Principle of Management?

Question

Case study:
Nearly 10yrs ago Ali & Usman opened a small chocolate shop named as ‘Royal
Chocolates’. Royal Chocolates manufactured high quality chocolates for all special
occasions. All the chocolates were manufactured & sold on the premises of the two
owners (Ali, Usman). Mr. Ali was responsible for the production & finances while Mr.
Usman took care of sales & advertising. At first, both were the only full-time employees
& part-time help was used during peek business seasons. However, the demand for their
chocolates grew & the business soon became successful beyond their optimistic
expectations.
As the firm grew, Ali & Usman expanded their retail & manufacturing facilities & hired
15 full-time employees. All employees, except the proprietors, were paid on an hourly
basis slightly above the federal minimum wage rate. Despite the low wages, the firm was
able to attract dedicated employees who enjoyed working in ‘Royal Chocolates’ small &
cohesive environment. Part-time employees were still used to help the full-time
employees when needed. However, some of the part-time employees were lacking in
aggressiveness & initiative that a small, but growing business required. As Ali put it,
some of the workers in the production area seemed to be lacking in performance. Often
shelf inventories of chocolates that were especially popular with the customers would be
depleted. In addition, some of his sales persons’ help would fail to report for work or
would call in sick. Turnover among part-time help was high & both Ali & Usman felt
that the firm’s pay policy might be contributing to their personnel problems.
Ali decided to institute a ‘piece-rate’ plan whereby production workers would be paid a
bonus for packing more than 75boxes of chocolates per hour. In order to ensure quality,
production workers were penalized for every box containing smashed or imperfect
chocolates that the quality control workers rejected. He hoped that this incentive system
would help maintain inventory levels without sacrificing quality. Unfortunately, the plan
was a failure because nearly all the production workers complained that the incentive
system was too demanding & making extra money was difficult. Royal Chocolates’
problems were compounded when its sales personnel complained that they were forced to
accept a straight hourly wage with no chance for any incentive bonus. The production
workers, in turn, claimed that they were not compensated fairly relative to the sales
workers because sales personnel worked in pleasant surroundings whereas; production
workers had to endure heat, noise, & greater safety hazards. A number of workers also
claimed that wages in other companies in the community were much higher than those at
Royal Chocolates.
Royal Chocolates recently received a visit from a state labor department’s representative
who threatened the company owners for violating the wage & hourly wage law. It
appears that Royal Chocolates had failed to pay overtime to employees who worked over
40 hours during the week during peek seasons. Between the employee about pay, the
legal problems, & the paper work that Ali is required to fill out for the state & federal
government, he is beginning to wonder whether being a small business owner is worth
the headaches. His headache became even worse when he began trying to figure out how the Reform Tax Act was going to affect his business & its tax situation.
Questions:
Q1. Which of the following method was adopted by the Royal Chocolates to achieve
optimum production level in order to meet customers’ order during peek seasons?
A. Training to existing workers to enhance their performance
B. Hiring the part-time workers to share the work burden
C. Installing high-tech manufacturing machines for efficient completion of orders
D. Outsourcing the orders to local bakery to fulfill customer orders timely
Q2. Royal Chocolates was succeeded to develop the taste for its chocolates & candies
among the masses and hence planned to expand its business; which of the
following tactic was adopted by the company owners to expand their business?
A. Opened an international outlet abroad
B. Borrowed bank loan to install the manufacturing machinery
C. Developed an alliance with one of the local bakeries
D. Hired full-time workers to meet the increased amount of customers’ orders
Q3. What kind of compensation policy was offered by Mr.Ali & Mr.Usman, the
company proprietors to their full-time workers?
A. Market match policy
B. Market lag policy
C. Market lead policy
D. Minimum wage rate policy
Q4. According to the mentioned case which of the following employee category was
not given their full potential to the company?
A. Contingent workers
B. Full-time workers
C. Production head
D. Sales & Advertising head
Q5. How did part-time workers respond to the company’s pay policy of hourly wage
rate?
A. It boosted up them to show better performance
B. It raised the

Answer 1

As per Dogbert’s Big Book of Business:



"Just outsource everything to the Elbonians."

Answer 2

Positive and negative reinforcement As Skinner discussed, positive reinforcement is superior to punishment in altering behavior. He maintained that punishment was not simply the opposite of positive reinforcement; positive reinforcement results in lasting behavioral modification, whereas punishment changes behavior only temporarily and presents many detrimental side effects. Forms of operant conditioning: Positive reinforcement: the adding of an appetitive stimulus to increase a certain behavior or response. Example: Father gives candy to his daughter when she picks up her toys. If the frequency of picking up the toys increases or stays the same, the candy is a positive reinforcer. Positive punishment: the adding of an aversive stimulus to decrease a certain behavior or response. Example: Mother yells at a child when running into the street. If the child stops running into the street the yelling is punishment. Negative reinforcement: the taking away of an aversive stimulus to increase certain behavior or response. Example: Turning off distracting music when trying to work. If the work increases when the music is turned off, turning off the music is a negative reinforcer. Negative punishment (omission training): the taking away of an appetitive stimulus to decrease a certain behavior. Example: A teenager comes home an hour after curfew and the parents take away the teen's cell phone for two days. If the frequency of coming home after curfew decreases, the removal of the phone is negative punishment.

Answer 3

Wow, you win. That's the longest question I've ever seen asked.