Friday, March 18, 2011

PRINCIPLES & PRACTICES OF MANAGEMENT (PPM)

PRINCIPLES & PRACTICES OF MANAGEMENT (PPM)

Question 1.(a) Describe the functions of a manager as applicable to an Industry, also amplify coordination as a task of the manager.
(b) Henry Fayol is regarded as “Father of modern management theory.” What are various groups, in which Industrial activities can be divided, support your answer be the figure diagram.
Answer 1. (a) The Functions of Managers
Planning
Planning involves selecting missions and objectives and the actions to achieve them, it requires decision making, that is, choosing future courses of action from among alternatives. No real plan exists until a decision-a commitment of human or material resources or reputation has been made.
Organizing
Organizing involves establishing an intentional structure of roles for people to fill in an organization. It is intentional in the sense of making sure that all the tasks necessary to accomplish goals are assigned and, it is hoped, assigned to people who can do them best.
Staffing
Staffing involves filling and keeping filled the positions in the organization structure. This is done by identifying work- force requirements; inventorying the people available; and recruiting, selecting, placing, promoting, appraising, planning the careers of, compensating, and training or otherwise developing both candidates and current job holders so that tasks are accomplished effectively and efficiently.
Leading
Leading is influencing people so that they will contribute to organization and group goals; it has to do predominantly with the interpersonal aspect of managing. Leading involves motivation, leadership styles and approaches, and communication.
Controlling
Controlling is measuring and correcting individuals and organizational performance to ensure that events conform to plans. It involves measuring performance against goals and plans, showing where deviations from standards exist, and helping to correct them.


Coordination
Coordination is the essence of manager ship, for it achieves harmony among individual efforts toward the accomplishment of group goals. Each of the managerial functions is an exercise contributing to coordination.
Coordination as a task of the Manager
Individual often interpret similar interests in different ways, and their efforts towards mutual goals do not automatically mesh with the efforts of others. It thus becomes the central task of the manager to reconcile differences in approach, timing, effort, or interest and to harmonize individual goals to contribute to organization goals.
Coordination is the orderly synchronization or fitting together of the interdependent efforts of the interdependent efforts of individuals in order to attain a common goal. Coordination is an essential part of all the managerial functions of planning, organizing, leading and controlling.



















Answer 1. (b) Henri Fayol, referred to as “The Father of modern management theory”, published his observations on the principles of general management in 1916 in French under the title “Administration Industrielle at Ge’ne’rale”.
Fayol found that activities of an industrial undertaking could be divided into six groups, as shown in Fig. These groups are :
1. Technical (Production),
2. Commercial (buying, selling and exchanging),
3. Financial (Search for and optimum use of capital),
4. Security (Protection of property and persons),
5. Accounting (including statistics) and
6. Managerial (Planning, Organization, command, Coordination and Control).


- Planning
- Organizing
- Command
- Coordination
- Control

Fayol listed fourteen principles of Management based on his experience. These are:
1. Division of work
This is the specialization that economists consider necessary for efficiency in the use of labour.
2. Authority and responsibility
The two are related, with responsibility arising from authority.
3. Discipline
Discipline is seen as a “respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect, “requiring good supervisors at all levels.
4. Unity of Command
This means that employees should receive orders from one superior only.
5. Unity of Direction
According to this principle, each group of activities with the same objective must have one head and one plan.
6. Subordination
Subordination of individual to general interest. When the two are different, management must reconcile them.
7. Remuneration
Remuneration and methods of payment should be fair and afford the maximum possible satisfaction to employees and employer.
8. Centralization
This principle refers to the extent to which authority is concentrated or dispersed.
9. Scalar Chain
This “Chain of Superiors” from the highest to the lowest ranks should be short circuited only when, to follow, it would be detrimental to the interest of the organization.
10. Order
This is essentially a principle of organization in the arrangement of things and people.
11. Equity
Managers should apply a combination of kindness and justice when dealing with subordinates so as to elicit loyalty and devotion from personnel.
12. Stability of tenure
For higher motivation and morale there should be job security. Unnecessary turnover is both the cause and effect of bad management.

13. Initiative
Initiative is the thinking out and execution of a plan. Fayol exhorts managers to “Sacrifice personnel vanity” in order to permit subordinates to exercise it.
14. Esprit de Corps
This is the Principle that “in union there is strength”. It emphasis the need for teamwork and the importance of communication in obtaining it.
























Question 2. (a) Explain the modern management thoughts, also give out Mc Kinsey’s 7-S frame work for management analysis.
(b) Planning in an Industry occupies an important place for all managers, write types of Plans as applicable to various industries.
Answere. 2 (a) A Management theory Jungle
The variety of approaches to management analysis, the amount of research, and the number of differing views have resulted in much confusion as to what management is, what management theory and science is, and how managerial events should be analyzed. Koontz has called this situation “The Management Theory Jungle”.
Some approaches to management are discussed below:-
The systems Approach
The systems concepts have broad applicability. Organizations are open systems i.e. systems have boundaries, but they also interact with the external environment. This approach recognizes the importance of studying interrelatedness of planning, organizing and controlling in an organization as well as the many subsystems.
Contingency or Situational Approach
According to this approach, managerial practice depends on circumstances a contingency or a situation. Contingency theory recognizes the influence of given solutions or organizational behavior patterns. Managers have long realized that there is no one best way to do things, but it can be very complex and difficult to determine all relevant contingency factors and show their relationships.
Mc KINSEY’S 7-S FRAMEWORK
The 7-S framework for management analysis was developed by the consulting firm of McKiniey + Company. The seven S’s are :
1. Strategy : Systematic action and allocation of resources to achieve company aims.
2. Structure: organization structure and authority / responsibility relationships.
3. Systems : Procedures and processes such as information systems, manufacturing processes, budgeting and control processes.
4. Style : The way management behaves and collectively spends its time to achieve organizational goals.
5. Staff : The people in the enterprise and their socialization into the organizational culture.
Operational Approach
This approach draws together concepts, principles, techniques and knowledge from other fields and managerial approaches and integrates these approaches with science and theory that is practical.
It develops classification systems built around the managerial functions of planning, organizing, staffing, leading and controlling.
The operational approach recognizes that there is a central core of knowledge about managing that is pertinent only to the field of management. Such matters as line and staff departments, managerial appraisal and various managerial control techniques involve concepts and theories found only in situations involving managers. In addition, this approach draws on and absorbs knowledge from other fields, including systems theory, decision theory, theories of motivation and leadership, individual and group behavior, social systems and cooperation and communication as well as the application of mathematical analysis and concepts.






















Answer.2. (b) The principle of efficiency of plans states “The efficiency of a plan is measured by the amount it contributes to purpose and objectives as offset by the costs required to formulate and operate it and by unsought consequences.”
Plans are efficient if they achieve their purpose at a reasonable cost, when cost is measured not only in terms of time or money or production but also in the degree of individual and group satisfaction.
Type of Plans
1. Missions or purpose
The mission, or purpose, identifies the basic function or task of an enterprise or agency or any part of it.
2. Objectives or goals
Objectives or goals are the ends toward which activity is aimed. They represent the end point toward which planning, organizing, staffing, leading and controlling are aimed. While enterprise objectives are the basic plan of the firm, a department may also have its own objectives. Its goals contribute to the attainment of enterprise objectives, but the two sets of goals may be entirely different.
3. Strategies
Strategy is defined as the determination of the basic long-term objectives of an enterprise and the adoption of course of action and allocation of resources necessary to achieve these goals. The purpose of strategies is to determine and communicate, through a system of major objectives and policies, a picture of the kind of enterprise that is envisioned. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives, but they furnish a framework for guiding, thinking and action.
4. Policies
Policies define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to, and objective. Policies help decide issues before they become problems, make it unnecessary to analyze the same situation every time it comes up, and unify other plans, thus permitting managers to delegate authority and still maintain control over what their subordinates do.
5. Procedures
Procedures are plans that establish a required method of handling future activities. They are chronological sequences of required action. They detail the exact manner in which certain activities must be accomplished.
6. Rules
Rules spell out specific required actions or nonactions, allowing no discretion. They are usually the simplest type of plan. Rules are unlike procedures in that they guide action without specifying a time sequence. A procedure might be looked upon as a sequence of rules. A rule, however, may or may not be part of a procedure. The essence of a rule is that it reflects a managerial decision that some certain action must, or must not, be taken.
7. Programs
Programs are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action and are ordinarily supported by budgets. A primary program may call for many supporting programs.
8. Budgets
A budget is a statement of expected results expressed in numerical terms. It may be referred to as a “numberized” program. The major advantage of budgeting is that it makes people plan; because a budget is in the form of numbers, it forces precision in planning. A budget may be expressed in financial terms; in terms of labour-hours, units of product, or machine-hours; or in any other numerically measurable term. It may deal with operations; it may reflect capital outlays, or it may show cash flow.
Budgets vary considerably in accuracy, detail and purpose. Some budgets vary according to the organization’s level of output; these are called variable or flexible budgets.


















Question 4. (a) Describe the major principles of Organizing.
(b) What do you understand by Matrix Organization, mention advantages and disadvantages of Matrix Organization?

Answer 4. (a) Major Principles of Organizing
There is considerable agreement among management scholars and practitioners about a number of principles underlying the science of organizing. These principles are truths of general applicability and are more in the nature of essential criteria for effective organizing. The most essential guiding principles of organizing are summarized below:-
1. Principle of Unity of Objectives
An organization structure is effective is it enables individuals to contribute to enterprise objectives.
2. Principle of Organizational Efficiency
An organization is efficient if it is structured to aid the accomplishment of enterprise objectives with a minimum of unsought consequences or costs.
3. Span of Management Principle
In each managerial position, there is a limit to the number of persons an individual can effectively manage, but the exact number will depend on the impact of underlying variables.
4. Scalar Principle
The clearer the line of authority from the ultimate management position in an enterprise to every subordinate position, the clearer will be the responsibility for decision making and the more effective will be organizational communication.
5. Principle of Delegation By Results Expected
Authority delegated to all individual managers should be adequate to ensure their ability to accomplish results expected.
6. Principle of Absoluteness of Responsibility
The responsibility of subordinates to their superiors for performance is absolute and superiors cannot escape responsibility for the organization activities of their subordinates.
7. Principle of Parity of Authority and Responsibility
The responsibility for actions cannot be greater than that implied by the authority delegated, nor should it be less.


8. Principle of Unity of Command
The more complete an individual’s reporting relationships to a single superior, the smaller the problem of conflicting instructions and the greater the feeling of personal responsibility for results.
9. Authority Level Principle
Maintenance of intended delegation requires that decisions within the authority of individual managers should be made by them and not be referred upward in the organization structure.
10. Principle of Balance
The application of principles must be balanced to ensure the overall effectiveness of the structure in meeting enterprise objectives.




















Answer 4. (b) In a matrix organization, the functional and project of product patterns of departmentation are combined in the same organization structure.
This kind of organization occurs frequently in marketing (for example, planning and executing an advertising campaign for a major new product) in the installation of an electronic data processing system, etc.
Functional departments are permanent fixture of the matrix organization; they retain authority for the overall operation of their respective units. Product departments or project teams are created as the need arises for them, that is, when a specific programme requires a high degree of technical skill in a concentrated period of time. Members of a project team are assembled from the functional departments and are placed under the direction of a project team are assembled from the functional departments and are placed under the direction of a project manager. The manager for each project is responsible and accountable for its success and has authority over the other team members for the duration of the project. On the completion of the project, the members of the team, including the project manager revert back to their respective departments until the next assignment to a project.
Advantages:-The problem of coordination is minimized because the project manager acts as an integrator to relate personnel from diverse disciplines.
1. There is a reservoir of specialists which ensures availability of expertise to all projects on the basis of their need.
2. There is economy in the cost. Each project is assigned only the number of people it needs, avoiding unnecessary surplus.
3. There is an effective information decision system which enables members to respond quickly to the change in product needs.
4. Is oriented towards end results.
5. Professional identification ias maintained.
6. Pinpoints product – profit responsibility.
Disadvantages
1. A state of conflict exists between functional and project managers, as both compete for limited resources.
2. Role conflict, role ambiguity, and role overload may result in stress for the functional and project managers as well as for the team members.
3. An imbalance of authority and power, as well as horizontal and vertical influence of the project and functional managers, can also lead to problems in matrix organization.
4. Because of the potential conflicts, managers may want to protect themselves against blame by putting everything in writing, which increases administration cost.
5. Matrix organization requires many time consuming meetings.

Question 5. (a) Enumerate broad categories of HRA models, What are the advantages of Human Resources Accounting to an Organization.
(b) Define motivation, differentiate between motivation and satisfaction. What are the special motivation techniques?
Answer 5. (a) HRA models fall into three broad categories, which are:
1. Historical cost models
Historical cost models are structured to collect and record expenditures for acquiring, allocation, and developing people to perform tasks within an organization. The cost outlays are then amortized over appropriate periods. The methods parallel the traditional accounting methods of recording information on the purchase and installation of equipment.
2. Present Value Models
Present value models, also known as economic value models, attempt to discount the future contributions of employee to the earning of the firm at a specified rate to arrive at a present value of “The Human element” of the organization. The steps involved are:
(a) To estimate the future earnings stream of the firm.
(b) To determine what portion of that stream represents services contributed by the employees.
(c) To select a specific discount rate-most commonly, the cost of capital.
(d) To calculate the present value of those futures contributions less the cost of acquiring, developing, maintaining and utilizing human resources.
(e) To devise a method of recording, reporting and utilizing the resulting information in a manner that is useful and understandable to management and possibly to external parties.
3. Human Organization Models
These models generally attempt to assess the attitudes, perceptions, motivations, interrelationships and interaction capabilities of the employees in the organization. They focus on an element of human value not found in other models; they assess the value of an organization’s synergism where the total output of the system is greater than the sum of its individual parts.
The foremost proponent of this method is Rensis Likert. He said that a firm may predict shifts in performance (“end result”) variables by approximately two years by measuring and analyzing “casual” and “intervening” variables. Likert felt that a monetary value could be placed on the human organization by developing predictive models over time, which would measure the impact of changes in casual or intervening variables, which are normally measured in monetary terms. Likert used the survey feedback method, which employs extensive questionnaires to measure casual and intervening variables.

Benefits of Human Resource Accounting to Organizations
1. Enables the manager to better express the impact of human resources on the performance of the company.
2. Aids in evaluating different corporate strategies like manpower changes, expansion etc.
3. Develops a more complete and accurate capital budgeting system and improves the quality of return on investment figures.
4. Alters the behavior and attitudes of managers especially if included in their evaluation.
5. Enables the manager to better utilize the scarce resources of human services.
6. Allows top management to evaluate the custodianship of human resources by managers.
7. With increasing pressure for social responsibility, serves as a vehicle for firms to evaluate their performance in human resource management.
8. Tends to change the conceptual approach to the management of people by highlighting their value to the organization in a regular and systematic fashion.















Answer 5. (b) Motivation is the need or drive within an individual that drives him or her towards goal-oriented action. The extent of drive depends on the perceived level of satisfaction that can be achieved by the goal.
According to Hellriegel and Slocum, Motivation is “a predisposition to act in a specific goal directed manner.”
According to Gibson, Motivation may be defined as “the state of an individual’s perspective which represents the strength of his or her propensity to exert effort toward some particular behavior.”
These definitions have several common denominators to help us characterize the motivation phenomenon:
1. An internal need energizes and activates behavior;
2. Drive is the inner force that propels behavior in a specific direction;
3. Goals are the incentives or payoffs that reinforce private satisfactions that in turn reinforce the perpetuation of needs.
DIFFERENCE BETWEEN MOTIVATION AND SATISFACTION
Motivation refers to the drive and effort to satisfy a want or goal.
Satisfaction refers to the contentment experiences when a want is satisfied. In other words, motivation implies a drive toward an outcome, and satisfaction is the outcome already experienced.
Work and Motivation
Work itself is an extremely important consideration in motivation. Work is regarded differently by different people. The vast majority perform it essentially for what they believe they are getting from it; that is, doing the work is, in the ultimate, related to the personal goals of the individual. A person tends to work, with zeal if the satisfaction from the work is high and in keeping with what the person wants.
Over the long term, work cannot supply an instrumental act to acquire a material possession. In the ultimate, a person wants work that is personally meaningful; when this is lacking, motivational efforts are extremely difficult to attain.
The four major aspects of work that are important to an employee are:
1. The general nature of the work its challenge and the use it requires of one’s talents.
2. Freedom to perform the work, to use personal ideas, to feel vital in the efforts that bring about work accomplishment, and to make decisions about the work.
3. Opportunity to grow and to develop through training, and feedback on performance, and to receive a reasonable variety of assignments.
4. Recognition of work achievement in a forthright, similar and timely manner.


SPECIAL MOTIVATIONAL TECHNIQUES
1. Money :
Money is often more than monetary value; it can also mean status or power. Money can never be overlooked as motivator, but managers must remember several things before they can fully realize the potential of money as a motivator.
2. Participation :
Participation can be formally defined a both mental and emotional involvement of a person to make contributions to the discussion-making process, especially on matters in which personal involvement of the person exists, and to assume one responsibility for them. The motivational basis is that people management action taken.
4. Results Management :
Results management, properly handled, is highly motivational. Each employee actively engages in determining his or her own objectives. How the person intends to achieve them, with final approval of the superior, and the evaluation of the subordinates efforts based on results using the employee’s subjective as the standard have tremendous built in motivational qualities. The required self-appraisal of the person’s abilities helps that person to realize where his or her strength or weakness lies and to behave accordingly.
5. Multiplier Manager :
A Manager who sees himself primarily as a multiplier of others promotes motivation. A multiplier manager acts in the context of how his behavior assists other in the work group to do a better and more effective job.
6. Effective criticism :
This can be a springboard for improving an employee’s behavior and performance. Adopting a positive approach makes criticism less difficult as well as more effective. The superior should examine his or her own motives before criticizing. He or she should be sure to plan what is going to be said in order to make the content and presentation the best possible. It also helps to know whether a consistent behavior matters or merely a one-time occurrence is being dealt with.
6. Zero Defects :
Zero defect (ZD) programme have been designed to motivate employees to adhere consistently to high standards of work excellence. The goal is to make the defects zero by avoiding mistakes, oversight, unreliable products, and delivery delays. ZD programmes rely on recognition of the importance of the human element and the self-will of personnel to want to do outstanding quality work. It emphasizes self-motivation to acquire pride and workmanship and to manufacture acceptable quality products.


Question 6. Write Short Notes on Any Five :-
(a) Job Enrichment and Job Enlargement
(b) Leadership Behavior and Styles.
(c) Barriers to Good Communications.
(d) Requirements of Effective Controls.
(e) Programme Planning & Budgeting.
(f) Formal & Informal Organizations.
(g) Bonded rationality
Answer 6.
(a) Job Enrichment and Job Enlargement
Job enlargement attempts to make a job more varied by removing the dullness associated with performing repetitive separations. It means enlarging the scope of the job by adding similar tasks without enhancing responsibility.
LIMITATIONS OF JOB ENRICHMENT
1. Technology:
With specialized machinery and assembly line techniques, it may not be possible to make all jobs very meaningful.
2. Costs:
Attempts to make the job challenging may not be cost effective.
3. Worker attitudes:
There is also some question as to whether workers really want job enrichment, especially of the kind that changes the basic content of their jobs. Various surveys of worker attitudes show that what they seem to want above all is job security and pay. Workers are concerned that changing the nature of tasks to increase productivity may mean a loss of job.
4. Skill Levels required:
The limitations of job enrichment are applicable mainly to jobs requiring low skill levels. The jobs of highly skilled professionals already contain varying degrees of challenge and accomplishments. These could be enriched considerable more than they were best by modern management techniques such a managing by objectives, utilizing more policy guidance with delegation of authority, and tying bonuses and other rewards more closely to performance.


PROBLEMS WITH JOB ENRICHMENT
1. A major problem is the tendency of top managers and personnel specialists to apply their own scale of values for challenge and accomplishment to other people’s personalities.
2. Job enrichment is usually imposed on people. They are told about it, rather than being asked whether they would like it and how their jobs could be made more interesting.
3. There has been little or no support of job enrichment by union leaders.























Answer.6.
(c) Barriers to Good Communications
Barriers to effective organizational communication cause breakdowns in information exchange. The astute manager must be aware of these hindrances and seek to dissolve their influence in the daily operation of the firm. These barriers are discussed below:
1. Lack of openness
Communication is between persons and is subjected to all the influences that condition human behavior. Foremost is the openness in the relationship between the persons communicating.
2. Filtering
Employees often ten to refrain from communicating information that is potentially threatening to them. As a result information is commonly distorted as it ascends from the bottom to the top of an organization. Likewise, a communication issued at the top management level may be considerable altered by the time it reaches the bottom level.
3. Degree of motivating
When communicating, people have various motives to persuade, to tell, to entertain, and to reinforce ideas. The enthusiasm displayed and the interest shown definitely conditions the communication.
4. Assumptions
Another barrier is making and acting on unjustified assumptions. It is well to be alert to the assumptions made, and the reader should not assume that the receiver understands what she or he has been told. Mutual understanding must not be taken for granted.
5. Fear
Fear is another consideration and plays as important part in communication when emotionally loaded words like failure, strike, liar and defeat are used. Fear can affect the translation of information.








Answer.6.
(d) Requirements of Effective Controls
1. Tailoring control to plans and positions
All control techniques and systems should reflect the plans they are designed to follow. In the same way, controls should be tailored to positions. Controls should also reflect the organization structure. The more carefully controls are designed to reflect the place in the organization where responsibility for action lies, the more they will enable managers to correct deviations from plans.
2. Tailoring controls to individual managers
Control system and information are intended to help individual managers carry out their function of control, and therefore, must be tailored to individual managers. People should get the information they need in a form they will understand and use.
3. Seeking objectivity of controls
Effective control requires objective, accurate and suitable standards. A manager’s personality must not influence judgment of performance and make it less accurate.
4. Ensuring flexibility of controls
Controls should remain workable in the face of changed plans, unforeseen circumstances, or outright failures.
5. Fitting the control system to the organizational culture.
To be most effective, any system or technique must fit the organizational culture.
6. Achieving economy of controls
Controls must be worth their cost. Control techniques and approaches are efficient when they bring to light actual or potential deviations from plans with the minimum of costs.








Answer.6.
(e) Programme Planning & Budgeting
Programme budgeting is basically a systematic method for allocating the resources of an enterprise in ways that will most effectively help the enterprise to meet its goals. But emphasizing goals and programmes to meet them, it overcomes the ordinary weakness of all kinds on budgets of being too closely tied to the time frames of accounting periods of months, quarters or years. By concentrating on goals and programmes in light of available resources, it stresses the desirability of assessing costs against benefits when selecting the best course towards accomplishing a programme goal.
PPB is used primarily in government operations but is applicable to any kind of enterprise. For most government agencies, programme budgeting has not been the great tool in practice because of the following reasons:
(i) Many government executives, particularly in the middle and lower levels of management, do not understand the philosophy and theory of the technique.
(ii) A major hurdle has been the lack of clearly defined goals.
(iii) Another difficulty is the lack of attention to planning premises.
(iv) Many government budgetary divisions are reluctant to make the change from their practice and procedures of annual budgets to longer-range programme budgets.
(v) Accounting data are often inconsistent with programme budgeting. There is lack of information in many areas to make meaningful cost effectiveness analysis.













Answer.6.
(f) Formal & Informal Organizations
Formal Organization Informal Organization
1. It is a prescribed structure of roles and relationships consciously coordinated towards a common objective. 1. It is a natural and spontaneous structure arising out of the social tendency of people to associate and interact.
2. Its values, goals and tasks are predominantly oriented towards productivity, efficiency, growth and so on. 2. Its values, goals and tasks predominantly center around individual and group satisfaction, esteem, afficiation, etc.
3. It is well-defined in shape. Majority of formal organizations are pyramid shaped. Ranks of individuals are made clear by the use of titles. Communication is simple. One can easily chart all relationships. 3. It is shapeless. There are a number of multidirectional, intricate relationships which cannot be easily charted.
4. There is a prescribed, mostly written system of reward and punishment. Rewards can be both monetary and non-monetary. 4. There is an unwritten system of reward and punishment. Rewards can be both monetary and non-monetary like continuous membership, social esteem, satisfaction, group leadership etc. Punishments are isolation, censure, harassment etc.
5. This organization is usually very enduring and may grow to any size. 5. This organization is not very enduring, being dependent on the sentiments of members, which often change. It also tends to remain small.

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