Management 2012 Private Solved

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Answer.

1 (a)
CONCEPTS OF MANAGEMENT
Management refers to the process of planning, organising, leading, and controlling
resources to achieve organisational goals and objectives. It involves coordinating and
allocating resources, such as people, materials, equipment, and money, to accomplish
speci c tasks and goals. Effective management ensures that resources are used ef ciently
and effectively to achieve organisational success.
Management is a dynamic and ongoing process that involves:
1. Planning: Setting goals, objectives, and strategies
2. Organising: Allocating resources and structuring the organisation
3. Leading: Motivating and in uencing employees
4. Controlling: Monitoring and correcting performance
Management is essential for achieving organisational success, as it enables organisations
to:
1. Achieve goals and objectives
2. Maximise ef ciency and productivity
3. Enhance employee motivation and engagement
4. Adapt to changing environments and circumstances
5. Build and maintain competitive advantage

Answer.1 (b)
Henri Fayol's 14 Principles of Management:
1. Division of Work: Segregate tasks to enhance quality, productivity, and ef ciency.
2. Authority and Responsibility: Authority enables ef cient management, while
responsibility holds managers accountable.
3. Discipline: Essential for achieving goals and maintaining a positive work environment.
4. Unity of Command: One employee, one boss, to avoid confusion and con ict.
5. Unity of Direction: Uni ed goals for all employees working towards the same activity.
6. Subordination of Individual Interest: Prioritize company interests over personal ones.
7. Remuneration: Fair compensation motivates employees.
8. Centralization: Balance hierarchy and power division for effective decision-making.
9. Scalar Chain: Clear hierarchy from top to bottom for easy communication.
10. Order: Maintain a favorable work culture with a well-de ned work order.
11. Equity: Treat all employees equally and respectfully.
12. Stability: Job security boosts employee performance.
13. Initiative: Encourage employee initiatives to increase motivation and morale.
14. Esprit de Corps: Foster a positive work environment through trust, mutual
understanding, and support.

Answer.2 (a)
RATIONAL DECISION MAKING
The manager should not make decision with out taking note of the atmosphere and
surroundings where he is operating. The beliefs, attitudes and prejudices of people must
often be taken into account. They play an important role in making the decision a success.
It is not enough that a decision be logical and point to the best way of reaching the goal.
The manager should look to the exigency of the circumstances. It is the rationality that
would guide him to look to the requirements of the time and decide accordingly.
Sometimes the circumstances do not pursuit the manager to make the decision that
appears to be the best logically. He has to be practical, that is, he must look to the need of
time which may make him to pick up the next best rather than the best. This is what we
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know as the "Principle of Bounded Rationality" advocated by Herbert A. Simon. Let the
manager follow this principle to make his decision practical and administratively successful
for the purpose. We also knew it as politics of decision making. Politics means the art of
possible and it is this art that has to be applied by the manager to make his decision a
success. Rationally teaches this art.

Answer.02 (b)
The old saying "An ounce of prevention is worth a pound of cure", certainly applies to
effective management practice. Problem is the process that allows the manager to get
facts, stated systematically for making a decision.
The suggested steps of problems analysis are as under:
1) - State the Problem: The more speci cally and clearly the problem is stated, the easier
the rest of the problem serving process will be.
(11)
De ne the present level: State in speci c and measurable terms the exact state of affairs
at present.
(Ill) State your objectives: State in speci c and measurable terms the exact difference
between the present and the way things ought to be.
(IV) List the possible causes: Write down all the possible reasons why the present concern
might have arisen.
Consider all the possible causes, may be even a few that seem impossible.
(V)
Select the most likely cause : This selection process itself may suggest other causes and
send back to steply.
(VI List alternative solutions: Write down all the possible with regard to effort, cost and risk,
will the solution cost more than the problem.
(VII) Analyze your alternative actions : Weigh each possible action with regard to effort,
cost and risk. Will the solution cost more than the problem.
(VIII) Make the decision: Select the action alternative that has the highest total rating on
your effort, cost and risk evaluation.
(IX) Make an action plan: Carefully and with attention to minimise details plan the events
that will have
to occur to bring about the selected alternatives.
Give attention to the speci c datas and obejectives of
end step towards accomplishing the solution.
(X) Accept the credit graciously : When the problem solving steps have been followed
carefully and the plan has been executed completely, there are only two possible activities
remaining. Successful managers should not be own-bearing and blustering on their
successful managers should not start looking down upon other managers.

Answer.4 (a)
Formal and informal organization
Organisations are basically classi ed on the basis of relationships. There are two types of
organisations formed on the basis of relationships in an organisation.
Formal Organisation: This is one which refers to a structure of well de ned jobs each
bearing a measure of authority and responsibility. It is a conscious determination by which
people accomplish goals by adhering to the norms laid down by the structure. This kind of
organisation is an arbitrary set up in which each person is responsible for his performance.
Formal organisation has a formal set up to achieve pre- determined goals.
Informal Organization: It refers to a. network of persenal and social relationships which
spontaneously originates within the formal set up. Informal organizations develop
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relatianships which are built on likes, dislikes, feelings and emotions. Therefore, the
network of social groups based on friendships can be called as informal organizations.
There is no conscious effort made to have informal organization: It emerges from the
formal organization and it is not based on any rules and regulations as in case of formal
organization.

Answer.4 (b)
William C. Scott has given four pillars upon which classical organization theory is built is
given as under:
(1)Division of Labour
(2)Scalar of Functional Process.
(3)Span of Control.
(4)Structure
(1) Division of Labour: Breaking down tasks into smaller, specialized jobs to improve
ef ciency and productivity.
(2) Scalar Chain: The hierarchical structure of authority and communication, where each
employee reports to only one supervisor.
(3) Span of Control: The number of employees a manager can effectively supervise and
control.
(4) Unity of Command: Each employee should have only one supervisor and report to only
one person to avoid confusion and con icting orders.

Answer.5 (a)
Meaning and Scope of Staf ng: Early de nition of staf ng focused narrowly on hiring
people for vacant positions in an enterprise. Today, staf ng is termed as human resource
management and de ned more broadly.
Staf ng may be de ned as a managerial function of attracting, acquiring, developing and
retaining human resources in order to provide the talent necessary for work activities
leading to accomplishment of organizational objectives.
This de nition emphasizes that people are vital and valuable resources requiring proper
care and attention.
Thus, staf ng involves: lling up various managerial and non-managerial positions created
in the organization structure with quali ed persons, upgrading the quality and usefulness
of the members of organization for its success and its retaining the members by providing
adequately for their welfare and career advancement.
The staf ng process involves job analysis, human resource planning, recruitment,
selection, placement, orientation, training and development, compensation performance
appraisal, career development, promotion, transfer and separation. In many organizations
most of the aforesaid activities are handled by the Personnel Department, now popularly
known as Human Resource Management Department. It may be noted that staf ng
decisions and initiatives are the basic responsibility of line managers. However, the
personnel management department provides necessary specialist services as well as
supportive and administrative services to line managers for effective management of
human resources.
Staf ng is a continuous function of management because human resources continue to be
a signi cant factor in organizational success and therefore the organization always needs
to acquire and retain in proper form its personnel. Moreover, employee welfare and
development, expansion and diversi cation, promotion and transfers, demotions and
separations, retirement and death,

Answer.5 (b)
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Following steps are involved in process of staf ng:
Manpower requirements: The very rst step in staf ng is to plan the manpower inventory
required by a concern in order to match them with the job requirements and demands.
Therefore, it involves forecasting and determining the future manpower needs of the
concern.
Recruitment: Once the requirements are noti ed, the concern invites and solicits
applications according to the invitations made to the desirable candidates.
Selection: This is the screening step of staf ng in which the solicited applications are
screened out and suitable candidates are appointed as per the requirements
Orientation and Placement: Once screening takes place, the appointed candidates are
made familiar to the work units and work environment through the orientation programmes.
Placement takes place by putting right man on the right job.
Training and Development: Training is a part of incentives given to the workers in order to
develop and grow them within the concern. Training is generally given according to the
nature of activities and scope of expansion in it. Along with it, the workers are developed
by providing them extra bene ts of ir depth knowledge of their functional-areas.
Development also includes giving them key and important jobs as a test or examination in
order to analyze their performances.
6. Remuneration: It is a kind of compensation provided monetarily to the employees for
their work performances.
This is given according to the nature of job- skilled or unskilled, physical or mental, etc.
Remuneration forms an important monetary incentive for the employees.
Performance Evaluation: In order to keep a track or record of the behavior, attitudes as
well as opinions of the workers towards their jobs. For this regular assessment is done to
evaluate and supervise different work units in a concern. It is basically concerning to know
the development cycle and growth patterns of the employees in a concern.
Promotion and transfer: Promotion is said to be a non-monetary incentive in which the
worker is shifted from a higher job demanding bigger responsibilities as well as shifting the
workers and transferring them to different work units and branches of the same
organization.

Answer.6 (a)
Reasons for Formation of Groups:
These are the various reasons from which a Group is to be framed:
(1) Physical Causes:
It is the most important cause of group formation.
Those who live and work in close proximity tend to become grouped. Location is not an
altogether independent cause, transportation and communication facilities have more
geographical nearness of a factor in group closeness.
(2)Economic Reasons:
Persons unite together on account of economic reasons. For instance, labourers of a
factory or factories, investors or shareholders may form a group to protect them against
economic in justice and help them to obtain for a better result.
(3) Security Needs:
These needs are most likely to come group formation when individuals lack suf cient
power to effect a change on their own. At labour power has grown over the years, many
security needs have been produced and many headaches for management.
4)Social Needs:
Human beings are social animals. They have the instinct to develop a social home, a
society based on culture, religion, or social needs. We have clubs, gymkhanas rest and
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recreation places and religious centres where people get together to ful l their social
needs. They have been developed by groups of people to pursue their social desires.
(5)The Esteem Needs:
Esteem needs are the most intangible of - the motivations of group formation. Some
employees are attracted towards joining a group or having a position that, according to
their perception, has a higher social standard.
(6)Self-Actualization Needs:
Such needs often lead to the formation of professional organizations and other groups that
facilitate communication among people working on the same or identical jobs. Many
professional groups are characterised under the ag of professional growth and
maintained for the satisfaction of status needs.

Answer.6 (b)
Various Classi cation of group
In the context of Principles of Management, groups can be classi ed into various
categories based on their characteristics, purpose, and duration. Here are some common
classi cations of groups:
1. Formal Groups:
- Command Groups: Formed by the organization's hierarchy and authority structure.
- Task Groups: Formed to accomplish speci c tasks or projects.
2. Informal Groups:
- Social Groups: Formed based on personal relationships and social interactions.
- Interest Groups: Formed around shared interests or hobbies.
3. Permanent Groups:
- Committees: Established to perform ongoing functions or tasks.
- Departments: Functional areas within an organization.
4. Temporary Groups:
- Ad Hoc Committees: Formed to address speci c issues or projects.
- Project Teams: Formed to accomplish a speci c project or task.
5. Functional Groups:
- Production Groups: Focused on producing goods or services.
- Service Groups: Focused on providing support or services.
6. Cross-Functional Groups:
- Teams composed of members from different departments or functions.
7. Virtual Groups:
- Teams that communicate and collaborate remotely, often using technology.

These classi cations help managers understand the different types of groups within an
organization, their purposes, and how to effectively manage them to achieve
organizational goals.

Answer.7 (a)
Motivation: Success at work is not a matter of only technical expertise but also dependent
on the interest of the worker. Creating interest in people to give their best to the work and
the workplace is the key to motivation. For this purpose, the managers should know why
people act as they do and what will make them to give their best on their jobs.
• Some important de nitions of motivation may be given as follows:
Carroll Startle: Motivation is a reported urge or tension to move in a given direction or to
achieve a certain goal.
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Michael Julius: Motivation is the art of stimulating someone or oneself to set a desired
course of action or push the right button to get the desired action.
E.F.I. Brech: Motivation is a general inspirational process which gets the members of the
team to pull their weight effectively, to give their loyalty to the group, to carry out properly
the tasks that they have accepted and generally to play an effective to play an effective
part in the job that the group has undertaken.
Weihrich and Koontz: Motivation is a general term applying to the entire class of drives,
desires, needs, wishes and similar forces: To say that managers motivate their
subordinates is to say that they do those things which key hope will satisfy these drives
and desires and induce the subordinates to act in a desired manner.
In sum, motivation is a psychological process which is related to human side and through
which the desires, needs or tensions of the employees are understood and they are.
inspired in such a way that they proceed in a desired direction, provide maximum help in
the achievement of speci ed goals, keep on the drive to work, continue to cooperate with
each other, develop and maintain the sense of belongingness towards the enterprise, feel
satis ed and their morale remains high. Thus, motivations are the process of steering a
person's inner drives and actions towards certain goals and committing his energies to
achieve these goals.
Various Theories of Motivation:
1Maslow's hierarchy of need Theory
2Alderfer's ERG theory
3Acquired Needs Theory (McClellan)
4Cognitive Evaluation Theory
5Two Factor theory (Herzberg)
6Equity Theory
7Reinforcement Theory
8Expectancy Theory (Vroom)

Answer.7 (b)
Abraham Maslow's Needs Theory is a humanistic approach to understanding human
motivation. He identi ed ve basic needs that are common to every human being, in a
sequential order:

1. Physiological Needs (basic survival needs)


2. Safety Needs (security and protection)
3. Love and Belonging Needs (social connections and relationships)
4. Esteem Needs (self-esteem and recognition)
5. Self-Actualization Needs (personal growth and ful llment)

1. The Physiological Needs: These are the most basic needs essential for the human life.
They are food, water, shelter, air, warmth, sleep etc. Maslow said that until these needs
are satis ed to the degree to maintain life, other needs will not rouse any type of
motivational impulse in the people.
2. Security or Safety Needs: When the above mentioned physiological needs are
satis ed, then the people get motivated, when they are offered the satis ers to satisfy
their security and safety needs e.g. security of life and property, security of food and
shelter and security against losing the job. A starving man dying of hunger may even
risk his life to get food from a dangerous place, but not other wise. It shows that
security and safety needs come only at stage no. 2, i.e. when his physiological needs
are ful lled.
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3. Love and Belonging Needs: (Social Needs) These needs can also be called as
af liation or acceptance needs or асСсsimply social needs. Since people are social
beings they need to belong to and be accepted by others. They want to funlove and be
loved by others. This would naturally mean that he would like to live in a society, into
his family, friends etc.
4. Esteem Needs: This is the 4" step in Maslow's ladder of Needs. These needs can be
classi ed into two subsidiary sets. The rst are, the desire for strength, for power, for
achievement, for mastery and competence. For the second, we have what we may call
the desire for prestige and for high esteem and respect from others, and for high
reputation and status etc. This impulse sometimes create the need for a'Big Car', or a "
Big Banglow," or a VIP treatment etc. etc.
5. Self. Actualization Needs: Even when the above needs are satis ed, we may still (not
always) feel some kind of restlessness and uneasiness. It refers to desire for self
ful llment a tendency to become what he is actually t for; a desire to become
everything that he is capable of becoming. These needs are exhibited when we see a
renown professional banker (Mushtaque Ahmed Yousu ) writing articles of humour;
some one feeling satis ed by inventions, by becoming an Athlete or a Singer or an
Actor etc. The Self Actualization Needs will emerge only when the psychological,
safety, love and esteem needs are either satis ed completely or adjusted at some
degree. After having satis ed the top class 'Self Actualization Need, the

Answer.8 (a)
The whole process of communication can be split up into its eight simple component parts
as follows:
1. The idea originated:
Suppose you are sitting in a playground watching a cricket march. Suddenly you see that
your fast friend is sitting at some distance and you want to ask him to come and sit with
you so as to give you the company at this enjoyable moments. This is the rst part of the
process of communication.
2. The idea encoded:
Now you think on how to convey this message to him.
Some written or spoken words or expresscas by hand movements, or gestures or
symbols, or sounds, etc. can be ways of encoding the idea to him.
3. The idea transmitted:
You shout out at him by name and ask him to come to you by hand movements.
4. Noise (internal and external stimulants)
There can be so many distracting or distinguishing factors which may make it dif cult for
your friends to know clearly what you want. They are internal and external stimuli. There
can be environmental noise, shouts, or inattention on the part of your friend or faulty
understanding by him or some kind of anger or grudge on the part of your friend not
allowing him to attend properly to your message (may be he is angry), etc. 'Noise' refers to
barriers in communication discussed later in this chapter.
5. The idea received:
In view of the noise at step 4, it is quite likely that the message may or may not distorted.
However, the message will be received by eyes (Reading if step 2 was a letter, or if it was
by expression or motion, etc) if step 2 was a call by shouting, etc.
6. The idea decoded:
he idea or message reccived at step 5 above is passed on 1o the brain which decodes or
tries to understand the message received through eyes, cars, etc:
7. The idea understood:
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The resulting impressions on the brain make up the 'idea received' understood, by the
brain. In actual practice if step No.7 is exactly like step 1 it will be considered as an
effective communication, otherwise a defective communication. How far it is an effective or
a defective communication, will become known by step No.8.
8. The feedback:If as a result of the above steps of the communication process, your
friend comes to you or responds back regretting his inability to come, then the
communication is effective and successful otherwise not. It is therefore the feedback at
step No.8 which ensures whether idea understand at (7) is exactly the replica of idea
originated at (1). It shows that two skillful communicators are involved in the
communication process. It takes two to make a meaningful message because either side
on the process can break down and distort the original idea. Effective communication is a
joint responsibility of both parties, the teacher and the student; the manager and the
worker; the orator and the audience, etc.

Answer.8 (b)
1. Thinking: This method is not popular is general public and very few people send and
receive messages through this media. The common name for this media is
"Telepathy', which can be developed after great practice and efforts. The sender simply
brings in certain message in his mind, and the receiver spontaneously receives that
message in his mind, and in this way both parties communicate with each other and no
one knows anything about it. 'Meditation' exercises can help us develop this technique.
2.Action: Messages can be sent through expressions, facial gestures movements and
motions, symbols, etc. Not a single word is spoken but the whole message is
communicated through signals, facial expression and through "body language"
' In 'boy scouting', methods to
convey messages through this media are taught to the, school students, through ag
signals, etc.
3.Observations: We also learn a lot by observing things around us. In a way, our
observations also give us messages, may be that message was meant for us or not.
But very often we fail to observe a thing in its real perspective and our personal prejudices
colour our observations, so much so as to distort the real message.
All failure to observe correctly cannot be traced to our intentional ignorance. Sometimes
things happen so fast in some chaotic manner that can confuse or distort what is seen and
perceived. Hence, 'observation', may sometimes
"mis-communicate"
4.Speaking: It is the most common. media of communication, and perhaps the casiest
unless the communicators are deaf and dumb. An average person is. said to speak 125
words a minute, but this is just for an average man. People can speak far more or far less
than this average.
5.Listening: Communication is a "two way" traf c, and therefore listening is also a common
mode of communicating. Messages are distorted only because it was not properly listened
to and many problems may arise due to poor attention or inattention towards listening.
Sometimes the speaker conveys the message with
"protective cover" around the real message, and we cannot get the real message unless
we listen with the 'third ear' Listening with the 'third ear' means that we should be able to
listen to the message that lies between the lines. Listening carefully is most essential for
all successful communication.
6 Writing: This is a common mode of communication and enjoys the advantage of having a
permanent record of all that was written, in black and white. Written messages stand as
conclusive evidence for any type of legal action for future. For all business letters, it is
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always desirable that they conform to 5 or 7 C's of communication. (C's of communication
refer to essential ingredients of a successful communication)
7.Reading: As through observations we receive messages, similarly we receive messages
also through reading and therefore 'Reading' is also a mode of communication. We spend
a lot of time reading books, magazines, newspapers, etc. and receive messages through
them. An average American business manager is supposed to be spending about 4 ½
hours daily is reading reports, memorials and of cial correspondence. How much you think
an Average Pakistan; Manager in a senior position.

Answer.10 short notes


1. Departmentation
According to Koontz and O'Donnel, "Departmentation is a process of dividing the large
monopolistic functional organization into smaller and exible admi istration units." The
mosi important function of organization is to form such groups of activities or divisions
which can easily and ef ciently be managed. This sort of division of activities will enable
the heads of the cepartments and other executives to execute the policy without much
dif culty. The question of classifying their activities and its sub-divisiors within different
groups of business, some times becomes a matter of dif culty for the organizer.

2. Types of Leader
All leaders do not possess same attitude or same perspective. As discussed earlier, few
leaders adopt the carrot approach and a few adopt the stick approach. Thus, all of the
leaders do not get the things done in the same manner. Their style varies. The leadership
style varies with the kind of people the leader interacts and deals with. A ' perfect/standard
leadership style is one which assists a leader in getting the best out of the people who
follow him.
Some of the important leadership styles are as follows:
• Autocratic leadership style is a leadership approach where the leader has complete
control and decision-making authority, with no input or feedback from employees. The
leader makes all decisions and takes full responsibility, which can lead to speedy
decision-making and high productivity. However, this style also has drawbacks, such as
high employee absenteeism and turnover, as employees may feel undervalued and
demotivated. This leadership style is best suited for short-term, routine, or risky projects,
or when the leader is the expert in the eld. It can be effective in certain situations, but it
can also sti e innovation and creativity, and is not suitable for teams that require
autonomy and collaboration.

• Laissez FaireLaissez Faire leadership style: Leader trusts employees to work


independently, focusing on intellectual work and not management. Employees are
encouraged to share views and suggestions. Suitable for skilled, loyal, experienced, and
intellectual employees.

• Democratic Democratic leadership style: Leader involves employees in decision-


making, guiding them on tasks and encouraging feedback. Advantages: satis ed,
motivated, and skilled employees, optimistic work environment, and creativity.
Disadvantage: time-consuming.

• Bureaucratic Bureaucratic leadership style: Leader strictly follows organizational rules


and policies, promoting employees based on adherence to rules. Suitable for safe work
conditions and quality, but discourages creativity and self-contentment
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3. Types of control
1)Production Control: Production Control is concerned with the timing and parts of any
production process. The purpose of production is to make the right quantity of goods of the
right kind and quality, at the right time, place and cost. To accomplish these goals requires
an effective combination of men, machines, process and materials.
Such a combination is sought through the efforts of various technicians and managerial
specialists. They plans, organize, direct, and control production.
(2)Inventory Control: Inventory Control monitors and adjust quantities of things. Every
business maintains a certain amount of inventory in which there is considerable nancial
investment. Factories, stores and of ces maintain inventories in stock rooms, in process,
and in intransit to and from company. Such inventories constitute the life-blood' of the
business ow and amount of material supplies throughout the operations are properly
adjusted, certain steps are to be taken which are termed
'INVENTORY CONTROL'
(3). Quality Control: Quality Control is concerned with keeping the quality of a rm's
production above the standards that have been established by the
(4). Financial Control: Financial Control is related to almost everything. Financial Control is
one of the four important funetional areas of the process of management. The major
objective of any business rm is to make a pro t for its owners by producing goods or
services for sale in the market. To reach the goal, the rm purchasesthe various factor of
production and then produces the output it sells.
This all process requires funds. Finance may be very aptly said to be the circulatory
system of the economic body of a rm. Financial Control is that aiministrative areas or set
of administrative functions which relate to the arrangement of cash anc credit so that the
organisation may have the means to carry out its objectives as satisfactorily as possible.

4. Human balance sheet


No doubt the people are very vital asset for the effective and successful of any company. It
is with the help of the physical assets of the company, that it earns pro ts, and all these
assets are recorded on the 'Balance Sheet.
But without the help of productive employees and capable managers, these physical
assets cannot do anything. After all, the companies invest large amount of money in
recruiting and training these people. Hence Rensis Likert asserts that 'Human Assets are
even more valuable than physical assets, and therefore they should also be shown in the
'Balance Sheet' of a company. This has given rise to
'Human Resource Accounting'. But the question is, "How to evaluate the worth of the
people to place them on Balance sheet in terms of money?" Two approaches are
suggested for this purpose. The 'Cost Approach' measures the value of the people by
calculating the cost involved if the company is to recruit all those people afresh. Naturally,
if the company loses all the present staff and is supposed to nd out the staff of the same
caliber and to train them to bring them up to the present level, the company will have to
spend a lot of money. That amount will be considered as the value of worth of the staff to
be shown on the Balance Sheet.
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