NCERT solutions class 12 Business Studies Chapter 2 PRINCIPLES OF MANAGEMENT

Chapter 2: Principles of Management

Part I: Very Short Answer Questions

1. What makes principles of management flexible? Nature of Management Principles

Management principles are highly dynamic and varied. One strict rule cannot be universally applied to all human cases.

Situational Application:

A manager has to carefully assess the specific situation and then modify or determine the best solution to the issue at hand, giving these principles their flexible nature.

2. State the main objective of time study. Objective of Time Study

Time study is undertaken to determine the standard time required by a worker to complete a designated job.

Determining Resource Requirements:

The core benefit of this process is that it helps employers accurately determine the number of human resources required to complete a particular task and effectively formulate their wages.

3. Name the principle that is an extension of the ‘harmony, not discord’. Extension of Harmony

The principle is "Cooperation, not individualism." It is the direct extension of Taylor's principle of ‘Harmony, not discord’.

4. State any two causes of fatigue that may create hindrance in the employee’s performance. Causes of Employee Fatigue

The factors that create hindrances and lead to fatigue in an employee's performance include:

1. Poor Working Relations: Not having a cordial and supportive relationship with the people in superior positions.
2. Overworking: Exceptionally long working hours at the organisation without proper rest intervals.

5. Sanaklal and Gagan started their career in Wales Limited... Since they had no prior work experience, the firm decided to give them one year to prove themselves. Name the principle of management followed. Principle of Stability

Wales Limited has effectively followed Henri Fayol's principle of "Stability of Personnel" (or Stability of Tenure of Personnel) by giving them sufficient time to settle into their roles.

6. Which technique is used by Taylor for distinguishing efficient and inefficient workers? Distinguishing Worker Efficiency

Taylor used the technique of the Differential Piece Wage System.

Mechanism of Action:

Under this system, wages were determined using a set standard. Efficient workers who performed at or above the standard were rewarded with a higher piece rate than those who performed below the standard.

Part II: Short Answer Questions

1. How is the principle of ‘Unity of Command’ useful to management? Explain briefly. Concept of Unity of Command

Unity of command dictates that an employee should receive orders from and be answerable to only one superior. Receiving commands from two or more bosses violates this principle.

Managerial Usefulness:

It eliminates confusion for the employee, which would otherwise lead to instability, conflicts, and disturbances in the workflow. It ensures steady operations and clear lines of authority.

2. Define Scientific Management. State any three of its principles. Definition of Scientific Management

Scientific management, developed by Frederick Winslow Taylor in 1911, focuses on finding the "one best way" of getting work done to maximize efficiency and effectiveness. It involves the use of scientific tools, techniques, and specialized personnel to achieve quality and cost reduction.

Key Principles:

1. Science, Not Rule of Thumb: Replacing the old trial-and-error approach (rule of thumb) with scientifically developed, balanced practices to improve efficiency.
2. Harmony, Not Discord: Fostering a harmonious environment where both managers and workers realize their mutual importance, culminating in a complete "Mental Revolution."
3. Cooperation, Not Individualism: Ensuring managers and workers jointly determine work standards, increasing involvement and productive outcomes.

3. If an organisation does not provide the right place for physical and human resources... which principle is violated? What are the consequences? Principle of Order

In this situation, the Principle of Order is violated. This principle mandates "a place for everything/everyone and everything/everyone in its place."

Consequences of Violation:

Violating this principle causes chaos, massive time wastage in searching for resources, and unnecessary delays in work execution, ultimately resulting in financial loss for the company.

4. Explain any four points regarding the significance of Principles of Management. Significance of Management Principles

1. Guidance for Real-World Problems: Based on years of observation and implementation, these principles guide managers in tackling real-life organizational issues seamlessly.
2. Logical Decision Making: Derived from real situations, they rely on logic and reasoning, helping managers make sound decisions devoid of personal bias.
3. Foundation of Management Education: They serve as the bedrock of management as an academic discipline and offer a basis for further management research and training.
4. Optimum Utilization of Resources: They empower organizations to perform at peak capacity by minimizing wastage of both human and physical resources.

5. Explain the principle of ‘Scalar Chain’ and gangplank. Defining the Communication Hierarchy

Scalar Chain: It is defined as the formal chain of authority and communication that follows a straight line extending from the highest rank (Top Management) to the lowest rank (Workers). It specifies the strict route information must travel.

The Role of Gangplank:

Gangplank is a temporary, alternative communication route used strictly in cases of emergencies. Its primary aim is to shorten the communication route, allowing employees of the same level to communicate directly without rigidly following the hierarchical scalar chain.

6. Mr. Rathore holds the responsibility for ordering raw material... he gave the order to his cousin at a higher price. Which principle was violated? What are the positive impacts of following it? Violation of General Interest

Mr. Rathore blatantly violated the principle of Subordination of Individual Interest to General Interest by prioritizing his family ties (and personal gain) over the firm's financial well-being.

Positive Impacts of Compliance:

1. Establishes harmony in the working environment and fosters a positive corporate culture.
2. Noticeably increases overall employee productivity.
3. Makes employees feel recognized as an integral part of the organization.
4. Ensures the smooth achievement of overarching organizational goals.

Part III: Long Answer Questions

1. Explain the Principles of Scientific management given by Taylor. Taylor's Scientific Framework

Scientific management emphasizes identifying the absolute best method to complete tasks, reducing costs, and boosting quality. The four defining principles are:

1. Science, Not Rule of Thumb: Managers must abandon intuition, guesswork, and trial-and-error. Every task must be scientifically analyzed to determine the single best method of execution.
2. Harmony, Not Discord: A complete "Mental Revolution" is required. Management and workers must abandon hostility and realize they need each other. Management should share gains, and workers should put in their best efforts.
3. Cooperation, Not Individualism: An extension of harmony. Work standards should be jointly determined through mutual cooperation, making workers feel involved and preventing strikes or disputes.
4. Development of Each Person to His Greatest Efficiency: Employees should be scientifically selected for roles that match their capabilities. Proper training must be provided to build their skills, resulting in development for both the worker and the organization.

2. Explain the following Principles of management given by Fayol with examples: (a) Unity of direction (b) Equity (c) Espirit de corps (d) Order (e) Centralisation and decentralisation (f) Initiative Fayol’s Administrative Principles a) Unity of Direction:

Activities with the same objective must have one head and one plan. It prevents overlapping. Example: A company producing cosmetics and medicines should have separate divisions, plans, and managers for each.

b) Equity:

Treating all employees fairly and impartially without discrimination based on religion, caste, or gender. Example: Providing equal pay and opportunities to both male and female workers.

c) Espirit de corps:

Management must promote team spirit, unity, and harmony. Example: A manager using "We" instead of "I" in conversations to foster a sense of belonging.

d) Order:

Ensuring the right people and materials are in the right place at the right time. Example: Having a designated tool room where workers can find their equipment without wasting time.

e) Centralisation and Decentralisation:

Centralisation is concentrating power at the top, while decentralisation is distributing authority downwards. Example: The CEO holding major strategic decisions (Centralisation) while allowing branch managers to handle daily leave approvals (Decentralisation).

f) Initiative:

Workers should be encouraged to develop and carry out their plans for improvement. Example: A suggestion box system where employees are rewarded for cost-saving ideas.

3. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’. Functional Foremanship

This technique is an extension of the principle of division of labor. Taylor believed one foreman couldn't possess all the qualities required to supervise workers perfectly. Thus, he separated planning from execution by creating 8 specialized foremen.

Under the Planning Incharge:

1. Instruction Card Clerk: Drafts instructions for workers.
2. Route Clerk: Specifies the route of production.
3. Time and Cost Clerk: Prepares time and cost sheets.
4. Disciplinarian: Ensures discipline on the factory floor.

Under the Production Incharge:

1. Speed Boss: Ensures timely completion of jobs.
2. Gang Boss: Keeps machines and materials ready for workers.
3. Repair Boss: Ensures machines are in proper working condition.
4. Inspector: Checks the quality of the final output.

Mental Revolution

Mental revolution involves a massive shift in the attitude of both workers and managers. Instead of viewing each other as adversaries competing for a larger share of profits, they must realize their interdependence. By working cooperatively to increase the total size of the profit "pie," both parties naturally benefit.

4. Discuss the following techniques of Scientific Work Study: (a) Time (b) Motion (c) Fatigue (d) Method (e) Simplification and standardisation. Techniques of Scientific Work Study a) Time Study:

Determines the standard time taken to perform a well-defined job. It helps in deciding the number of workers needed and their fair wages.

b) Motion Study:

Analyzes the physical movements (lifting, bending) of workers. The goal is to eliminate unproductive and incidental movements to increase the speed of the task.

c) Fatigue Study:

Determines the amount and frequency of rest intervals required during a task. Proper rest allows workers to regain stamina, preventing drops in productivity.

d) Method Study:

Aims to find the "one best way" to execute a job, from procuring raw materials to the final delivery, minimizing costs and maximizing quality.

e) Standardisation and Simplification:

Standardisation involves setting strict benchmarks for every business activity (processes, raw materials). Simplification involves eliminating unnecessary varieties, sizes, and dimensions of products to save inventory and labor costs.

5. Discuss the differences between the contributions of Taylor and Fayol. Taylor vs. Fayol: A Comparative Analysis

Basis of Comparison	F.W. Taylor	Henri Fayol
Concept Focus	Scientific theory of management.	General theory of administration.
Background	Practicing mechanical engineer.	Mining engineer and top-level executive.
Perspective/Approach	Focuses on the shop-floor level (bottom-up approach).	Focuses on top-level management (top-down approach).
Techniques & Principles	Introduced techniques like work study, functional foremanship.	Introduced 14 universal principles of management (e.g., Equity).
Applicability	Applicable mostly to specialized, production situations.	Universally applicable in all types of organizations.

6. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment. Applicability in the Contemporary Environment

Despite being over a century old, the contributions of Taylor and Fayol remain highly relevant. They act as foundational guidelines for modern managers facing complex situations.

• Decision Making: They provide logic-based frameworks that assist managers in resolving real-world business cases efficiently.
• Resource Optimization: Taylor's scientific techniques are heavily used in modern manufacturing (like Lean and Six Sigma) to improve effectiveness and cut costs.
• Human Behavior: Fayol's focus on Equity, Initiative, and Team Spirit (Espirit de corps) forms the core of modern Human Resource Management (HRM) practices.

7 & 8. Bhasin Limited Case Study: Identify the violated principles, explain them, and suggest remedies including Mukti Consultants' recommendations. Case Analysis: Bhasin Limited a) Principles Violated by the Company:

1. Unity of Command: Subordinates had to work for more than one superior.
2. Division of Work: Divisions were forced to work on multiple products causing overlapping.
3. Discipline: Workers were becoming undisciplined.
4. Espirit de corps: The spirit of teamwork was beginning to wane.
5. Initiative: Workers felt cheated and their initiative declined.

b) Explanation of the Violated Principles:

Unity of Command ensures orders come from one boss to avoid confusion. Division of Work ensures specialization and efficiency. Discipline requires adherence to organizational rules. Espirit de corps fosters team unity. Initiative encourages employees to contribute ideas for growth.

c) Corrective Steps & Application of Scientific Management (Mukti Consultants):

The introduction of scientific management, as recommended by Mukti Consultants, will result in the intended positive outcome if executed with the following precautions and steps:

• Production Planning: Must be implemented systematically to streamline routing and scheduling.
• Functional Foremanship: Should be introduced cautiously to separate planning from execution without confusing the workers; proper training is required.
• Work Study: Implementing Time, Motion, and Fatigue studies will optimize resource utilization and prevent worker exhaustion.
• Standardisation: Setting benchmarks for all activities will eliminate wastage and restore product quality.
• Differential Piece Rate: Should be applied fairly to motivate workers monetarily and differentiate between efficient and inefficient personnel.