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CMA Foundation · Fundamentals of Business Economics and Management · Communication, Co-ordination, Collaboration, Monitoring and Control

At Sundaram Auto Parts, the purchase department buys steel in bulk to get discounts, while the production department complains that storage space is short and the sales department promises quick deliveries without checking stock. Which need for co-ordination is most clearly shown here?

The case shows the need to reconcile conflicting departmental goals with overall organisational objectives. Purchase, production and sales each act on their own priorities, creating friction. Co-ordination aligns them so the firm as a whole benefits. Nothing in the case concerns centralisation, written policies or a labour surplus.

  1. AConflict between departmental goals that must be reconciled with overall organisational objectivesCorrect
  2. BAbsence of any need for written policies
  3. CExcessive centralisation of decision-making authority
  4. DSurplus of skilled labour in the firm

Explanation

Each department pursues its own narrow aim (discounts, space, delivery promises) and these clash. Co-ordination is needed to reconcile such differences with the firm's overall objectives. The case says nothing about centralisation, policies or labour surplus.

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