2 PRINCIPLES OF

MANAGEMENT

CBSE SYLLABUS
 Principles of Management — Concept and Significance.
 Fayol’s Principles of Management.
 Taylor’s Scientific Management — Principles and Techniques.

LEARNING OBJECTIVES
After studying this chapter, you should be able to:
 Understand the concept of principles of management.
 Explain the the significance of management principles.
 Discuss the principles of management developed by Fayol.
 Explain the principles and techniques of ‘Scientific Management.’
 Compare the contributions of Fayol and Taylor.

Principles of Management 2.1

 INTRODUCTION
Now-a-days business has assumed wider dimensions. As a result of this, number of problems
arise in day-to-day work and the manager of the company has to solve these problems. Some
guidelines are required with the help of which a manager can grapple with the problems
and run the enterprise smoothly and efficiently. Management principles guide the manager in
solving numerous problems arising in day-to-day activities. Management principles are the
statements of fundamental truth which provide guidelines to managers for effective decision
making and action under different situations. Management principles are not developed
overnight, they are derived on the basis of observation and analysis of events which managers
have to face in real life and by conducting experimental studies. Principles of management
are universally applicable. They can be applied to all types of organisations such as hospitals,
business organisations, educational institutions, military, etc. However, these principles are
not rules or rigid laws. They can be modified according to the situation and applied.
Over the years, a number of management thinkers have discovered certain principles of
management from their experiences as managers. The two most famous names among such
trailblazers or pioneers are Henri Fayol (1841-1925) and Frederick Winslow Taylor (1856-
1915). Henri Fayol called the ‘Father of General Management’ for his greatest contribution.
On the basis of his own experience in the field of management Fayol set fourteen principles
of general management which provide guidelines for managerial decision-making and action.
The principles laid down by him were flexible and they could be utilised in the light of
changing situations. It was Henri Fayol who showed concern for achieving efficiency at the
higher levels of management for the first time. F. W. Taylor, who is called the ‘Father of
Scientific Management’ felt that the only way to minimise wastes and to attain efficiency
is to apply methods of science to the field of management. He insisted that managers adopt
scientific and systematic management methods in place of rule of thumb or trial and error
methods. The contribution made by Henri Fayol and F. W. Taylor to the field of management
will always remain immortal.

2.1. CONCEPT OF PRINCIPLES OF MANAGEMENT

Principles of Management are broad and

general guidelines for decision-making and USEFUL TIP
behaviour of managers. Principles of management are guidelines
For example, while deciding about promotion to action while functions of management
of an employee the manager may consider seniority, like planning, organising, staffing, directing
whereas the other way is to follow the principle of and controlling are the actions to be taken
merit. while practicing management. Principles
help managers to take decisions while
 Principles of Management vs. Principles
performing these functions.
of Pure Science
1. Principles of management are quite flexible whereas principles of pure science
are rigid.

2.2 Business Studies

 2. Principles of management deal with human behaviour and cannot be tested in
laboratories like the principles of pure science.
 Principles of Management vs. Techniques of Management
1. Techniques are procedures or methods, which involve a series of steps to be
taken to achieve desired goals.
2. Principles are guidelines to take decisions or actions while practicing techniques.
 Principles vs. Values
1. Values are something which are acceptable or desirable. They have moral
connotations. Principles are basic truths or guidelines for behaviour.
2. Values are general rules for behaviour of individuals in society formed through
common practice. Principles of management are formed after research in work
situations, which are technical in nature.
However, while practicing principles of management, values cannot be neglected since
businesses have to fulfill social and ethical responsibilities towards society.
2.2 NATURE OF PRINCIPLES OF MANAGEMENT
The management principles have the following features:
1. Universal Applicability : The management principles are universal in nature. These
principles are universally applicable to all types of organisations - business as well as
non business, small as well as large, etc, at all levels and at all times. However, the
extent of their applicability may vary as per nature and size of organisation.
Examples:
(a) The principle of ‘Division of Work’ is applied in all kinds of organisations and
results in specialisation. The extent of division of work may vary depending upon
the nature and size of organisation.
(b) The principle of ‘Centralisation and Decentralisation’ is applied to all organisations,
but how much authority should be given to subordinates depends upon the nature
and size of the organisation.
2. General Guidelines : The principles of management act only as guidelines for
decision-making and action. However, they do not provide readymade solutions to
all managerial problems. This is so because real business situations are very complex
and dynamic and are a result of many factors. The importance of principles cannot
be underestimated because even a small guideline helps to solve a given problem.
Example:
(a) The principle of ‘Unity of Command’ states
that a subordinate should receive orders/ U SEFUL IP T
instructions from one superior only at a time Derivation of principle of
and that subordinate should be accountable management may be said to
only to that superior. This seems to be very be a matter of science and
general but applicability of this principle their creative application may
improves employees motivation, ensures be regarded as an art.
smooth functioning of the enterprise, etc.
Principles of Management 2.3
 (b) In dealing with a situation of conflict between two departments, a manager may
emphasise the primacy of the overall goals of the organisation.
3. Formed by Practice and Experimentation : Management principles are not developed
overnight. They are formed on the basis of :
(a) Observation and Experimentation : For example, in order to remedy the
problem of fatigue of workers in the factory, an experiment may be conducted
to see the effect of improvement of physical conditions to reduce stress.
(b) Personal Experiences of Managers : For example, it is a matter of personal
experience of managers that discipline is indispensable for accomplishing the
organisational objectives.
4. Flexible : Management principles are not rigid prescriptions, which have to be followed
absolutely. They are flexible and can be modified by the manager when the situation
so demands.
Examples:
(a) The degree of concentration of authority (centralisation) or its dispersal
(decentralisation) will depend upon the situations and circumstances of each
enterprise.
(b) The principle of ‘Division of Work’ may not be applicable in small enterprises
to the same extent as that in large enterprises.
5. Mainly Behavioural : Management principles are mainly behavioural in nature
because they aim at influencing the behaviour of human beings. Moreover, principles
of management enable a better understanding of the relationship between human
and material resources in accomplishing organisational goals. For example, while
planning the layout of a factory the principle of ‘Order’ is required to ensure proper
flow of materials and movement of employees leading to smooth functioning and
accomplishment of goals.
But the management principles may not bring the desired result due to complex and
unpredictable nature of human behaviour. For example, division of work is supposed
to make tasks easier and thereby increase efficiency, but after doing the same task
repeatedly workers may feel bored. As a result, their efficiency may decline. Thus,
complex and unpredictable nature of human behaviour may restrict the application of
management principles.
6. Cause and Effect Relationships : Management principles establish a relationship
between cause and effect so that they can be used in similar situations in a large
number of cases. When a principle is applied to a particular situation, is known as
‘cause’ and the result of application of the principle is called ‘effect’. Management
principles tell the managers if a particular principle is applied in a given situation,
what may be its likely effect.
However, the principles of management are less than perfect as they mainly apply to
human behaviour. In real life, situations are not identical. So, accurate cause and
effect relationships may be difficult to establish.

2.4 Business Studies

 Examples:
(a) According to the principle of ‘Division of Work’, the work is divided among the
workers according to their skills and capability which will lead to specialisation
and increase in efficiency. So, division of work is the cause and efficiency is its
effect.
(b) Principle of ‘Unity of Command’ states that if an employee receives orders/
instructions from more than one boss, confusion will occur. In this case, multiple
command is the cause and confusion is the effect.
7. Contingent (Careful Application) : The application of management principles is
contingent or dependent upon the prevailing situations at a particular point of time.
The application of principles has to be changed as per requirements. For example,
employees deserve fair and just remuneration. But what is just and fair is determined
by multiple factors, like contribution of the employee, paying capacity of the employer
and prevailing wage rate/salary for the occupation under consideration (Principle of
Remuneration of Employees).
EXAM ORIENTED SAMPLE QUESTION
Q. Reema is one of the most successful managers of her company, Globe Ltd. She
knows that the principles of management are intended to be applied to all types
of organisations, business as well as non-business, small as well as large, public
sector as well as private sector.
(i) One of the points related to the nature of management principles is being
highlighted in the above description. Identify the point.
(ii) Explain any three other points of the nature of principles of management
other than the one identified above. (4)
Ans. (i) Universal applicability
(ii) (RTP-2.3)

OBJECTIVE TYPE QUESTIONS

Multiple Choice Questions:
Choose the correct option to answer the following questions:
1. The principles of management can be changed according to the prevailing situation
in organisation. This shows that management principles are (1)
(a) Flexible (b) Behavioural
(c) Scientific (d) Universal
2. Why is it said that principles of management are flexible? (1)
(a) Because they are formed by practice and experimentation
(b) Because they are universally applicable
(c) Because they can be modified as per the situation
(d) Because they are to be followed absolutely

Principles of Management 2.5

 Fill in the Blank with appropriate word:
3. The principles of management are _________ to action but do not provide readymade
solutions. (1)
State whether the following statements are ‘True’ of ‘False’:
4. The principles of management are rigid statement. (1)
5. Principles of management provide an accurate cause and effect relationship. (1)

CRACK THE CASE

Q. Rishabh and Naina are the team members of Varun who works as a team leader
in a FMCG company. Varun observes that both Rishab and Naina are in constant
conflict with each other due to their personal prejudices. Many a times, this conflict
between them influences their work performance adversely. Varun always resolves
such situations by emphasising on the principle of primacy of organisational goals
over individual interests. Which related characteristic of principles of management
is being highlighted in the above case? (1)

2.3 SIGNIFICANCE/IMPORTANCE OF PRINCIPLES OF MANAGEMENT

The importance of management principles becomes clear from the following points:
1. Providing Managers with Useful Insight into Reality : Principles of management
increase their knowledge, ability and understanding of managerial situations and
circumstances. It will also enable managers to learn from past mistakes and conserve
time by solving recurring problems quickly. As such management principles increase
managerial efficiency.
For example, a manager can leave routine decisions to his subordinates and concentrate
on exceptional situations which need his/her expertise by following the principle of
delegation.
2. Optimum Utilisation of Resources and Effective Administration : Optimum
utilisation of resources means that the human and material resources should be put
to use in such a manner that they should give maximum benefit with minimum cost.
Principles of management equip managers to foresee the cause and effect relationships
of their decisions and actions. Therefore, the wastages associated with trial and error
approach can be reduced.
Principles of management help in effective administration by limiting the boundaries
of managerial discretion so that their decisions are free from personal prejudices and
biases.
3. Scientific Decisions : Management principles help in scientific/thoughtful
decision-making because the management decisions taken on the basis of principles
are free from bias and prejudice. They are based on the objective assessment of the
situation. They emphasise on logic rather than blind faith.

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 For example, the principle of ‘Science not Rule of Thumb’ suggested by Taylor stresses
on scientific analysis of each part of work.
4. Meeting Changing Environment Requirements : Principles of management help the
managers in meeting changing environment requirements because they can be modified
according to the changes taking place in the environment. It is because principles of
management are flexible in nature.
5. Fulfilling Social Responsibility : Management principles also guide the managers
to perform social responsibilities. For example, the principle of “Remuneration of
Employees” insists on payment of adequate salary to employees, which should give
them at least a reasonable standard of living. Similarly, the principle of “Equity”
emphasis kindness and justice in the behaviour of managers towards workers.
6. Management Training, Education and Research : Management principles are used
as a basis for management training, education and research.
Entrance of management institutes is preceded by management aptitude tests.
These tests could not have been developed without an understanding of management
principles.
Professional courses such as MBA (Master of Business Administration) and BBA
(Bachelor of Business Administration) also teach these principles as part of their
curriculum at the beginner’s level.
New management techniques like Operations Research, Cost Accounting, Just in Time,
Kaizen, Lean Manufacturing, Six Sigma, etc. have developed due to research on the
principles of management.

EXAM ORIENTED SAMPLE QUESTION

Q. S.G. is a well-known company manufacturing washing machines. The company
has the policy of paying proper attention to the training of the managers. The
organisation teaches various management principles to the managers whenever
required so that they apply them and understand the practical aspects of business
through them. Year by year the organisation is able to increase its revenue. This
is because the managers are able to economically use the funds of the company
and increase the output of the workers through various principles of management.
The company has decided to donate 10% of their earnings to a nearby orphanage.
Identify and explain the three points of importance of principles of management
highlighted above by quoting the lines. (6)
Ans. (i) Providing managers with useful insight into reality. (RTP-2.6)
“The organisation teaches ... practical aspects of business through them.”
(ii) Optimum utilisation of resources (RTP-2.6)
“This is because the managers are ... through various principles of management.”
(iii) Fulfilling social responsibility (RTP-2.7)
“The company has decided to donate ... to a nearby orphanage.”

Principles of Management 2.7

 OBJECTIVE TYPE QUESTIONS
Multiple Choice Questions:
Choose the correct option to answer the following questions:
1. Which of the following is NOT a significance of principles of management? (1)
(a) Contingent
(b) Scientific decisions
(c) Meeting changing environment requirements
(d) Optimum utilisation of resources and effective administration
2. Professional courses like MBA (Master of Business Administration), BBA (Bachelor
of Business Administration) also teach management principles as part of their
curriculum at the beginner’s level. Which significance of the principles of
management has been highlighted here? (1)
(a) Scientific decisions
(b) Fulfilling social responsibility
(c) Meeting changing environment requirements
(d) None of the above
State whether the following statement is ‘True’ or ‘False’:
3. The principles of management provide the managers with useful insight into real
world situation. (1)

CRACK THE CASE

Q. Principles of management equip the managers to foresee the cause and effect
relationships of their decisions and actions so that the wastages associated with a
trial and error approach can be overcome.

Identify the point of significance of principles of management highlighted here.
[CBSE 2019 (1)]

2.4 FAYOL’S PRINCIPLES OF MANAGEMENT

Life History and Background of Henri Fayol

• Life Time —1841-1925
Henri Fayol was born in 1841 in France. He completed his graduation in
Mining Engineering from the Mining Academy of St. Entienne in 1860.
At the age of 19, he started working as an engineer in a mining company
“Compagnie de Commentary-Fourchambean - Decazeville”. In 1888, he
became the Managing Director of the Company. At that time the company
was nearly bankrupt. His managerial excellence was reflected by the fact that
he not only saved a large coal and steel company from bankruptcy but turned the losing
company into a flourishing organisation.

2.8 Business Studies

 After his retirement in 1916, he devoted himself for writing principles and practice of
management.
Fayol’s Contribution
(i) He classified industrial activities into Technical, Commercial, Financial, Security,
Accounting Management and Managerial.
(ii) Henri Fayol was the first to define four functions of management - Planning,
Organising, Directing and Controlling although his version was a slightly different-
plan, organise, command, co-ordinate and control.
(iii) He also suggested that the qualities a manager must possess should be - Physical,
Moral, Education, Knowledge and Experience.
(iv) He laid down 14 principles of management in his original classic book known as
“Administration Industrielle at Generale” was written in French and published in
1916, which was translated into English in 1929 under the heading, General and
Industrial Management. For his contribution, Henri Fayol is regarded as the ‘Father
of General Management’.
Given below are 14 principles of management propounded by Henri Fayol:
1. Division of Work. 2. Authority and Responsibility.
3. Discipline. 4. Unity of Command.
5. Unity of Direction. 6. Subordination of Individual Interest
to General Interest.
7. Remuneration of Employees. 8. Centralisation and Decentralisation.
9. Scalar Chain. 10. Order.
11. Equity. 12. Stability of Personnel.
13. Initiative. 14. Espirit de corps.

2.4.1 Principles of Management Developed by Henri Fayol

1. Division of Work and Specialisation
 According to this principle, work should be divided into small tasks/jobs. A
trained specialist who is competent is required to perform each job. Thus, division
of work leads to specialisation.
 According to Fayol, “The intent of division of work is to produce more and
better work for the same effort. Specialisation is the most efficient way to use
human effort.”
 All kinds of work (technical as well as managerial) can be performed more
efficiently if it is divided into specialised tasks; each performed by a specialist
or trained employee. This results in efficient and effective output.
Examples:
(a) Tommy Hilfiger, a famous brand name among quality shirts, divided its work
among different groups. One group is responsible for making collars, other is

Principles of Management 2.9

 responsible for stitching buttons, yet another is engaged in packing shirts and so
on.
(b) Atul, a furniture manufacturer, gets an order to supply 50 lecture stands from a
school. He has four workers who will do the job. Here manufacturing of lecture
stands can be divided in four different parts and only one worker does the same
job for all the 50 lecture stands i.e., one worker to cut the leg pieces, one to
cut top boards, one to assemble (join) them and one to polish and give them
finishing touch. With this division each worker will become specialised in doing
his part of job and his effectiveness and efficiency improves.
(c) A bank involves several operations like cash collection, payments of cash, issue
of cheque books, issue of pass books etc. All these activities are performed by
different persons. It improves their efficiency and makes them specialists in their
respective fields.
(d) Publication of a book involves several operations like computer typing of text
material, proof reading, negative making, printing, assembling of printed pages,
binding and so on. All these activities are performed by different persons who
are specialists in their respective fields.
2. Authority and Responsibility
 Authority is the right of a superior to give orders to his subordinates and obtain
obedience.
 Responsibility means obligation to carry out an assigned job on time.
 There are two types of authority — Official Authority and Personal Authority.
The term Official Authority means authority to command and Personal authority
means authority of the individual manager.
 Managers require authority commensurate with their responsibility. There should
be a balance between authority and responsibility. Giving more authority may
lead to misuse of authority. Therefore, an organisation should build safeguards
against abuse of managerial power. For example, if a sales manager requires to
offer a credit period of 60 days to negotiate a deal with a buyer (to fetch the
company net margin of `  25 lakh), he/she should not be given authority to offer
a credit period of 100 days. He/she may misuse his/her authority.
 At the same time, a manager should
have necessary authority to carry out U SEFUL IP T
his responsibility. For example, suppose A manager should have the right
the production manager of a company
to punish a subordinate for wilfully
manufacturing scooters asks his/her
not obeying a legitimate order but
foreman to achieve a target production of
250 scooters per day. But he/she does not only after sufficient opportunity has
give him the authority to requisition tools been given to a subordinate for
and materials from stores department. The presenting his/her case.
foreman is not able to achieve the target.
Then, the production manager cannot blame him because he should have necessary
authority to carry out his responsibility.
2.10 Business Studies
 3. Discipline
 Discipline is the obedience to organisational rules and employment agreement,
which are necessary for the working of the organisation. For example, the
employees of KFC are required to sanitize their hands every 30 minutes.
 According to Fayol, discipline requires :
l good superiors at all levels,
l clear and fair agreements, and
l judicious application of penalties.
For example, suppose management and labour union have entered into an agreement
whereby workers have agreed to work overtime without any additional payment to
revive the company out of loss. In return, the management has promised to increase
wages when this mission is accomplished. Here, ‘discipline’ would mean that workers
and management both honour their commitments.
4. Unity of Command
 According to Fayol, there Superiors
should be one and only one boss/ SUBORDINATE
superior for every individual
employee. In other words, each Do my wo
rk first
employee in an organisation
should receive orders from one Do my wo
rk first
superior only. He should be
responsible to only one superior.
Do my work first
Dual subordination should be
avoided to prevent confusion
regarding tasks to be done.
 This principle resembles military organisation.
 If an employee gets orders from two or more superiors at the same time, the
principle of unity of command is violated.
 Henri Fayol observed that if this principle is violated, then ‘authority is
undermined, discipline is in jeopardy, order disturbed and stability threatened’.
Examples:

(a) Mr. Himanshu (Sales Executive) gets instruction from Mr. Dev (Sales Manager)
to sell more to reach desired target. At the same time, Mr. Naresh (Production
Manager) instructs the Sales Executives to go slow in selling due to shortage of
raw materials. In such a situation, Mr. Himanshu will get confused as to whose
instruction should he follow.
(b) If an employee of Production department is asked by production head to go
slow in production to maintain quality standard and Sales incharge instructs
the employee to fasten the production to meet the pending orders. In this case
employee will get confused as to whose instructions should he follow.

Principles of Management 2.11

 (c) Suppose a salesperson is asked to make a deal with a buyer and is allowed to give
15% discount by the Marketing manager. But the Finance department tells him
not to offer more than 10% discount. Now there is no unity of command. There
will be confusion in the mind of the salesperson regarding whose instructions to
follow. This can be avoided if there is coordination between the two departments.
5. Unity of Direction
Unity of direction states that all the units of an organisation should be moving towards
the same objectives through coordinated and focused efforts. Each group of activities
having the same objective must have “One head and one plan”. This ensures unity
of action and coordination.
For example, if a company is manufacturing motorcycles as well as cars, then it should
have two separate divisions. Each division should have its own incharge, plans and
resources. The working of the two divisions should not overlap on any account.
Difference between Unity of Command and Unity of Direction
Basis Unity of Command Unity of Direction
1. Meaning One subordinate should receive orders Each group of activities having the
from one and should be responsible to same objectives must have one head
only one superior. and one plan.
2. Aim It prevents dual subordination. It prevents overlapping of activities.
3. Implications It affects an individual employee. It affects the entire organisation.
6. Subordination of Individual Interest to General Interest
 According to this principle, the interests of the organisation should take priority
over the interests of any one individual employee.
 Every worker has some individual interest for working in a company. The
company has got its own objective. For example, a company may want to get
maximum output from its employees at a competitive cost (salary). One the other
hand, an employee may want to get maximum salary while working for less time
or may demand some concession, which is not admissible to any other employee
like producing less output.
 In all the situations, the interests of the group/company will supersede the interests
of any one individual employee. This is so because larger interests of various
stakeholders, i.e., workers, owners, shareholders, creditors, customers and the
society cannot be sacrificed for one individual or a small group of individuals
who want to exert pressure on the company.
 A manager can ensure this by his/her exemplary behaviour. For example, he/she
should not fall into temptation of misusing his/her powers for individual family
benefit at the cost of larger general interest of the workers/company. This will
ensure the same behaviour by the workers.
Examples:
(a) A worker has the objective of earning more wages by increasing the number
of units to be produced. But in doing so he finds that there is huge wastage of

2.12 Business Studies

 materials and greater risk of breakdown of machinery. Since these are not in the
interest of the organisation, so the worker should give priority to the interest of
the organisation.
(b) If a manager has the objective to earn more salary and company is going through
the situation of financial crisis and wants to cut down expenses, then in this
situation the manager must surrender or sacrifice his interest. Manager can
achieve his objective when company recovers from financial crisis.
(c) If a particular employee asks his manager to change his working hours, then in
this situation, no such change should be allowed for the sake of his convenience
only, unless other employees are also prepared for this change.
(d) Hitesh, a Purchase manager of ABC Ltd., has to purchase 150 tonnes of raw
material. Jhony, who is Hitesh’s son, is also a supplier along with other suppliers
in the market. The manager (Hitesh) purchases the raw material from his son
(Jhony) at rate higher than the market rate. This will profit the manager personally,
but will result in heavy loss to the company. This situation is not in the interest
of the company and violates the principle of Subordination of Individual Interest
to General Interest.
7. Remuneration of Employees
 Remuneration of employees should be just and equitable so as to give maximum
satisfaction to both the employees and the organisation.
 The employees should be paid fair wages/salaries, which would give them at
least a reasonable standard of living.
 At the same time, it should be within the paying capacity of the company.
 This will ensure good relations between workers and management. Consequently,
the working of the company would be smooth.
For example, Adtiya is working in a toy manufacturing company. The management
asked him to work more than normal working hours of the company so that company
will meet the rising demand of its toys in the market. In this case, Adtiya must be
given adequate wages for the extra time worked by him.
8. Centralisation and Decentralisation
 The concentration of decision-making
authority by top management is called U SEFUL IP T
Centralisation whereas its dispersal among Panchayats in our country have
more than one person is known as been given more powers to decide
Decentralisation. and spend funds granted to them
 According to Fayol, “There is a need to by the government for the welfare
balance subordinate involvement through of villages. This is decentralisation
decentralisation with managers’ retention at the national level.
of final authority through centralisation.”
 The degree of centralisation will depend upon the circumstances in which the
company is working. In general large organisations having more decentralisation
than small organisations.

Principles of Management 2.13

 9. Scalar Chain
 An organisation consists of superiors and subordinates. The
formal lines of authority from highest to lowest ranks are
known as ‘Scalar Chain’.
 According to Fayol, ‘scalar chain refers to a chain of authority
and communication that runs from top to bottom and should
be followed by the managers and the subordinates.’ Fig. Scalar Chain
 We consider a situation where there is one head ‘A’ who has
two lines of authority under him/her. One line consists of B-C-D-E. Another line
of authority under ‘A’ is L-M-N-O. If ‘E’ has to communicate with ‘O’, who is
at the same level of authority, then he/she has to transverse the route E-D-C-B-
A-L-M-N-O. This is due to the principle of scalar chain being followed in this
situation.
 According to Fayol, this chain should not be violated in the normal course of
formal communication. However, if there is an emergency then ‘E’ can directly
contact ‘O’ through ‘Gang Plank’. This is a shorter route and has been provided
so that communication is not delayed in case of emergency.
 For example, a worker cannot directly contact the CEO of the company. If at all
he/she has to, then all the formal levels, i.e., foreman, superintendent, manager,
director, etc. must know about the matter. However, in an emergency, it can be
possible that a worker can contact CEO directly.
10. Order
 The principle of ‘Order’ states that there should be a place for everything and
everyone in an organisation and that thing or person should be found in its/
his allotted place. Essentially, it means orderliness.
 According to Fayol, “people and materials must be in suitable places at
appropriate time for maximum efficiency.
 If there is a fixed place for everything (everyone) and it (he/she) is present there,
there will be no hindrance in the activities of business/factory. This will lead to
increased productivity and efficiency.
Examples: Hey...keep the tools in
(a) The head of the marketing the tool box after you
complete your work.
department may be allotted
an office room, the typist,
a particular table and the
foreman to supervise a Supervisor Worker
workshop. These persons
should remain in their
allotted places during
working hours so that they
can be easily contacted
whenever necessary.
2.14 Business Studies
 (b) If a worker needs tools then he must know the place from where he can get
his tools. Similarly, if a worker needs guidance from his supervisor, then he
must know the fixed cabin of his supervisor. If everything and everyone is
not in their right place then worker will waste his time and energy searching
for tools or their supervisor.
11. Equity
 According to Fayol, “Good sense and experience are needed to ensure fairness
to all employees, who should be treated as fairly as possible.” This principle
emphasis kindliness and justice in the behaviour of managers towards workers
to ensure loyalty and devotion. There should be no discrimination on account of
sex, religion, language, belief, nationality, caste, etc.
 Fayol does not rule out use of force sometimes. Rather he says that lazy personnel
should be dealt with sternly to send the message that everyone is equal in the
eyes of the management.
Examples:
(a) In a multinational company, people of different nations work together in an
environment which is free from all kinds of discrimination. Equal opportunities
are available for everyone to rise.
(b) The rules for granting medical leave to an employee should be the same
irrespective of their position, gender, age, etc.
(c) A worker produces 100 units in a day. Another worker, who is a relative of the
supervisor, produces 95 units in a day but both get equal remuneration. This
violates the principle of equity. The second worker should get less remuneration
as compared to the first worker.
12. Stability of Tenure of Personnel
 According to this principle, employees once selected, should be kept at their
post/position for a minimum fixed tenure. In other words, they should have
stability of tenure. They should be given reasonable time to show results.
 Fayol suggests that labour turnover should be minimised to maintain
organisational efficiency.
 Stability of tenure of personnel is good for the business because of the following
reasons :
(i) Any adhocism will create instability/insecurity among employees. They
would tend to leave the organisation.
(ii) Recruitment, selection and training costs of new employees will be high.
13. Initiative
 Initiative means taking the first step with self-motivation. It is thinking out and
executing the plan within the prescribed limits of authority.
 According to Fayol, worker should be encouraged to develop and carry out
their plans for improvements. For example, a good company has an employee

Principles of Management 2.15

 suggestion system whereby initiative/suggestions, which results in substantial
cost/time reduction, is rewarded.
 Initiative should be encouraged. But it does not mean going against the established
practices the company for the sake of being different.
14. Espirit de Corps (Unity is Strength)
 ‘Espirit de corps’ means
Sir, from today
‘unity is strength’. According
we will work
to Fayol, management with team spirit
should promote a team
spirit of unity and harmony
among employees to realise
organisational objectives.
 A manager should replace
‘I’ with ‘We’ in all his
conversations with workers to
foster team spirit. This will Unity is
give rise to a spirit of mutual strength
trust and belongingness among
team members. It will also minimise the need for using penalties.
 Management should promote team work especially in large organisations because
otherwise it will result in a loss of coordination and hence the organisation will
not be able to achieve its objectives.
 For example, the production manager assigned a target of producing 200 units
to a group consisting of 10 members. The members divided the target among
themselves to produce 20 units each. As per the principle of ‘Espirit de Corps’ they
should not concentrate only on achieving their individual targets but they should
concentrate on achieving the group target of 200 units so that even if 2 workers
of that group fall sick, then the other 8 members must divide individual target of
those 2 workers among themselves and try to accomplish the group target.

EXAM ORIENTED SAMPLE QUESTION

`Q. Damini D’souza took over the reins of ‘Kinsa Retail’ as its Managing Director in
India. Kinsa Retail with its headquarters at Japan has been in retail business for
the last 40 years. It has regional offices in many countries with each regional office
taking care of the shops in that particular region. As it is a large organisation, the
regional officers have been given the powers to decide and spend funds sanctioned
to them by the headquarter for the welfare of the customers of their region.
Kinsa Retail wants the highest possible standards of ethical conduct being followed
for which a code of conduct is in place for putting values into practice. All employees
as well as Board members are required to act in accordance with the highest standards
of personal and professional integrity when acting on behalf of the company.
Non-compliance involves a heavy penalty including termination of employment.

2.16 Business Studies

 State two principles of general management being followed by Kinsa Retail.
[CBSE 2019 (4)]
Ans. Principles of General management being followed by Kinsa Retail are :
(i) Discipline which refers to obedience to organizational rules and employment
agreement what are necessary for the working of the organisation. It
requires good superiors at all levels, clear and fair agreement and judicious
application of penalties
(ii) Centralisation and Decentralisation which suggests that there is a need to
balance subordinate involvement through decentralisation with managers
retention of final authority through centralisation.

OBJECTIVE TYPE QUESTIONS

Multiple Choice Questions:
Choose the correct option to answer the following questions:
1. “One head one plan” is concerned with the following principle of Fayol (1)
(a) Unity of command (b) Unity of direction
(c) Fair remuneration (d) Division of work
2. This principle emphasise kindliness and justice in the behaviour of managers towards
workers. (1)
(a) Equity (b) Order
(c) Espirit de corps (d) Initiative
3. “Panchayats in our country have been given more powers to decide and spend funds
granted to them by the government for welfare of villagers.” Identify the principle of
management highlighted in the statement. (1)
(a) Equity (b) Centralisation and decentralisation
(c) Authority and responsibility (d) Espirit de corps
Match the following:
4. Match the principles of management given under ‘B’ with suitable statements given
under ‘A’ : (1)
A B
1. Minimising employee turnover (i) Equity
2. Kindliness and justice in the (ii) Fair remuneration
behaviour of managers (iii) Subordination of individual
3. Fair pay and compensation interest to general interest
4. Priority to organisational interest (iv) Stability of tenure of personnel
over individual interest
Choose the correct option:
(a) 1–(i); 2–(iv); 3–(ii); 4–(iii) (b) 1–(iv); 2–(i); 3–(ii); 4–(iii)
(c) 1–(iii); 2–(iv); 3–(ii); 4–(i) (d) 1–(iv); 2–(iii); 3–(i); 4–(ii)

Principles of Management 2.17

 CRACK THE CASE
Q. ‘Apaar Foundation’ is a Non Governmental Organization (NGO) working to
improve the lives of children with medical needs, the homeless and victims of
natural disasters. Apart from donations in cash, they collect dry ration, old clothes,
shoes, toys, books and medicines from donors. At Apaar Foundation’s office in
Bhopal the material collected is segregated, classified and put in shelves and boxes
that are labelled systematically. There is a specific place for each of these items and
volunteers put everything at their respective places.
The volunteer work is divided into specific jobs like fund raising, field visits, social
media updates and so on. Each volunteer is part of a particular team, depending
on their competency and training. Each volunteer becomes specialized in their
respective field, leading to efficient utilization of human effort.
(i) Identify and explain two principles of management adopted by ‘Apaar
Foundation’.
(ii) State two values that Apaar Foundation is displaying and promoting in
society through their work. [CBSE 2017 (5)]

2.5 SCIENTIFIC MANAGEMENT DEVELOPED BY F.W. TAYLOR

Frederick Winslow Taylor (1856-1915)

Frederick Winslow Taylor was born in 1856 in Philadelphia, USA.
He began his career as a machinist in Midvale Steel Company in
Philadelphia, USA, and rose to the position of its chief engineer. Taylor
was primarily concerned with the problems of increasing the efficiency
of workers, eliminate wastages in factories and maximum utilisation
of resources. Taylor conducted a series of experiments with his ideas
over a period of more than two decades and made significant contribution to the theory of
management.
F. W. Taylor was the first management pioneer who insisted on the introduction of scientific
methods in management and it was he who, along with his associates, made the first
systematic study of management. He developed a theory of management, which came to be
known as ‘scientific management’. Therefore, Taylor is considered as the father of scientific
management.

2.5.1 Meaning of Scientific Management

Scientific management means the application of science to management. It means
conducting business activities according to standardised tools, methods and trained personnel
in order to increase the output, improve its quality and reduce the costs and wastes.
Taylor thought that by scientifically analysing work, it would be possible to find ‘one best
way’ to do it. Previously, managers relied on personal judgement in attending to the problems
they confronted in the course of managing their work. This is what is referred to as ‘rule of

2.18 Business Studies

thumb’ or ‘trial and error approach’. Taylor thought that managers should follow an approach
that was based on the method of science defining a problem, developing alternative solutions,
anticipating consequences, measuring progress and drawing conclusions.
In this scenario, Taylor emerged as the ‘Father of Scientific Management.’ He proposed
Scientific Management as opposed to rule of thumb. He broke up human activity into small parts
and found out how it could be done effectively, in less time and with increased productivity.
Taylor also wanted that workers should cooperate with the management and, thus, there
would be no need of trade unions. The best results would come from the partnership between
a trained and qualified management and a cooperative and innovative workforce. Each side
needed the other.
Definition of Scientific Management
• “Scientific management means knowing exactly what you want men to do and seeing
that they do it in the best and the cheapest way.” — F.W. Taylor
2.5.2 Principles of Scientific Management
F. W. Taylor developed some principles of scientific management which are explained below:
1. Science, not Rule of Thumb :
 Taylor believed that there was only one best method to maximise efficiency. This
method can be developed through scientific study and analysis of each element
of a job. The method so developed should substitute ‘Rule of Thumb’ (or trial
and error approach) throughout the organisation.
 Scientific method involved investigation of traditional methods through work study,
unifying the best practices and developing a standard method, which would be
followed throughout the organisation. This can result in tremendous saving of
human efforts, time and materials. The more sophisticated the process, greater
would be the savings.
 In the present context, the use of internet has brought about dramatic improvements
in internal efficiencies and customer satisfaction.
For example, in case of rule of thumb the standard time required to do a particular
job is fixed by the manager on the basis of his own past experience. Taylor
emphasised that standard time for a job should be decided by analysing the work
scientifically by performing time study in the enterprise and then the day’s target
should be fixed.
2. Harmony, not Discord (Conflict) : Factory system of production implies that managers
serve as a link between the owners and the workers. Since managers get work done
from the workers, there always exists the possibility of a kind of class-conflict, the
managers versus workers. Taylor recognised that this conflict helped none, the workers,
the managers or the factory owners. Therefore, Taylor emphasized that there should be
complete harmony between the management and workers. Both should realise that each
one is important. To achieve this, Taylor advocated ‘Mental Revolution’, which means
Principles of Management 2.19
 that management and workers should
change their thinking, mindset. Mental U
SEFUL IP T
revolution involves change in the attitude In Japanese companies, there is complete
openness between the management and
of workers and management towards one
workers. Usually, workers don't go on the
another from competition to cooperation.
strike but, if at all workers go to strike
Both should realise that they require one
they just wear a black ribbon to show
another. Both should aim to increase the
their dissatisfaction and work more than
size of surplus. This would eliminate the normal working hours just to gain the
need for any agitation. In such a situation sympathy of the management.
even trade unions will not think of going
on strike, etc.
Management should share the gains of the company with workers. Workers on their
part should work hard and be willing to embrace change for the good of the company.
Both should be part of the family. According to Taylor, “prosperity for the employer
cannot exist for a long time unless it is accompanied by prosperity for the employees
and vice-versa.”
For example, the main objective of workers is to earn more whereas the objective of
management is to produce maximum. Instead of discord for each other’s objectives
workers can earn more by producing more which will help in maximising production
also.
Thank you sir, we
Management feels pleasure
will work harder and
in sharing the gains of the
take our company to
company with dedicated
the top.
people like you.

Harmony, Not Discord:

Sharing of gains between management and workers leads to complete harmony.
3. Cooperation, not Individualism : This principle is an extension of principle of
‘Harmony, not discord’. According to this principle, there should be complete
cooperation between the labour and the management instead of individualism.
Competition should be replaced by cooperation. Both should realise that they need
each other. For this, management should not close its ears to constructive suggestions

2.20 Business Studies

 made by employees but should reward them for their suggestions which result in
substantial reduction in costs. For all important decisions taken by the management,
workers should be taken into confidence.

Lunch Time
No Lunch time 1 pm-2pm
for today.

Cooperation, not individualism

(Principle is overlooked)
At the same time, workers should not go for strikes and should not make unreasonable
demands on the management. In such a situation, there will be open communication
system and goodwill, and there will be no need for even a trade union.
According to Taylor, there should be an almost equal division of work and
responsibility between workers and management. Management should work almost
side by side with the workers helping, encouraging and smoothing the way for them.
This is called ‘Paternalistic style’ of management, whereby the employer takes care
of needs of employees.
4. Development of Each and Every Person to his or her Greatest Efficiency and
Prosperity : Industrial efficiency depends to a large extent on personal competencies.
Taylor was of the view that the concern for efficiency could be built in right from the
process of employee selection. Each person should be scientifically selected. Then
work assigned should suit his/her physical, mental and intellectual capabilities. To
increase their efficiency, they should be given the required training to learn the ‘best
method’. Efficient employees will produce more and earn more. This will ensure the
greatest efficiency and prosperity for both company and workers.

EXAM ORIENTED SAMPLE QUESTION

Q. ‘ABC Ltd.’ is engaged in producing electricity from domestic garbage. There is
almost equal division of work and responsibility between workers and management.
The management ever takes workers into confidence before taking important
decisions. All the workers are satisfied as the behaviour of the management is very
good.
(i) State the principle of scientific management described in the above para.
(ii) Identify any two values which the company wants to communicate to the
society. [CBSE 2014 (3)]
Ans. (i) Cooperation, not individualism. (RTP-2.20)

Principles of Management 2.21

 (ii) Values that the company wants to communicate to the society are:
(a) Optimum utilisation of resources.
(b) Empathy towards workers.

OBJECTIVE TYPE QUESTIONS

Multiple Choice Questions:
Choose the correct option to answer the following questions:
1. Which principle is an extension of harmony not discord? (1)
(a) Cooperation, not individualism
(b) Espirit de corps
(c) Initiative
(d) Discipline
2. Which of the following is a principle of scientific management given by Taylor? (1)
(a) Equity
(b) Scalar chain
(c) Harmony, not discord
(d) Order
Fill in the Blanks with appropriate words:
3. When there will be open communication system and goodwill, there will be no need
for even a ___________ . (1)
4. ___________ was the profession of F.W. Taylor. (1)
Match the following:
5. Match the principles given under ‘A’ with the correct options given under ‘B’. (1)
A B
1. Cooperation, not individualism (i) Mental revolution
2. Harmony, not discord (ii) Training
3. Science, not rule of thumb (iii) Paternalistic style of
management
4. Development of each and every (iv) Logical thinking
person to his or her greatest efficiency
and prosperity
Choose the correct option:
1 2 3 4
(a) (iv) (iii) (ii) (i)
(b) (iii) (i) (iv) (ii)
(c) (ii) (iv) (i) (iii)
(d) (i) (ii) (iv) (iii)

2.22 Business Studies

 CRACK THE CASE
Q. Pawan is working as a ‘Production Manager’ in ‘CFL Ltd.’ engaged in
manufacturing of CFL bulbs. There is no class-conflict between the management
and workers. The working conditions are very good. The company is earning huge
profits. As a policy matters, management is sharing the gains with the workers
because they believe that prosperity of the company cannot exist for a long time
without the prosperity of the employees.
(i) State the principle of scientific management described in the above para.
(ii) Identity any two values that the company wants to communicate to the
society. [CBSE 2014 (3)]

2.5.3 Techniques of Scientific Management

To put scientific management into practice, F.W. Taylor developed the following techniques
or mechanisms:
1. Functional Foremanship : Functional foremanship is an extension of the principle
of ‘Division of Work and Specialisation’ to the shop floor level of a factory. Each
worker will have to take orders from eight foreman in the related process or function
of production.

Factory Manager

Planning Incharge Production Incharge

Instruction Route Time and Speed Gang Repairs Inspector

Card Clerk Clerk Cost Clerk Boss Boss Boss
Disciplinarian

Workman
Fig. Functional Foremanship
Taylor advocated separation of planning and execution functions. Under the factory
manager, there was a planning incharge and a production incharge. Under planning
incharge, four foremen would concentrate on planning the job of workers. Under
production incharge, four foremen would involve themselves in execution of job.
Role of Foremen under Planning Incharge
(i) Instruction Card Clerk – Drafting instructions for workers.
(ii) Route Clerk – Specifying the route of production.

Principles of Management 2.23

 (iii) Time and Cost Clerk – Preparing
time and cost sheet. U SEFUL IP T
(iv) Disciplinarian – Ensuring discipline. In the factory system, foreman is the pivot around
whom revolves the entire production planning,
Role of Foremen Under Production
implementation and control. Thus, Taylor
Incharge
concentrated on improving the performance
(i) Speed Boss – Timely and accurate
of this role in the factory set up. According to
completion of job.
Taylor, a foreman should have intelligence,
(ii) Gang Boss – Keeping machines education, tact, judgement, special knowledge,
and tools, etc. ready for operation honesty, energy and good health. Since all
by workers. these qualities could not be found in a single
(iii) Repairs Boss – Ensuring proper person so Taylor proposed eight specialists.
working condition of machines and Each specialist is to be assigned work according
tools. to his/her qualities. For example, those with
(iv) Inspectors – Checking the quality of technical mastery and intelligence may be given
work. planning work. Those with energy and good
2. Standardisation and Simplification health may be assigned execution work.
of Work : Standardisation of
work refers to the process of setting standards for every business activity, e.g.,
standardisation of process, raw material, time, product, machinery, methods or working
conditions.
These standards are the benchmarks, which must be adhered to during production.
Objectives of standardisation of work are :
• To reduce a given line or product to fixed types, sizes and characteristics.
• To establish standards of excellence and quality in materials.
• To establish standards of performance of men and machines.
• To establish interchange ability of manufactured parts and products.
Simplification of work aims at eliminating superfluous varieties, sizes and
dimensions of products. It implies reduced inventories, fuller utilisation of
equipment and increased turnover. It results in savings of cost of labour, machines
and tools.
3. Work Study : Work study is a systematic, objective and critical examination of
all factors relating to work so as to maximise efficiency. It includes the following
techniques:

(i) Method Study : The objective of method study is to find out the best way
of doing the job so as to minimise the cost of production and maximise the
quality and satisfaction of the customer. For example, for designing a car, the
assembly line production will need to decide the sequence of operations, place
for men, machines and raw materials, etc. All this is a part of method study.

2.24 Business Studies

 (ii) Motion Study : Motion study is the technique used to study the various
movements like lifting, putting objects, sitting, changing positions etc., of workers,
while performing a particular task. The objective of motion study is to identify
wasteful or unnecessary motions/movements and eliminate them to determine
the best way of doing a particular job. Through motion study an attempt is made
to know whether some elements of a job can be eliminated, combined or their
sequence changed to achieve the necessary rhythm. In recent times, videography
can be used to identify different types of motions.
On close examination of body motions, it is possible to find out different types
of motions-productive, incidental (e.g., going to stores) and unproductive.
For example, if it is observed through motion study that worker has to move

frequently for taking tools from tool box, then such wasteful movements can
be eliminated by keeping the tool box near the worker. It will increase the
productivity as well as efficiency level of the worker.
(iii) Time Study : Time study is a technique which is used to determine the standard
time taken by a worker of reasonable skill and efficiency to perform a well-
defined job.
Time measuring devices (e.g., stopwatch) are used for each element of task. The
standard time is fixed for the whole task by taking several readings/observations.
The objective of time study is to determine the number of workers to be

employed, frame suitable incentive schemes and determine labour costs.
The method of time study will depend upon:
(i) Volume and frequency of the task,
(ii) The cycle time of the operation and
(iii) Time measurement costs.
For example, on the basis of several observations it is determined that standard

time taken by a worker to make 100 pens is 20 minutes. So in one hour, a worker
will make 300 pens. Assuming that a worker works for 8 hours in a shift and
after deducting one hour for rest and lunch it is determined that in 7 hours a
worker will make 2,100 pens i.e., @ 300 pens per hour. Thus, this is the standard
task a worker has to perform and wages can be decided accordingly.
(iv) Fatigue (Tiredness) Study : The objective of fatigue study is to determine the
amount and frequency of rest intervals in completing a task. For example,
normally in a plant, work takes place in three shifts of eight hours each. Even in
a single shift a worker has to be given some rest interval to take his/her lunch,
etc. If the work involves heavy manual labour, then small pauses have to be
frequently given to the worker so that he/she can recharge his/her energy level
for optimum contribution.

Principles of Management 2.25

 A person is bound to feel tired physically and mentally if he/she works without
rest for a long period of time. In such a case, he/she will not be able to work
with full capacity. If he/she is allowed rest intervals, he/she will regain stamina
and start working with same capacity. This will result in increased productivity.
There can be many causes for fatigue like long working hours, doing unsuitable
work, having uncordial relations with boss or bad working conditions, etc. Such
hindrances in good performance should be removed.
4. Differential Piece Wage System : Taylor wanted to differentiate between
efficient and inefficient workers on the basis of their actual performance and the
standard performance. He wanted to reward efficient workers. So he introduced
differential piece wage system. It is a technique which differentiates between
efficient and less efficient workers. It rewards the efficient workers and motivates
the less efficient ones to improve efficiency.
In this wage system, there are two piece wage rates — one for those workers
who produce the standard output or more, and the other for those who produce
less than the standard output. The difference in wages is enough for the inefficient
worker to be motivated to perform better in future.
This technique is the strongest motivator/for a worker to reach standard
performance.
Due to difference in the wage rates for efficient and inefficient workers, it is
known as Differential piece wage system.
The wages of a worker can be calculated by using the following formula:
Wages = Actual Output × Wage Rate
For example, Gupta Ltd. gives ` 2 per piece if in one day 50 or more units are

produced and ` 1.50 per unit for less than 50 units.
Standard output (per worker per day) : 50 units
Worker ‘M’ produces 40 units in a day


\ He will get = ` 60 (40 × 1.50/Lower Output × Lower Rate)
Worker ‘N’ produces 70 units in a day


\ He will get = ` 140 (70 × 2/Higher Output × Higher Rate)
The gap of 30 units only will amount to a loss of ` 80 to ‘M’.
According to Taylor, this loss will be the strongest motivator for worker M to reach
standard performance the next time.
Worker Standard Output Actual Output Wage Rate (`) Amount of Wages (`)
M 50 40 1.50 60
N 50 70 2 140

2.26 Business Studies

 EXAM ORIENTED SAMPLE QUESTION
Q. Karan Nath took over ‘D’ north Motor Company’ from his ailing father three
months ago. In the past the company was not performing well. Karan was
determined to improve the company’s performance. He oberved that the methods
of production as well as selection of employees in the company were not scientific.
He believed that there was only one best method to maximise efficiency. He also
felt that once the method is developed, the workers of the company should be
trained to learn that ‘best method’.
He asked the production manager to develop the best method and carry out
the necessary training. The production manager developed this method using
several parameters right from deciding the sequence of operations, place for men,
machines and raw materials till the delivery of the product to the customers. This
method was implemented throughout the organisation. It helped in increasing the
output, improving the quality and reducing the cost and wastage.
Identify and explain the principles and the technique of scientific management
followed by the prodcution manager in the above case. [CBSE 2018 (6)]
Ans. Following are the principles of scientific management followed by the production
manager in the above case:
(i) Science, not rule of thumb. (RTP-2.19)
(ii) Development of each and every person to his/her greatest efficiency and
prosperity. (RTP-2.21)
The technique of scientific management discussed in the given case is ‘Method Study’.
(RTP-2.24)

OBJECTIVE TYPE QUESTIONS

Multiple Choice Questions:
Choose the correct option to answer the following questions:
1. Which study of Taylor aims to eliminating unnecessary movements to ensure timely
completion of work? (1)
(a) Method study (b) Motion study
(c) Time study (d) Fatigue study
2. The technique in which task of supervision is divided into several specialised functions
and each function is entrusted to a specialist foremen is (1)
(a) Standardisation (b) Differential piece wage system
(c) Simplification (d) Functional foremanship
3. Which of the following is not the part of work study? (1)
(a) Method study (b) Motion study
(c) Time study (d) Functional foremanship

Principles of Management 2.27

 4. Number of specialist in the technique of functional foremanship is (1)
(a) 4 (b) 8
(c) 10 (d) 6
Fill in the Blanks with appropriate words:
5. The study of movements like lifting, putting objects, sitting and changing positions,
etc. is known as ____________ . (1)
6. Fatigue study determines the amount and ____________ of rest intervals to be given
to the workers. (1)

CRACK THE CASE

Q. Sanchit, after completing his entrepreneurship course from Sweden, returned to India and
started a coffee shop ‘Aroma Coffee Can’ in a famous mall in New Delhi. The speciality
of the coffee shop was the special aroma of coffee and a wide variety of flavours to
choose from. Somehow, the business was neither profitable nor popular. Sanchit was
keen to find out the reason. He appointed Sandhya, an MBA from a reputed college, as
a Manager to find out the causes for the same.
Sandhya took feedback from the clients and found out that though they loved the
special unique aroma of coffee but were not happy with the long waiting time
being taken to process the order. She analysed and found out that there were many
unnecessary obstructions in between which could be eliminated. She fixed a standard
time for processing the order.
She also realised that there were some flavours whose demand was not enough. So,
she also decided to stop the sale of such flavours. As a result, within a short period
Sandhya was able to attract the customers.
Identify and explain any two techniques of scientific management used by Sandhya
to solve the problem. [CBSE 2017 (4)]

Comparison between F.W. Taylor and Henri Fayol

Both F.W. Taylor and Henri Fayol are great names in the field of management. Both of
them have contributed immensely to the knowledge of management, which has formed a basis
for further practice by managers. The contribution of Taylor and Fayol are complementary to
each other. The two eminent pioneers differ from each other on the following basis:
Basis of Difference Henri Fayol F.W. Taylor
1. Perspective Top level of management Shop floor level of a factory
2. Unity of Command Taylor did not follow this He was a strict follower of the
principle and stressed on principle of unity of command.
minimum eight bosses.
3. Applicability Applicable universally. Applicable to specialised
situations.
4. Basis of Formation Personal experience. Observations and
experimentation.

2.28 Business Studies

 5. Focus Improving overall Increasing productivity.
administration.
6. Personality Practitioner. Scientist
7. Expression General Theory of Scientific Management.
Administration.
After studying the view points of two management pioneers, it can safely be concluded that
both of them are the masters in their field of management. No one can be called as superior or
inferior to each other. In the words of Theo Haimann, ‘As long as we refer to Taylor as the
father of scientific management, we would do justice to Fayol and his work to call him the
father of principles of management.’

QUICK RECAP
Principles of Management: Concept, Nature and Significance
Concept: Management principles are the statements of fundamental truth which provide
guidelines for managerial decision making and action i.e., they act as guidelines for the practice
of management.
Nature of Principles of Management
1. Universal Applicability. 2. General Guidelines.
3. Formed by Practice and Experimentation. 4. Flexible.
5. Mainly Behavioural. 6. Cause and Effect Relationships.
7. Contingent (Careful Application).
Significance/Importance of Principles of Management
1. Providing Managers with Useful Insight into Reality.
2. Optimum Utilisation of Resources.
3. Effective Administration.
4. Scientific Decisions.
5. Meeting Changing Environment Requirements.
6. Fulfilling Social Responsibility.
7. Management Training, Education and Research.
Principles of Management Developed by Henri Fayol
1. Division of Work: According to this principle, the entire work should be divided into
different tasks and instead of assigning the entire work to one person, one task or
work should be assigned to one person according to his competence, qualification and
experience.
2. Authority and Responsibility: Authority is the right of a superior to give orders to
his subordinates and obtain obedience. Responsibility means obligation to carry out an
assigned job on time.
Principles of Management 2.29
 3. Discipline: In management discipline means obedience, respect of authority and
complying with the rules and regulations of the organisation.
4. Unity of Command: This principle states that a subordinate should receive orders/
instructions from only one superior at a time and that subordinate should be accountable
only to that superior.
5. Unity of Direction: Unity of direction states that there should be ‘ONE HEAD AND
ONE PLAN’ for a group of activities having the same objective.
6. Subordination of Individual Interest to General Interest: An organisation is superior
to its individual employees. The interest of the organisation must be given priority over
the interest of the individuals or employees.
7. Remuneration of Employees: This principle states that remuneration payable to
employees should be fair, equitable and reasonable so as to give maximum amount of
satisfaction to both the employees and the organisation.
8. Centralisation and Decentralisation: Centralisation means the concentration of
authority at the top management. On the other hand, Decentralisation means sharing
of authority at all levels of management.
9. Scalar Chain: Scalar chain refers to the formal lines of authority or chain of superiors
from highest to lowest rank. The Gang Plank is a shorter route in a scalar chain which
permits two persons at the same level to communicate directly with each other.
10. Order: This principle states that in an organisation there should be a place for everything
(everyone) and everything (everyone) should be at its (his/her) right place.
11. Equity: This principle suggests that managers should be fair and impartial while dealing
with their subordinates.
12. Stability of Tenure of Personnel: This principle states that management should remove
the feeling of job insecurity from the minds of employees because if the job of a person
is insecure, he will be looking for job elsewhere and cannot contribute his maximum.
Moreover, the period of service in a position should be fixed and employees should
not be moved or rotated from their positions very frequently.
13. Initiative: Workers should be encouraged to develop and carry out their plans for
improvement.
14. Espirit de Corps: Espirit de corps means team spirit or harmony in group effort and
mutual understanding among employees.
Principles of Scientific Management
1. Science, not Rule of Thumb: According to this principle, Taylor stressed that each
job performed in the organisation should be based on scientific enquiry and not on
intuition, experience and hit and miss methods.

2.30 Business Studies

 2. Harmony, not Discord (Conflict): This principle suggests that there should be
complete harmony and proper understanding between management and workers and
they should work together for achieving organisational goals.
3. Cooperation, not Individualism: This principle is an extension of principle of
‘Harmony, not Discord’. This principle states that there should be complete cooperation
between management and workers.
4. Development of Each and Every Person to his or her Greatest Efficiency and
Prosperity: Taylor insisted that due care should be taken while selecting the employees
and after selection, they must be given jobs according to their qualifications, physical,
mental and intellectual capabilities. The selected employees must be sent for training
from time to time to improve their skills and work performance.

Techniques of Scientific Management

1. Functional Foremanship: Taylor suggested that specialisation should be introduced
at the supervisory level. He recommended ‘Functional Foremanship’ for this purpose.
Functional foremanship states that the task of supervision is divided into several
specialised functions and each function is entrusted to a specialist foreman. The
technique of functional foremanship is an extension of the principle of division of work
or specialisation but it violates the principle of unity of command. In this technique,
Taylor advocated separation of planning and execution function.
2. Standardisation and Simplification of Work: Standardisation is the process of setting
standards for every step of business operation. Simplification refers to eliminating
superfluous (unwanted) varities, sizes and dimensions.
3. Work Study: Work study is a systematic, objective and critical examination of
all factors relating to work so as to maximize efficiency. It includes the following
techniques:
(i) Method Study: Method study refers to finding out one best way of doing a
particular job.
(ii) Motion Study: Motion study is the technique used to study the various movements
like lifting, putting objects, sitting, changing positions, etc., of workers, while
performing a particular task.
(iii) Time Study: Time study is the technique used to measure the standard time taken
by a worker of reasonable skills and ability to perform a given task.
(iv) Fatigue Study: Fatigue study seeks to determine the amount and frequency of
intervals of rest required in completing a task.
4. Differential Piece Wage System: This concept was introduced by F.W. Taylor in order
to attract highly efficient workers. Differential piece wage system is a method of wage
payment in which efficient and inefficient workers are paid at different rates.

Principles of Management 2.31

TYPOLOGY OF QUESTIONS

1. OBJECTIVE TYPE QUESTIONS

I. Multiple Choice Questions (MCQs) [1 Mark]

Tick (ü) the correct answer

1. Science, not rule of thumb, this principle was given by
(a) Koontz (b) Henri Fayol
(c) F.W. Taylor (d) Kotler
2. Life time of Henri Fayol is
(a) 1845 to 1930 (b) 1845 to 1925
(c) 1841 to 1930 (d) 1841 to 1925
3. How many principles are given by Henri Fayol?
(a) 20 (b) 22
(c) 14 (d) 24
4. Which of the following is not concerned with the Henri Fayol?
(a) Espirit de corps (b) Unity of command
(c) Initiative (d) Time study
5. Unity of direction is concerned with
(a) One head one plan (b) One head different plans
(c) Planning by employees (d) Planning by production manager
6. Espirit De Corps means
(a) Unity is strength (b) Order
(c) Gang plank (d) Scalar chain
7. Gang plank means
(a) Indirect contact (b) Contact not allowed
(c) Appointment before contact (d) Direct contact
8. Life time of F.W. Taylor is
(a) 1856 to 1915 (b) 1856 to 1935
(c) 1856 to 1925 (d) 1856 to 1905
9. Which of the following is not concerned with F.W. Taylor?
(a) Motion study (b) Fatigue study
(c) Method study (d) Discipline
10. The main objective of motion study is
(a) To find out labour cost
(b) To provide more work to the workers

2.32 Business Studies

 (c) To eliminate the unproductive movements
(d) To eliminate the rest hours of workers
11. Which of the following is not a specialist supervising a worker under functional
foremanship?
(a) Route clerk (b) Gang boss
(c) Officer (d) Inspector
12. Which principle/technique of scientific management is being reflected in the given picture?

(a) Fatigue study

(b) Method Study
(c) Science, not rule of thumb
(d) No principle or technique of scientific management reflected
13. Identify the principle of management, as reflected/followed in the given picture:

(a) Unity of direction (b) Authority and Responsibility

(c) Division of work (d) Order
14. Gang plank is required in which principle?
(a) Authority and responsibility (b) Initiative
(c) Scalar chain (d) Order
15. On close examination of body motions, e.g., it is possible to find out which types of motions?
(a) Motions which are incidental (b) Motions which are unproductive
(c) Motions which are productive (d) All of the above
Principles of Management 2.33
16. Which is the objective of time study?
(a) Determine the number of workers to be employed
(b) Frame suitable incentive schemes
(c) Determine labour costs
(d) All of the above
17. The method of time study will depend upon
(a) Volume and frequency of the task
(b) The cycle time of the operation
(c) Time measurement costs
(d) All of the above
18. Which is the objective of standardisation?
(a) To establish interchange ability to manufactured parts and products
(b) To establish standards of performance of men and machines
(c) To find out one best way of doing a job
(d) Both (a) & (b)
19. Shenoy Ltd. has decided to become the market leader in selling water bottles. The company
decides to take care of all the departments. The top management decides to set criterion for all
the business activities right from the purchase of raw material to manufacturing and packaging
the water bottles.
Which technique of Scientific Management is used by the company?
(a) Time Study (b) Differential Piece Wage System
(c) Method Study (d) Standardisation
20. Henri Fayol was a
(a) Accountant (b) Production Engineer
(c) Social Scientist (d) Mining Engineer
21. Which technique of scientific management differentiates between efficient and inefficient
workers?
(a) Functional Foremanship (b) Simplification of work
(c) Differential piece wage system (d) Motion Study
22. A Production Manager set a target to manufacture 2,000 shirts in 2 months and accordingly
divided the work among 10 employees. One of the workers fell ill and took medical leave for
a month. The production manager divided his work among other workers in order to achieve
the target on time. The workers cooperated for achievement of targets
Which principle of Fayol is highlighted here?
(a) Initiative (b) Unity of Direction
(c) Scalar Chain (d) Espirit de Corps
23. He/She keeps machines, materials, tools, etc. ready for operations by concerned workers.
Whose work is described by this sentence under functional foremanship?

2.34 Business Studies

 (a) Route Clerk (b) Repair Boss
(c) Gang Boss (d) Instruction Card Clerk
24. “Prosperity for the employer cannot exist for a long time unless it is accompanied by the
prosperity for the employees. Both should realise the importance of each other and feel that
they are part of same family.” Which scientific principle of management is highlighted by this
statement?
(a) Harmony, not discord
(b) Science, not rule of thumb
(c) Cooperation, not individualism
(d) Development of each and every person to his
or her greatest efficiency and prosperity
25. “Three subordinates- S1, S2 and S3 receive orders from M1’. In such a situation which principle
of management is being observed?
(a) Unity of direction (b) Equity
(c) Order (d) Unity of command
26. In what situation has Fayol permitted the violation of the Principle of Scalar Chain?
(a) When the employee is extraordinarily capable
(b) In no condition or situation
(c) At the time of sudden happening
(d) In all conditions and circumstances
27. In what two departments did Taylor divide the work of a factory manager?
(a) Department of Planning and Finance
(b) Department of Planning and Production
(c) Department of Planning and Research
(d) Department of Planning and Marketing
28. Which company did Taylor join in America in 1878 as a labourer?
(a) Bethlehem Steel Works (b) Midvale Steel Company
(c) American Steel Company (d) None of these
II. Fill in the Blanks with appropriate words [1 Mark]
1. According to _________ principle the workers must be given reasonable time to show results.
2. According to the principle of _________ workers performing similar jobs should be paid the
same wage rate.
3. Fayol also suggested, short cut to scalar chain, called _________ .
4. Functional foremanship is an extension of _________ .
5. Under differential wage rate technique, efficient and inefficient workers are paid at _________
rates.
6. According to the principle of _________, each subordinate must have only one boss.
Principles of Management 2.35
 7. _________ principle promotes specialisation.
8. _________ principle suggests that manager should replace ‘I’ with ‘We’ in all his conversations
with workers.
9. _________ principle is violated when the tools and raw materials are not found at the right
place in the company.
10. _________ principle requires judicious application of penalties by the management.
III. True and False [1 Mark]
1. Management principles are rigid statements.
2. Scalar chain is crucial to ensure unity of command and effective communication in the
company.
3. Remuneration should always be fair to employees even if it is not favourable to the
organisation.
4. Gang plank permits horizontal communication.
5. According to principle of ‘Order’, there should be a place for everything and everyone.
6. Henri Fayol is called the ‘Father of Scientific Management’.
7. Unity of command suggests that an employee should receive orders and be accountable to any
one superior.
8. According to subordination of individual interest to general interest, interest of the individual
must be given priority over the interest of the organisation.
9. Unity of direction prevents unnecessary duplication of efforts and wastage of resources.
10. Fayol was mechanical engineer, whereas Taylor was a mining engineer.
IV. Matching Type Questions [1 Mark]
1. Match the ‘Techniques of Scientific Management’ given under List-B with the suitable
statements under List-A:
List A List B
1. One best way of doing job A. Simplification
2. Eliminates unnecessary diversity B. Standardisation
of products C. Motion study
3. Setting standards for business activities D. Method study
4. Eliminates unnecessary movements
Choose the correct alternative:
1 2 3 4
(a) D A B C
(b) B D C A
(c) C A D C
(d) A C B D

2.36 Business Studies

 2. Match the ‘Principles of Management’ given under Column A with the suitable statements
given under Column B by using the given options:
Column A Column B
A. Division of work 1. Prevents dual subordination
B. Unity of command 2. Prevents overlapping of
C. Unity of direction activities
3. Minimises employee turnover
D. Fair remuneration 4. Prevents lack of efficiency and
specialisation
Pick the correct option:
A B C D
(a) 4 1 2 3
(b) 2 3 4 1
(c) 3 4 1 2
(d) 1 3 2 4
3. Match the ‘Features of Principles of Management’ given in Column A with the correct
statement given in Column B.
Column A Column B
1. Flexibility A. Principles depends upon
prevailing situations
2. Contingent B. Principles can be modified by
the managers
C. Principles aim at influencing
human behaviour
D. Principles are applied to all
organisations
Choose the correct option:
1 2
(a) C D
(b) D C
(c) B A
(d) A B
4. Match the Column I with Column II by using the given options:
Column I Column II
1. Scientific principles of management A. Fatigue study
2. General principles of management B. Technique of Taylor
3. Functional foremanship C. Fayol
4. Rest intervals in job D. Taylor

Principles of Management 2.37

 Choose the correct option:
(a) 1 — B, 2 — C, 3 — A, 4 —B
(b) 1 — D, 2 — A, 3 — B, 4 —C
(c) 1 — B, 2 — C, 3 — D, 4 —A
(d) 1 — D, 2 — C, 3 — B, 4 —A
5. Match the following on the basis of ‘Concepts’ by using the given options:
Column A Column B
A. Management principles 1. Moral connotation
B. Pure science principles 2. Procedure involving series of
C. Techniques steps
D. Values 3. Flexible
4. Rigid
Choose the correct option:
(a) A — 3, B — 4, C — 1, D — 2 (b) A — 4, B — 3, C — 2, D — 1
(c) A — 3, B — 4, C — 2, D — 1 (d) A — 2, B — 3, C — 1, D — 4
6. Match the following columns:
Column I Column II
1. Father of general management A. Fredrick Wislow Taylor
2. American Mechanical Engineer B. Unity of Command
3. One man one boss C. Unity of Direction
D. Henri Fayol
Choose the correct option:
(a) 1 — D, 2 — A, 3 — C
(b) 1 — D, 2 — C, 3 — B
(c) 1 — C, 2 — A, 3 — B
(d) 1 — D, 2 — A, 3 — B
7. Match the statements given under Column ‘A’ with Column ‘B’ by using the given options:
Column A Column B
1. Right to give orders to A. Responsibility
subordinates B. Authority
2. Retention of decision-making C. Decentralisation
authority at top level D. Centralisation
3. Obligation to perform tasks
4. Distribution of authority at
all levels

2.38 Business Studies

 Choose the correct option :
1 2 3 4
(a) B C D A
(b) C B D A
(c) D A B C
(d) B D A C
8. Match the Column I with Column II on the basis of ‘Objectives of Techniques of Management’
by using the options given:
Column I Column II
A. Differential piece (i) Elimination of unnecessary
wage system movements
B. Motion study (ii) Elimination of diversity of
C. Simplification products
D. Fatigue study (iii) Reward efficient workers
(iv) Regain lost stamina
Select the correct option:
(a) A — (iii), B — (iv), C — (ii), D — (i)
(b) A — (iii), B — (i), C — (iv), D — (ii)
(c) A — (iii), B — (ii), C — (i), D — (iv)
(d) A — (iii), B — (i), C — (ii), D — (iv)
9. Match the following on the basis of ‘Principles’ being followed by using the options given:
Column I Column II
A. Prevent confusion 1. Espirit de Corps
regarding task to be done 2. Unity of Command
B. Emphasise on kindliness and 3. Equity
justice in behaviour of
managers towards workers
Choose the correct option:
(a) A — 3, B — 2
(b) A — 2, B — 3
(c) A — 3, B — 1
(d) A — 2, B — 3
Principles of Management 2.39
10. Match the Column I with Column II on the basis of ‘Nature of Principles of Management’ by
using the options given:
Column I Column II
A. Dependent on the prevailing situations 1. Mainly behavioural
B. Do not provide strait jacket solutions 2. Contingent
C. Aim at influencing behaviour 3. General guidelines
4. Cause and effect
Choose the correct option:
(a) A — 2, B — 3, C — 4
(b) A — 2, B — 4, C — 1
(c) A — 3, B — 1, C — 2
(d) A — 2, B — 3, C — 1

2. REMEMBERING AND UNDERSTANDING

BASED QUESTIONS WITH ANSWERS
Section-I
1. What is meant by ‘principles of management’? [CBSE 1994, 08, 11 (1)]
Ans. Management principles are the statements of fundamental truth which provide guidelines
for managerial decision-making and action.
2. The principles of management are different from those of pure science. State any one
difference. [CBSE 2008 (1)]
Ans. The principles of management are different from those of pure science because principles
of management are quite flexible whereas principles of pure science are rigid.
3. Give any one point of difference between principles of management and techniques of
management. (1)
Ans. Management principles are guidelines for managerial action whereas techniques of
management are procedure or methods to be followed to achieve desired goals.
4. Give one point of difference between management principles and management
values. (1)
Ans. Principles of management are guidelines for managerial action whereas values are rules
for behaviour of individual in the society.
5. Why it is said that management principles are universal in application?
[CBSE 2008,11 (1)]
Ans. The principles of management are said to be universal because these are applicable in
all types of organisations, at all levels, and at all times.
6. Principles of management are guidelines to action but do not provide readymade
straitjacket solutions to all managerial problems. Why? (1)
Ans. It is so because real business situations are very complex and dynamic and are a result
of many factors.
2.40 Business Studies
 7. Why is it said that principles of management are flexible? [CBSE 2008, 11 (1)]
Ans. Principles of management are called flexible because these can be modified as per the
demand of the situation.
8. The principles of management are not rigid prescriptions. What does this highlight about
the nature of principles of management? [CBSE 2010 (1)]
Ans. Management principles are flexible.
9. The degree of concentration of authority (centralisation) and dispersal of authority
(decentralisation) depends upon the circumstances and situations of an enterprise. Which
feature of principles of management has been highlighted here? (1)
Ans. Management principles are flexible.
10. Why is it said that principles of management are mainly behavioural in nature?
[CBSE 2015 (1)]
Ans. Principles of management are mainly behavioural in nature as they aim at influencing
behaviour of human beings.
11. Give any one reason why principles of management are called contingent.
[CBSE 2010, 12 (1)]
Ans. Because the application of management principles is dependent upon the situation
prevailing at a particular point of time.
12. ‘The management principles are to be applied according to the prevailing situation at a
particular point of time and have to be changed as per the requirements.’ Which nature
of principles of management has been highlighted here? (1)
Ans. Management principles are contingent.
13. Who is known as ‘Father of Management Thought’? (1)
Ans. Henri Fayol.
14. Ayesha, a manager, decided that there will be separate departments for finance,
marketing, production and sales in her company. By doing so she is following a principle
of management. Name the principle. [CBSE 2013 (1)]
Ans. Division of work.
15. In a company, there are four separate departments for finance, marketing, production
and human resource department. Identify the principle of management.[CBSE 2013 (1)]
Ans. Division of work.
16. Define the term ‘Personal Authority’. (1)
Ans. Personal authority means authority of the individual manager.
17. The management and workers have entered into an agreement that workers will do
overtime to cover up losses of the firm. In return, the management will increase the
wages. But management later refused to increase the wages. Which principle is violated
here? (1)
Ans. Principle of discipline.
18. The sales employee is allowed to give discount of upto 10% by the marketing manager,
while finance manager allows him to give discount upto 5%. Which principle of
management is violated here? (1)
Ans. Unity of command.
Principles of Management 2.41
 19. Which principle of management is violated if an employee is asked to receive orders
from two or more superiors? [CBSE 2008, 10 (1)]
Ans. Unity of command.
20. Getting orders from more than one superior is against which principle? (1)
Ans. Unity of command.
21. Which principle of management implies that there should be ‘ONE HEAD AND ONE
PLAN’ for a group of activities having the same objective? [CBSE 2010 (1)]
Ans. Unity of direction.
22. Name the following Principles of Management: [CBSE 2012 (1)]
(i) that prevents dual subordination and
(ii) that prevents overlapping of working of two divisions.
Ans. (i) Unity of command. (ii) Unity of direction.
23. In Gaurav Ltd., an employee has the goal of maximising his salary, but the goal of the
organisation is to maximise output at competitive cost. There was some dispute on this
for a while. Eventually, the organisation’s interest was given priority over employee’s
interest. Name the principle related to the above situation. (1)
Ans. Principle of subordination of individual interest to general interest.
24. Name the principle of Fayol which suggests that organisational interest should be given
more priority as compared to any employee’s interest. (1)
Ans. Principle of subordination of individual interest to general interest.
25. Yogesh, a manager, expects his subordinates to work for the happiness and pleasure of
being in the organisation. Which principle of management is being overlooked? (1)
Ans. Remuneration of employees.
26. Angad is working in a tea factory. The management asked him to work overtime so
as to produce more in order to meet increasing demand in the market. But he was not
paid extra wages for extra time worked by him. Which principle of management is
being overlooked? (1)
Ans. Remuneration of employees.
27. ‘Policies and objectives should be determined by the top level and authority for day to
day activities should be given to the subordinates.’ Identify the management principle
highlighted in the given statement. (1)
Ans. Centralisation and decentralisation.
28. Name that principle of management which suggests that communication from top to
bottom should follow the official lines of command. (1)
Ans. Scalar chain.
29. Ayush, a manager, very often speaks to people at all levels, passing on instructions
regarding his department and also other departments. State the management principle
being violated in the given case. (1)
Ans. The principle of ‘Scalar Chain’ is violated in this case. (RTP-2.14)
30. Which device permits direct communication between employees working at the same
level? (1)
Ans. Gang plank.
2.42 Business Studies
 31. Why did Fayol introduce the concept of ‘Gang Plank’ in the principle of ‘Scalar
Chain’? (1)
Ans. Fayol introduced the concept of Gang Plank in order to avoid delay in communication
in case of emergency between two people working at the same level but in different
departments.
32. If an organisation does not provide the right place for physical and human resources
in the organisation, which principle is violated? (1)
Ans. Principle of order.
33. Lack of arrangement of place for things and people creates difficulty in accomplishing
goals of the organisation on time. Name the principle violated in this situation. (1)
Ans. Principle of order.
34. Name the principle of management which suggests orderly arrangement of men and
material. (1)
Ans. Order.
35. Shenoy and Sagar are typists in a company having same educational qualifications.
Shenoy is getting ` 10,000 per month and Sagar ` 8,000 per month as salary for the
same working hours. Which principle of management is violated in this case? (1)
Ans. Principle of Equity.
36. Shreya, a manager, feels that employees should get enough time to adapt to a new
environment to show results. By doing so she is following a principle of management.
Name the principle. [CBSE 2013 (1)]
Ans. Stability of Tenure of Personnel.
37. “Workers should be encouraged to develop and carry out their plans for development.”
Identify the principle of management formulated by Fayol. [CBSE 2010 (1)]
Ans. Principle of Initiative.
38. “A manager should replace ‘I’ with ‘We’ in all his conversations with workers to
foster team spirit.” Which principle of management is being highlighted in the given
statement? (1)
Ans. Espirit de corps.
39. Following this principle of management will minimise the need for using penalties, but
not following it may result in a loss of coordination. Name the principle. (1)
Ans. Espirit de corps.
40. Who is popularly known as the ‘Father of Scientific Management’? (1)
Ans. Fredrick Winslow Taylor.
41. List any two principles of scientific management formulated by Taylor for managing
an organisation scientifically. (1)
Ans. (a) Science, not rule of thumb. (b) Harmony, not discord.
42. Name the principle of Taylor which suggests that the job performed should be based
on scientific enquiry and not on intuition. (1)
Ans. Science, not rule of thumb.
Principles of Management 2.43
 43. Which principle of Taylor advocates scientific enquiry as opposed to hit and trial? (1)
Ans. Science, not rule of thumb.
44. Name the principle of scientific management which emphasises on study and analysis
of methods rather than estimation. [CBSE 2011 (1)]
Ans. Science, not rule of thumb.
45. Which principle of scientific management suggests the introduction of scientific
investigation and analysis of management practices? [CBSE 2011 (1)]
Ans. Science, not rule of thumb.
46. ‘Change in attitude of workers and management towards one another from competition
to cooperation.’ Identify the concept highlighted in the given statement. (1)
Ans. Mental Revolution.
47. Give the meaning of ‘Mental Revolution’ suggested by F.W. Taylor.
[CBSE 2009, 11 (1)]
Ans. Mental Revolution means a complete change in the attitude or mindset of workers and
management towards each other from competition to cooperation.
48. What did Taylor want to communicate through ‘Mental Revolution’?[CBSE 2009 (1)]
Ans. The workers and management should change their attitude or mindset towards each
other from competition to cooperation.
49. Which revolution involves a change in the attitude of workers and management towards
one another from competition to cooperation? [CBSE 2010 (1)]
Ans. Mental Revolution.
50. Principle of cooperation, not individualism, is an extension of which principle given
by F.W. Taylor? (1)
Ans. Principle of harmony, not discord.
51. Which technique of scientific management has specialist foremen over workers? (1)
Ans. Functional Foremanship.
52. Name the technique of Taylor which separates ‘Planning’ and ‘Execution’ function.
[CBSE 2009 (1)]
Ans. Functional Foremanship.
53. “Vibhor drafts instructions for the workers.” Whose work is being described by this
sentence under Functional Foremanship? (1)
Ans. Instruction Card Clerk.
54. Under Functional Foremanship, who determines route of production? (1)
Ans. Route Clerk.
55. Under Functional Foremanship, who frames the time table for doing various jobs and
maintains the records of the cost of work. (1)
Ans. Time and Cost Clerk.
56. “He/she is responsible to ensure discipline in the work place.” Whose work is being
described in this sentence under Functional Foremanship? (1)
Ans. Disciplinarian.

2.44 Business Studies

 57. “He/she is responsible for timely and accurate completion of job.” Whose work is being
described in this sentence under Functional Foremanship? (1)
Ans. Speed Boss.
58. Under Functional Foremanship, who is responsible for keeping machines and tools etc.
ready for operation by workers so that there is no delay? (1)
Ans. Gang Boss.
59. Under Functional Foremanship, who ensures proper working condition of machines and
equipments? (1)
Ans. Repair Boss.
60. Which technique of Scientific Management aims at the elimination of superfluous
varieties, sizes and dimensions of the product? [CBSE 2010 (1)]
Ans. Simplification of Work.
61. What is the objective of ‘Method Study’ as a technique of Scientific Management?
[CBSE 2014, 10, 08 (1)]
Ans. The objective of ‘Method Study’ is to find out the one best method of doing a particular
job.
62. What is the main objective of Motion Study? [CBSE 2008, 10 (1)]
Ans. The objective of Motion Study is to identify wasteful motions and eliminate them to
determine the best way of doing a particular job.
63. What is determined by ‘Time-Study’? [CBSE 2008, 10, 14 (1)]
Ans. It determines the standard time taken to perform a well-defined job.
64. Different techniques were developed by Taylor to facilitate principle of Scientific
Management. One of them is ‘Fatigue Study’. What is the objective of this study?
[CBSE 2010 (1)]
Ans. The objective of ‘Fatigue Study’ is to determine the amount and frequency of rest
intervals in completing a task.
65. List any two causes for fatigue of workers, according to F.W. Taylor. (1)
Ans. (a) Long working hours.
(b) Bad working conditions like poor lighting, ventilation, etc.
66. Name the technique of Scientific management which is the strongest motivator for a
worker to reach standard performance. [CBSE 2009,12 (1)]
Ans. Differential piece wage system.
67. Why did Taylor introduce differential piece wage system? [CBSE 2009 (1)]
Ans. The purpose behind this technique is to differentiate efficient and inefficient workers
and to suitably reward the efficient workers.
68. Name any two professional courses which teach management principles as part of their
curriculum. (1)
Ans. (a) B.B.A. (Bachelor of Business Administration).
(b) M.B.A. (Master of Business Administration).
Principles of Management 2.45
 69. Which principle does Functional Foremanship violate? (1)
Ans. Unity of Command.
70. Rachit, a manager, expects his subordinates to adapt to the new environment and working
conditions without giving them time to settle down. Which principle of management is
being overlooked? (1)
Ans. Stability of Tenure of Personnel.
71. Why does Taylor insist on having specialised foremen? (1)
Ans. Because all needed qualities like intelligence, education, tact, grit, etc. cannot be found
in a single person.
72. Give any one reason why principles of management are not rigid prescriptions.
[CBSE 2010 (1)]
Ans. Because they are flexible in nature i.e., they can be modified by the managers according
to the given situation.
73. Why is it said that principles of management are less than perfect? (1)
Ans. Because they mainly apply to human behaviour. In real life, situations are not identical.
74. How are principles of management formed? State. [CBSE 2008, 11 (1)]
Ans. Principles of management are formed by practice and experimentation.
75. Which principle of management envisages that each group of activities having the same
objectives must have one head and one plan? [CBSE 2010 (1)]
Ans. Unity of Direction.
76. Name the principle of management which resembles military organisation. (1)
Ans. Unity of Command because dual subordination is avoided in military organisation.
77. Which principle of management suggests that employees should be treated with justice
and kindness? (1)
Ans. Equity.
78. What light does the idea of ‘Gang Plank’ show ‘about the nature of Fayol’s principles
of management’? (1)
Ans. Fayol’s principles of management are not a set of rigid prescriptions on how to manage.
Rather, they are flexible guidelines which can be modified when the situations so
demand.
79. What does the principle of ‘Initiative’ indicate? [CBSE 2012 (1)]
Ans. The principle of ‘Initiative’ indicates that the workers should be encouraged to develop
and carry out their plans for improvement within the prescribed limits of authority.
80. In one of the principles of scientific management, Taylor emphasises that there should
be equal division of work and responsibility between workers and management and
management should work almost side by side with workers helping and smoothing the
way for them. Identify the principle. (1)
Ans. Cooperation, not individualism.
81. On which principle of management is Taylor’s technique of functional foremanship
based? (1)
Ans. Division of work.

2.46 Business Studies

 82. Name the four personnel who work under the Planning Incharge. (1)
Ans. Instruction Card Clerk, Route Clerk, Time and Cost Clerk and Disciplinarian.
83. Name the four personnel who work under the Production Incharge. (1)
Ans. Speed Boss, Gang Boss, Repairs Boss and Inspector.
84. Which technique of Scientific Management is an extension of the principle of division
of work and specialisation to the shop floor? (1)
Ans. Functional Foremanship.
85. What is the objective of Time Study? [CBSE 2010 (1)]
Ans. The objective of Time Study is to determine the number of workers to be employed,
frame suitable incentive schemes and determine labour costs.
86. ‘Prosperity for the employer cannot exist for a long time unless it is accompanied by
the prosperity for the employees. Both should realise the importance of each other and
feel that they are part of the same family.’ Identify principle of scientific management
highlighted here. (1)
Ans. Harmony, not discord.
87. Name the technique of scientific management which focusses on separation of planning
and execution functions. [CBSE 2009 (1)]
Ans. Functional Foremanship.

Section-II
Solved Scanner
(Answers Strictly as Per CBSE Marking Scheme)

1. State any four characteristic of principles of management. [CBSE 2016 (6)]

OR

Explain briefly any four points of nature of the ‘Principles of Management’.
[CBSE 2015,12 (4)]
OR
Explain any five characteristics which reflect the nature of ‘Principles of
Management’. [CBSE 2010 (5)]
OR
Explain any five features of ‘Principles of Management’. [CBSE 2012 (5)]
Ans. Characteristic of Principles of Management:
(a) The principles of management have universal applicability in all types of
organisations, business as well as non-business, small as well as large, public
sector as well as private sector, manufacturing as well as the service sectors.
(b) They are general guidelines to action but do not provide readymade straight
jacket solutions to all managerial problems.
Principles of Management 2.47
 (c) They are formed by practice, experience, collective wisdom of managers and
experimentation.
(d) They are flexible and can be modified by the managers when the situation so
demands.
(e) They are aimed at influencing human behaviour to enable a better understanding
of human and material resources in accomplishing organisational purposes.
(f) They intend to establish cause and effect relationship so that they can be used
in similar situations in a large number of cases.
(g) The application of the principles is contingent or dependent upon the prevailing
situation at a particular point of time.
2. Explain how principles of management:
(i) help the managers in taking scientific decisions, and
(ii) in providing the managers with useful insights into real world situations.
[CBSE 2019 (5)]
Ans. (i) Principles of management help the managers in taking scientific decisions:
l Principles of management help in taking scientific decisions because the
decisions based on principles are free from bias.
l They are based on the objective assessment of the situation.
(ii) Principles of management provide the managers with useful insights into real
world situations:
l Principles of management provide useful insights into reality by enabling
the managers to learn from past mistakes and conserve time by solving
recurring problems quickly.
l Adherence to these principles adds to their knowledge, ability and
understanding of managerial situations and circumstances.
3. Explain any four points which highlight the importance of principles of management.
[CBSE 2016 (4)]
OR
Explain how principles of management: [CBSE 2012 (3)]
(a) help in optimum utilisation of resources and effective administration, and
(b) help the manager in meeting changing environment requirements.
OR
Explain how principles of management provide: [CBSE 2012, 10 (5)]
(a) useful insight into reality, and
(b) thoughtful decision-making
OR
Explain by giving any five reasons why principles of management are needed.
[CBSE 2010 (5)]
OR
2.48 Business Studies
 State any five reasons as to “why proper understanding of management principles is
necessary.” [CBSE 2009, 04 (5)]
Ans. Importance of principles of management:
(i) Principles of management provide useful insights into reality by enabling
managers to learn from past mistakes and conserve time by solving recurring
problems quickly.
(ii) Principles of management help in scientific/thoughtful decision making because
the decisions based on principles are free from bias and are based on the objective
assessment of the situation. They emphasise on logic rather than blind faith.
(iii) Principles of management help in optimum utilisation of resources by equipping
managers to foresee the cause and effect relationships thereby reducing the
wastages associated with trial and error approach.
Principles of management help in effective administration by limiting the
boundaries of managerial discretion so that decisions are free from personal
prejudices.
(iv) Principles of management help the managers in meeting changing environment
requirements because they can be modified according to the changes taking
place in the environment.
(v) Principles of management guide the managers to perform social responsibilities.
For example, the principle of ‘remuneration of employees.’
4. Explain the following principles of general management :
(a) Division of Work;
(b) Authority and Responsibility; and
(c) Discipline [CBSE 2019 (6)]
Ans. (a) Division of Work
l The principle of Division of work suggests that work can be performed
more efficiently if it is divided into specialised tasks.
l A trained specialist who is competent, is required to perform each job
leading to specialisation which results in efficient and effective output.
(b) Authority and Responsibility
l Authority is the right to give orders and obtain obedience, and responsibility
is the corollary of authority.
l The principle of Authority and Responsibility suggests that managers require
authority commensurate with their responsibility.
l An organisation should build safeguards against abuse of managerial power.
At the same time, a manager should have necessary authority to carry out
his responsibility.
(c) Discipline
l It is the obedience to organizational rules and employment agreement which
are necessary for the working of the organisation.

Principles of Management 2.49

 l It requires good superiors at all levels, clear and fair agreement and judicious
application of penalties.
5. Explain the following Principles of general management :
(a) Scalar Chain
(b) Equity; and
(c) Initiative [CBSE 2019 (6)]
Ans. (a) Scalar Chain
l Organisations should have a chain of authority and communication that
runs from top to bottom and should be followed by managers and the
subordinates.
l The formal lines of authority from highest to lowest ranks are known as
Scalar chain.
(b) Equity
l Fayol advocated that there should be no discrimination against anyone on
account of gender, religion, language, caste, belief, nationality etc.
l This principle emphasises kindliness and justice in the behaviour of
managers towards the workers to ensure loyalty and devotion.
(c) Initiative
l Principle of initiative indicates that the subordinates should be encouraged
to make and execute plans within the prescribed limits of authority.
l A good company should have an employee suggestion system whereby
suggestions which result in substantial reduction in cost or time should be
rewarded.
6. Explain the following Principles of general management :
(a) Unity of Command;
(b) Subordination of Individual Interest to General Interest, and
(c) Stability of Personnel. [CBSE 2019 (6)]
Ans. (a) Unity of Command
l The principle of unity of command states that each employeee in an
organisation should receive orders from one superior only and he should
be responsible to only one superior.
l It prevent confusion regarding tasks to be done.
(b) Subordination of Individual Interest to General Interest
l The principle of Subordination of Individual Interest of General Interest
states that the interest of an organisation should take priority over the
interest of any one individual employee.
l Larger interests of the workers and stakeholders are more important than
the interest of any one person.
(c) Stability of Personnel
l Employees, once selected, should be kept at their post for a minimum fixed
tenure and be given reasonable time to show results.
2.50 Business Studies
 lIt will help to minimize employee turnover and maintain organisational
efficiency. Any adhocism in this regard will create instability/insecurity
among employees. They would tend to leave the organisation.
7. Explain ‘Unity of Direction’ and ‘Order’ as principles of general management.
[CBSE 2017 (3)]
Ans. Order
l It states that there should be a place for everything and everyone in an organisation
and that thing or person should be found in its allotted place.
l People and materials must be in suitable places at appropriate time for maximum
efficiency.
Unity of Direction
l Unity of direction states that all the units of an organisation should be moving
towards the same objectives through coordinated and focused efforts.
l Each group of activities having the same objective must have one head and one
plan.
8. Explain briefly the principle of ‘Espirit de Corps’ and ‘Scalar Chain’. [CBSE 2017 (3)]
Ans. Espirit de Corps
l It states that management should promote a team spirit of unity and harmony
among employees to realise organisational objectives.
l The manager should replace ‘I’ with `We’ to foster team spirit.

l This will give rise to a spirit of mutual trust and belongingness among team
members. It will also minimise the need for using penalties.
Scalar Chain
l Meaning : It refers to chain of authority and communication that runs from top
to bottom and should be followed by the managers and the subordinates.
l We consider a situation where there is one head ‘A’ who has two lines of authority
under him. One line consists of B-C-D-E-F. Another line of authority is L-M-N-
O-P. If ‘E’ has to communicate with ‘O’, then he/she has to traverse the route
E-D-C-B-A-L-M-N-O.
9. Explain the following techniques of Scientific management:
(a) Method Study;
(b) Fatigue Study; and
(c) Differential Piece – Wage System [CBSE 2019 (6)]
Ans. Method Study
l It is a study to find out one best way of doing the job and includes all activities
from procurement of raw materials till the final product is delivered to the
customer.
l It helps to minimize the cost of production and maximize quality and satisfaction
of the customer.

Principles of Management 2.51

 Fatigue Study
l Fatigue study seeks to determine the amount and frequency of rest intervals in
completing a task efficiently.
l The rest intervals will help one to regain stamina and work again with the same
capacity. This will result in the increased productivity.
Differential Piece-Wage System
l Differential Piece Wage System is a technique which differentiates between
efficient and less efficient workers. It rewards the efficient workers and motivates
the less efficient ones to improve their efficiency.
l In this plan, there are two piece rates – higher for those workers who produce the
standard output or more, and lesser for those who produce less than the standard
output.
l This acts as an incentive for a less efficient workers to be motivated to perform
better.
10. Explain the following techniques of scientific management :
(a) Time Study;
(b) Motion Study; and
(c) Functional Foremanship [CBSE 2019 (6)]
Ans. (a) Time Study
l Time Study is a technique to determine the standard time taken by a worker
of reasonable skill and efficiency to perform a well-defined job.
l It helps in deciding the number of workers to be employed, frame suitable
incentive schemes and determine labour cost.
(b) Motion Study
l Motion Study is a technique to study the movement that are necessary for
doing a well defined job.
l It seeks to eliminate unnecessary and wasteful movements so that it takes
less time to complete a job efficiently.
(c) Functional Foremanship
l Functional foremanship is a technique which aims to improve the quality of
supervision at shop floor by putting a worker under eight specialist foremen.
l In this technique, planning is separated from execution. Taylor suggested
four foremen for planning, namely, route clerk, instruction card clerk, time
and cost clerk and disciplinarian and four foremen for execution, namely,
gang boss, speed boss, repair boss and inspector.
11. Explain the following principles of management :
(a) Harmony, not discord
(b) Development of Each and Every Person to His or Her Greatest Efficiency and
Prosperity. [CBSE 2019 (5)]

2.52 Business Studies

 Ans. (a) Harmony Not Discord
l The principle emphasises that there should be complete harmony between
the management and the workers.
l This requires ‘Mental revolution’ on the part of both management and
workers. Both management and the workers should transform their thinking.
l Management should share gains of the company if any with the workers and
workers should work hard and be willing to embrace change for the good
of the company.
(b) Development of Each and Every Person to His or Her Greatest Efficiency
l This principle is concerned with efficiency of employees which could be
built in right from the process of employee selection.
l The work assigned to employees should suit their capabilities. They should
be given the required training to increase their efficiency.
l Efficient employees would produce more and earn more. This will ensure
their greatest efficiency and prosperity for both the company and the workers.
12. Explain the following principles of Scientific Management : [CBSE 2015, 13 (5)]
(a) Science, not rule of thumb
(b) Co-operation, not individualism
Ans. (a) Science, not rule of thumb : Taylor believed that there was one best method of
maximising efficiency. This method could be developed through study and
analysis.
 The method so developed should substitute the “rule of thumb” throughout
the organisation.
 Scientific method involves investigation of traditional methods through work
study, unifying the best practices and developing a standard method which
would follow throughout the organisation.
 This can result in tremendous saving of time and materials.
(b) Cooperation, not individualism : There should be complete cooperation between
employees and management instead of individualism. It is an extension of
principles of ‘Harmony, not Discord’.
 Management should not close its ears to constructive suggestions by
employees but should reward their suggestions which result in substantial
reduction in costs. Workers should be a part of management and a part of
all important decisions.
 Workers, on the other hand, should desist making unreasonable demands.
When there is open communication system and goodwill there will be no
need for trade unions.
 There should be almost equal division of work and responsibility between
employees and management. Management should help, encourage and smooth
the way for employees.
13. Fayol and Taylor both have contributed immensely to the knowledge of management,
which has become a basis for further practice by managers. Taylor thought that by

Principles of Management 2.53

 scientifically analysing work it would be possible to find ‘one best way’ to do it. He is
most remembered for his time and motion studies and functional foremanship. He said
that the best result would come from the partnership between a trained and qualified
management and a cooperative and innovative workforce. Fayol explained what amounts
to a manager’s work and what principles should be followed in doing this work.
In the light of the above discussion, differentiate between the contribution of Taylor
and Fayol on the following basis: [CBSE 2019 (6)]
(a) Perspective (b) Unity of command
(c) Focus (d) Expression
(e) Applicability (f) Basis of formation
Ans. Difference between the contribution of Taylor and Fayol :
Basis Taylor Fayol
(a) Perspective Taylor’s perspective was on the Fayol’s perspective was on the Top
shop floor level of a factory. level of management.
(b) Unity of Taylor did not feel that it is Fayol was a staunch proponent of
Command important as under functional unity of command.
foremanship a worker received
orders from eight specialists.
(c) Focus Taylor focused on increasing Fayol focused on improving overall
productivity of workers. administration.
(d) Expression Taylor used the expression Fayol used the expression ‘General
‘Scientific Management’. Theory of Administration’.
(e) Applicability Taylor’s principles are Fayol’s principles are applicable
applicable to specialised universally.
situations.
(f) Basis of Principles were based Principles were based on his
formation on observations and personal experience.
experimentation.
14. (i) Name and explain the management principle in which workers should be
encouraged to develop and carry out their plans for improvements in the
organisation.
(ii) Name and explain the technique of scientific management which helps in
eliminating unnecessary diversity of products and thus results in saving cost.
[CBSE 2010 (5)]
Ans. (i) Initiative. (RTP-2.15)
(ii) Simplification of work. (RTP-2.24)
15. (i) Name and explain the principle of management which requires judicious
application of penalties by the management.
(ii) Name and explain the technique of scientific management which helps in
establishing interchange ability of manufactured parts and products.
[CBSE 2010 (5)]

2.54 Business Studies

Ans. (a) Discipline. (RTP-2.11)
(b) Standardisation of work. (RTP-2.24)

Case Studies

3. APPLYING, ANALYSING, EVALUATING AND

CREATING BASED QUESTIONS (WITH ANSWERS)
1. Vishesh completed his MBA at a reputed business school in Lucknow. He was impressed
by the Principles and Techniques of Scientific Management developed by F.W. Taylor.
On completing his MBA, he wanted to apply scientific Management in his family’s
business of fast food chain of restaurants named ‘Burger Mania’.
His main goal was to reduce costs with increased output. To begin with, he wanted to
develop a standard method which would be followed throughout the organisation. So,
he investigated traditional methods through work study and unified the best practices.
The standard method, i.e., the best way of doing the job was then developed taking
into account all parameters right from the procurement of raw materials till the delivery
of the final product to the customer. Vishesh also believed that each person should not
only be scientifically selected but should also be given the required Training to increase
efficiency. For this, he set up a Special training Unit called ‘Hamburger’ in Bengaluru
where the workers were given the required training to increase efficiency. For this,
he set up a workers were given the required training to learn the best method. At the
factory, the ingredients making up a burger were strategically placed to reduce the time
taken for excess movements. The standard time and other parameters were determined
on the basis of work study and Vishesh rewarded the workers for meeting the standard
output.
Now, ‘Burger Mania’ has standardised processes, raw material, time, machinery, product
and working conditions that ensure the food they send out to their customers has the
same high standards of excellence and level of quality in every chain or franchise. The
application for Scientific Management to every aspect of restaurant operations led to
‘Burger Mania’s’ widespread success.
Quoting the lines from the above, explain the Principles and Techniques of ‘Scientific
Management’ used by ‘Burger Mania’. [CBSE 2019 (6)]
Ans. The Principles and Techniques of ‘Scientific Management’ used by ‘Burger Mania’
are: (Any six)
Principles of scientific management (RTP-2.19)
l Science, not rule of thumb

“To begin with, he wanted to develop a standard method which should be followed
throughout the organisation. So, he investigated traditional methods through work
study and unified the best practices.”
l Development of each and every person to his/her greatest efficiency and prosperity

“Vishesh also believed that each person should not only be scientifically selected
but should also be given the required training to increase efficiency.”
Principles of Management 2.55
 Techniques of scientific management (RTP-2.23)
Method Study
“The standard method, i.e., the best way of doing the job was then developed taking
into account all parameters right from the procurement of raw materials till the delivery
of the final product to the customer.”
Motion study
“At the factory, the ingredients making up a burger were strategically placed to reduce
the time taken for excess movements.”
Time study
“The standard time and other parameters were determined on the basis of work study.”
Standardization (Standardization and Simplification of Work)
“Now, ‘Burger Mania’ has standardised processes, raw material, time, machinery,
product and working conditions that ensure the food they send out to their customers has
the same high standards of excellence and level of quality in every chain or franchise.”
Differential piece wage system
“Vishesh rewarded the workers for meeting the standard output.”
2. ‘Scientific Management means knowing exactly what you want men to do and seeing
that they do it in the best and the cheapest way.’ Taylor developed various techniques
for application of Scientific Management principles and was able to achieve a three-fold
increase in productivity in Bethlehem Steel Company, where he worked. One of the
techniques helps to determine the number of workers to be employed; frame suitable
incentive schemes and labour costs. Another technique recognises those workers who
are able to accomplish/exceed the fair day’s work and is based on the premise that
efficiency is the result of the joint efforts of the managers and the workers.
Quoting the lines from the above paragraph, identify and explain the two techniques
of Scientific Management. [CBSE 2019 (5)]
Ans. Time Study (RTP-2.25)
‘One of the techniques helps to determine ... labour costs.’
Differential Piece Wage System (RTP-2.26)
‘Another technique recognises those workers who are able to accomplish/exceed the fair
day’s work and is based on the premise that efficiency is the result of the joint efforts
of the managers and the workers.’
3. The Production manager of a garment manufacturing company asked the foreman to
achieve a target production of 100 shirts per day. But he did not give him the authority of
access to requisition tools and materials from the stores department. Can the production
manager blame the foreman if he is not able to achieve the desired target? Explain
briefly the principle relating to the situation. (3)
Ans. No, the production manager cannot blame the foreman because he did not give him the
authority of access to requisition tools and materials from the stores department. Since
he had no authority, he could not fulfill his responsibility.
In this case, the principle of Authority and Responsibility is violated. (RTP-2.10)

2.56 Business Studies

 4. Deewan Ltd. is a multinational consulting company with its headquarters at Washington
D.C. It hires young people from different countries of the world. It is a company
in which people dream to work because of its work-environment, pay and growth
prospectus. The company has a culture of open communication and people of various
nationalities work together in a discrimination free environment. The behaviour of
managers of Deewan Ltd. emphasises kindliness and justice which ensures loyalty and
devotion of workers.
It also promotes mutual trust and belongingness among team members. In this way,
management of Deewan Ltd. is able to achieve its objectives by promoting team work.
By doing so managers of Deewan Ltd. are following some principles of management.
Identify and explain any two such principles. [CBSE 2018 (5)]
Ans. Following are the principles of management discussed in the above para.
(i) Equity. (RTP-2.15)
(ii) Espirit de corps. (RTP-2.16)
5. Sakaar Foundation is a Non Governmental Organization (NGO) working to improve the
lives of children with medical needs, the homeless and victims of natural disasters. Apart
from donations in cash, they collect dry ration, old clothes, shoes, toys, books, medicines,
etc. from donors. At Apaar Foundation’s office in Bhopal the material collected is
segregated, classified and put in shelves and boxes that are labelled systematically.
There is a specific place for each of these items and volunteers put everything at their
respective places.
The volunteer work is divided into specific jobs like fund raising, field visits, social
media updates and so on. Each volunteer is part of a particular team, depending on
their competency and training. Each volunteer becomes specialized in their respective
field, leading to efficient utilization of human effort.
(i) Identify and explain two principles of management adopted by Apaar Foundation.
(ii) State two values that Apaar Foundation is displaying and promoting in society
through their work. [CBSE 2017 (5)]
Ans. (i) Principle of scientific management : ‘Cooperation, not individualism’.
(RTP-2.20)
Principle of General Management : ‘Order’. (RTP-2.14)
(ii) Values that Sakaar Foundation is displaying and promoting in society through
their work are :
(a) Concern for the society; (b) Optimum utilisation of resources
6. Complete mental revolution on the part of both, the management and workers, is found
in Japanese work culture. How? (3)
Ans. In the case of Japanese companies, there is complete openness between the management
and the workers. Usually, workers don’t go on the strike but, if at all workers go to
strike they just wear a black ribbon to show their dissatisfaction and work more than
normal working hours just to gain the sympathy of the management.
7. Taylor was a firm believer in developing methods which could substitute ‘Rule
of Thumb’ in various activities of the organisation. He wanted that the competition

Principles of Management 2.57

 between the trade unions and the management should be replaced by coordination
in decision-making. He also gave techniques which, if applied in the organisation,
would lead to minimisation of the cost of production and help in removing unnecessary
movements of the workers. He also developed a payment plan where a financial loss
in wages will work as the strongest motivator for workers to improve their efficiency.
Identify the principles and techniques of Taylor highlighted in the above paragraph.
(6)
Ans. Principles of Taylor:
(i) Science, not rule of thumb. (RTP-2.19)
(ii) Cooperation, not individualism. (RTP-2.20)
Techniques of Taylor:
(i) Motion study. (RTP-2.25)
(ii) Differential piece wage system. (RTP-2.26)
8. In the festive season, ‘Kapoor Industries’ (leading manufacturers of gift items) decided
to reduce the rest interval of workers from 40 minutes to just 8 minutes. However, due
to heavy work load and reduction in time of rest interval, the workers’ efficiency level
went down and it led to fall in production level, instead of rising. (3)
Which technique of Scientific Management should be followed by Kapoor Industries?
Also state the technique.
Ans. Fatigue study. (RTP-2.25)
9. The Delhi government imposed ban on the use, storage, sale and manufacture of plastic
bags after considering its adverse impact on environment and ecology. Which principle
of Fayol is mentioned in the above decision? Explain. (3)
Ans. Initiative. (RTP-2.15)
10. Principles of Taylor and Fayol are mutually complementary. One believed that the
management should share the gains with the workers, while the other suggested that
employees’ compensation should depend on the earning capacity of the company and
should give them a reasonable standard of living.
Identify and explain the principles of Fayol and Taylor referred to in the above para.
[CBSE 2014 (5)]
Ans. Principle of Taylor - Harmony, not discord. (RTP-2.19)
Principle of Fayol - Remuneration of employees. (RTP-2.13)
11. The Sales Manager assigned a target of selling 50 electric irons in one month to a group
of 10 sales executives. They mutually decided to sell 5 electric irons each. However,
after selling 1 electric iron, Prathush (one of the sales executives) met with an accident.
The other sales executives did not pay any attention to the remaining target of Prathush
and concentrated on their individual sales target. At the end of the month, only 46
electric irons could be sold.
Identify and explain the principle of management violated in the given case. (3)
Ans. Espirit de corps. (RTP-2.16)
2.58 Business Studies
 12. Taylor’s techniques of management are universally applicable. Do you agree? Give
reasons in support of your answer. (4)
Ans. No, some techniques of Scientific Management are not universally applicable under
some situations. These are:
(i) Functional Foremanship: Functional foremanship insists on orders and instructions
from eight specialists. This technique is not applicable in the organisation
following the principle of unity of command because according to the principle
of unity of command, a subordinate should receive orders/instructions from only
one superior at a time. Moreover, the technique of functional foremanship is not
applicable in the case of small-sized organisations.
(ii) Differential Piece Wage System: This technique is also not applicable in the
organisation following the principle of equity as it differentiates the workers and
divides them into two categories — efficient and inefficient; and makes provision
for payment of different wages for the same job.
13. There are three departments, Commerce, Science and Arts in Delhi Public School. Mr.
Shunil is the head of all the three departments. Mrs. Shalini is the Principal of the
school. She always keeps this in mind that whatever message she is to convey to the
teachers should be routed through the medium of head of the department. All teachers
have also been instructed that they too should communicate with the principal through
the medium of head of the department. Thus, there is a pre-defined arrangement of
communication in the college. Mr. Shunil is looking after three departments of different
nature. He is not able to manage them properly. The principal is also not satisfied with
his performance.
Identify and explain the principle of management which is followed and violated in the
above case. (5)
Ans. Principle followed - Scalar Chain. (RTP-2.14)
Principle violated - Unity of Direction. (RTP-2.12)
14. ‘New Delhi Ltd.’ is a famous services providing company. Mr. Lakshay Wadhwa
is its Managing Director. He continuously motivates his Research and Development
department that new and latest methods of doing work must be explored. The provisions
have also been made to give reward to those employees who will participate in a
particular exploration. He also believes that two groups working on managerial and
non-managerial posts each are similar to two wheels of an organisational vehicle. If
this vehicle (organisation) is to be driven in a right way then both the wheels should
be properly aligned. Mr. Lakshay is a successful leader. Among his employees, he has
instilled the feeling that no decision will be taken without consulting the subordinates.
To excel and surpass the other companies in this field is the main motive of Mr. Lakshay.
Paying attention to training is the secret of the company. (6)
Identify the four principles of Scientific Management highlighted in the above para by
quoting the lines.
Ans. (i) Science, not Rule of Thumb
‘He continuously motivates his Research and Development department that new
and latest methods of doing work must be explored.’
Principles of Management 2.59
 (ii) Harmony, not Discord
‘If this vehicle (organisation) is to be driven in a right way then both the wheels
should be properly aligned.’
(iii) Cooperation not Individualism
‘Among his employees he has instilled the feeling that no decision will be taken
without consulting the subordinates.’
(iv) Development of Each and Every Person to his/her Greatest Efficiency and
Prosperity.
‘Paying attention to training is the secret of the company.’
15. Principles of Taylor and Fayol are mutually complementary. One believed that
management should not close its ears to constructive suggestions made by the employees,
while the other suggested that a good company should have an employee suggestion
system, whereby suggestions which result in substantial time or cost reduction should
be rewarded.
Identify and explain the principles of Taylor and Fayol referred in the above para.
[CBSE 2014 (5)]
Ans. The principle of Taylor referred to is:
Cooperation, not individualism. (RTP-2.20)
The principle of Fayol referred to is:
Initiative. (RTP-2.15)
16. Shenoy is the production manager of ‘Persistent Ltd.’. He has decided to study various
movements of workers while performing a particular task so that unnecessary movements
are eliminated. Identify the technique of Scientific Management highlighted here. (1)
Ans. Motion study.
17. In a big steel manufacturing company there was a constant training programme running
for the workers throughout the year. The workers were trained about the machines as
the management realised that management is all about the relationship among workers
and their proper handling of the machinery. As the size of the organisation increased,
the management decided to release hold on day-to-day activities of the organisation.
A more decentralised approach was adopted where the workers could decide about the
machines and the amount of raw material required instead of the traditional centralised
approach. The management knew that the external environment is dynamic. In order to
face intense competition they clarified to the workers that their instructions should not
be taken as rigid statement and should be modified according to the circumstances.
Identify and explain the three nature of principles of management highlighted above
by quoting the lines. (6)
Ans. (a) Mainly behavioural. (RTP-2.4)
‘The workers were trained ... proper handling of the machines.’
(b) Flexible. (RTP-2.4)
‘A more decentralised approach ... instead of the traditional centralised
approach.’

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 (c) General Guidelines. (RTP-2.3)
‘In order to face intense competition ... modified according to the circumstances.’
18. Rajat joined as a CEO of Bharat Ltd., a firm manufacturing computer hardware. On the
first day he addressed the employees. He said that he believed that a good company
should have an employee suggestion system and he wished to minimise employee
turnover to maintain organisational efficiency. He informed all employees that he
would ensure that all agreements were clear, fair and there was judicious application
of penalties. However, he said that he believed that lazy personnel should be dealt with
sternly to send the message that everyone was equal in the eyes of management. Also
that we would want to promote a team spirit of unity and harmony among employees,
which would give rise to a spirit of mutual trust and belongingness among team members
and eventually minimise need for using penalties. He told all present that the interests of
the organisation should take priority over the interests of any one individual employee.
(a) Identify and briefly explain any four principles of management given by Fayol,
which Rajat highlighted in his address to the employees.
(b) Also state two values that Rajat wanted to spread in the organisation.
[CBSE SQP 2018 (6)]
Ans. (a) Following are the principles of management highlighted by Rajat in his address
to the employees : (RTP-2.9)
(i) Initiative
(ii) Stability of tenure of personnel
(iii) Discipline
(iv) Equity
(v) Espirit de Corps
(vi) Subordination of Individual Interest to General Interest
(b) Following are the values that Rajat wanted to spread in the organisation : (any
two)
(i) Responsibility (ii) Discipline
(iii) Conflict resolution (iv) Good behaviour in human interaction
(v) Team work
19. Nutan Tiffin Box Service was started in Mumbai by Mubai Dabbawalas. The Dabbawalas
who are the soul of entire Mumbai aim to provide prompt and efficient services by
providing tasty homemade tiffin to all office goers at right time and place. The service is
uninterrupted even on the days of bad weather, political unrest and social disturbances.
Recently they have started online booking system through their website ‘mydabbawala.
com’. Owing to their tremendous popularity amongst the happy and satisfied customers
and members, the dabbawalas were invited as guest lecturers by top business schools.
The Dabbawalas operate in a group of 25-30 people along with a group leader. Each
group teams up with other groups in order to deliver the tiffin on time. They are not
transferred on frequent basis as they have to remember the addresses of their customers.
Principles of Management 2.61
 They follow certain rules while doing trade — No alcohol during working hours; No
leave without permission; Wearing of white cap and carrying ID cards during business
hours.
Recently on the suggestion of a few self motivated fellow men, the dabbawalas thought
out and executed a plan of providing food left in tiffins by customers to slum children.
They have instructed their customers to place red sticker if food is left in the tiffin, to
be fed to poor children later.
(a) State any one principle of management given by Fayol and one characteristic of
management mentioned in the above case.
(b) Give any two values which the Dabbawalas want to communicate to the
society. [CBSE SQP 2016 (4)]
Ans. (a) Principles of Management: (any one) (RTP-2.9)
(i) Stability of tenure of personnel.
(ii) Initiative.
(iii) Discipline.
(iv) Espirit de corps.
Characteristic of Management : (any one)
(i) Goal oriented (RTP-1.6)
(ii) Group activity. (RTP-1.8)
(b) Values that have been communicated by the Dabbawalas : (any two)
(i) Fulfilling social responsibility;
(ii) Empathy towards disadvantaged children;
(iii) Team work.
20. ‘Voltech India Ltd’. is manufacturing LED bulbs to save electricity and running under
heavy losses. To revive from the losses, the management thought of shifting the unit to
backward area where labour is available at a low cost. The management also asked the
workers to work overtime without any additional payment and promised to increase the
wages of the workers after achieving its mission. Within a short period the company
started earning profits because both the management and the workers honoured their
commitment. [CBSE 2014 (4)]
(a) State the principle of management described in the above para.
(b) Identify any two values that the company wants to communicate to the society.
Ans. (a) Discipline. (RTP-2.11)
(b) Values that the company wants to communicate to the society:
(i) Development of backward area.
(ii) Determination to revive/commitment.
21. Nikita and Salman completed their MBA and started working in a multinational company
at the same level. Both are working hard and are happy with their employer. Salman

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 had the habit of backbiting and wrong reporting about his colleagues to impress his
boss. All the employees in the organisation knew about it. At the time of performance
appraisal the performance of Nikita was judged better than Salman. Even then their
boss, Mohammed Sharif decided to promote Salman stating that being a female Nikita
will not be able to handle the complications of a higher post. [CBSE 2013 (5)]
(a) Identify and explain the principle of management which was not followed by
this multinational company.
(b) Identify the values which are being ignored by quoting the lines from the above
para.
Ans. (a) The principle of management which has been violated is ‘Equity’. (RTP-2.15)
(b) The values which are being ignored are:
(i) Good Human Behaviour because ‘Salman had the habit of backbiting and
wrong reporting about his colleagues to impress his boss.’
(ii) Gender Equality because ‘Their boss decided to promote Salman stating
that being a female, Nikita will not be able to handle the complications
of a higher post.’
22. ‘Aapka Vidyalaya’ believes in holistic development of students and encourages team
building through a mix of curricular, co-curricular and sports activities. On its founders
day a stage performance had to be put up. A committee of ten prefects was constituted
to plan different aspects of the function. They all decided to use recycled paper for
decoration. There was a spirit of unity and harmony and all members supported each
other. With mutual trust and belongingness the programme was systematically planned
and executed. Kartik, one of the prefects realised that unknowingly the group had applied
one of the principles of management while planning and executing the programme. He
was so inspired by the success of the function that he asked his father to apply the same
principle in his business. His father replied that he was already using this principle.
(a) Identify the principle of management applied for the success of the programme.
(b) State any two features of management highlighted in the above para.
(c) Identify any two values which ‘Aapka Vidyalaya’ communicated to the
society. [CBSE 2015 (4)]
Ans. (a) Principle of management - Espirit de corps.
(b) Features of management: (RTP-1.6)
(i) Management is Pervasive.
‘... he asked his father to apply the same principle in his business.’
(ii) Management is a Group Activity
‘There was a spirit of unity and harmony and all members supported each
other.’
(iii) Management is Goal Oriented.
‘.... the programme was systematically planned and executed.’

Principles of Management 2.63

 NCERT FOLDER

Very Short Answer Type Questions

1. What makes principles of management flexible? (RTP-2.4)
2. State the main objective of time study. (RTP-2.25)
3. Name the principle that is an extension of the ‘harmony, not discord’.
Ans. Cooperation, not individualism.
4. State any two causes of fatigue that may create hindrance in the employee’s performance. (RTP-2.26)
5. SanakLal and Gagan started their career in Wales Limited (a printing press) after going through a rigorous
recruitment process. Since they had no prior work experience, the firm decided to give them one year to
prove themselves. Name the principle of management followed by Wales Limited.
Ans. Stability of tenure of personnel.
6. Which technique is used by Taylor for distinguishing efficient and inefficient workers?
Ans. Differential piece wage system.
Short Answer Type Questions
1. How is the Principle of ‘Unity of Command’ useful to management? Explain briefly. (RTP-2.11)
2. Define scientific management. State any three of its principles. (RTP-2.18)
3. If an organisation does not provide the right place for physical and human resources in an organisation,
which principle is violated? What are the consequences of it?
Ans. Order-Consequences : (i) Inefficient use of resources, (ii) Lack of discipline in the organisation.
4. Explain any four points regarding significance of principles of management. (RTP-2.6)
5. Explain the principle of ‘Scalar Chain’ and gang plank. (RTP-2.14)
6. A production manager at top level in a reputed corporate, Mr. Rathore holds the responsibility for ordering
raw material for the firm. While deciding on the supplier for the financial year 2017-18, he gave the order
to his cousin at a higher price per unit instead of the firm’s usual supplier who was willing to lower the
rates for the order. Which principle of management was violated by Mr. Rathore? What are the positive
impacts of following the above identified principle?
Ans. Subordination of individual interest to general interest. Positive impacts—(i) It ensures efficient and
effective realisation of goals, (ii) It develops the sense of commitment among the employees.
Long Answer Type Questions
1. Explain the Principles of Scientific management given by Taylor. (RTP-2.19)
2. Explain the following Principles of management given by Fayol with examples: (RTP-2.9)
(a) Unity of direction (b) Equity
(c) Espirit de corps (d) Order
(e) Centralisation and decentralization (f) Initiative
3. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’ as enunciated
by Taylor. (RTP-2.20 & 2.23)
4. Discuss the following techniques of Scientific Work Study: (RTP-2.24)
(a) Time Study (b) Motion Study
(c) Fatigue Study (d) Method Study
(e) Simplification and standardisation of work
5. Discuss the differences between the contributions of Taylor and Fayol. (RTP-2.28)
6. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business
environment. [Hint : Explain significance of Principles of Management] (RTP-2.6)

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