Class 12 NCERT Solutions Business Studies – Principles of Management – Free PDF Download
Business Studies Revision Notes for Class 12
Business Studies NCERT Solution for Class 12
CBSE Class 12 Business Studies
NCERT Solutions
Chapter 02 Principles of Management
1. Principles of management are NOT
(a) Universal
(b) Flexible
(c) Absolute
(d) Behavioural
Ans: Principles of management are not absolute. They are just the guidelines for the decision making in the course of management. That is, principles of management are not applied as it is in the real business situations rather they need to be modified by the manager as per the situation and the requirement.
2. How are principles of management formed?
(a) In a laboratory
(b) By experiences of managers
(c) By experiences of customers
(d) By propagation of social scientists
Ans: Principles of management were developed over years by experiences and observations of the managers. Every manager faces varying situations in real business organisations. Based on these experiences, they draw general conclusions and inferences that guide them in their action and decision making in similar situations. That is, the experiences of the managers form the basis of the principles of management.
3. The principles of management are significant because of
(a) Increase in efficiency
(b) Initiative
(c) Optimum utilisation of resources
(d) Adaption to changing technology
Ans: Optimum utilisation of resources entails employing the limited resources (such as capital and labour) to their best possible usage so that maximum benefit can be derived with minimum possible cost. Principles of management help in predicting the cause and effect relationship of the decisions of the managers. Thus, the wastage of resources that may be associated with the hit and trail method can be avoided. Thus, principles of management are significant because of optimum utilisation of resources. Increase in efficiency, initiative and adaptation to changing technology arrives at later stages, ones the resources are fully utilised.
4. Henry Fayol was a
(a) Social Scientist
(b) Mining Engineer
(c) Accountant
(d) Production engineer
Ans: Henry Fayol (1841-1925) was a French mining engineer who started his work in the mining industry at the age of nineteen. Based on his own experience, he developed the theory of business administration. He gave the concept of ‘Administrative Principles’.
5. Which of the following statement best describes the principle of ‘Division of Work’
(a) Work should be divided into small tasks
(b) Labour should be divided
(c) Resources should be divided among jobs
(d) It leads to specialisation
Ans: According to the principle of ‘Division of Work’, the work should be divided into small jobs. This is because of the fact that any complex task can be performed efficiently if it is divided into smaller units and performed by specialists.
6. ‘She/he keeps machines, materials, tools, etc., ready for operations by concerned workers’. Whose work is described by this sentence under functional foremanship
(a) Instruction Card Clerk
(b) Repair Boss
(c) Gang Boss
(d) Route Clerk
Ans: The work of Gang Boss is being described in the given sentence. Gang boss is assigned the task of keeping the machines and tools ready for operations. That is, he has to take care of the materials which are to be used by the working people. On the other hand, repair boss ensures that these machines are in proper working condition. Route clerk is there to watch over the route of production and instruction card clerk assigns the duties of the workers.
7. Which of the following is NOT a Principle of management given by Taylor?
(a) Science, not rule of Thumb
(b) Functional Foremanship
(c) Mamum not restricted output
(d) Harmony not discord
Ans: Among the options given above, Functional Foremanship is not a principle of management rather it is a technique of scientific management as given by Taylor. It comprises of the methods or steps to be taken to achieve a desired goal. On the other hand, the other three are principles of management that acts as guidelines for decision making in the actual practice of the techniques.
8. Management should find ‘One best way’ to perform a task. Which technique of Scientific management is defined in this sentence?
(a) Time Study
(b) Motion Study
(c) Fatigue Study
(d) Method Study
Ans: The technique that is being described in the given sentence is ‘Method Study’. According to the ‘Method Study’ there is always a ‘one best way’ to complete any task. Every task can be performed via best method to gain efficiency. The basic purpose of this study is to reduce the costs to its minimal and increase the productivity to its maximum. Time study, Motion study and Fatigue study aims at standardising the time limits, eliminating the unwanted actions and deciding the break limits, respectively.
9. Which of the following statements best describes ‘Mental Revolution’?
(a) It implies change of attitude
(b) The management and workers should not play the game of one upmanship.
(c) Both management and workers require each other.
(d) Workers should be paid more wages.
Ans: ‘Mental Revolution’, a term given by Taylor implied that the management and workers should change their attitude and thinking towards harmony. Management should take care of the needs and suggestions given by the workers and workers on the other hand, should work to their best capability. This will build a harmonious working environment in the organisation.
10. Which of the following statements is FALSE about Taylor and Fayol?
(a) Fayol was a mining engineer whereas Taylor was a mechanical engineer
(b) Fayol’s principles are applicable in specialised situations whereas Taylor’s principles have universal application.
(c) Fayol’s principles were formed through personal experience whereas Taylor’s principles were formed through experimentation.
(d) Fayol’s principles are applicable at the top level of management whereas Taylor’s principles are applicable at the shop floor.
Ans: The false statement is ‘Fayol’s principles are applicable in specialised situations whereas Taylor’s principles have universal application’. The correct statement in place of this is, ‘ Fayol’s principles are universally applicable whereas Taylor’s principles are applicable only in specialised situation.’
Short Answer Type:
1. How is the principle of ‘Unity of Command’ useful to management? Explain briefly.
The Following are three principles of scientific management.
i.Harmony, Not Discord: According to this principle, the managers and the workers should maintain a harmonious work environment. They should realise that they are dependent on each other. Only if they work in amity, will they be able to perform better. Taylor emphasised on complete mental revolution. That is, the workers should change their attitude and each one should realise others importance.Management should take care of the needs of the workers and workers on the other hand should work to their best efficiency. Both should work in harmony towards the common goals of the organisation.
ii.Science, Not Rule of Thumb: According to Taylor, instead of rule of thumb scientific management practices should be followed. Under the rule of thumb, each manger handles a situation as and when they arise. They used the trial and error method to find solutions to a problem. Taylor proposed that instead of this management practices should be scientific. He suggested that a study of various traditional methods should be done and the best method/solution among them should be adopted and followed by all the managers in the organisation. Such a scientific management greatly reduces the costs and improves efficiency.
iii.Personnel Development: Overall efficiency of the organisation depends on the individual competencies of the employees. Scientific management aimed at improving the working capabilities of the employees to their maximum level. It focused on the training and development of the labourers to raise their productivity.
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: In the stated situation, the Principle of Order is violated. In this principle order does not mean command but it refers to orderly arrangements of men and material that is a fixed place for everything and every one in the organisation. There are certain consequences of violation of these principles:
1.Wastage of time and energy in search of men and material.
2. Not able to contact the people at the right time.
4. Explain any four points regarding significance of Principles of Management.
Ans: Principles of management play an important role in managerial practices. They guide the managers in taking actions and decisions. The following points highlight the significance of Principles of Management
(a) Insights to Reality: Principles of Management are based on years of experimentation and experience. Thus, these principles guide the managers, when they face the real world problems. Managers can use them in different situations to solve the recurring problems.
(b) Logistic Decisions: Decisions regarding management should be taken carefully. They should be based on reasons and proofs rather than beliefs and ignorance. As principles of management were developed from real life problems so, they stand the test of logic and reasoning. Thus, principles of management help the managers in taking logical decisions that are free from personal bias.
(c) Basic Education of Management: These principles form the basic roots of management education. Without them management as a discipline could not have been developed. That is, they form an important part of management curriculum. In addition, they also form the basis of further research on management techniques and methods.
(d) Optimal use of Resources: Principles of management help in the optimum utilisation of the available resources. With principles of management the exact cause and effect relationship of the decisions of the managers can be predicted. Thereby, the wastage of resources that may be associated with the hit and trail method can be avoided.
Thus, by following the principles of management, best possible usage of resources becomes possible such that maximum benefit can be derived with minimum possible cost.
5. Explain the principle of ‘Scalar Chain’ and gang plank.
Ans: Scalar Chain means line of authority or chain of superiors from highest to lowest rank. Fayol insists that this chain must be followed strictly in the organisation. Every information must pass through every key of this chain, no skipping of one key should be allowed. According to scaler chain principle of C wants to contact E he has to move through B – A- D and then E. If this chain is broken then there are chances of communication gap in the organisation but sometimes following scaler chain becomes a long process and if someone important information has to be passed, it gets delayed so in case of emergency, Fayol permitted a short cut in the chain which is called Gang Plank in which Case can directly contact to E.
Long Answer Type:
The following are the principles of scientific management.
(a) Science, not a rule of thumb: According to this principle Taylor insists that each job performed on the organisation should be based on scientific enquiry and not on intuition, experience and hit and miss methods. He says that there must be thinking before doing which is not in case of rule of thumb. Rule of thumb means dictatorship of managers whereas scientific decision are based on cause and effect and scientific measurement of methods and ways of production.
(b) Harmony, not Discord: According to this principle those who work together in an organisation must work in harmony that is with mutual give and take and proper understanding. Generally in every organisation there are two groups of people- workers group and management group and both the groups work as rivals of each other as workers always feel that they are underpaid and are overburdened with the work and management always feels that workers are good for nothing. In this principle Taylor insists that there is a need for both the groups to change their attitudes and outlook for each other.
(c) Cooperation, not Individualism: This principle is the extension of the Harmony not discord. According to this principle work must be carried on in co – operation with each other, with mutual confidence and understanding for each other. Workers and management must work in cooperation.
(d) Personnel Development: Industrial efficiency depends upon the efficiency of workers. Worker’s efficiency depends upon proper training and their selection. Taylor insisted due care should be taken while selecting the employees and after selecting they must be given Job according to their Qualification. Employees must be sent for training from time to time to update their knowledge. This will ensure greatest efficiency and prosperity for both company and workers.
(a) Unity of direction
(b) Equity
(c) Espirit de corps
(d) Order
(e) Centralisation and decentralisation
(f) Initiative
(b)Equity: Equity refers to kind, fair and just treatment to employees. Employees will put their maximum efforts only when they are treated with kindness an justice. Equity means no discrimination on Account of sex, religion, language, caste, belief or nationality.
(c)Espirit de Corps: Management must encourage and promote team spirit, unity, and harmony. This will bring coordination and cooperation in organisation. A manager should replace “I” with “we”. This will give rise to mutual trust and belongingness among team members. It will minimise the need for using penalties.
(d)Order: Orderliness principle focuses on right arrangement of things. Everything and everyone should be at their respective places, in short ‘right people at right place and at right time’. This helps in carrying out the tasks smoothly. For example, if files are kept in a certain order then this will help in locating the file easily when required. Violation of this principle leads to chaos and delay in work.
(e)Centralisation and Decentralisation: Centralisation refers to the consolidation of power and authority to one or only few hands. Here, the decision making power gets reserved to the centre point of an organisation. On the other hand, decentralisation refers to the delegation of authority to more than one level. According to Fayol, the involvement of the employees with the higher authority should be balanced by decentralising the authority to the managers. For example, if the CEO of a company is responsible for decision making for the entire organisation then, this is centralisation of power. On the other hand, if the decision making power is delegated to managers at the middle and lower level then, this will be called decentralisation.
(f)Initiative– According to this principle, workers should be given enough motivation and incentive to work. They should be inspired to come up with suggestions for regarding the work. Although initiatives should be encouraged, but they should be in line with the practices and rules of the organisation. For example, the managers can ask the workers for their inputs over how to increase efficiency. Also, good suggestions can be rewarded.
3. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’ as enunciated by Taylor.
Ans: Functional Foremanship:In this technique Taylor suggested the division of factory in two departments: planning and production department as Taylor felt that workers must be free from the burden of planning and they must concentrate on work and production. To develop specialisation in the productivity, Taylor suggested under each department there must be some functional experts in every aspect of work so Taylor stressed on minimum 8 specialistOr functional expert to supervise and give orders to workers. Each boss will be specialized in one aspect of work and while observing and instructing the worker there will be definitely specialization. So this technique is the extension of principle of division of labour.
The following are the four persons that worked under the planning in-charge.
i.Instruction Card Clerk- To give instructions to the workers.
ii.Route Clerk- To show the route of production.
iii.Time and Cost Clerk- To take care about the time and costs.
iv. Disciplinarian- To ensure that discipline is being maintained.
The following are the four persons that worked under the production in-charge.
i.Speed Boss- To ensure timely completion of tasks
ii.Gang Boss- To keep the machines and tools ready for the workers.
iii. Repair Boss- To ensure proper working of the machines.
iv. Inspector- To control the quality of work done.
Mental Revolution:
The objectives of mental revolution are :
1. Change in mental attitudes of workers and management towards each other.
2. Co-operation between workers and management.
3. Ruling out feeling of suspicion or prejudice from the minds of workers and management to adapt systematic thinking.
In this technique of mental revolution Taylor stressed that there is need to change the attitude of both the groups drastically. He referred to change as a revolution of mind to develop positive thinking and feeling of co –operation for each other.
4. Discuss the following techniques of Scientific Work Study:
(a) Time Study
(b) Motion Study
(c) Fatigue Study
(d) Method Study
(e) Simplification and standardisation of work.
Ans: (a)Time Study–
The technique of time study is conducted to determine or the objectives of time study are:
1. The standard time required to perform a job.
2. Setting up the standard targets for workers.
3. Determining the number of workers in efficient and inefficient categories.
To conduct time study Taylor suggested to observe an average worker when he is performing the job with a stop watch in hand and note down the average time taken by the worker in completion of job. This time should considered the average time for performance of the job. Keeping this time in mind the targets for workers should be fixed and the workers who are able to achieve their targets in standard time are average workers. If the worker is able to achieve target before standard time then he is an efficient worker and if the worker failed to achieve target in standard time then he is an inefficient worker.
(b)Motion Study-To conduct motion study Taylor suggested to observe an average worker when he is performing the job and note down all the movements he is doing.. This technique aims at removing the unwanted actions/motions so that the work can be completed in a lesser time. How many times he is getting up from his place, how many times he is bending down etc. Repeat it for 100 times with different workers. After writing all the movements classify them in productive and unproductive movements and make the strategy to cut down or minimize the unproductive movements.
(c)Fatigue Study– This technique is regarding requirement of rest or break during the work. If a worker works continuously physical and mental fatigue sets. This reduces his/her efficiency. Thus, the worker requires rest or break. Fatigue study identifies the intervals required while completing a task. It suggests that standard break timings should be decided for improving the working performance of workers.
(d)Method Study– This study aims at finding out the best method of completing any work. It takes into account each and every activity involved in the task. It helps in reducing the costs and maximising the satisfaction of the customers. Assembly line production, used by Ford Motors is a popular example of method study.
(e)Simplification and Standardization of Work– Taylor holds up standardization as the very basis of techniques of scientific management. Standardization as the word suggests implies setting of milestones or benchmarks for any work or activity. Various other techniques by Taylor, such as method study, fatigue study and time study are also based on the concept of standardization.
Simplification on the other hand means eliminating any unnecessary diversification in the product. It aims at fuller utilisation of the resources, reducing inventories and increasing the turnover. It helps in reducing the costs of labour and machines. This technique helps in optimum utilisation of resources and removes the unnecessary costs related to work.
5. Discuss the differences between the contributions of Taylor and Fayol.
Ans:
| Basis of Difference | Taylor’s Contributions | Fayol’s Contributions |
| Contribution | Scientific Management or ‘Taylorism’ Theory was given by Taylor in 1911. | General Theory of Administration or ‘Fayolism’ was given by Fayol in 1916 |
| Personality | Taylor was a mechanical engineer/scientist. | Fayol was a mining engineer/practitioner. |
| Principles and Techniques | Taylor introduced Principles of Scientific Management and Functional Foreman-ship along with the techniques such as method study, motion study, etc. | Fayol introduced 14 Principles of Management such as Order, Equity, Espirit de Corps, etc. |
| Application of Principles | Principles are applicable to specialized situations. | Principles are accepted everywhere and are universal in nature. |
| Perspective | Taylor’s principles are based on improving the conditions of floor level workers first. | Fayol’s principles are based on the functions of the higher level managers. |
| Emphasis and Focus | Focus was on improving the overall administration of an organization. | Focus was on increasing the productivity along with the worker’s efficiency. |
| Title | Taylor is called ‘Father of Scientific Management’ | Fayol is called ‘Father of General Management’ |
6. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.
Ans: Taylor’s and Fayol’s principles are complementary to each other because both have relevance in the business due to following reasons:
1. The main aim of Taylor’s as well as Fayol’s principles is maximising the efficiency.
2. Both insist on cooperation between employees and employers.
3. Both give more importance to organisational interest over the individual interest.
4. Both suggested division of work for specialisation.
5. The principles of both are used as basis for research in the field of management studies.
