1. The workers were full of applause for the new policy of the management.





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QA->Synonym of Applause (n)....
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MCQ-> Read carefully the four passages that follow and answer the questions given at the end of each passage:PASSAGE I The most important task is revitalizing the institution of independent directors. The independent directors of a company should be faithful fiduciaries protecting, the long-term interests of shareholders while ensuring fairness to employees, investor, customer, regulators, the government of the land and society. Unfortunately, very often, directors are chosen based of friendship and, sadly, pliability. Today, unfortunately, in the majority of cases, independence is only true on paper.The need of the hour is to strengthen the independence of the board. We have to put in place stringent standards for the independence of directors. The board should adopt global standards for director-independence, and should disclose how each independent director meets these standards. It is desirable to have a comprehensive report showing the names of the company employees of fellow board members who are related to each director on the board. This report should accompany the annual report of all listed companies. Another important step is to regularly assess the board members for performance. The assessment should focus on issues like competence, preparation, participation and contribution. Ideally, this evaluation should be performed by a third party. Underperforming directors should be allowed to leave at the end of their term in a gentle manner so that they do not lose face. Rather than being the rubber stamp of a company’s management policies, the board should become a true active partner of the management. For this, independent directors should be trained in their in their in roles and responsibilities. Independent directors should be trained on the business model and risk model of the company, on the governance practices, and the responsibilities of various committees of the board of the company. The board members should interact frequently with executives to understand operational issues. As part of the board meeting agenda, the independent directors should have a meeting among themselves without the management being present. The independent board members should periodically review the performance of the company’s CEO, the internal directors and the senior management. This has to be based on clearly defined objective criteria, and these criteria should be known to the CEO and other executive directors well before the start of the evolution period. Moreover, there should be a clearly laid down procedure for communicating the board’s review to the CEO and his/her team of executive directors. Managerial remuneration should be based on such reviews. Additionally, senior management compensation should be determined by the board in a manner that is fair to all stakeholders. We have to look at three important criteria in deciding managerial remuneration-fairness accountability and transparency. Fairness of compensation is determined by how employees and investors react to the compensation of the CEO. Accountability is enhanced by splitting the total compensation into a small fixed component and a large variable component. In other words, the CEO, other executive directors and the senior management should rise or fall with the fortunes of the company. The variable component should be linked to achieving the long-term objectives of the firm. Senior management compensation should be reviewed by the compensation committee of the board consisting of only the independent directors. This should be approved by the shareholders. It is important that no member of the internal management has a say in the compensation of the CEO, the internal board members or the senior management. The SEBI regulations and the CII code of conduct have been very helpful in enhancing the level of accountability of independent directors. The independent directors should decide voluntarily how they want to contribute to the company. Their performance should decide voluntarily how they want to contribute to the company. Their performance should be appraised through a peer evaluation process. Ideally, the compensation committee should decide on the compensation of each independent director based on such a performance appraisal. Auditing is another major area that needs reforms for effective corporate governance. An audit is the Independent examination of financial transactions of any entity to provide assurance to shareholder and other stakeholders that the financial statements are free of material misstatement. Auditors are qualified professionals appointed by the shareholders to report on the reliability of financial statements prepared by the management. Financial markets look to the auditor’s report for an independent opinion on the financial and risk situation of a company. We have to separate such auditing form other services. For a truly independent opinion, the auditing firm should not provide services that are perceived to be materially in conflict with the role of the auditor. These include investigations, consulting advice, sub contraction of operational activities normally undertaken by the management, due diligence on potential acquisitions or investments, advice on deal structuring, designing/implementing IT systems, bookkeeping, valuations and executive recruitment. Any departure from this practice should be approved by the audit committee in advance. Further, information on any such exceptions must be disclosed in the company’s quarterly and annual reports. To ensure the integrity of the audit team, it is desirable to rotate auditor partners. The lead audit partner and the audit partner responsible for reviewing a company’s audit must be rotated at least once every three to five years. This eliminates the possibility of the lead auditor and the company management getting into the kind of close, cozy relationship that results in lower objectivity in audit opinions. Further, a registered auditor should not audit a chief accounting office was associated with the auditing firm. It is best that members of the audit teams are prohibited from taking up employment in the audited corporations for at least a year after they have stopped being members of the audit team.A competent audit committee is essential to effectively oversee the financial accounting and reporting process. Hence, each member of the audit committee must be ‘financially literate’, further, at least one member of the audit committee, preferably the chairman, should be a financial expert-a person who has an understanding of financial statements and accounting rules, and has experience in auditing. The audit committee should establish procedures for the treatment of complaints received through anonymous submission by employees and whistleblowers. These complaints may be regarding questionable accounting or auditing issues, any harassment to an employee or any unethical practice in the company. The whistleblowers must be protected. Any related-party transaction should require prior approval by the audit committee, the full board and the shareholders if it is material. Related parties are those that are able to control or exercise significant influence. These include; parent- subsidiary relationships; entities under common control; individuals who, through ownership, have significant influence over the enterprise and close members of their families; and dey management personnel.Accounting standards provide a framework for preparation and presentation of financial statements and assist auditors in forming an opinion on the financial statements. However, today, accounting standards are issued by bodies comprising primarily of accountants. Therefore, accounting standards do not always keep pace with changes in the business environment. Hence, the accounting standards-setting body should include members drawn from the industry, the profession and regulatory bodies. This body should be independently funded. Currently, an independent oversight of the accounting profession does not exist. Hence, an independent body should be constituted to oversee the functioning of auditors for Independence, the quality of audit and professional competence. This body should comprise a "majority of non- practicing accountants to ensure independent oversight. To avoid any bias, the chairman of this body should not have practiced as an accountant during the preceding five years. Auditors of all public companies must register with this body. It should enforce compliance with the laws by auditors and should mandate that auditors must maintain audit working papers for at least seven years.To ensure the materiality of information, the CEO and CFO of the company should certify annual and quarterly reports. They should certify that the information in the reports fairly presents the financial condition and results of operations of the company, and that all material facts have been disclosed. Further, CEOs and CFOs should certify that they have established internal controls to ensure that all information relating to the operations of the company is freely available to the auditors and the audit committee. They should also certify that they have evaluated the effectiveness of these controls within ninety days prior to the report. False certifications by the CEO and CFO should be subject to significant criminal penalties (fines and imprisonment, if willful and knowing). If a company is required to restate its reports due to material non-compliance with the laws, the CEO and CFO must face severe punishment including loss of job and forfeiting bonuses or equity-based compensation received during the twelve months following the filing.The problem with the independent directors has been that: I. Their selection has been based upon their compatibility with the company management II. There has been lack of proper training and development to improve their skill set III. Their independent views have often come in conflict with the views of company management. This has hindered the company’s decision-making process IV. Stringent standards for independent directors have been lacking....
MCQ-> Read the following case and choose the best alternative.Chetan Textile Mills (CTM) has initiated various employee welfare schemes for its employees since the day the mill began its operations. Due to its various welfare initiatives and socially responsible business practices, the organisation has developed an impeccable reputation. Majority of the regular workers in Chetan Mills had membership of Chetan Mills Mazdoor Sangh (CMMS), a non political trade union. CMMS had the welfare of its member as its guiding principle. Both CTM and CMMS addressed various worker related issues on a proactive basis. As a result no industrial dispute had been reported from the organiza tion in the recent past.These days majority of the employers deploy large number of contract labourers in their production processes. In an open economy survival of an organization depends on its competitiveness. In order to become competitive, an organization must be able to reduce cost and have flexibility in employment of resources. Engaging workers through contractors (contract labourer) reduces the overall labour cost by almost 50%. Indian labour legislations make reduction of regular workers almost impossible, but organisations can overcome this limitation by employing contract labourers. Contract labourers neither get the same benefit as regular employees nor do they have any job security. According to various recent surveys, government owned public sector units and other departments are the biggest employers of contract labourers in the country. Contractors, as middle - men, often exploit the contract labourers, and these government organizations have failed to stop the exploitation.Over time CTM started engaging a large number of contract labourers. At present, more than 35% of CM’s workers (total 5,000 in number) are contract labourers. CMMS leadership was wary about the slow erosion of its support base as regular workers slowly got replaced by contract workers and feared the day when regular workers would become a minority in the mill. So far, CMMS has refused to take contract labourers as members.Recently, based on rumours, CTM management started to investigate the alleged exploitation of contract labourers by certain contractors. Some contractors felt that such investigations may expose them and reduce their profit margin. They instigated contract labourers to demand for better wages. Some of the contract labourers engaged in material handling and cleaning work started provoking CTM management by adopting violent tactics.Today’s news - paper reports that police and CTM security guards fired two or three rounds in air to quell the mob. The trouble started while a security guard allegedly slapped one of the contract labourers following a heated argument. Angry labourers set fire to several vehicles parked inside the premises, and to the police jeeps.In the wake of recent happenings, what decision is expected from CTM management? From the combinations given below, choose the best sequence of action. I. Stop the current investigation against the contractors to ensure industrial peace; after all allegations were based on rumours. II. Continue investigation to expo se exploitation and take strong actions against trouble makers. III. Get in direct touch with all contract labourers through all possible means, communicate the need for current investigation to stop their exploitation, and convince them regarding CTM’s situation due to competition. Also expose those contractors who are creating problems. IV. Promise strong action against the security guards who are guilty. V. Increase the wages of contract labourers.....
MCQ-> on the basis of the information given in the following case. Teknik Group of industries had businesses in different sectors ranging from manufacturing, construction, fish farming and hotels. These different businesses operated as semi-independent units managed by the unit level managers. Teknik’s management had an internal consultancy group called as Business Advisory Group (known internally as BAG). The 15 experts in BAG were hired personally by Mr. Teknikwala, the owner of Teknik, who wanted this core group of experts to help his organization grow fast without facing the typical growth hurdles. Most of them were specialists in fields like law, information technology, human resource management, and operations management. Almost all of them had experience spanning decades in the industry. Whenever any of the units faced any significant all units and it represented an extra work for those who were involved. This coordination was required to understand the different work processes and the users’ requirements. This coordination activity was being extensively managed by the old timers as they were familiar with internal processes and people in the different units. An external consultant was also hired for customization and implementation After two months, BAG teams had to fortnightly present their progress to Ms. Teknikwali’s team. In the last meeting Ms. Teknikwali was dissatisfied. She explained her thinking that since ERP impacted every aspect of the business, the roll out had to be done faster. She wanted Mr. Shiv to get the implementation completed ahead of schedule. In the meeting she asked Mr. Shiv to get the people in IT team to be more productive. Not willing to disagree, Mr. Shiv committed to a roll-out schedule of complete ERP system in 6 months instead of earlier decided 14 months. Next day, Mr. Shiv presented the revised project milestone to BAG members. He told them that in order to meet the deadline, the members were expected to work on week-ends till the completion of the project. Along with that, they were also expected to maintain their earlier standards of delivery time and quality for the normal trouble-shooting and internal advisory work. Mr. Shiv also pointed out that anyone whose performance did not meet the expectations would be subjected to formal disciplinary action. The meeting ended without any member commenting on Shiv’s ideas, although Mr. Shiv heard a lot of mumbling in the corridor. Over the week, Shiv noticed that the members seemed to avoid him and he had to make extra effort to get ideas from them. After a fortnight Shiv reviewed the attendance register and found the Mr. Lal, an old time member, had not come during the week-ends and certain decisions were held up due to lack of inputs from Mr. Lal. Mr. Shiv issued a written reprimand to Mr. Lal. He was speechless on receiving the reprimand but kept silent. It has been three days since that incident. Some of the senior members had put in request for transfer to other business units. It was rumoured that four problems, the unit level managers would put up a request for help to BAG. The problems ranged from installation of internal MIS systems, to financial advice related to leasing of equipment, to handling of employee grievances. Over a period of 20 years, Teknik’s revenues grew from 100 crore 10,000 crore with guidance of BAG and due to Mr. Tekinwala’s vision. Given its reputation in the industry, many people wanted to start their careers in BAG. Often young MBAs fresh out of business schools would apply. However their applications used to be rejected by Mr. Teknikwala, who had a preference for people with extensive industry experience. Things changed after the unfortunate demise of Mr. Teknikwala. His daughter Miss. Teknikwali took up the family business. She was an MBA from one of the premier business schools, and was working in a different company when Mr. Tekinwala passed away. She preferred that BAG developed new ideas and therefore inducted freshly graduated MBAs from premier business schools. She personally supervised the recruitment and selection process. Now the entire group constituted of 50 specialists, out of which 35 were the old time members. She also changed the reporting relationships in the BAG group with some of the older members being made to report to the new members. In IT team, Mr. Shiv, a newly recruited MBA, was made in-charge. For the older members it was a shock. However, as most of them were on the verge of retirement, and it would be challenging to search for new jobs while competing with younger professionals, they decided to play along. After one month, all business units were caught up in the ERP fever. This was an idea pushed by Ms. Teknikwali who the need the need to replace the old legacy systems with latest ERP system integrating all the units of Teknik. This was heavily influenced by her experience in the previous where an ERP system was already up and running. Therefore she was not aware of the difference between installing an ERP system and working on an already installed one. The ERP mplementation in Teknik Group required extensive coordination with senior level managers of senior legal experts had agreed to an offer from a law firm. Other senior members would sporadically come in late to work, citing health reasons. Almost all senior members now wanted a weekly work-routine to be prepared and given to them in advance so that they could deliver as per the schedule. This insistence on written communication was a problem as urgent problems or ad-hoc requests could not be foreseen and included. Also normal services to other business units were being unattended to, and there were complaints coming from the unit heads.Which of the following could have been a better response of Mr. Shiv to Ms. Teknikwali’s request to re-schedule the ERP implementation?....
MCQ-> Read the following passage carefully and answer the questions given below. Certain words/phrases have been printed in bold to help you locate them.Management is a set of processes that can keep a complicated system of people and technology running smoothly. The most important aspects of management include planning, budgeting, organising, staffing, controlling, and problem-solving. Leadership is a set of processes that creates organizations in the first place or adapts them to significantly changing circumstances. Leadership defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles. This distinction is absolutely crucial for our purposes here: Successful transformation is 70 to 90 per cent leadership and only 10 to 30 per cent management. Yet for historical reasons, many organizations today don't have much leadership. And almost everyone thinks about the problems here as one of managing For most of this century, as we created thousands and thousands of large organizations for the first time in human history, we didn't have enough good managers to keep all those bureaucracies functioning. So many companies and universities developed management programmes, and hundreds and thousands of people were encouraged to learn management on the job. And they did. But, people were taught little about leadership. To some degree, management was emphasized because it's easier to teach than leadership. But even more so, management was the main item on the twentieth-century agenda because that's what was needed. For every entrepreneur or business builder who was a leader, we needed hundreds of managers to run their ever growing enterprises.Unfortunately for us today, this emphasis on management has often been institutionalized in corporate cultures that discourage employees from learning how to lead. Ironically, past success is usually the key ingredient in producing this outcome. The syndrome, as I have observed it on many occasions, goes like this: success creates some degree of market dominance, which in turn produces much growth. After a while keeping the ever larger organization under control becomes the primary challenge. So attention turns inward, and managerial competencies are nurtured. With a strong emphasis on management but not on leadership, bureaucracy and an inward focus take over. But with continued success, the result mostly of market dominance, the problem often goes unaddressed and an unhealthy arrogance begins to evolve. All of these characteristics then make any transformation effort much more difficult.Arrogant managers can over-evaluate their current performance and competitive position, listen poorly, and learn slowly. Inwardly focused employees can have difficulty seeing the very forces that present threats and opportunities. Bureaucratic cultures can smother those who want to respond to shifting conditions. And the lack of leadership leaves no force inside these organisations to break out of the morass.Why, according to the author, is a distinction between management and leadership crucial?
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MCQ-> The story begins as the European pioneers crossed the Alleghenies and started to settle in the Midwest. The land they found was covered with forests. With incredible efforts they felled the trees, pulled the stumps and planted their crops in the rich, loamy soil. When they finally reached the western edge of the place we now call Indiana, the forest stopped and ahead lay a thousand miles of the great grass prairie. The Europeans were puzzled by this new environment. Some even called it the “Great Desert”. It seemed untillable. The earth was often very wet and it was covered with centuries of tangled and matted grasses. With their cast iron plows, the settlers found that the prairie sod could not be cut and the wet earth stuck to their plowshares. Even a team of the best oxen bogged down after a few years of tugging. The iron plow was a useless tool to farm the prairie soil. The pioneers were stymied for nearly two decades. Their western march was hefted and they filled in the eastern regions of the Midwest.In 1837, a blacksmith in the town of Grand Detour, Illinois, invented a new tool. His name was John Deere and the tool was a plow made of steel. It was sharp enough to cut through matted grasses and smooth enough to cast off the mud. It was a simple too, the “sod buster” that opened the great prairies to agricultural development.Sauk Country, Wisconsin is the part of that prairie where I have a home. It is named after the Sauk Indians. In i673 Father Marquette was the first European to lay his eyes upon their land. He found a village laid out in regular patterns on a plain beside the Wisconsin River. He called the place Prairie du Sac) The village was surrounded by fields that had provided maize, beans and squash for the Sauk people for generations reaching back into the unrecorded time.When the European settlers arrived at the Sauk prairie in 1837, the government forced the native Sank people west of the Mississippi River. The settlers came with John Deere’s new invention and used the tool to open the area to a new kind of agriculture. They ignored the traditional ways of the Sank Indians and used their sod-busting tool for planting wheat. Initially, the soil was generous and the nurturing thrived. However each year the soil lost more of its nurturing power. It was only thirty years after the Europeans arrived with their new technology that the land was depleted, Wheat farming became uneconomic and tens of thousands of farmers left Wisconsin seeking new land with sod to bust.It took the Europeans and their new technology just one generation to make their homeland into a desert. The Sank Indians who knew how to sustain themselves on the Sauk prairie land were banished to another kind of desert called a reservation. And they even forgot about the techniques and tools that had sustained them on the prairie for generations unrecorded. And that is how it was that three deserts were created — Wisconsin, the reservation and the memories of a people. A century later, the land of the Sauks is now populated by the children of a second wave of European tanners who learned to replenish the soil through the regenerative powers of dairying, ground cover crops and animal manures. These third and fourth generation farmers and townspeople do not realise, however, that a new settler is coming soon with an invention as powerful as John Deere’s plow.The new technology is called ‘bereavement counselling’. It is a tool forged at the great state university, an innovative technique to meet the needs of those experiencing the death of a loved one, tool that an “process” the grief of the people who now live on the Prairie of the Sauk. As one can imagine the final days of the village of the Sauk Indians before the arrival of the settlers with John Deere’s plow, one can also imagine these final days before the arrival of the first bereavement counsellor at Prairie du Sac) In these final days, the farmers arid the townspeople mourn at the death of a mother, brother, son or friend. The bereaved is joined by neighbours and kin. They meet grief together in lamentation, prayer and song. They call upon the words of the clergy and surround themselves in community.It is in these ways that they grieve and then go on with life. Through their mourning they are assured of the bonds between them and renewed in the knowledge that this death is a part of the Prairie of the Sauk. Their grief is common property, an anguish from which the community draws strength and gives the bereaved the courage to move ahead.It is into this prairie community that the bereavement counsellor arrives with the new grief technology. The counsellor calls the invention a service and assures the prairie folk of its effectiveness and superiority by invoking the name of the great university while displaying a diploma and certificate. At first, we can imagine that the local people will be puzzled by the bereavement counsellor’s claim, However, the counsellor will tell a few of them that the new technique is merely o assist the bereaved’s community at the time of death. To some other prairie folk who are isolated or forgotten, the counsellor will approach the Country Board and advocate the right to treatment for these unfortunate souls. This right will be guaranteed by the Board’s decision to reimburse those too poor tc pay for counselling services. There will be others, schooled to believe in the innovative new tools certified by universities and medical centres, who will seek out the bereavement counsellor by force of habit. And one of these people will tell a bereaved neighbour who is unschooled that unless his grief is processed by a counsellor, he will probably have major psychological problems in later life. Several people will begin to use the bereavement counsellor because, since the Country Board now taxes them to insure access to the technology, they will feel that to fail to be counselled is to waste their money, and to be denied a benefit, or even a right.Finally, one day, the aged father of a Sauk woman will die. And the next door neighbour will not drop by because he doesn’t want to interrupt the bereavement counsellor. The woman’s kin will stay home because they will have learned that only the bereavement counsellor knows how to process grief the proper way. The local clergy will seek technical assistance from the bereavement counsellor to learn the connect form of service to deal with guilt and grief. And the grieving daughter will know that it is the bereavement counsellor who really cares for her because only the bereavement counsellor comes when death visits this family on the Prairie of the Sauk.It will be only one generation between the bereavement counsellor arrives and the community of mourners disappears. The counsellor’s new tool will cut through the social fabric, throwing aside kinship, care, neighbourly obligations and communality ways cc coming together and going on. Like John Deere’s plow, the tools of bereavement counselling will create a desert we a community once flourished, And finally, even the bereavement counsellor will see the impossibility of restoring hope in clients once they are genuinely alone with nothing but a service for consolation. In the inevitable failure of the service, the bereavement counsellor will find the deserts even in herself.Which one of the following best describes the approach of the author?
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