Important Questions : Principles of Management | EduRev Notes

Class 12 : Important Questions : Principles of Management | EduRev Notes

 Page 1


 
CHAPTER - 2 
 
PRINCIPLES OF MANAGEMENT 
 
CONCEPT MAPPING 
 
Concept :   Principles of management are general guidelines which can be used 
under certain situations. 
 
 
Nature :   (a) universal applicability (b) formed by practice (c) flexible (d) 
mainly behavioural (e) cause and effect relationships (f) general guidelines contingent 
 
 
Importance:   (a) useful insights into reality (b) optimum utilisation of resources (c) 
scientific decisions (d) meeting changing environment (e) management 
training and research (f) fulfilling social responsibility 
 
 
Principles of Scientific Management : (a) science not rule of thumb (b) harmony 
not discord (c) cooperation not individualism (d) maximum not 
restricted output (e) development of each person to greatest efficiency. 
 
 
Techniques of Scientific Management: (a) functional foremanship (b) differential 
piece rate system (c) work study - time study, motion study, 
fatigue study, method study (d) standardisation and simplification 
of work. 
 
 
Fayol's Principles : (a) division of work (b) authority and responsibility (c) 
discipline (d) unity of command (e) unity of direction (f) 
subordination of individual interest to common interest   (g) 
remuneration (h) centralisation and decentralisation (i) scalar chain 
(j) order (k) equity (I) stability of tenure (m) initiative (n) esprit de 
corps 
 
Taylor vs. Fayol : Their contributions are complementary in nature despite several 
differences. 
 
 
KEY CONCEPTS IN A NUTSHELL: 
 
1. MEANING: - The principles are broad statement of fundamental truth 
which provide guide lines for management decision and action. These 
guidelines are derived through experimentation and observation 
 
 
 
2. NATURE OF PRINCIPLES OF MANAGEMENT 
 
Page 2


 
CHAPTER - 2 
 
PRINCIPLES OF MANAGEMENT 
 
CONCEPT MAPPING 
 
Concept :   Principles of management are general guidelines which can be used 
under certain situations. 
 
 
Nature :   (a) universal applicability (b) formed by practice (c) flexible (d) 
mainly behavioural (e) cause and effect relationships (f) general guidelines contingent 
 
 
Importance:   (a) useful insights into reality (b) optimum utilisation of resources (c) 
scientific decisions (d) meeting changing environment (e) management 
training and research (f) fulfilling social responsibility 
 
 
Principles of Scientific Management : (a) science not rule of thumb (b) harmony 
not discord (c) cooperation not individualism (d) maximum not 
restricted output (e) development of each person to greatest efficiency. 
 
 
Techniques of Scientific Management: (a) functional foremanship (b) differential 
piece rate system (c) work study - time study, motion study, 
fatigue study, method study (d) standardisation and simplification 
of work. 
 
 
Fayol's Principles : (a) division of work (b) authority and responsibility (c) 
discipline (d) unity of command (e) unity of direction (f) 
subordination of individual interest to common interest   (g) 
remuneration (h) centralisation and decentralisation (i) scalar chain 
(j) order (k) equity (I) stability of tenure (m) initiative (n) esprit de 
corps 
 
Taylor vs. Fayol : Their contributions are complementary in nature despite several 
differences. 
 
 
KEY CONCEPTS IN A NUTSHELL: 
 
1. MEANING: - The principles are broad statement of fundamental truth 
which provide guide lines for management decision and action. These 
guidelines are derived through experimentation and observation 
 
 
 
2. NATURE OF PRINCIPLES OF MANAGEMENT 
 
 
1. Universal application - can be applied to all kind of organisations, 
irrespective of their size and nature. 
 
2. General guidelines - the formulated guidelines to action which need to be 
adjusted and used as per the demands of the situation. 
 
3. Formed by practice and experimentation - derived through 
experimentation and Observation. 
 
4. Flexible - principles are not rigid like science but are modified according to the 
business environment needs. 
 
5. Behavioural - the principles aim to influence the unpredictable, complex and 
dynamic human behaviour. 
 
6. Cause and effect relation - they aid in predicting the outcome of management 
actions. 
 
7. Contingent - the management principles are dependent upon the prevailing 
Conditions/situations at that particular time hence amended accordingly. 
 
 
3. SIGNIFICANCE/ IMPORTANCE OF MANAGEMENT PRINCIPLES 
 
i. Provides managers with useful insights into reality - through improved 
knowledge, ability, understanding and improved guidance to the managers. 
 
ii. Optimum utilisation of resources - and effective administration through 
coordinated use of physical, financial and human resources. 
 
iii.   Scientific decision - they lend to be more realistic, thoughtful, justifiable 
and free from personal bias. 
 
iv. Meet the changing environmental requirements - by providing effective 
and dynamic leadership in implementing changes. 
 
v. Fulfils social responsibility - guides the manager in fulfilling the social 
responsibility. 
 
vi.   Management training, education and research - the principles help in 
increasing knowledge which is used as the basis for management training 
and research. 
 
 
4. FAYOL’S PRINCIPLES OF MANAGEMENT 
 
1. Division of labour - work could be divided into small specialised task and 
performed by a trained specialist 
 
2. Authority and responsibility - there must be a right balance between 
authority (right to give orders) and responsibility (obligation to perform 
the assigned task). 
3. Discipline - obedience to organisation rules and employment agreement. 
 
Page 3


 
CHAPTER - 2 
 
PRINCIPLES OF MANAGEMENT 
 
CONCEPT MAPPING 
 
Concept :   Principles of management are general guidelines which can be used 
under certain situations. 
 
 
Nature :   (a) universal applicability (b) formed by practice (c) flexible (d) 
mainly behavioural (e) cause and effect relationships (f) general guidelines contingent 
 
 
Importance:   (a) useful insights into reality (b) optimum utilisation of resources (c) 
scientific decisions (d) meeting changing environment (e) management 
training and research (f) fulfilling social responsibility 
 
 
Principles of Scientific Management : (a) science not rule of thumb (b) harmony 
not discord (c) cooperation not individualism (d) maximum not 
restricted output (e) development of each person to greatest efficiency. 
 
 
Techniques of Scientific Management: (a) functional foremanship (b) differential 
piece rate system (c) work study - time study, motion study, 
fatigue study, method study (d) standardisation and simplification 
of work. 
 
 
Fayol's Principles : (a) division of work (b) authority and responsibility (c) 
discipline (d) unity of command (e) unity of direction (f) 
subordination of individual interest to common interest   (g) 
remuneration (h) centralisation and decentralisation (i) scalar chain 
(j) order (k) equity (I) stability of tenure (m) initiative (n) esprit de 
corps 
 
Taylor vs. Fayol : Their contributions are complementary in nature despite several 
differences. 
 
 
KEY CONCEPTS IN A NUTSHELL: 
 
1. MEANING: - The principles are broad statement of fundamental truth 
which provide guide lines for management decision and action. These 
guidelines are derived through experimentation and observation 
 
 
 
2. NATURE OF PRINCIPLES OF MANAGEMENT 
 
 
1. Universal application - can be applied to all kind of organisations, 
irrespective of their size and nature. 
 
2. General guidelines - the formulated guidelines to action which need to be 
adjusted and used as per the demands of the situation. 
 
3. Formed by practice and experimentation - derived through 
experimentation and Observation. 
 
4. Flexible - principles are not rigid like science but are modified according to the 
business environment needs. 
 
5. Behavioural - the principles aim to influence the unpredictable, complex and 
dynamic human behaviour. 
 
6. Cause and effect relation - they aid in predicting the outcome of management 
actions. 
 
7. Contingent - the management principles are dependent upon the prevailing 
Conditions/situations at that particular time hence amended accordingly. 
 
 
3. SIGNIFICANCE/ IMPORTANCE OF MANAGEMENT PRINCIPLES 
 
i. Provides managers with useful insights into reality - through improved 
knowledge, ability, understanding and improved guidance to the managers. 
 
ii. Optimum utilisation of resources - and effective administration through 
coordinated use of physical, financial and human resources. 
 
iii.   Scientific decision - they lend to be more realistic, thoughtful, justifiable 
and free from personal bias. 
 
iv. Meet the changing environmental requirements - by providing effective 
and dynamic leadership in implementing changes. 
 
v. Fulfils social responsibility - guides the manager in fulfilling the social 
responsibility. 
 
vi.   Management training, education and research - the principles help in 
increasing knowledge which is used as the basis for management training 
and research. 
 
 
4. FAYOL’S PRINCIPLES OF MANAGEMENT 
 
1. Division of labour - work could be divided into small specialised task and 
performed by a trained specialist 
 
2. Authority and responsibility - there must be a right balance between 
authority (right to give orders) and responsibility (obligation to perform 
the assigned task). 
3. Discipline - obedience to organisation rules and employment agreement. 
 
 
4. Unity of command - receive orders from one boss. 
 
5. Unity of Direction - all the units of the organisation should aim and move 
towards achieving the organisational goal. 
 
6. Subordination of individual interest to general interest - the 
organisation interest to be prioritised over individual interest. 
 
7. Remuneration - pay should be fair and satisfying to both employee 
and the organisation. 
 
8. Centralisation and decentralisation - there should be a proper balance 
between centralisation (concentration of decision making powers with top 
management) and decentralisation (dispersal of decision making power 
among more than one person). 
 
9. Scalar chain - orders or communication should pass from top to bottom 
and follow the official line of command. 
 
10. Orders - A place for everything/ everyone and every one in its place 
 
11.  Equality - kindness, empathy and justice in the behaviour of manager towards 
workers. 
 
12. Tenure stability - frequent displacement of employee from their position 
should be avoided. They should be given sufficient time to show their 
results 
 
13.  Initiative - Employees to be encouraged to develop and carry out their 
improvement plans 
 
14. Espirit de corps - need for team work, spirit and harmony. 
 
 
5. SCIENTIFIC MANAGEMENT:  
Meaning:Conduct of business activities according to standardised tools, 
methods and trained personal so as to have increased output through effective 
and optimum utilisation of resources. Hence it stresses that there is always one 
best way of doing things. 
 
Principles of Scientific Management 
 
1.  Science not rule of thumb - 
 
There should be scientific study and analysis of each element of job rather than 
adopting old rule of the thumb approach on a hit and miss method. 
Encourage “thinking before doing”. 
 
2.  Harmony not discord - 
 
Page 4


 
CHAPTER - 2 
 
PRINCIPLES OF MANAGEMENT 
 
CONCEPT MAPPING 
 
Concept :   Principles of management are general guidelines which can be used 
under certain situations. 
 
 
Nature :   (a) universal applicability (b) formed by practice (c) flexible (d) 
mainly behavioural (e) cause and effect relationships (f) general guidelines contingent 
 
 
Importance:   (a) useful insights into reality (b) optimum utilisation of resources (c) 
scientific decisions (d) meeting changing environment (e) management 
training and research (f) fulfilling social responsibility 
 
 
Principles of Scientific Management : (a) science not rule of thumb (b) harmony 
not discord (c) cooperation not individualism (d) maximum not 
restricted output (e) development of each person to greatest efficiency. 
 
 
Techniques of Scientific Management: (a) functional foremanship (b) differential 
piece rate system (c) work study - time study, motion study, 
fatigue study, method study (d) standardisation and simplification 
of work. 
 
 
Fayol's Principles : (a) division of work (b) authority and responsibility (c) 
discipline (d) unity of command (e) unity of direction (f) 
subordination of individual interest to common interest   (g) 
remuneration (h) centralisation and decentralisation (i) scalar chain 
(j) order (k) equity (I) stability of tenure (m) initiative (n) esprit de 
corps 
 
Taylor vs. Fayol : Their contributions are complementary in nature despite several 
differences. 
 
 
KEY CONCEPTS IN A NUTSHELL: 
 
1. MEANING: - The principles are broad statement of fundamental truth 
which provide guide lines for management decision and action. These 
guidelines are derived through experimentation and observation 
 
 
 
2. NATURE OF PRINCIPLES OF MANAGEMENT 
 
 
1. Universal application - can be applied to all kind of organisations, 
irrespective of their size and nature. 
 
2. General guidelines - the formulated guidelines to action which need to be 
adjusted and used as per the demands of the situation. 
 
3. Formed by practice and experimentation - derived through 
experimentation and Observation. 
 
4. Flexible - principles are not rigid like science but are modified according to the 
business environment needs. 
 
5. Behavioural - the principles aim to influence the unpredictable, complex and 
dynamic human behaviour. 
 
6. Cause and effect relation - they aid in predicting the outcome of management 
actions. 
 
7. Contingent - the management principles are dependent upon the prevailing 
Conditions/situations at that particular time hence amended accordingly. 
 
 
3. SIGNIFICANCE/ IMPORTANCE OF MANAGEMENT PRINCIPLES 
 
i. Provides managers with useful insights into reality - through improved 
knowledge, ability, understanding and improved guidance to the managers. 
 
ii. Optimum utilisation of resources - and effective administration through 
coordinated use of physical, financial and human resources. 
 
iii.   Scientific decision - they lend to be more realistic, thoughtful, justifiable 
and free from personal bias. 
 
iv. Meet the changing environmental requirements - by providing effective 
and dynamic leadership in implementing changes. 
 
v. Fulfils social responsibility - guides the manager in fulfilling the social 
responsibility. 
 
vi.   Management training, education and research - the principles help in 
increasing knowledge which is used as the basis for management training 
and research. 
 
 
4. FAYOL’S PRINCIPLES OF MANAGEMENT 
 
1. Division of labour - work could be divided into small specialised task and 
performed by a trained specialist 
 
2. Authority and responsibility - there must be a right balance between 
authority (right to give orders) and responsibility (obligation to perform 
the assigned task). 
3. Discipline - obedience to organisation rules and employment agreement. 
 
 
4. Unity of command - receive orders from one boss. 
 
5. Unity of Direction - all the units of the organisation should aim and move 
towards achieving the organisational goal. 
 
6. Subordination of individual interest to general interest - the 
organisation interest to be prioritised over individual interest. 
 
7. Remuneration - pay should be fair and satisfying to both employee 
and the organisation. 
 
8. Centralisation and decentralisation - there should be a proper balance 
between centralisation (concentration of decision making powers with top 
management) and decentralisation (dispersal of decision making power 
among more than one person). 
 
9. Scalar chain - orders or communication should pass from top to bottom 
and follow the official line of command. 
 
10. Orders - A place for everything/ everyone and every one in its place 
 
11.  Equality - kindness, empathy and justice in the behaviour of manager towards 
workers. 
 
12. Tenure stability - frequent displacement of employee from their position 
should be avoided. They should be given sufficient time to show their 
results 
 
13.  Initiative - Employees to be encouraged to develop and carry out their 
improvement plans 
 
14. Espirit de corps - need for team work, spirit and harmony. 
 
 
5. SCIENTIFIC MANAGEMENT:  
Meaning:Conduct of business activities according to standardised tools, 
methods and trained personal so as to have increased output through effective 
and optimum utilisation of resources. Hence it stresses that there is always one 
best way of doing things. 
 
Principles of Scientific Management 
 
1.  Science not rule of thumb - 
 
There should be scientific study and analysis of each element of job rather than 
adopting old rule of the thumb approach on a hit and miss method. 
Encourage “thinking before doing”. 
 
2.  Harmony not discord - 
 
 
There should be complete harmony and proper understanding between 
management and workers in achieving the organisation goals. 
 
3.  Cooperation not individualism - 
 
Taylor emphasised on the importance of cooperative group effort 
between the management and workers in achieving the organisation’s goals 
and not individualism. 
 
4.  Development of workers to their greatest efficiency and prosperity: 
 
The management should scientifically select the workers; assign job as 
per their physical, mental and intellectual capability and potential; and train 
them as per the job requirement. 
 
Techniques of scientific 
management a) F u n c t i o n a l 
foremanship 
• Supervision is to be divided into several specialized functions and each 
function to be entrusted to a special foreman. 
 
• Each worker will have to take orders from eight foremen in the related 
process of function of production. 
 
• Stress on separating planning function from executive function. 
 
b)  Standardisation and simplification of work 
 
• Process of setting standards for every business activity to maximise output. 
 
• Simplification is eliminating unnecessary varieties, sizes and grades of 
product manufactured in the organisation. 
 
c)  Method study 
 
• Finding one best way of doing a job. 
 
• Critical analysis is made for plant layout, product design, material handling 
and work processes using techniques like process charts, operations 
research etc. 
 
d)  Motion study 
 
• Making a thorough analysis of various motions being performed by a 
worker while doing a particular task. 
 
• Identifying and determining the ideal productive movement. 
 
• Eliminate the unproductive movements and equipments. 
 
e) Time study 
 
• It is the technique used to determine the standard time taken by the 
Page 5


 
CHAPTER - 2 
 
PRINCIPLES OF MANAGEMENT 
 
CONCEPT MAPPING 
 
Concept :   Principles of management are general guidelines which can be used 
under certain situations. 
 
 
Nature :   (a) universal applicability (b) formed by practice (c) flexible (d) 
mainly behavioural (e) cause and effect relationships (f) general guidelines contingent 
 
 
Importance:   (a) useful insights into reality (b) optimum utilisation of resources (c) 
scientific decisions (d) meeting changing environment (e) management 
training and research (f) fulfilling social responsibility 
 
 
Principles of Scientific Management : (a) science not rule of thumb (b) harmony 
not discord (c) cooperation not individualism (d) maximum not 
restricted output (e) development of each person to greatest efficiency. 
 
 
Techniques of Scientific Management: (a) functional foremanship (b) differential 
piece rate system (c) work study - time study, motion study, 
fatigue study, method study (d) standardisation and simplification 
of work. 
 
 
Fayol's Principles : (a) division of work (b) authority and responsibility (c) 
discipline (d) unity of command (e) unity of direction (f) 
subordination of individual interest to common interest   (g) 
remuneration (h) centralisation and decentralisation (i) scalar chain 
(j) order (k) equity (I) stability of tenure (m) initiative (n) esprit de 
corps 
 
Taylor vs. Fayol : Their contributions are complementary in nature despite several 
differences. 
 
 
KEY CONCEPTS IN A NUTSHELL: 
 
1. MEANING: - The principles are broad statement of fundamental truth 
which provide guide lines for management decision and action. These 
guidelines are derived through experimentation and observation 
 
 
 
2. NATURE OF PRINCIPLES OF MANAGEMENT 
 
 
1. Universal application - can be applied to all kind of organisations, 
irrespective of their size and nature. 
 
2. General guidelines - the formulated guidelines to action which need to be 
adjusted and used as per the demands of the situation. 
 
3. Formed by practice and experimentation - derived through 
experimentation and Observation. 
 
4. Flexible - principles are not rigid like science but are modified according to the 
business environment needs. 
 
5. Behavioural - the principles aim to influence the unpredictable, complex and 
dynamic human behaviour. 
 
6. Cause and effect relation - they aid in predicting the outcome of management 
actions. 
 
7. Contingent - the management principles are dependent upon the prevailing 
Conditions/situations at that particular time hence amended accordingly. 
 
 
3. SIGNIFICANCE/ IMPORTANCE OF MANAGEMENT PRINCIPLES 
 
i. Provides managers with useful insights into reality - through improved 
knowledge, ability, understanding and improved guidance to the managers. 
 
ii. Optimum utilisation of resources - and effective administration through 
coordinated use of physical, financial and human resources. 
 
iii.   Scientific decision - they lend to be more realistic, thoughtful, justifiable 
and free from personal bias. 
 
iv. Meet the changing environmental requirements - by providing effective 
and dynamic leadership in implementing changes. 
 
v. Fulfils social responsibility - guides the manager in fulfilling the social 
responsibility. 
 
vi.   Management training, education and research - the principles help in 
increasing knowledge which is used as the basis for management training 
and research. 
 
 
4. FAYOL’S PRINCIPLES OF MANAGEMENT 
 
1. Division of labour - work could be divided into small specialised task and 
performed by a trained specialist 
 
2. Authority and responsibility - there must be a right balance between 
authority (right to give orders) and responsibility (obligation to perform 
the assigned task). 
3. Discipline - obedience to organisation rules and employment agreement. 
 
 
4. Unity of command - receive orders from one boss. 
 
5. Unity of Direction - all the units of the organisation should aim and move 
towards achieving the organisational goal. 
 
6. Subordination of individual interest to general interest - the 
organisation interest to be prioritised over individual interest. 
 
7. Remuneration - pay should be fair and satisfying to both employee 
and the organisation. 
 
8. Centralisation and decentralisation - there should be a proper balance 
between centralisation (concentration of decision making powers with top 
management) and decentralisation (dispersal of decision making power 
among more than one person). 
 
9. Scalar chain - orders or communication should pass from top to bottom 
and follow the official line of command. 
 
10. Orders - A place for everything/ everyone and every one in its place 
 
11.  Equality - kindness, empathy and justice in the behaviour of manager towards 
workers. 
 
12. Tenure stability - frequent displacement of employee from their position 
should be avoided. They should be given sufficient time to show their 
results 
 
13.  Initiative - Employees to be encouraged to develop and carry out their 
improvement plans 
 
14. Espirit de corps - need for team work, spirit and harmony. 
 
 
5. SCIENTIFIC MANAGEMENT:  
Meaning:Conduct of business activities according to standardised tools, 
methods and trained personal so as to have increased output through effective 
and optimum utilisation of resources. Hence it stresses that there is always one 
best way of doing things. 
 
Principles of Scientific Management 
 
1.  Science not rule of thumb - 
 
There should be scientific study and analysis of each element of job rather than 
adopting old rule of the thumb approach on a hit and miss method. 
Encourage “thinking before doing”. 
 
2.  Harmony not discord - 
 
 
There should be complete harmony and proper understanding between 
management and workers in achieving the organisation goals. 
 
3.  Cooperation not individualism - 
 
Taylor emphasised on the importance of cooperative group effort 
between the management and workers in achieving the organisation’s goals 
and not individualism. 
 
4.  Development of workers to their greatest efficiency and prosperity: 
 
The management should scientifically select the workers; assign job as 
per their physical, mental and intellectual capability and potential; and train 
them as per the job requirement. 
 
Techniques of scientific 
management a) F u n c t i o n a l 
foremanship 
• Supervision is to be divided into several specialized functions and each 
function to be entrusted to a special foreman. 
 
• Each worker will have to take orders from eight foremen in the related 
process of function of production. 
 
• Stress on separating planning function from executive function. 
 
b)  Standardisation and simplification of work 
 
• Process of setting standards for every business activity to maximise output. 
 
• Simplification is eliminating unnecessary varieties, sizes and grades of 
product manufactured in the organisation. 
 
c)  Method study 
 
• Finding one best way of doing a job. 
 
• Critical analysis is made for plant layout, product design, material handling 
and work processes using techniques like process charts, operations 
research etc. 
 
d)  Motion study 
 
• Making a thorough analysis of various motions being performed by a 
worker while doing a particular task. 
 
• Identifying and determining the ideal productive movement. 
 
• Eliminate the unproductive movements and equipments. 
 
e) Time study 
 
• It is the technique used to determine the standard time taken by the 
 
workman with reasonable skill and ability to perform a particular task. 
 
• Here the job is divided into series of elements and the time required to 
complete each element idealistically is recorded using a stop watch. 
 
f)  Fatigue Study 
 
• Determines the amount and frequency of rest intervals required in 
completing a task. 
 
g)  Differential Piece wage system 
 
• Evolve a system wherein the efficient and inefficient workers are paid at 
different rates, as financial incentives act as motivators. 
 
• First a standard task is established with the aid of time and motion study, 
then two rates are established. Higher when standard outputs is produced 
and lower when the standard is not met 
 
TAYLOR V/S FAYOL 
 
Basis Henry Fayol F .W Taylor 
 
1. Basis of formation 
 
Personal Experience 
 
Observations and 
experimentation  
2. Focus 
 
Improvement in the 
overall administration 
 
Concentrates on improving 
the productivity 
 
3. Applicability 
 
Universally applicable 
 
Applicable only to 
specialised situations 
 
4. Perspective 
 
Top level management 
 
Lower level - shop floor level 
 
5. Personality 
 
Scientist and known as father 
of scientific management 
 
Practitioner and known as the 
father of General management 
 
6. Human element 
 
More importance attached 
to increasing the 
production than to the 
human element 
 
More importance given to 
human element; e.g. principle 
of equity, stability of tenure 
 
7. Emphasis 
 
Greater emphasis on tools and 
standardisation of work i.e. 
General Theory of 
Administration 
 
Emphasis on principles and 
theory of general 
administration i.e. Scientific 
Management 
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