customer or client+ii) )easibility analysis( which examines the expected costs, benefits, and ris(s of underta(ing the
pro1ect+
iii) lannin"( which spells out the details of the wor( and provides estimates of the necessaryhuman resources, time, and cost+
iv) %*ecution( during which the pro1ect itself is done2 *his phase often accounts for the ma1ority of
time and resources consumed by a pro1ect+
v) +ermination( during which closure is achieved2 *ermination can involve reassigning personneland dealing with any leftover materials, e<uipment e2g2, selling or transferring e<uipment), and
any other resources associated with the pro1ect2
Q2. a) Discuss how industriali'ation is basic to the national economic development.b) ,hat is the importance of M ot ivat ion-
c) Discuss the importance of #usiness plannin" in a small scale industry.
a+ %ndustriali5ation lays a vital role in the economic development of any country2 *he historical
facts reveal that all the developed countries of the world bro(e the vicious circle of underdevelopment
by industriali"ation2 *he role of industriali"ation in economic development is as follows:
%ncrease in national income: &ndustriali"ation ma(es possible the optimum utili"ation of the
scarce resources of the country2 &t helps in increasing the <uantity and <uality of various (inds
of manufactured goods and thereby ma(e a larger contribution to gross national product2
=;%)2 3i.her standard of livin.: &ndustriali"ation helps in increasing the value of output per wor(er2
*he income of the labour due to higher productivity increases2 *he rise in income raises the
living standard of the people2
Economic stability: &ndustriali"ation is the best way of providing economic stability to the
country2 nation which depends upon the production and export of raw material alone cannot
achieve a rapid rate of economic growth2 *he uncertainties of ;ature, the restricted and
fluctuating demand of the agricultural raw material hampers economic progress and leads to an
unstable economy2
%mrovement in balance of ayments: &ndustriali"ation brings structural changes in the
pattern of foreign trade of the country2 &t helps in increasing the export of manufactured goods
and thus earn foreign exchange2 #n the other hand the processing of raw material at home
curtails the import of goods and thereby helps in conserving foreign exchange2 *he export
orientation and import substitution effects of industriali"ation help in the improvement of
balance of payments2
Stimulates ro.ress in other sectors: &ndustriali"ation stimulates progress in other sectors of
the economy2 development of one industry leads to the development and expansion of other
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industries2 !or instance the construction of a transistor radio plant, develops the small battery
industry bac(ward lin(age)2 *he construction of mil( processing plants adds to its line of
production ice cream2 cone cream plants etc22 forward lin(age)2
Easy to control industrial activity: *he industrial activity compared to agricultural is easy to
control2 *he industrial production can be expanded or cut down according to the price cost and
demand of the product2 %ncreased emloyment oortunities: &ndustriali"ation provides increased employment
opportunities in small and large scale industries2 &n an agrarian economy, industry absorbs
underemployed and unemployed wor(ers of agricultural sector and thereby increases the income
of the community2
-romotes seciali5ation: &ndustriali"ation promotes speciali"ation of labour2 *he division of
wor( increases the marginal value product of labour2 *he income of wor(er in the industrial
sector is therefore higher than that of a wor(er in agricultural sector2
)ise in a.ricultural roduction: &ndustriali"ation provides machinery li(e tractors thrashers
harvesters, bulldo"ers, transport, aerial spray etc, to be used in the farm sector2 *he increased use
of modern inputs has increased the yield of crops per hectare2 *he increase in the income of thefarmers has given boost to economic development in the country2
*ar.e scoe for technolo.ical ro.ress: &ndustriali"ation provides larger scope for on the 1ob
training and technological progress2 *he use of advanced technology increases the scale of
production, reduces cost of production, improves <uality of the product and helps in widening of
the mar(et2
)eduction in the rate of oulation .ro1th: &ndustriali"ation leads to migration of surplus
labour from farm sector to the industries mostly situated in urban centers2 &n cities improved
facilities of sanitation and health care are available2 %eople through the adoption of family
planning measures, reduce the rate of population growth2
%ncreased savin. and investment: &ndustriali"ation increases the income of the wor(ers2 &tenhances their capacity to save2 *he voluntary savings, stimulate industrial growth and by
cumulative effect lead to further expansion of industry2 -rovision for defense: &f a country is industriali"ed, it can manufacture arms and ammunition
necessary for the defense of the country2 nation which depends on other countries for the
supply of ammunition will eventually suffer and may face defeat2
*esser ressure on land: *he establishment and expansion of industries lessens the excessive
pressure of labour force from the agriculture sector2
.evelopment of mar(ets: 7ith the development of industries the mar(et for raw materials and
finished goods widens in the country2
%ncrease in the 'overnment revenue: &ndustriali"ation increase the supply of goods both for
internal and external mar(ets2 *he export of goods provides foreign exchange2 *he customs
excise duties and other taxes levied on the production of goods increase the revenue of the State2
*he income tax received from the industrialists adds to the revenue stream of the =overnment
which eventually is spent for the welfare of the people as a whole2
b+ $he imortance of Motivation
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=enerally spea(ing, motivation is what energi"es, maintains, and controls behavior2 s such, it is clear
why it plays an important role in the wor(place2 otivating employees is vital to any business2
motivated wor(force means a highly productive staff, all of which will help the organi"ation achieve
its business goals2 nd this should be a main ob1ective in the organi"ational and business plan2
>ltimately when employees are motivated this increases productivity, lowers turnover, and improves
overall performance2
Research has shown that motivated employees will:
• lways loo( for a ?better? way to complete a tas(
• /e more <uality-oriented
• 7or( with higher productivity and efficiency
c+ $he imortance of 6usiness lannin.
•&t provides guidance in an organi"ation and managing a venture
• &t provides self-assessment forcing organi"ation to bring ob1ectivity to business
• Services as a communication 0 tool2 &t facilitates organi"ation thin(ing2
• &t’s an indication of owners’ ability and commitment2
• Creates a road map to successful business2
Q3. a) ,hat do you understand by market research-
b) Market research can be used to improve marketin" in an or"ani'ation. Discuss
c) Define an entrepreneur. ,hat are the attributes of a successful entrepreneur-a+ Maret research:
i) &t’s the gathering recording and analy"ing of all facts about problems relating to transfer andsale of goods from producer to consumer2
ii) %rocess of analy"ing the mar(et and its potential
b+ Mana.ement can use it to:
i) 'ocate the customer
ii) =et solutions to satisfy the customer
iii) nalyse and ran( them with a profit earning point of view2iv) $stimate life of maintaining supply of selected products
v) !ind <uality and <uantity of goods wanted by customer
vi) !ind best distribution channel
vii)*ime when products are re<uiredviii) $nter Competition
c+ Entrereneur:
n entrereneur is a person who recogni"es a business opportunity and organi"es, manages, and
assumes the ris(s of a business enterprise, with the intent of increasing the mar(et value of the
business2
$he attributes of a successful entrereneur
i) Recogni"es opportunities
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ii) .esires achievement
iii) as high energy
iv) *a(es ris(sv) as determination
vi) as self-confidence
i) &s enthusiasticii) .esires to earn profit
iii) 7ants to control his@her destiny
Q4. a) ,hat are the bene f it s of mana"ement by ob ject ive s-
b) %*plain four bases throu"h which industries are classified.
c) utline any five advanta"es of bud"etin" and #ud"etary Control.
a+ Mana.ement by 7b4ectives /M67+
anagement by ob1ectives /#) is a systematic and organi"ed approach that allows management tofocus on achievable goals and to attain the best possible results from available resources2 /# aims at
increasing organi"ational performance by aligning goals and subordinate ob1ectives throughout the
organi"ation+ ideally, employees get strong input to identify their ob1ectives, time lines for completion,etc2 *he benef its of management by ob 1ectives are:
i+ /# programs continually emphasi"e what should be done in an organi"ation to achieve
organi"ational goals2
ii+ /# process secures employee commitment to attaining organi"ational goals2
iii+ /# focuses wor(ers on most important tas(s and ob1ectives2
iv+ /# focuses supervisor’s efforts on important areas of support2
v+ /# contributes to relationship building2
vi+ /# gives wor(ers a structured opportunity to participate in decision ma(ing+
em ployees c an be m o t i v a t e d because they par tici pate in the goal setting
pr ocess2
vii+ %erformance can b e i mp ro v e d because /# concentr ates on ob 1ectives2
viii+ >nnecessary efforts will be m i n i m i " e d because ob 1ectives are set clear ly2
ix+ /# hel ps managers t o e x e r c i s e better c o n t r o l over
em ployees2
b+ 6ases throu.h 1hich industries are classified
i) Raw material industrial which may be agriculture based, marine etc2
ii) Si"e 0 the amount of capital invested the number of people employed and volume of
production2
iii) #wnership 0 industries can be classified2iv) *ime 0 changes that have ta(en place in industry due to various discoveries and
development2
c+ #dvanta.es of bud.etin. and 6ud.etary "ontrol:
*here are a number of advantages to budgeting and budgetary control:
i) Compels management to thin( about the future, which is probably the most importantfeature of a budgetary planning and control system2 !orces management to loo( ahead, to
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set out detailed plans for achieving the targets for each department, operation and ideally)
each manager, to anticipate and give the organi"ation purpose and direction2
ii) %romotes coordination and communication2iii) Clearly defines areas of responsibility2 Re<uires managers of budget centers to be made
responsible for the achievement of budget targets for the operations under their personal
control2iv) %rovides a basis for performance appraisal variance analysis)2 budget is basically a
yardstic( against which actual performance is measured and assessed2 Control is provided
by comparisons of actual results against budget plan2 .epartures from budget can then beinvestigated and the reasons for the differences can be divided into controllable and non-
controllable factors2
v) $nables remedial action to be ta(en as variances emerge2
vi) otivates employees by participating in the setting of budgets2vii) &mproves the allocation of scarce resources2
viii) $conomi"es management time by using the management by exception principle2
7nly ! advanta.es x ! /! Mars+
Q5. a) %*plain the internal and e*ternal factors that influence marketin".
b) ,hat i s d eci sion mak in" -
c) ,hat i s the purpose of pl annin" -
a+ %nternal and external factors that influence maretin.
%nternal
i) 7or(ing culture
ii) 7or(ing conditioniii) %roductivity
iv) $mployee satisfaction
External Factors
i) $conomic factors
ii) Social factors
iii) %olitical factorsiv) $nvironmental factors
v) *echnological factors
vi) %sychological factors
b+ Decision ma0 in.
.ecision ma( ing is def ined as the selection of a course of action among alter native
c o ur se s of action2 .ecision ma( ing should be r ational2 .ecision ma( ing involves achoice among alter natives2
c+ $he ,ur,ose of ,lannin.
%lanning is a process by which a manager loo( s to the future and discover salter native courses of action2 &n other words, planning is antici pator y decision ma( ing2%lanning is the process used by manager s to identify and select goals and courses of
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action of the or gani"ation2 *he purpose of planning can be summari"ed asfollows:
i) *o deter mine the dir ection of an or gani"ation
ii) *o pr ovide a basis for team wor(
iii) to minimi"e wastages in the f utur e
iv) *o f acilitate decision ma( ingv) *o im pr ove mor ale of the em ployees2vi) *o reduce the r is( or uncer tainty
vii)*o f acilitate contr ol
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