MANAGEMENT EXERCISES

Throughout Principles of Management: Text and Cases, we have extensively discussed various
management theories. In this section, we focus on certain tools and techniques to apply these
theories. Students can make use of such tools and techniques to apply their knowledge and
gradually develop into competent decision makers and managers. Some of the widely known
tools and techniques that are used are given here.

MANAGEMENT GAMES

Management games are simulation exercises for the application of management theories and
practices by students. It is basically a training exercise to develop decision-making skills in a
simulated work environment. Management games are also known as business games. These
games are for both the individual and the group. Such games focus on stimulating the ideas of
people, so that with practice, they can transform into competent managers. The games are
oriented towards the acquirement of transferable managerial skills.

Management games can be either computer-based simulations or conceptual and descriptive in
nature. In both cases, they can sensitize the cognitive and affective (attitudinal) aspects of ones
mind. Here, simulation implies the simulation of real-life management problems. For example,
financial and operating results can be simulated in a classroom environment with management
games, and students can be asked to take decisions at different stages to understand the efficacy
of their decisions in terms of achieving the results. Some of the objectives of management games
are:
Improvement of decision-making and analytical skills
Development of skills and competency to collect and collate information for decision
making
Development of cognitive and affective skills to understand the interrelationships of the
various functions of management
Development of understanding to relate decisions to the overall performance of
organizations
Development of ideas to risk-hedge in situations of uncertainty
Development of skill for resource optimization
Development of interpersonal skills to work cooperatively
The foremost objective of management games, however, is to develop the decision-making
capability of students (aspiring executives and managers). Depending on the level of knowledge
and the hierarchy, various types of management games can be used in organizations. Board
games, card games, electronic games, conceptual games, etc., are commonly used in
organizations.

Business simulations are important to develop the application-based knowledge of aspiring
managers and executives. It is particularly important for the development of functional
knowledge and decision-making skills. Computer-enabled business simulations are now
available for the marketing, finance, and operations management divisions. In the area of human
resource management; compensation design, balanced scorecard, competency mapping,
performance management, etc., can be taught to aspiring managers and executives using business
simulations or computer-enabled standard solutions.

The advantage of learning through business simulations is that learners can quickly understand
their capabilities, before they put in the effort to troubleshoot problems in real-life situations.
Learning through ones failures enhances understanding. From this perspective, some of the
benefits of business simulations can be listed as the following:
Opportunity to develop application-based knowledge
Opportunity to apply quantitative tools
Opportunity to integrate previously learned conceptual knowledge
Opportunity to develop planning and analytical skills
Opportunity to achieve perfection in computer-based decision-support systems
Opportunity to gradually groom oneself for future decision-making roles
Rise in the motivation to learn
These benefits can not be realized in one or two business simulation exercises; it requires
sustained practice in different segments of business functions. Efficient organizations make such
learning exercises ongoing.

Open-ended exercises like developing a mission statement, identifying critical success factors,
drawing business plans, strategy mapping, preparing cash flow statements, mock negotiations
and collective bargaining exercises, and mock grievance handling can help in developing
application-based knowledge.
Various professional bodies and vendors design standard computer-simulated management
games for organizational use. However, it is always desirable to develop customized
management games keeping in mind the specific requirements of the organization.
Business Simulation 1
An equity broking house recruits equity researchers in large numbers through campus
recruitment. Equity trading requires extensive knowledge about market dynamics. The
movement of the Sensex (sensitivity index) is highly dependent on the business situation and the
environment. For example, a steel manufacturing companys share may go up or down with
respect to changes in government policies or the internal work dynamics of the company, or
when the companys CEO gets entangled in a scam. A real-world situation that depicts the
interrelatedness between the Sensex and the business environment is the Lehman Brothers
failure which affected the profitability of even closely-held family business units in India that
had no apparent relation to international business.
It requires years of experience to groom oneself as a seasoned dealer who decides the fate of the
investor with the click of a mouse. Therefore, after a thorough induction programme, the
company takes the equity researchers through a series of simulated trading games to enable them
to understand the extent of development of their application-based knowledge. A simulated game
for equity trading is explained here.

Make a group of 10 to 12 trainee equity researchers. Explain the norms of the game to them as
listed here:
Each one will get a hypothetical sum of INR 0.1 million before the trading hour begins.
They must start right from the beginning of the trading hour and buy and sell at least 10
times within the trading session of the day.
They must keep track of their buying and selling in the specified format already made
available to them.
Each one of them will get a laptop with Internet connectivity for use during trading hours.
After the end of the trading hours, they will count their gains and losses and submit the
report with documentary evidence, that is, the computer records of their trading in the
prescribed format.
In the lecture room, the trading bourse
1
needs to be connected and shown on a large screen for it
to be visible to all the participants in the game.
By analysing the results of the equity researchers performance in the trading bourse, the
company can determine their knowledge and skill gap and accordingly design future training and
development programmes.
Business Simulation 2
In a turbulent business situation, it was difficult for a company to achieve consensus on decisions
regarding business results. The decisions were often imposed from a strategic level, forcing
others down the line to comply with the directives. Gradually, people became restless, as they
were earlier operating in an environment of participative decision making and could easily relate
their actions to the business results of the company. A conceptual game to help the company gain
the confidence of the workers is explained here.
Make small groups of workers, irrespective of the nature of their functions and the hierarchy.
Ask each of them to note down what they feel is important for successfully performing their
jobs, or note down the critical success factors for their jobs. Ask them to apply the 80/20 rule of

1
Trading bourse means trading of shares without a broker, using computers.
management to reduce their identified critical success factors to five. According to the 80/20
rule, a 100 per cent solution to problems is not required. Due to interrelatedness, 80 per cent of
the solution automatically leads to a 100 per cent solution. Repeated use of the 80/20 rule can
identify many redundancies in the prevalent thought process.
Ask the workers to sit in groups of five and share the identified critical success factors. Ask them
to list the commonalities. If the identified commonalities exceed five, ask them to apply the
80/20 rule and reduce it to a manageable five. Do this exercise for all members of the
organization at the unit and division levels. Now, map the perceived critical success factors of
the workers with the managements perceived critical success factors in a goal congruence
model. Show them the shaded areas of commonality. In most cases, the areas of difference are
very few.
THINKING ON CONSTRAINT TO SOLVE PROBLEMS
In organizations, all problems relate to decisional dilemmas. No managerial decision can lead to
a hundred per cent solution for a problem. Yet, organizations need to risk-hedge using various
tools and techniques. A systematic approach implies that every problem can be stated in terms of
conflict or conflicts. A problem without conflict is not a problem. Hence, a solution to a problem
requires a structured approach, at least, to minimize the risk of decisional errors.

We are already aware that a hundred per cent rational decision-making model is more a myth
than reality. Therefore, it is even more necessary to practice the science of thinking on
constraint (TOC). TOC can effectively lead to solutions for problems. TOC requires
organizations to translate their ideas and plans into a format and discuss them rationally. Rational
discussion is possible when such plans can be questioned and modified for better understanding
of the situation. TOC leads to commonsensical solutions to problems, and, thereby, also
facilitates communication, collaboration, and consensus on the solution.

TOC requires the pursuit of three generic objectives, which are understanding of what to change,
what leads to the change, and how to make the change happen. The first objective requires
assessment of the situation, taking stock of the current reality. Hence, it requires a diagnostic
probe, keeping in view the premises, based on which one decides what to change. The second
objective requires the organization to map the post-change scenario with strategic moves that can
lead to that change. Finally, the third objective leads to the development of detailed plans,
strategies, and tactics to realize the change.

TOC then requires one to draw logical constructs of the situation using various tools, such as
systems thinking for understanding dynamic complexity and graphical trees for cause and effect
relationships, as discussed in the textbook, leveraging the common-sense approach. A problem-
solving model based on the common-sense approach is illustrated in Table 1.
Table 1: Problem-solving model
Analyse the problem Select the strategy Implement the
strategy
Review the strategy
Clearly write your
problem.
List various
alternatives to solve
your problem.

Draw the action plans
to realize your
strategy.

Review your strategic
premises. Check the
results. Meet the gap,
if any, redrawing your
strategy.
Ask yourself: What is
your strategic
premise?





Ask yourself: How
can the most cost-
effective alternative
lead to the solution of
your problem?











If you fail, then ask
yourself: Was the
strategic problem or
the issue correct?
Were your action
plans correct? If yes,
then settle for the
strategy. If no, then
ask yourself: Do you
require reframing of
the strategy?
Can the problem be
mapped with your
past experience?
What is your past
track record of
solving problems?




What is the degree of
similarity and
difference between
your past experience
and present problem?
What degree of
success do you
anticipate?



What additional
information do you
require to meet the
difference? How can
your selected
information address
the problem?
Can it lead to more
than 50 per cent of the
solution? If yes, then
finalize your strategy.
Implement your
strategy to solve the
problems.

The following exercise has been provided for students to practise TOC in the classroom
preferably in a group.
Exercise
IFB Agro Industries Limited is a licensed processor of rectified spirit, which is used as a core
raw material for the liquor industry. The company sources the core raw material, that is,
industrial molasses, from different countries. As the sourcing of raw material from India is
limited to the harvesting season of sugarcane, the company sources it from Pakistan, China,
Indonesia, and even the Far East to run production throughout the year. Sourcing of industrial
molasses is a critical job, for which the company has to engage high-profile negotiators in
different countries on a retainer basis. The yield from industrial molasses varies widely due to
quality differences. As it is an excise item, the company has to use every consignment to run
production. The price of rectified spirit is controlled by the government and, hence, the company
cannot adjust its price to neutralize the effect of increased raw material-procurement cost.

The company is now in a fix as it has identified that it is unable to realize its costs. Meanwhile,
the Pollution Control Board has passed the order that without installing an effluent-treatment
plant (ETP), the company cannot run production, as the carbon discharge and the sludge (residue
after the processing of industrial molasses) pollute the environment. Using TOC, suggest how
the company can survive.
(Hint: In Chapter 7, you will find some mention about IFB Agro.)
CREATIVITY AND INNOVATION TO SOLVE PROBLEMS
Creativity implies make something newa new solution to a problem, a new process to execute
a job, a new method or device, etc. A creative solution to a business problem provides a
competitive edge to the organization. Innovation, on the other hand, is translating creative ideas
into new products, designs, or services. Rather, innovation is the successful exploitation of
creative ideas. From an organizations point of view, innovation is the coming together of
creativity and productivity. Hence, in new product development, product differentiation, and
strategy framing, and even in finding solutions to business problems, creativity and innovation
play a very crucial role.
To make managers and executives creative and innovative, it is important for the organization to
allow space for incubation of ideas. Generation of creative ideas is possible when we produce a
large number of ideas for a specific issue. From such a bundle of ideas, the best idea can be
selected to solve the problem. For example, let us understand how effective marketing is viewed
by an organization. If products or services need to appeal to artists, then the marketing strategy
must exploit emotion and expression. If one needs to sensitize children, then the marketing
strategy can be to offer free play items, like a Pokemon (pocket monster) inside a packet of fries.
If the products need to appeal to housewives, then the marketing strategy can be to sensitize their
impulses through a display of those products. Most lifestyle products are bought on an impulse.
A fairness cream for men was not a necessity; however, today, it has many users, creating a
multi-crore business opportunity.
Another example of successful results of an innovative marketing strategy is the advertisement
of a chewing gum, where the buffalo gets sparkling teeth by chewing that gum implying that this
is also possible for human beings who are a lesser challenge. As a result, solutions to bad breath
and yellow teeth are now mostly associated with chewing gum. Here the source of the referent
power, that is, the buffalo is the biggest innovation.
Globally, there are many examples of organizations that earned business success by
institutionalizing creativity and innovation. For example, Honda Motor Company was able to
achieve improvement in engine efficiency by 35 per cent through creative solutions to problems.
DuPont was able to reduce its requirements of spares parts by 80 per cent through innovative
process designs.
To implement creativity in an organization, it is important to think of its vision, modification of
its vision to optimize, value diversity, cultivation of intuition, etc. One restrains creativity when
one limits ones beliefs. Ones fears, emotions, stress, over-specialization, narrow thinking, and
lack of imagination also limit ones beliefs.
Brainstorming
Brainstorming is an effective idea-generating technique and is considered one of the most
effective tools to spark creativity. Brainstorming helps to think beyond ones habits and to
produce a new set of ideas. In organizations, brainstorming in a group is considered more
effective. However, the effectiveness of brainstorming depends on certain parameters, which are
as follows:
Do not give any judgement
Think without boundaries
Relate your thinking with others to build ideas
Generate more ideas
Brainstorming session 1
You are an Indian bhujiawala (snack food manufacturer). You have an established market
record. Of late, you find that your branded bhujias (snack food) are selling less and your
revenues are dropping. Placed at this juncture, you decide to make your bhujias more appealing,
including finding a new name that catches Indian sentiments. Conduct a brainstorming session
and present your line of solution.
To stimulate thinking, ask questions related to who, what, when, where, why, and how.
Answer to the who will tell you who the customers or end users of your product are, and how
their interests get affected by your bhujias. Answer to the what can give you ideas on what was
done and ought to be done, what went wrong, and what could result in success. Answer to the
when can give you ideas on the preferred timing for action. Answers to the where will tell
you where the action should occur, and wherever there is the possibility of such occurrence.
Answers to the why will throw up ideas on why it should be done or avoided. Finally, answers
to the how will generate ideas on how this can be done, prevented, improved, altered, etc.
Make use of this cycle of idea generation in brainstorming sessions and list at least 25 ideas to
troubleshoot your problemof the reduced sale of your brand of bhujias.
During such a classroom exercise, various ideas can emerge. An example would be naming the
bhujias Halka Phulka, and having the picture of a dadi ma (grandmother) cooking the bhujias
with care on the packet.
Brainstorming session 2
Design a pen and name it.
Think of several alternative uses of a pen, in addition to writing. This will help in determining
the extent to which you can multiply the utility value of the pen. Some alternative uses of a pen
that can be listed are:
Chopsticks
Hairdo holder
Ear cleaner
Page divider
Weapon of self-defence
Hair clip
Calling a person by poking them with a pen
Tearing open plastic bags
Paper weight
Demarcation
Drumsticks
How to Generate Ideas to Improve Something
We can generate ideas to improve a product by thinking from the following perspectives:
Simplification
Application to a new use
Automation
Cost reduction
Making it user-friendly
Making it safe to use (for example, in the case of toys)
Improving performance effectiveness
Increasing durability and reliability
Giving a better look
Increasing acceptance by users
Adding new features and functions
Integrating functions
Making it more flexible
Making it lighter or heavier
Making it smaller or larger
Making it more powerful
Reducing or eliminating drawbacks and adverse side effects
Making it more elegant
Giving it a better shape, design, and style
Providing better sensory appeal
Providing better psychological/emotional appeal
Enhancing its capacity
Making it portable
Making it easy to maintain
Increasing the level of accuracy
Making it quieter
In addition, creative ideas can be generated by using the attribute analysis of products in terms of
shape, size, colour, texture, etc. Similarly, reversal thinking, using creativity triggers, raising
issues during brainstorming sessions, and activating the five senses can help to generate creative
ideas.

Creativity and Innovation Roles
The different roles that contribute to the generation of creative and innovative ideas are:
Product champions: They transmit excitement and enthusiasm.
Sponsors: They are the diplomats and overseers.
Inventors: They are the originators of the idea.
Project managers: They are the stabilizers, carrying the process forward effectively.
Coaches: They give guidance to less-experienced personnel.
Gatekeepers: They monitor external conditions and relay updates to internal teams.
Internal monitors: They review ongoing ideas and the creative climate in an
organization.
Facilitators: They help elicit new ideas and foster collaborative teamwork.
Some methods that help in creativity and innovation are:
Evolution
Synthesis
Revolution
Re-application
Changing direction
Exercise
Your organization is facing the problem of high customer dissatisfaction in terms of complaints.
Presently, the customers complaints are recorded by a call centre and forwarded to you on a
daily basis. By the time it reaches the customer care division, two days are lost. Sorting out the
complaints and allocating people to attend to customers complaints take another two days,
resulting in a delay of almost 5 to 6 days after the complaints are logged in by customers. Find an
innovative solution to customers complaint handing.

ROLE PLAY

In organizations, employees define their roles based on their own understanding. They form their
expectations about the roles that they need to play and the roles that others will play. A
comprehensive job description can outline their functions as well as specify their responsibilities.
In organizational systems, employees act within their perceived role expectations. Role
expectations are formed based on the internal mental pattern. Role-playing exercises help
employees to mature to a great extent, and gradually, their internal mental pattern gets influenced
to meet organizational requirements. Employees can then align their roles with their
organizational roles.

Internal mental pattern or schema is a mental structure which organizes and simplifies ones
knowledge about the world. Using our schema, we interpret, take decisions, and act. Hence, it is
more like a filter of the map of our mind, and the basis of attribution of everything to particular
causes. Our mental schemas also get influenced by our culture. When something does not match
with our schemas, we feel discomfort. Through role-playing exercises, our schemas can get
modified.

We also use our frame of mind while we interact. Our mental frame combines our beliefs,
values, and attitudes, based on which we perceive. With our frame of mind, we draw inferences
to take a decision. Stereotyping of generalization is another typical syndrome of attributing
certain defined sets of characteristics. Through stereotypes, we recognize some objects and
situations favourably or unfavourably. We also develop our personal constructs (both verbal and
non-verbal) to understand and explain a situation. Reframing our mind to eliminate some of
these stereotypes and negative constructs is possible through role-play exercises.

Role playing is a social learning concept and helps us to learn on our own through trial and error.
It develops our competency to interact with and influence others to meet both the individual and
the organizational objectives. Role play facilitates the development of the following skill sets:

Questioning skills
Listening skills (including summarizing and reflecting)
Establishing a rapport
Controlling conversations
Understanding of body language
Giving and receiving feedback
Objective setting
Gaining agreement and commitment
Structuring a meeting
Observation, interpretation, and judgement
Identifying training/development needs
Reconciling individual and organizational needs


Exercise

Remember that you have to confine your discussion within the ambit of the script. This role play
requires two characters. It is better to practise through role reversal as well. Non-participants in a
role play can fill up a structured role play observation sheet. This will allow them to develop
their analytical skills. However, everyone must participate in the role play turn by turn.

Read the script given here and form a group to play the role of the individual characters. Read
and re-read the brief. Limit your discussions within the brief. Always emphasize a win-win
solution to problems. Document the feedback to your discussions through an observer, as per the
structured format of the observation sheet. The theme of this role play is to praise and develop.

Brief for the manager

You are the manager of a development department. Your task is to plan, organize, and control
the layout and the equipment changes in the operations department. One of your staff members, a
graduate engineer in their mid-20s, successfully completed the project of installing machines for
an automatic bottling plant, which received the order of supplying bottles in bulk to a soft-drink
manufacturer. After successful installation, they also performed the trial run and helped the line
staff to understand the nitty-gritty of operating the machines. You have received appreciative
letters from the line managers. As the manager of the development team, you see that the
engineer put in their best efforts, even going beyond the job requirements, to complete the
installation before time.

You feel so happy that you have now decided to talk to the talented young engineer to
understand their potential and to entrust them with bigger responsibilities in critical installation
projects. You also feel the necessity of further building their skills and competency through
sustained training and development to gradually groom them as the successor to the position of
the development head of the department.

Brief for the engineer

You are working in the development department of your company for the last one year. Your
department plans, organizes, and controls the layout and equipment changes in the operations
department. Recently, you successfully completed the installation of machines for the bottle-
manufacturing division of the company. Line managers of the division praised your efforts quite
highly. They consider your contribution to be unparalleled.

Your manager has asked you to meet them. You feel that they might be feeling happy about the
successful outcome of the installation project. You feel you can put in better efforts if exposed to
computer-aided design systems. You have already thought of talking this out with your manager.
In your last project, you experienced some tough negotiation problems with several machine
vendors.

Brief for non-participants

Note down both positive and negative observations in the role play observation sheet (Table 2).

Table 2: Role play observation sheet
Points to consider Examples and their effect
Beginning:
Is everybody at ease?
Are the venue and seating formal in
nature?
How far is the clarity of purpose
explained?



Middle:
How sensitive is the use of
questions and how much are the
participants listening to each other?
Who is doing all the talking?
Do the participants have control on
pacing their discussion?
Do they realize the importance of
the structure and the direction of the
discussions?

Do they realize the importance of
body language, approach, and
style?
Do they build a rapport and reach
an agreement?

Summary:
What is the final outcome?
What are the feelings left at the
end?
What is the level of acceptance or
agreement?


Overall effectiveness: Was the aim
achieved?



CASE STUDY METHODOLOGY

A case study method is a qualitative analysis pertaining to an organization. In some cases,
however, where quantitative details about the organization are available, a case study also
provides certain insights into operational details scientifically. Usually, the case study method
focuses on one organization or at best two or three homogenous or competing organizations (for
benchmarking) unless it is a cross-organizational study to authenticate a management practice, or
approve or disapprove an assumption to establish a certain theory. A case study can also include
an in-depth analysis of certain situations in an organization and a study on their interrelationships
within the organization.

Characteristics of a Case Study Method

Important characteristics of a case study method are listed as follows:

In the case study method, one can choose to study a single organization or more than one
organization. One can even confine their focus to certain areas or situations in the sample
organization. For example, if the purpose is to review an organizations strategy, one may
critically examine the vision, mission, goals, objectives, strategies, and action plans of the
organization, and accordingly document their observations.

A case analysis is done by focusing on the identified areas intensively rather than
exhaustively. Such studies need to be longitudinal in nature (the data should be gathered
over a long period of time) to draw correct inferences.

While the case study method is considered to be a qualitative analysis pertaining to an
organization, it also allows one to do a quantitative analysis and interpret organizational
issues when relevant details are available. For example, one can analyse the resource
allocation strategy of an organization in terms of a costbenefit analysis. Similarly, the
efficacy of a compensation strategy can be studied by comparing outsourcing vis--vis
employment on a permanent payroll.

In a case analysis, one always attempts to establish a causal relationship between various
factors by using both qualitative and quantitative information. Thus, effective customer
relationship management (CRM) can be correlated to increased market share and
employee motivation can be related to productivity.

A case analysis is a direct approach and, therefore, requires analytic rigour and
experience.

Case studies unravel the best management practices and, therefore, significantly
contribute to the development of various theories. For example, the benefits of direct
participation, which is a strategy to use the collective wisdom of the people to develop
response capability towards certain targeted goals of the organization, would not have
been known to the world unless the management practices at Chevron Corporation, the
petroleum giant, were brought into the limelight by researchers.

Despite the advantages, the case study method often suffers from the problem of generalization,
and unless properly structured, it can also vitiate the purpose of learning.

Steps of a Case Analysis
The steps to analysing a case study are:
1. Read the case carefully, note down all the facts, and identify the problem(s).
2. Mention the area of management to which the main problem is connected. It is possible
that the problem may overlap with another area as well, which may demand a
simultaneous solution. The total view of the situation should not be lost.
3. Place yourself in the position of the management and view the problem from the
managements perspective. The analysis should be from a managerial angleunbiased
and objective.
5. List out various possible alternatives and then prioritize on the basis of comparative
superiority and feasibility.
6. Select the best alternatives and present them as your solution.
7. Indicate an estimate of the outcome including possible side effects, if any.

Important Guidelines
Important guidelines that students needs to keep in mind while analysing cases are:
There is no single correct solution for a specific management problem. Logical thinking,
in tandem with the accepted principles and practices (processes) of management, is the
aspect that is judged and assessed by an examiner.

Questions that are given at the end of each closing case study in the text suggest the line
of enquiry. Hence, the questions need to be studied carefully.

A case with questions at the end is known as a close-ended case study. There are cases
that may not have questions at the end, and these are called open-ended cases. Students
are required to identify the problems or issues presented in such cases independently and
provide answers to these problems.

A mere restating of the facts in a case report needs to be avoided.