This page contains the NCERT Business Studies class 12 chapter 2 PRINCIPLES OF MANAGEMENT from Part 1 Principles and Functions of Management. You can find the solutions for the chapter 2 of NCERT class 12 Business Studies, for the Short Answer Questions, Long Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 12 Business Studies related topic PRINCIPLES OF MANAGEMENT question and answers.
Very Short Answer Type:
1. What makes principles of management flexible?
The principles of management are flexible because they are not rigid prescriptions and can be modified by the manager depending on the situation.
2. State the main objective of time study.
Time Study: The main objective of time study is to determine the standard time taken to perform a well-defined job, which helps in determining the number of workers to be employed, framing suitable incentive schemes, and determining labour costs.
3. Name the principle that is an extension of the ‘harmony, not discord’.
The principle that is an extension of the ‘harmony, not discord’ is Cooperation, Not Individualism
4. State any two causes of fatigue that may create hindrance in the employee’s performance.
Two causes of fatigue that may create hindrance in the employee’s performance are
long working hours and
having uncordial relations with the boss
or bad working conditions etc.
Such hindrances in good performance should be removed
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.
Wales Limited followed the “Stability of Personnel” principle of management, which emphasizes that personnel should be given a reasonable time to show results after their selection.
6. Which technique is used by Taylor for distinguishing efficient and inefficient workers?
Taylor used the “Differential Piece-Rate System” as a technique to distinguish between efficient and inefficient workers.
Short Answer Type:
1. How is the Principle of ‘Unity of Command’ useful to management? Explain briefly.
The Principle of ‘Unity of Command’ is useful to management as it states that each employee should receive orders from and be accountable to only one superior. This ensures clarity in communication, prevents confusion, and maintains discipline and stability in the organization. By adhering to this principle, authority is not undermined, order remains undisturbed, and the organizational structure remains stable.
2. Define scientific management. State any three of its principles.
Scientific Management: Scientific management is an approach that emphasizes using scientific methods to increase business efficiency.
Three key principles are:
Science not Rule of Thumb: This advocates using scientific methods over traditional methods to determine the best way of doing a job.
Harmony, Not Discord:This emphasizes the need for harmony between management and workers for mutual benefit.
Cooperation, Not Individualism:This principle underscores the importance of mutual cooperation between labor and management for the organization’s success.
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?
Violation of the Principle of Order: If an organisation does not provide the right place for physical and human resources, it violates Fayol’s principle of “Order.” According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” The principle of order essentially means orderliness.
Consequences of violating this principle include hindrances in the activities of the business or factory, leading to decreased productivity and efficiency.
4. Explain any four points regarding significance of principles of management.
Significance of Principles of Management:
Development of Management Thought: Fayol’s principles bridge the gap between workers’ efficiency and managerial efficiency, highlighting the importance of both in the classical school of management.
Guidance to Managers: These principles, like “Division of Work” and “Authority and Responsibility,” provide clear directions to managers, ensuring effective management and decision-making.
Enhancement of Managerial Efficiencies: Fayol’s principles have had a lasting impact on improving managerial efficiencies, emphasizing the balance between authority, responsibility, and discipline.
Foundation for Modern Management: Fayol’s principles are foundational in classical management theory, influencing and shaping contemporary management practices and thinking.
5. Explain the principle of ‘Scalar Chain’ and gang plank.
The principle of ‘Scalar Chain’ refers to the formal lines of authority from the highest to the lowest ranks in an organization. According to Fayol, organizations should have a chain of authority and communication that runs from top to bottom and should be adhered to by both managers and subordinates. However, in situations of emergency, Fayol introduced the concept of ‘Gang Plank’, a shorter route of communication that allows direct communication between two employees on the same level without following the scalar chain. This ensures that communication is not delayed during critical times.
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?
Mr. Rathore violated the principle of ‘Subordination of Individual Interest to General Interest’. According to Fayol, the interests of an organisation should take priority over the interests of any one individual employee. By following this principle, larger interests of the workers and stakeholders are prioritized over individual interests, ensuring that the objectives of the organization are met without any prejudice. Adhering to this principle also ensures that there is no misuse of power for individual or family benefits, thereby maintaining the trust and integrity of the organization.
Long Answer Type/ Essay Type:
1. Explain the Principles of Scientific management given by Taylor.
Taylor’s Scientific Management
Fredrick Winslow Taylor introduced the concept of Scientific Management as a method to improve industrial efficiency. He believed in a systematic approach to management rather than the traditional ‘rule of thumb’. Taylor’s principles were based on the scientific method, emphasizing efficiency, cooperation, and worker development.
Principles of Scientific Management
Science not Rule of Thumb: Taylor believed in replacing the traditional ‘rule of thumb’ method with a scientific approach. He emphasized the need to study and analyze work to determine the most efficient way to perform specific tasks. By breaking down tasks and studying them scientifically, one could find the best method to maximize efficiency.
Harmony, Not Discord: Taylor emphasized the importance of harmony between management and workers. He believed that conflicts between the two were unproductive and that both parties should understand the importance of the other. Mutual respect and understanding would lead to better efficiency and productivity.
Cooperation, Not Individualism: Building on the previous principle, Taylor stressed the need for cooperation between management and workers. Instead of working in isolation or in competition, both parties should work together, sharing ideas and suggestions. Cooperation would lead to a more productive and efficient work environment.
Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity: Taylor believed in the importance of worker development. He felt that workers should be selected based on their abilities and then trained to perform their tasks in the most efficient manner. By ensuring that each worker was trained and working at their highest potential, both the company and the workers would prosper.
In conclusion, Taylor’s Scientific Management principles were revolutionary for their time and laid the foundation for modern management practices. They emphasized the importance of efficiency, cooperation, and worker development, leading to increased productivity and prosperity for both companies and their employees.
2. Explain the following Principles of management given by Fayol with examples:
Unity of direction
Espirit de corps
Centralisation and decentralisation
Fayol’s Principles of Management
Unity of Direction: All units of an organisation should move towards the same objectives through coordinated and focused efforts. For instance, if a company manufactures both motorcycles and cars, it should have separate divisions for each, with distinct plans and resources, ensuring that the operations of the two divisions do not overlap.
Equity: Managers should treat all employees fairly and justly. For example, there should be no discrimination against anyone based on sex, religion, language, or nationality. In multinational corporations today, people of various nationalities work together in a discrimination-free environment, ensuring equal opportunities for all.
Esprit De Corps: Management should foster a team spirit of unity and harmony among employees. For instance, a manager should use “We” instead of “I” in conversations to promote teamwork, creating a sense of mutual trust and belongingness among team members, reducing the need for penalties.
Order: Everything should be in its designated place, ensuring efficiency. This means that there should be an orderliness in the organisation, and if everything is in its place, there will be no hindrance in operations. For example, in a company, specific departments like finance, marketing, and production should have designated spaces and personnel to ensure smooth operations.
Centralisation and Decentralisation: Centralisation refers to the concentration of decision-making authority, while decentralisation is its dispersal among multiple individuals. The balance between the two depends on the company’s circumstances. For instance, in a national context, panchayats in India have been granted more powers to decide and spend funds, showcasing decentralisation at the national level.
Initiative: Employees should be encouraged to take the first step and come up with plans for improvements. Initiative means acting with self-motivation. For example, a good company might have an employee suggestion system where initiatives or suggestions leading to significant cost or time reductions are rewarded.
In conclusion, Fayol’s principles of management provide a comprehensive framework for effective and efficient organisational operations, emphasizing unity, fairness, teamwork, order, decision-making balance, and proactive initiative.
2. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’ as enunciated by Taylor.
Technique of Functional Foremanship: In Taylor’s scientific management, he emphasized the importance of the foreman in the factory system. Recognizing that no single person could possess all the qualities of a good foreman, Taylor introduced the concept of functional foremanship. This involved dividing the responsibilities of a foreman among eight specialists. Under this system, planning and execution functions were separated. For instance, under the planning incharge, there were roles like instruction card clerk, route clerk, time and cost clerk, and a disciplinarian, each responsible for specific tasks. Similarly, under the production incharge, there were roles like speed boss, gang boss, repair boss, and inspector. This division ensured that each specialist could focus on their specific function, leading to increased efficiency and productivity.
Concept of Mental Revolution: Taylor believed that for scientific management to be successful, there needed to be a change in mindset, which he termed as “mental revolution.” This involved a shift in the attitude of both workers and management towards each other. Instead of viewing each other as competitors, they should see each other as collaborators working towards a common goal. Taylor emphasized that both parties should aim to increase the size of the surplus, and the resultant benefits should be shared. This cooperative approach would eliminate conflicts and ensure the prosperity of the business. In essence, mental revolution called for mutual respect and understanding, emphasizing that the well-being of workers and the success of the business were interlinked.
3. Discuss the following techniques of Scientific Work Study:
Simplification and standardisation of work
Time Study: Time Study is a technique that determines the standard time taken to perform a well-defined job. By using time measuring devices for each element of a task, the standard time is established by taking multiple readings. This method helps in deciding the number of workers needed, framing appropriate incentive schemes, and determining labour costs. For instance, if it’s observed that a worker takes 20 minutes to make a cardboard box, then in an hour, they would make 3 boxes.
Motion Study: Motion Study involves analyzing the movements, such as lifting or changing positions, undertaken during a specific job. The goal is to eliminate unnecessary movements, ensuring the job is completed efficiently in less time. Taylor and his associate Frank Gailberth, for example, reduced motions in brick layering from 18 to just 5, leading to a fourfold increase in productivity.
Fatigue Study: Fatigue Study focuses on the physical and mental exhaustion experienced by workers if they don’t rest while working. By determining the amount and frequency of rest intervals required for a task, this study aims to boost productivity. Factors causing fatigue can range from long working hours to poor working conditions, and addressing these can enhance a worker’s performance.
Method Study: The objective of Method Study is to identify the best way to perform a job. Every activity, from procuring raw materials to delivering the final product to the customer, is part of this study. Taylor introduced the assembly line concept using method study, which was later successfully adopted by companies like Ford Motor Company.
Simplification and Standardisation of Work: Taylor was a staunch supporter of standardisation, which involves setting benchmarks for every business activity, be it processes, raw materials, or working conditions. The goals of standardisation include reducing products to fixed types and establishing standards of excellence. On the other hand, simplification seeks to eliminate unnecessary product varieties, leading to cost savings and better equipment utilization. Large companies like Nokia and Toyota have effectively implemented these techniques, as evident from their significant market shares.
4. Discuss the differences between the contributions of Taylor and Fayol.
Basis of Difference
F. W. Taylor
Focused on the top level of management.
Concentrated on the shop floor level of a factory.
Unity of Command
A staunch proponent, believing in one superior.
Did not deem it as crucial; under functional foremanship, a worker received orders from eight specialists.
Principles were universally applicable.
Principles were tailored for specialized situations.
Basis of Formation
Derived from his personal experiences.
Based on his systematic observations and experimentation.
Aimed at improving overall administration.
Primarily focused on increasing productivity.
Was a practitioner in the field of management.
Approached management from a scientific perspective.
Presented a General Theory of Administration.
Introduced and championed the concept of Scientific Management.
5. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.
The relevance of Taylor and Fayol’s contributions in the contemporary business environment is as follows:
Relevance of F. W. Taylor’s contributions:
Efficiency and Productivity: In today’s competitive business environment, the emphasis on efficiency and productivity remains paramount. Taylor’s principles, such as time study and motion study, have evolved but still influence areas like operations management, lean manufacturing, and Six Sigma.
Employee Training: Taylor’s emphasis on training workers to ensure they are best suited for their roles is mirrored in today’s emphasis on continuous professional development and training programs.
Task Specialization: While the modern workplace values multi-skilling, there are still many areas, especially in manufacturing and assembly lines, where task specialization derived from Taylor’s principles is applied.
Performance-based Rewards: Taylor’s differential piece-rate system laid the foundation for today’s performance-based bonuses and incentives.
Relevance of Henri Fayol’s contributions:
Management Functions: Fayol’s five functions of management – planning, organizing, commanding, coordinating, and controlling – are still taught in management courses worldwide and serve as the foundation for managerial practices in many organizations.
Hierarchy and Structure: While many modern organizations are moving towards flatter structures, the hierarchical structure Fayol emphasized is still prevalent, especially in large corporations.
Unity of Command: The principle that an employee should have only one direct supervisor or manager is still considered a best practice in many organizations to prevent confusion and conflicting instructions.
Decentralization: Fayol’s advocacy for decentralization is more relevant today than ever, with many businesses adopting decentralized structures and even decentralized autonomous organizations (DAOs) emerging in the digital space.
Esprit de Corps: The emphasis on team spirit and unity is a core value for many contemporary businesses, especially with the rise of team-based projects and agile methodologies.
In conclusion, while the business environment has evolved significantly since the times of Taylor and Fayol, their foundational principles and contributions continue to influence modern management practices and theories. Their emphasis on efficiency, structure, and worker well-being are concepts that remain relevant and are continually adapted to fit the contemporary business landscape.
6. ‘Bhasin’ limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was expanding due to good quality and reasonable prices. Also with more people working the market for processed food was increasing. New players were also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which had characterized the company, previously was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease. Actually the company had implemented changes without creating the required infrastructure.
Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
Explain these principles in brief.
What steps should the company management take in relation to the above principles to restore the company to its past glory?
a. Principles of Management Violated by ‘Bhasin’ Limited:
Division of Work
Unity of Command
Unity of Direction
Esprit de Corps
Stability of Tenure of Personnel
b. Explanation of these principles:
Division of Work: This principle emphasizes that work specialization leads to faster and more efficient output. When each worker specializes in one task, proficiency increases, leading to increased productivity.
Unity of Command: According to this principle, an employee should receive orders from one superior only. This prevents confusion, conflicts, and overlapping of responsibilities.
Unity of Direction: This principle suggests that there should be one head and one plan for a group of activities with the same objective. This ensures consistency and clarity in operations.
Esprit de Corps: This principle emphasizes the importance of team spirit and camaraderie among staff members. Unity and mutual respect are the strengths of an organization.
Stability of Tenure of Personnel: Employees should not be moved around frequently. A stable tenure fosters organizational growth as employees become more efficient by understanding their department’s operations deeply.
Initiative: Workers should be encouraged to take initiatives in their work. This boosts their morale and motivates them to work efficiently.
c. Steps the Company Management Should Take:
Reorganize Work: The company should ensure that tasks are clearly divided and specialized. Each worker should be assigned a specific task based on their expertise.
Clear Reporting Relationships: Ensure that each employee has only one direct superior from whom they receive instructions to avoid confusion.
Unified Direction: Instead of making divisions work on multiple products, they should be given a clear direction with one plan and one head for similar activities.
Team Building Activities: Organize team-building exercises and workshops to restore the spirit of teamwork and unity among the employees.
Stable Positions: Avoid frequent shifting of employees from one job role to another. Let them settle and become experts in their respective roles.
Encourage Employee Feedback: Create a platform where employees can share their ideas and suggestions. This will make them feel valued and boost their initiative.
By implementing these steps and adhering to Fayol’s principles, ‘Bhasin’ Limited can hope to regain its efficiency, improve product quality, and restore its market position.
7. (Further information related to the above question 6) The management of company Bhasin Limited now realised its folly. In order to rectify the situation it appointed a management consultant -Mukti Consultants – to recommend a restructure plan to bring the company back on the rails. Mukti Consultants undertook a study of the production process at the plant of the company Bhasin Limited and recommended the following changes —
The company should introduce scientific management with regard to production.
Production Planning including routing, scheduling, dispatching and feedback should be implemented.
In order to separate planning from operational management ’Functional foremanship’ should be introduced.
‘Work study’ should be undertaken to optimise the use of resources.
‘Standardisation’ of all activities should be implemented to increase efficiency and accountability.
To motivate the workers ‘Differential Piece Rate System’ should be implemented.
(The above changes should be introduced apart from the steps recommended as an answer to Part c – case problem 6 above.)
It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.
Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome?
What precautions should the company undertake to implement the changes?
Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.
a. Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome?
Yes, the introduction of scientific management as recommended by Mukti Consultants is likely to result in the intended outcome. Scientific management, as propounded by F.W. Taylor, focuses on increasing productivity through observations and experimentation. By introducing scientific management with regard to production, Bhasin Limited aims to optimize the use of resources, standardize activities, and increase efficiency and accountability. This approach, combined with other techniques like production planning, functional foremanship, work study, and the differential piece rate system, can lead to a radical transformation in the company’s operations.
b. What precautions should the company undertake to implement the changes?
Before implementing the changes, Bhasin Limited should ensure:
Thorough Training: Employees should be adequately trained to understand and adapt to the new techniques and processes.
Effective Communication: The purpose and benefits of the changes should be clearly communicated to all stakeholders, especially the employees, to ensure buy-in and cooperation.
Gradual Implementation: Instead of introducing all changes at once, a phased approach can help in smooth transition and addressing any issues that arise.
Feedback Mechanism: A system to gather feedback from employees can help in identifying challenges and making necessary adjustments.
c. Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.
Scientific Management: This technique, rooted in F.W. Taylor’s approach, focuses on increasing productivity. Bhasin Limited should ensure that the principles of scientific management are applied in a manner that suits the company’s specific needs and challenges.
Production Planning: Implementing routing, scheduling, dispatching, and feedback will streamline the production process. The company should ensure that there’s a dedicated team to oversee this and that they’re equipped with the necessary tools and software.
Functional Foremanship: Introducing functional foremanship, where a worker receives orders from multiple specialists, can improve efficiency. However, Bhasin Limited should ensure that this doesn’t lead to confusion or conflicts, a challenge F.W. Taylor didn’t consider significant.
Work Study: Undertaking a work study will help in optimizing resource use. The company should ensure that the study is comprehensive, covering all aspects of the production process, and that the findings are implemented effectively.
Standardisation: Standardizing all activities will increase efficiency and accountability. Bhasin Limited should ensure that the standards set are realistic, achievable, and in line with the company’s goals.
Differential Piece Rate System: Implementing this system will motivate workers by rewarding them based on their productivity. The company should ensure that the rates are set fairly and that the system doesn’t lead to undue pressure or compromise on product quality.