BUSINESS STUDIES MASTER

 

CHAPTER 2: PRINCIPLES OF MANAGEMENT-REVISION NOTE

1. Meaning of Principles of Management

Principles of management are general guidelines for managerial decision-making and behaviour. They help managers improve efficiency and deal with managerial problems.

2. Management Principles vs Scientific Principles

Basis	Management Principles	Scientific Principles
Nature	Flexible	Exact
Application	Depends on situation	Same result every time
Behaviour	Related to human behaviour	Related to physical science
Example	Division of Work	Law of Gravity

3. Principles vs Techniques vs Values

Basis	Principles	Techniques	Values
Meaning	Guidelines for decisions	Methods of doing work	Moral beliefs
Example	Unity of Command	Budgeting	Honesty

4. Evolution of Management Principles

Management principles developed gradually through experience and research.
Important contributors: Max Weber, Elton Mayo, Peter Drucker, F.W. Taylor, Henri Fayol.

Taylor → Scientific Management
Fayol → Administrative Management

5. Nature of Principles of Management

Memory Code → U-GIFTED

• U – Universal applicability
• G – General guidelines
• I – Formed by practice and experimentation
• F – Flexible
• T – Mainly behavioural
• E – Cause and effect relationship
• D – Contingent (depends on situation)

6. Significance of Principles of Management

Memory Code → ROADS

• R – Reality insights
• O – Optimal utilisation of resources
• A – Adaptation to environment
• D – Scientific decision making
• S – Social responsibility

7. Henri Fayol

• French industrialist
• Father of Administrative Management
• Book: General and Industrial Management
• Gave 14 Principles of Management

Fayol’s Principles of Management

1. Division of Work – Work divided into specialised tasks.
2. Authority and Responsibility – Right to give orders must match responsibility.
3. Discipline – Employees must follow rules.
4. Unity of Command – One employee receives orders from one boss.
5. Unity of Direction – One plan and one head for similar activities.
6. Subordination of Individual Interest to General Interest – Organisation’s interest first.
7. Remuneration of Employees – Fair wages to employees.
8. Centralisation and Decentralisation – Proper balance of authority.
9. Scalar Chain – Clear line of authority from top to bottom.
10. • Gang Plank: Direct communication between two employees at same level in urgent situations.
11. Order – Right person and material in the right place.
12. Equity – Fair and kind treatment of employees.
13. Stability of Tenure – Job security for employees.
14. Initiative – Encourage employees to take ideas and actions.
15. Esprit de Corps – Promote team spirit.

Taylor’s Scientific Management

Father: F.W. Taylor | Book: Principles of Scientific Management (1911)
Meaning: Using scientific methods to increase efficiency and productivity.

Principles of Scientific Management

• Science, Not Rule of Thumb
• Harmony, Not Discord
• Cooperation, Not Individualism
• Development of Each and Every Person to His Greatest Efficiency

Techniques of Scientific Management

1. Functional Foremanship
Supervision divided among specialised supervisors.

Planning: Route Clerk, Instruction Card, Time & Cost, Disciplinarian.

Production: Gang Boss, Speed Boss, Repair Boss, Inspector.

2. Standardisation & Simplification: Standards for tools/methods; remove unnecessary varieties.

3. Method Study: Find "one best way" to reduce cost & increase efficiency.

4. Motion Study: Eliminate unnecessary movements to reduce fatigue.

5. Time Study: Determines standard time for a job.

6. Fatigue Study: Identifies rest intervals needed.

7. Differential Piece Wage: Higher efficiency → higher wage; Lower efficiency → lower wage.

Ultra-Fast Exam Memory Codes

Nature → U-GIFTED | Significance → ROADS
Fayol → 14 Principles | Taylor → 4 Principles + 7 Techniques

EXAM REVISION MASTER INDEX

Prepared by Rathin Kumar Bardhan | Class XII Business Studies Series

(c)  2026-27