CLASS 12 BUSINESS STUDIES

CHAPTER-2
PRINCIPLES OF MANAGEMENT
IMPORTANT QUESTIONS

VERY SHORT ANSWER QUESTIONS (1 or 2 Marks)

QUESTION 1:
State the role of 'Gang Boss' in functional foremanship.
Answer: Gang boss has to ensure that all the required material are
available for workers to start the work. He has to report to the
production in charge as per functional foremanship.

QUESTION 2:
What is meant by Management principles?
Answer. Principles of management are broad and general guidelines
for managerial decision-making and behavior.

QUESTION 3:
State the technique of scientific management which is the strong
motivator for a worker to
reach standard performance.
Answer: Differential piece wage system.

QUESTION 4:
State the role of 'route clerk' in functional foremanship.
CBSE Board 2016
Answer: Route clerk is the person who work under the planning in
charge & responsible for showing the route of production.
QUESTION 5:Factory owners or managers relied on personal
judgment in attending to the problems they confronted in the
course of managing their work. Which principle of Taylor is it
referring to? Answer: 'Rule of thumb'
QUESTION 6:
What do you mean by Mental Revolution?
Answer: Mental Revolution means revolutionary change in the
attitude of both workers and managers

QUESTION 7:
Name the organizational structure which helps in increasing
managerial and operational efficiency. (CBSE 2016)
Answer: Functional structure helps in increasing the managerial &
operational efficiency.

QUESTION 8:
A company manufacturing motorcycles and cars should have
separate divisions for both, headed by separate divisional
managers, separate plans and resources. Identify the principle
with the help of this example.
Answer. Unity of Direction

QUESTION 9:
The directors of XYZ limited, an organization manufacturing
computer, want to double the sales and have given the
responsibility to the sales manager. The sales manager has no
authority either to increase sales expense or appoint new
salesmen. Hence, he could not achieve this target. Identify the
principle violated in this situation.
Answer: Principle of Authority and Responsibility

QUESTION 10:
Who Suggested the concept of functional foreman ship?
Answer: F.W.Taylor.

QUESTION 11:
A subordinate receives order from more than one boss’. Which
principle in violated?
Answer: Unity of command.
QUESTION 12:
Hina & Hitesh are typists in a company having the same
educational qualification. Hina is getting Rs. 3000 per month $
Hitesh is getting Rs 4000 per month as salary for the same work
hours .Which principle of management is violated in this case?
Name the principle $ explain it.
Answer: In this case, the ‘Principle of Equity’ is violated .As both are
working in same job position, possessing same qualification they
must be paid same salary.

QUESTION 13:
What is meant by flexibility of principles of management?
Answer: The principles of management are not rigid. They can be
modified by the manager when the situation so demands.

SHORT ANSWER QUESTIONS (3 or 4 Marks)

QUESTION 14:
Explain why is it said that principles of management are 'mainly
behavioural' and 'contingent' in nature. Also explain how principles of
management 'provides managers with useful insights into reality' and
'helps in thoughtful decision-making'. (CBSE 2016)
Answer: Principles of management are 'mainly behavioural',
'contingent' in nature and 'provides managers with useful insights into
reality' and 'helps in thoughtful decision-making'. These points have
been explained below.
1. Mainly behavioural: The principles of management are 'mainly
behavioural' in nature as management principles aim at
influencing individuals, and their applicability vary as per
human nature. Besides this, these principles provide an
understanding of the relationship between individuals and
material resources so that organisational objectives can be
achieved.
2. Contingent: Their applicability depends upon the prevailing
situation at a particular point of time. The application has to be
changed as per the situation.
 3. Formed by practice and experimentation: 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 problems, which are of recurring
nature.
4. Cause and Effect relationship: Decisions regarding
management should be taken carefully. They should be based on
reasons and facts. 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.

QUESTION 15:
Explain the principles of scientific management.
Answer:
1. Science, not rule of Thumb As per Taylor the work /task
should not be performed by ‘hit or miss method, rather a logical
and a rational approach should be followed in each and every
element of work. We should be constantly experimenting to
develop new techniques, which make the work much simpler,
easier and quicker.

2. Harmony, not discord : There should be complete harmony

between management and workers in achieving organizational
goals. It implies that there should be mental revolution on the
part of managers and workers in order to respect each other’s
role and eliminate any class conflict to realize organizational
objectives.

3. Cooperation, not individualism : According to this principle,

all the activities in the firm should be carried out by the mutual
cooperation of one and all. Managers and employees should
jointly determine standards and take measures to achieve them.
 4. Development of each and every person to his or her greatest
Efficiency and Prosperity: As per this principle each and every
employee should be given importance, their efficiency should be
taken care of right from the beginning by giving proper training
to them and increase and enhance their future prospect.

QUESTION 16:
Explain briefly 'discipline' and 'scalar chain' as principles of
general management. CBSE BOARD 2017
Answer:
(i) Discipline: Discipline implies that an organisation should follow
the rules and regulations and ensure conformity to the set rules and
policies. Discipline requires good supervisors at all levels, clear and
fair agreements and judicious application of penalties.
(ii) Scalar chain: Scalar chain refers to a pre-defined, formal path of
authority and communication in the order of the highest to the lowest.
Every individual in an organisation follows this chain of authority for
communication.

QUESTION 17:
Sanchit, after completing his entrepreneurship course from
Sweden returned to India and started a coffee shop 'Aroma
Coffee Can' in a famous mall in New Delhi. The specialty of the
coffee shop was the special aroma of coffee and wide variety of
flavors to choose from. Somehow, the business was neither
profitable nor popular, Sanchit was keen to find out the reason.
He appointed Sandhya, an MBA from a reputed college, as a
Manager to find out the causes for the same. Sandhya took
feedback from the clients and found out that though they loved
the special unique aroma of coffee but were not happy with the
long waiting time being taken to process the order. She analyzed
and found out that there were many unnecessary obstructions in
between which could be eliminated. She fixed a standard time for
processing the order. She also realised that there were some
flavors whose demand was not enough. So, she also decided to
stop the sale of such flavors. As a result with in a short period
Sandhya was able to attract the customers. Identify and explain
any two techniques of scientific management used by Sandhya to
solve the problem. CBSE BOARD 2017
Answer:
The techniques of scientific management used by Sandhya to solve
the problem are:
(a) Standardization of work: Standardization of work implies
setting milestones or benchmarks for any work or activity. It aims at
establishing standards of excellence against which actual performance
can be measured. Standards are to be followed by the managers and
workers in the production process, and standardization has the
objective of ensuring that the final product is of fixed size,
characteristic and quality. Various other techniques given by Taylor,
such as method study, fatigue study and time study, are based on the
concept of standardization.
(b) Simplification of work: Simplification of work involves
eliminating the unnecessary diversifications in the production terms
of variety, size and dimension. It aims at fuller utilisation of the
resources, reducing the inventories and increasing the turnover. It also
helps in reducing the costs of labour and machines. Along with this,
simplification aims at removing the unnecessary steps involved in a
process to achieve efficiency.

QUESTION 18:
Explain briefly 'Unity of Direction' and 'Order' as principles of
general management. CBSE BOARD 2017
Answer:
(i) Unity of Direction: According to this principle, each unit of the
organisation should work towards a common objective. According to
it, units having same goals should have a single head and plan. This
principle helps in eliminating the overlapping of work. For example,
if an organisation is engaged in the manufacturing of two products,
then each products should have its own separate department and
divisions with their respective heads and plans.
(ii) 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 important documents
are kept in a certain order then it will help in locating these files easily
when required. Violation of this principle leads to chaos and delay in
work.
QUESTION 19:
How are management principles derived?
OR
"Management principles are evolutionary." Explain.
OR
"Derivation of management principles may be said to be a matter
of science." Explain.

Answer: Management principles have emerged gradually, through an

evolutionary process of combining deep observations and
experimental studies.
(i) Observation method
Under this method, managerial researchers to derive management
principles observe and analyze practical events. For example, it was
observed that by dividing the work into different units, efficiency of
employees improved. As a result, it led to formulation of principle of
'division of labor'.
(ii) Experimental method
Under this method, experiments are conducted so that management
principles can be derived and their validity can be tested. For
example, two units, one unit involving one superior and one
subordinate and other unit involving two superiors and one
subordinate, were taken. It was found that unit having one superior
and one subordinate performed better. As a result, it led to formation
of principle of "unity of command." From the above it can be
concluded that observations and experiments result in the formulation
of management principles, which therefore are evolutionary. Hence,
derivation of management principles can be said to be a matter of
Science. It is worth mentioning here that even though derivation of
management principles is a matter of science; their application
remains a matter of art. The success of managers depends upon how
skillfully they put these principles into practice.
QUESTION 20:
‘Discipline is double-edged tool’ Comment.
Answer: Discipline is a double-edged tool. It is expected to strike a
balance between, forcing the discipline on one hand and motivating
employees on the other. Personnel entrusted with enforcing it are
expected to be competent and capable of achieving this balance.
Employees must honor the commitment made by them and
management must meet its promises to increase wages declaration of
bonus etc.

LONG ANSWER TYPE QUESTIONS (5 OR 6 MARKS)

QUESTION:

Explain the Features of the principles of Management.

Answer:
Management principles are the statements of basic truths, which have
the ability to predict the result of managerial activities. Following are
the features:
1. Universal applicability: The principles are universal in nature.
Universality refers to the truth, which is equally applicable in all
the spheres. All Business units such as Industries and non
business units such as educational institutions has to apply more
or less the same principles in order to achieve their objectives.
2. General guidelines: The principles of management are not definite
and specific like the principles of science. The principles of
management cannot be applied blindly anywhere and are not applied
strictly.
3. Formed by practice and experimentation : Principles of
management are the result of the various problems faced by the
professionals. As the problems arises research is easily done, through
observation and continuous experimentations.
4. Flexibility: The principles of management are flexible as they can
be changed according to the situation in hand . As there is the change
in the environment, new kinds of problems arise and so the principles
are altered and the new ones are propounded.