UNIT – 2 PRINCIPLES OF MANAGEMENT

1. What do you mean by management principle? How management principles are derived?

Ans: The term principle may be defined as “The statement which reflects the
fundamental truth about some phenomenon based on cause and effect relationship
between two or more variables”

Management principles are the statements of fundamental truth and ‘broad and general’
guidelines for making managerial decisions and their execution.

In other words management principles can be defined as rules and regulations and
guidelines which give correct way to take correct decision to the management.

Management principles are not developed overnight but a complete procedure to develop
these principles is undertaken. The main steps involving in derivation of Management
principles are:

i. Deep observation and

ii. Repeated experiments

2. What are the nature/feature/characteristics of management principles? [AHSEC 2024]

Also explain its importance/need.

Ans: The following are the nature/feature/characteristics of principles of management:

a. Universally Applicable: Management principles are universal in nature. It means they

can be applied to all type of organisations irrespective of their size and nature.

b. General Guidelines: These principles are not static or absolute statements. The
applicability of management principles depends on the nature and condition of the
organisation and the problems.

c. Flexibility: Management principles are not static. It means they cannot be blindly used
in every situation. Some management principles are applied differently under different
conditions.

d. General Statements: Management principles are stated in a form of general statements

that means these are not like exact principles like of Physics, science etc.

e. Promote better functioning of the organisation: Management principles are always

intended to promote better functioning of the organisation. However sometimes, principles
may fail to deliver the output to the organisation.

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f. Fundamental Truth: The principles of management are fundamental truth based on
experience and testing. They are the guide to the managers to think and do their job.

g. Behavioural in Nature: Management principles are formulated to guide and establish

relations between human and material resources. Such principles are behavioural in
nature

h. Cause and Effect Relationship: These principles are based on cause and effect
relationship which means the principles of management can be used in similar situations.
However, absolute result cannot be estimated as it is behavioural in nature.

i. Management principles are contingent: Principles of management are contingent in

nature. It means the applicability of management principles depends on the situation
prevailing in the organisation. The organisation may have to change the principles applied
according to nature, size and type of organisation.

Importance/need of Management:

i. Providing managers with useful insight into reality: Managers can improve their
knowledge, ability and understanding under various managerial situations with the help of
Management principles.

ii. Optimum utilisation of resources: Several principles of management are based on

optimum utilisation of all type of resources available in the organisation such as man,
material, machinery and market etc. Such principles help managers to get maximum
benefits from all kind of resources.

iii. Helps in increasing managerial efficiency: Management principles provide guidelines as

how managers function in different situations which help to increase their efficiency.

iv. Meeting environmental challenges: Every business operates in a dynamic environment

which is changes in economic, social and political environment which create challenges
for the business. With the help of Management principles manager can apply different
techniques to deal with different situations.

v. Fulfilling social responsibilities: Management principles not only act as guideline for
achieving organisational goal but it also guide the managers to perform social
responsibilities like paying adequate salary and taking care of their employees etc.

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3. Explain the path formed by Henry Fayol. Or Discuss the principles of Management
evolved by Henry Fayol. [AHSEC 2025]

Ans: Henry Fayol was an industrialist as well as mining engineer who developed the theory
of management. Fayol’s “management principles” applicable equally to all kinds of
organisations weather social, political or economic. In the year 1916 he published his well-
known work in French named “General and Industrial Administration” which was
translated into English in 1929. He is also called the father of “Administrative
Management Theory”. Henry Fayol become famous as “father of modern studies and
thoughts”.

Fourteen principles of management developed by Henry Fayol:

1. Division of work: When a work is divided among the employees in an organisation,

by doing the same work for long period, they (employees) become specialised and
achieve greater efficiency which increases the productivity and reduces the
unnecessary wastage in an organisation.
2. Authority and responsibility: Authority and responsibility are the two sides of a
single coin known as management. Acceptance of authority implies acceptance of
responsibility to perform a work. Authority flows downwards, whereas responsibility
flows upwards.
3. Discipline: Discipline means obedience proper conduct in relation to other
members of the organisation and complying with the rules and regulations of the
organisation. Fayol insisted on the concept of promotion and demotion of
employees on the basis of their performance.
4. Unity of command: This principle means every employee should have only one
boss and employees should receive orders from him (boss) only because if he has
to receive orders from different sources or more than one boss the situations will
be confusing for him.[AHSEC – 2023]
5. Unity of direction: This principle insists on “one head one plan”. The members of
an organisation should have a single plan which should be the organisation’s plan.
If every member will be targeting their own plan no one will achieve their plan. So,
it is better to help one another to achieve the organisational goal in order to attain
personal goal.[AHSEC – 2023]
6. Subordination of individual interest to general interest: This principle is an
extension of the principle unity of direction. This is also known as principle of
cooperation. Here each should work for all and all for each.
7. Fair remuneration: In practical world “money works as the biggest motivator”.
Remuneration to an employee should be fair and satisfactory to both organisations
and employees.
8. Centralisation: The degree of centralisation and decentralisation of authority
varies according to the needs of the situation. Top level management should
decide the extent to which the authority should be centralised or decentralised.
9. Scalar chain: Scalar chain forms line of authority between the superior and the
subordinates from the highest to the lowest ranks which must be followed strictly.

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 Every information must pass through every level of the each and no skipping of
any one should be allowed.

Gang Plank: (Gangplank is not a principle but a part of scalar chain.) In case of
emergency an urgent information shortcut is allowed in this chain known as
“gangplank”. It permits direct communication between the employees working at
same level in the organisation.

10. Principle of order: This principle does not mean command but it refers to orderly
arrangement of men material that is fit for player for everything and everyone in
the organisation.
11. Principle of equity: Equity is the combination of kindness and Justice in
management system. Every manager should apply the principles of equity while
dealing with his subordinates.
12. Stability of tenure:An employee needs time to adjust himself in a new environment.
So, organisation should try to minimise employee turnover.
13. Principle of Initiative:Employees in an organisation should be encouraged to
develop and carry out their plan for improvement. They should be motivated to
work independently.
14. Esprit de Corps:This principle means union is strength. This principle emphasises
the need for teamwork and the importance of effective communication in order to
obtain it.

4. What do you mean by Scientific Management? Discuss the Scientific POM

developed by F. W. Taylor [AHSEC 2025] and its different techniques /
techniques of Scientific Management? [AHSEC 2024]

Ans:According to F. W. Taylor,“Scientific Management means knowing exactly what you

want men to do and seeing that they do it in the cheapest way.”

Frederick Winslow Taylor (or F W Taylor) was born in 1856 in Philadelphia near
Pennsylvania, USA in a middle class family. He was employed in Midvale Steel Company
from 1878 to 1889. He began his career as a labourer and finally at the age of 28 he
became the Chief Engineer of the company. Later he joined Bethlehem Steel Company
and became the General Manager. He left the practice in 1901 and devoted all his time to
the cause of scientific management until his death in 1915. In 1911 Taylor published his
famous work“Principles and Methods of Scientific Management”.In that book Taylor
suggested fundamental principles of scientific management. He is also known as father of
“Scientific Management.”

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1. Science, not rule of thumb: Taylor emphasised on the use of scientific approaches
instead of unscientific approaches. It means an organisation should use scientific
techniques rather than incited on scientific techniques to solve any problem.

2. Harmony, not discord: According to Taylor item should be made to create harmony
rather than creating discords among the organisation, i.e. creating conflict among the
employees.

3. Cooperation, not individualism: This principle is an extension of the principle of

‘harmony, not discord’. Taking constructive suggestions of workers should be
encouraged and they should not go on strikes as both management and workers a
responsibility and perform together.

4. Development of each and every person to his or her greatest efficiency and prosperity:
According to the principal all workers must be trained to all possible extent in order to
get the maximum of their level. This will not only help the organisation to attain its goal
but also help the employees working in the organisation building their confidence.

5. Maximum output in place of restricted output: This principle implies continuous

increase in output and productivity in instead of restricted output by management or by
workers.

Scientific techniques of Taylor [AHSEC 2024]

FW Taylor evolved some techniques / elements of scientific management which are

explained below:

i. Functional foremanship:

Here Taylor suggested the division of factory into two departments namely planning
department and production department. He suggested it for men for looking after the
smooth functioning of the factory operations they are:

Under planning department

• route clerk
• instruction card clerk
• time and cost clerk
• disciplinarian

Under production department

• gang Boss
• speed Boss
• repair Boss

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 • Inspector Boss

ii. Separation of planning and doing or standardisation and simplification of work: Before
Taylor scientific management workers themselves use to decide how they have to work
and what tools and instruments will be required for that. Taylor Emphasis that the
planning functioning should be separated from execution and given to a specialist for
better results.

iii. Fatigue study: This technique of scientific management is conducted to find out the
frequency of the rest intervals, the duration of rest intervals and the number of rest
intervals. This scientific approach of Management helps the managers to save the time
wastage by labourers.

iv. Method study: This technique aims to identify the most efficient method of performing
a job, minimising production costs and maximising resource utilisation. Instead of relying
on arbitrary rules, Taylor advocated for trying out various methods and selecting the one
that brings the greatest benefits at the lowest cost.

v. Time study: The meaning/objective of time study is to determine several key factors,
including the standard time required for a job, setting targets for workers, determining the
required workforce, and categorising workers into efficient and inefficient categories.
[AHSEC-2023]

vi. Job analysis: This principle is undertaken to find out one of the best way of performing
the job. The best way of performing the job is one which requires the least movements,
less time and less cost.

vii. Work study: It ensures maximum production at minimum cost and getting best
contribution from every factor: Work study = Time study + Motion study + Method study +
Fatigue study.

5. Write
two differences between time study and motion study. [AHSEC 2024]
Ans: Two differences between time study and motion study are:

Basis Time study Motion study

Objective Time study aims to Motion study focus on
determine the standard analysing and minimising
time required for a job and unproductive movements of
set targets workers. worker
Focus It focus on the time taken It focuses on the
to complete a task and movements made by
determines the required workers and eliminates
workforce.

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 unnecessary or inefficient
movement.

6. What are the advantages and disadvantages of scientific management?

Ans: The following are the advantages and disadvantages of scientific management

Advantages of scientific management

1. Increase in production and productivity: Scientific management helps the

organisation to grow and increase its production and productivity because of
increased efficiency of its employees.
2. Reduction in cost of production: Scientific management in business avoids all
types of wastage and losses which leads to reduction in cost of production.
3. Better quality products: Standardisation, which is an essential element of scientific
management, ensures better quality product at lower cost by minimising the cost
of production.
4. Improvement in workers’ efficiency and earn more: Scientific selection of workers
helps the enterprise place the right man in the right job, which helps the workers
to improve their working efficiency, produce more output and earn more wages.

Disadvantages of scientific management

1. Expensive: Introduction of scientific management is quite expensive for a newly

formed organisation.
2. Complex and time-consuming: Reorganisation of workforce and working style is
very complex and time-consuming.
3. Monopoly among the workers: The workers are supposed to do routine work like
automatic machines under this principle, which creates problems of monopoly
among the workers.
4. No use of workers’ initiative and creativity: Scientific management separates
planning from performance. Workers are to carry out instructions given to them, so
they are not given any opportunity to take initiative and show their creativity.
5. Problem of unemployment: Under scientific management, management has to take
decisions to reduce employees, which creates unemployment, and surplus workers
are likely to be thrown out of the organisation.

Extra: (ch 7/8)

Meaning of Management by Exception (MBE) [AHSEC – 2018, 23]:

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Management by exception is a style of business management that focuses on identifying
and handling cases that deviate from the norm, recommended as best practice by the
project management method. Management by exception has both a general business
application and a business intelligence application.

Management by Objectives (MBO):

MBO is a strategic management model that aims to improve the performance of an

organisation by clearly defining objectives that are agreed to by both management and
employees. The term was first outlined by management guru Peter Drucker in his 1954
book, The Practice of Management.

7.Differentiate between Taylorism and Fayolism

OR

Differentiate between Taylor’s scientific management and Fayol’s administrative

management.

OR

Differentiate between scientific/modern management and

administrative/traditional/general management. [AHSEC 2023]

Ans: The differences between Scientific Management and Traditional/General

Management are:

Basis Taylor’s scientific Fayol’s scientific

management management
Starting point Taylor began his approach Fayol began his approach
from the lowest level of the from the top level of
organisation and moved management and moved
upwards. downwards.
Level of management It focuses on the operative It focuses on administrative
level of management. or top level management.
Emphasis It emphasises on increasing It emphasises the function
productivity and eliminating of management and the
wastage in the production principle involved in the
process general administration.
Applicability It is applicable in specific It is applicable universally.
situations.
Goal The main goal is to The goal is to develop a
enhance efficiency and general theory of

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 productivity by applying administration to guide
scientific principles and management practices.
methods.
Dynamism and rigidity It is relatively rigid. It is dynamic in nature.

Very short answer type questions (1 mark each)

1. Who is called the father of scientific management? (2019)

Ans: F. W. Taylor

2. Who authored the “The Principles and Methods of Scientific Management” / “The
Principles of Scientific Management”?

Ans: F. W. Taylor

3. Who is called the father of administrative management theory of 14 principles of

management?

Ans: Henry Fayol

4. Name the book authored by Henry Fayol on Management. (2008, 2012, 2017)

Ans: General and Industrial Management in the year 1949

5. Who introduced the concept of Gang Plank? (2011, 2017)

Ans: Henry Fayol. It permits direct communication between employees working at

same level.

6. Similar: Name the device which permits direct communication between employees
working at the same level.

Ans: Gang Plank

7. Which principles state ‘one plan one boss’ and ‘one head, one plan’?

Ans: Unity of command, Avoidance of confusion leading to efficiency.

8. Which principle of management promotes team spirit, harmony and unity within the
organisation?

Ans: Principle of Esprit De Corps

9. Who gave functions and principles of management?

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 Ans: Henry Fayol

10. Which techniques of scientific management describe one best way to perform a
task?

Ans: Method Study

11. State how the principles of management are flexible.

Ans: Principles of Management are flexible, which means that they are not rigid,
and can be modified by the manager as per the situation.

12. Who introduced the concept of functional foremanship?

Ans: F.W. Taylor. It insists on hiring specialist for every job. (8 Specialists foremen)

13. Who classified the activities of an industrial organisation into six groups?
(2010)

Ans: Henry Fayol

14. Why are the Principles called contingent?

Ans: Because they are affected by situations.

15. Why management principles are universal?

Ans: Management principles are universal because they are applicable in all
organisations in all situations whether it is a profit making or non-profit making
.
16. State the technique of scientific management which is the strong motivator for a
worker to reach standard performance.

Ans: Differential piece wage system which is introduced by F.W. Taylor.

17. Name the association that has devised a code of conduct for Indian managers.

Ans: All India Management Association (AIMA).

18. State one violating effect of the principle of 'Division of work'

Ans: Lack of specialisation.

19. State one positive effect of the principle of 'Unity of command"

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 Ans: Avoidance of confusion leading to efficiency.

20. State the principle of 'order'.

Ans: Proper placement of things and persons is called order.

21. Which principle of management insists in orderly arrangement of men and material?

Ans. Principle of order.

22. State the technique of scientific management which is the strong motivator for a
worker to reach standard performance. Or Which technique of Taylor overlook the
principle of equity?

Ans: Differential piece wage system which is introduced by F. W. Taylor.

23. What is meant by Simplification as a technique of scientific management?

Ans: Simplification refers to putting an end to unnecessary types, qualities, sizes

etc.

24. Who introduced the concept of functional foremanship?

(2008, 2010, 2015)

Ans: F.W. Taylor. It insists on hiring specialist for every job. (8 Specialists foreman)

25. Which technique of scientific management violated the principle of 'unity of

command'?( 2018)

Ans: Functional foremanship.

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