PRINCIPLES OF MANAGEMENT

1 Q. What is meant by principles of management?

Ans: Principles of management are broad and general guidelines for
managerial decision making and behavior.

2 Q. Explain the following principles of scientific management.

Ans.
(i)Science not rule of thumb
● Taylor believed that there was only one best method which can be
developed through scientific study and analysis of each element of a job and
should substitute ‘Rule of Thumb’.
● Scientific method involved investigation of traditional methods, unifying the
best practices and developing a standard method, which would be followed
throughout the organisation.

(ii)Harmony Not Discord

▪ The principle emphasises that there should be complete harmony between
the management and the workers.
▪ This requires ‘Mental revolution’ on the part of both management and
workers. Both management and the workers should transform their
thinking.
▪ Management should share gains of the company if any with the workers and
workers should work hard and be wiling to embrace change for the good of
the company.

(iii) Cooperation, not individualism:

● There should be complete co-operation between the management and the
workers instead of individualism.
● This principle is an extension of principle of ‘Harmony, Not Discord’.
Competition should be replaced by cooperation.
● For all important decisions taken by the management, workers should be
taken into confidence. The management should be open to any constructive
suggestions made by the employees and suitably reward them.

(iv) Development of each and every person to his or her greatest efficiency
and prosperity
▪ Each person should be scientifically selected, then work should be assigned
to suit his physical, mental and intellectual capabilities.
▪ To increase efficiency, workers should be given the required training.
Efficient employees would produce more and earn more. This will ensure
their greatest efficiency and prosperity for both, company and workers.

3 Q. Explain the principles given by Fayol.

Ans
(i) Division of work
● The principle of Division of work states that work is divided into small
tasks/ jobs. A trained specialist who is competent is required to
perform each job.
● Division of work leads to specialisation.

(ii) Authority and Responsibility

● According to this principle there should be a balance between
responsibility and authority. Authority is right to give orders to
subordinates to perform the given job.Responsibility is duty to
perform the work.
● It prevents the misuse of authority and also helps in fixing
responsibility. If responsibility exceeds authority, then subordinate
cannot support his duties. If authority exceeds responsibility,
subordinates may misuse it.
● A manager should have the right to punish a subordinate for willfully
not obeying the orders but only after sufficient opportunity has
been given for presenting his case.
● An organisation should build safeguards against abuse of managerial
power. At the same time a manager should have necessary authority
to carry out his responsibility.

(iii)Discipline:
● It is the obedience to organizational rules and employment agreement
which are necessary for the working of the organization.
● According to Fayol, discipline requires good superiors at all levels, clear
and fair agreement and judicious application of penalties.

● It requires honouring of commitments by both the employer and the

employee.

(iv) Unity of command

● There should be one and only one boss for every individual
employee at a given time and dual subordination should be avoided
to prevent confusion.
● If this principle is violated, authority is undermined, discipline is in
jeopardy, order disturbed and stability threatened.
● It avoids dual subordination.

(v) Unity of Direction

● All the units of an organisation should be moving towards the same
 objectives through coordinated and focussed efforts.
● Unity of directions implies that there should be one head and one
plan for a group of activities having the same objectives.
● It ensures unity of actions and facilitates coordination.

(vi) Subordination of individual interest to general interest

● The interests of an organisation should take priority over the
interests of any one individual employee according to Fayol.
● In all the situations the interests of the group/company will
supersede the interest of any one individual. This is so because
larger interests of the workers and stakeholders are more important
than the interest of any one person.
● A manager can ensure this by her/his exemplary behaviour. For
example, she/he should not fall into temptation of misusing her/his
powers for individual/family benefit at the cost of larger general
interest of the workers/company. This will raise her/his stature in
the eyes of the workers and at the same time ensure same
behaviour by them.
(vii) Remuneration
● The overall pay and compensation should be fair to both employees
and the organisation. The employees should be paid fair wages, which
should give them at least a reasonable standard of living. At the same
time, it should be within the paying capacity of the company.
● If remuneration is just and equitable, it will ensure a congenial
atmosphere and good relations between workers and management.

(viii) Centralisation and Decentralisation:

● The concentration of decision-making authority is called centralisation
whereas its dispersal among more than one person is known as
decentralisation.
● According to Fayol, “There is a need to balance subordinate
involvement through decentralisation with managers’ retention of final
authority through centralisation.”
● The degree of centralisation will depend upon the circumstances in
which the company is working. In general large organisations have
more decentralisation than small organisations.
● For example, panchayats in our country have been given more powers
to decide and spend funds granted to them by the government for the
welfare of villages. This is decentralisation at the national level.

(ix) Scalar chain

▪ Scalar chain may be defined as the chain of superiors and subordinates
ranging from the top levels of management down to the lowest level of
management.
▪ This principle suggests that there should be a clear line of authority from
the top level to the bottom linking all the managers at all the levels.
▪ It is regarded as a chain of communication since orders and instructions
issued at high levels flow through the intermediate managers before
reaching the lower levels.
▪ In case of emergency or urgent matters, direct communication can be
established between two people working at the same level but in different
departments with the help of gang plank.

(x) Order
● The principle of Order states that people and materials must be in
suitable places at appropriate time for maximum efficiency i.e. there
should be a place for everything and everyone in an organization and
that person or thing should be found in its allotted place.
● This will lead to increased productivity and efficiency.

(xi) Equity:

▪ It advocates that there should be no discrimination against anyone on

account of sex, religion, language, caste, belief, nationality etc.
▪ It emphasises kindliness and justice in the behaviour of managers towards
the workers to ensure loyalty and devotion.

(xii) Stability of personnel

● “Employee turnover should be minimised to maintain organisational
efficiency”, according to Fayol.
● Personnel should be selected and appointed after due and rigorous
procedure. But once selected they should be kept at their post/position
for a minimum fixed tenure.
● They should have stability of tenure. They should be given reasonable
time to show results.
● Any adhocism in this regard will create instability/insecurity among
employees. They would tend to leave the organisation.Recruitment,
selection and training cost will be high.

(xiii) Initiative
● The principle of initiative indicates that the subordinates should be
encouraged to make and execute plans within the prescribed limits of
authority.
● Initiative means taking the first step with self-motivation. It is thinking
out and executing the plan. Initiative should be encouraged.
● It does not mean going against the established practices of the
company for the sake of being different.
● A good company should have an employee suggestion system whereby
initiative/suggestions which result in substantial cost/time reduction
 should be rewarded.

(iv) Espirit de corps

● ‘Management should promote team spirit of unity and harmony among
employees.
● A manager should replace ‘I’ with ‘We’ in all his conversations with
workers to foster team spirit.
● This will give rise to the spirit of mutual trust and belongingness among
team members and will minimise the need for using penalties.It will
also minimise the need for using penalties.

4 Q. Explain the following techniques of scientific management.

Ans
(i) Differential Piece Wage System
▪ Differential Piece Wage System is a technique which differentiates
between efficient and less efficient workers. It rewards the efficient
workers and motivates the less efficient ones to improve their efficiency.
▪ In this plan, there are two piece rates – one for those workers who
produce the standard output or more, and the other for those who
produce less than the standard output e.g.
Standard output (per worker per day) = 10 units.
Wage rate I =Rs.2 per unit (for output<10 units)
Wage rate II =Rs.3 per unit (for output>=10 units)
Particulars Worker A Worker B
Actual output 9 units 11 units
Total wages (in 9 x Rs.2 = 11 x Rs.3
Rs.) Rs.18 =Rs.33
Difference in units produced = 2
Difference in wages = Rs.15
The difference in the wage payment is a strong motivator for the less
efficient workers to work hard.

(ii) Functional Foremanship

▪ Functional foremanship is a technique which aims to improve the quality of

supervision at shop floor by putting a worker under eight specialist
foremen.
● Under functional foremanship, the work of the Factory Manager is divided
among eight foremen. Each foreman is assigned work according to his/her
qualities.

● In this technique, planning is separated from execution. Taylor suggested

 four foremen for planning,
- route clerk- defines the route of production
-instruction card clerk-draft instructions for the workers
-time and cost clerk -prepare time and cost sheet
-disciplinarian - ensure discipline

Four foremen for execution were:

- gang boss- keeping machines and tools etc., ready for operation by
workers
-speed boss-responsible for timely and accurate completion of job
- repair boss -ensure proper working condition of machines and tools
- inspector-check the quality of work.

● Functional foremanship is an extension of the principle of division of

work and specialization to the shop floor.

(iii) Time Study

● Time study is a technique which determines standard time required to
perform a well-defined job.
● The objective of time study is to determine the number of workers to
be employed, frame suitable incentive schemes and determine labour
costs.

(iv)Method Study
● Method study is a technique to find out the one best way of doing the
job.
● The objective of method study is to minimise the cost of production
and maximise the quality and satisfaction of the customer.

(v)Fatigue Study
● Fatigue study is a technique which determines the amount and
frequency of rest intervals that should be given in completing a task.
● A person is bound to feel tired physically and mentally if she/he does
not rest while working. The rest intervals will help one to regain
stamina and work again with the same capacity. This will result in
increased productivity.

(vi) Motion Study

● Motion study refers to the study of movements which are undertaken
while doing a typical job.
● Unnecessary movements are sought to be eliminated so that it takes
less time to complete the job efficiently.
 (vii) Standardisation and Simplification of Work
● Standardisation refers to the process of setting standards for every
business activity- process, raw material, time, product, machinery,
methods or working conditions.

● The objectives of standardisation are:

(a)To reduce a given line or product to fixed types, sizes and

characteristics.
(ii) To establish interchange ability of manufactured parts and
products.
(iii) To establish standards of excellence and quality in materials.
(iv) To establish standards of performance of men and machines.

● The main objective of simplification is to eliminate unnecessary

diversity of products.

● Simplification aims at eliminating superfluous varieties, sizes and

dimensions while standardisation implies devising new varieties
instead of the existing ones.

5 “The principles of management are different from those of Pure Science.”

State any one difference.
Ans. Management principles are different from those of pure science because
(any one reason):
(a) Management principles are not as rigid as principles of pure science.
(b) Management principles deal with human behaviour and cannot be tested
in laboratories like principles of pure science.
(c) Principles of management are general guidelines whereas the principles of
pure science are specific.

6 Q. State the principles of scientific management.

Ans. Principles of scientific management:
1. Science, not rule of thumb advocates that there is only one best method to
maximise efficiency and this method should substitute ‘rule of thumb’
throughout the organisation.
2. Harmony, not discord advocates that there should be complete harmony
between management and the workers.
3. Co-operation, not individualism states that competition should be replaced
by co-operation.
4. Development of each and every person to his or her greatest efficiency or
prosperity states that each person should be scientifically selected, placed and
trained to ensure the greatest efficiency and prosperity for both the company
and the workers.
7 Q. State any one reason why ‘Principles of Management’ are important.
Ans. Principles of management are important because they :
1. Provide useful insights into real world situations enabling the managers to
learn from past mistakes and conserve time by solving recurring problems
quickly.
2. Help in optimum utilisation of resources reducing the wastages associated
with trial and error approach.
3. Help in effective administration by limiting the boundaries of managerial
discretion so that decisions are free from personal prejudices.
3. Help in taking scientific decisions based on facts and objective assessment
of the situation.
4. Help the managers in meeting changing environment requirements because
these principles can be modified according to the changes taking place in the
environment.
5. Help in fulfilling social responsibility.
6. Help in management training, education and research.

8 Q. Give the meaning of ‘Mental Revolution’ as suggested by F.W.Taylor.

Ans. Mental Revolution refers to the change in the attitude of management
and workers towards one another from competition to co-operation.
9 Q. Why did Fayol introduce the concept of ‘Gang Plank’ in the principle of
Scalar-Chain’?
Ans. The concept of gang plank was developed to avoid delay in
communication in case of emergency between two people working at the
same level but in different departments.
10 Q. Distinguish between ‘Unity of Command’ and ‘Unity of Direction’
principles of management on the basis of ‘Aim’.
Ans. ‘Unity of Command’ prevents dual subordination while ‘Unity of
Direction’ prevents overlapping of activities.
11 Q. Explain why is it said that principles of management are ‘mainly
behavioral’ and ‘contingent’ in nature. Also explain how principles of
management ‘provide managers with useful insights into reality’ and ‘help in
thoughtful decision-making.’

Ans. Mainly behavioral

▪ Management principles aim at influencing human behaviour.
▪ They enable a better understanding of the relationship between human and
material resources in achieving organisational goals.

Contingent
▪ Application of principles of management is dependent upon the prevailing
situation at a particular point of time.
▪ The application of principles of management has to be changed as per the
requirements.

Provide managers with useful insights into reality

 ▪ Adherence to the principles adds to their knowledge, ability and
understanding of managerial situations and circumstances.
▪ They also enable managers to learn from past mistakes and conserve time
by solving recurring problem quickly.

Help in thoughtful decision-making

▪ Management principles emphasise on logic rather than on blind faith.
Management decisions taken on the basis of principles are free from bias.
12 Q. State any three features of principles of management.

Ans. Features of principles of management:

(i) Management principles are said to be universally applicable as they are
applicable to all types of organisations, irrespective of the type or size.
(ii) Management principles are guidelines to action but do not provide
readymade solutions to all managerial problems.
(iii) Management principles are formed by observation and experimentation
or experience and collective wisdom of managers.
(iv) Management principles are flexible because these can be modified
according to the demand/ needs of the situation.
(v) Management principles are mainly behavioural as they aim at influencing
behaviour of human beings.
(vi) Management principles are intended to establish relationship between
cause and effect so that they can be used in similar situations in a large
number of cases.
(vi) Management principles are contingent because the application of
principles has to be changed according to the prevailing situation at a
particular point of time.