(Notes) Subject Notes - Business Studies (Principles Of Management )

(Subject Notes) Business Studies


Principles Of Management


What is GANG-PLANK? Show it through a diagram – 3 marks

Gang-plank is the technique of shortening the route of communication which is usually followed through all channel of hierarchy. Fayol suggested that in case of urgencies, by jumping the prescribed line of authority, these officials could deal with one another at one sitting and sort out several problems quickly.

How can Fayol’s PRINCIPLES OF EQUITY and order be applied in work situation?-4 marks. Illustrate with an example. (CBSE-1996, CBSE-2001)


Which principle of management aims at securing the loyalty and devotion of the employees by giving them kind, fair and just treatment? Explain this principle with a suitable example -4 marks

  • The principle of equity suggest that similar treatment is assured to people performing similar jobs. Example – two typists should be paid the same wage rate.

  • An effective management is always kind, fair and just in its dealing with its subordinates. This way it earns the respect, loyalty and devotion of the employees and they are motivated to put in their best efforts.

  • However the principle of equity should be applied at all levels. Workers should be treated at par at every level.

  • For example: There should be no discrimination with regards to position, sex, age etc while granting medical leave to the employees.

Name the function of management, which concentrates on employing and retaining the right person at the right place. Explain why this function is important in any organisation.


If an organisation does not provide the right place for physical and human resources in the organisation., which principle is violated? What are the consequences of it?

Principle of ORDER:

If an organisation does not provide the right place for physical and human resources in the organisation, the PRINCIPLE OF ORDER is violated.

The principle of order is concerned with proper arrangement of things and people. This principle can be divided into two:

Material order: An orderly arrangement of things is called material order. There should be an orderly arrangement of physical factors of production like land, raw material, tools and equipment. This means that there should be a specific place for everything. Every piece of land and every article should be used properly, economically and in the best possible way.

Social order: An orderly arrangement of people is called social order. This includes employees. Right man for the right job will ensure effective use of man power resources. Right place for everything and for everyone should therefore be the guiding principle for every management.

Adverse Effect: When there is no arrangement for things and people, the organisation will not be able to achieve its objectives in time. Effective utilisation of physical and human resources will not be possible.

Explain the principle of “INITIATIVE” through a suitable example - 3 marks (CBSE-2000)

  • Freedom to think and execute a plan is known as initiative.

  • Employees at all level should be allowed to take initiative in work related matters.

  • Encouraging initiative is likely to motivate employees to work better and harder.

  • However initiative should not be confused with disrespect to authority. For example: if any employee is given the initiative to make suggestions but once the decision is taken on any issue then there is no scope for disobedience.

Fayol points out the danger and costs of unnecessary labour turnover in one of his principles. Name and explain the principle.(CBSE-2000) (2004)


Illustrate the principle of “STABILITY OF TENURE” through a suitable example – 3 marks

Fayol emphasised in his principle “STABILITY OF TENURE” that employees should not be shifted from their position frequently. The period of service should be fixed. It takes time for an employee to get used to his work and he cannot render useful service if he is removed before he gets accustomed to the work assigned to him.

  • Production requires team-work. If the members of the team go on changing the entire production process will be disturbed.

  • An effective management will ensure that trusted, trained and experienced personnel do not leave the organisation, unless it is unavoidable such as illness, retirement or death of an employee.

  • Stability of job creates a sense of belonging among the workers and so they are motivated to improve the quantity and quality of work.
    Adverse Effect: If principle of stability of tenure is violated, it will lead to high labour turnover rate and will increase the cost of selection and training of the employees.

Define Scientific Management? – 2 marks

  • According to F.W.Taylor who is regarded as the father of scientific management, “Scientific Management is the art of knowing exactly what you want your men to do and seeing that they do it in the cheapest way”.

  • It means conducting business activities according to standardised tools, methods and trained personnel in order to increase the output, improve its quality and reduce cost and wastage.

Explain any two principles of Scientific Management.


Describe in brief TAYLOR’S PRINCIPLES of (i) science not rule of the thumb and (ii) separation of planning and operational work - 4 marks. (any two out of 5 taylor’s principles will be asked- 4 marks) Important

Science not rule of thumb – 2 marks

  • In traditional management “rule of thumb” was prevailing. This was also known as “Trial and errors method “ or “Hit or miss method”

  • This principle meant that go on trying, failing and wasting the resources and finally perfecting the job.

  • Workers were careless because no specific amount of work was expected from them. Even the employer did not know the real worth of his employee. Everything was left to ”Trial and Errors” method.

  • Taylor introduced the scientific method in which he emphasized that “Rule of the thumb” does NOT involve thinking before doing and that each job in the organisation should NOT be performed based on intuition, experience and hit and miss methods.

  • According to scientific method the causes, effects and exact measures of effort and output should be kept in view for any work to be performed. This forms the core of scientific management.

Separation of planning and operational work: - 2 marks

  • According to Taylor, planning operations should be separated from operational operations.

  • He stressed that managers should concentrate on planning the job of the workers while workers’ potential should be developed to the fullest extent for their own benefit as well as the prosperity of the company.

  • For this purpose there has to be a scientific selection of workers and they should be trained to adopt new methods of work.

Harmony not discord -2 marks

  • According to Taylor those who work together should work in harmony i.e. there should be mutual give and take and proper understanding among the managers and workers. This is because group efforts contribute more than an individual’s efforts.

  • Managers should adopt an enlightened attitude and share the productive gains with the workers and workers on their part should work with discipline and loyalty.

Maximum not restricted output – 2 marks

  • Continuous productivity is one of the principles of scientific management.

  • According to this principle, production should not be curtailed and management and labour should both be interested in increasing productivity.

  • Conflict between management and labour arises mainly on division of surplus. The best solution is to increase the size of the surplus so that both can have a larger share.

Cooperation not individualism: - 2 marks

  • Scientific management works on cooperation between workers and management and among workers themselves.

  • Management can earn higher profits if workers produce better quality, low cost goods.

  • Workers can earn higher wages if management provides standard materials, standard tools, standard working conditions and training in standard methods.

Explain “method study” as a technique of Scientific Management? –2 marks (CBSE-2004)

  • Method study is concerned with methods of performing a job.

  • There are various methods to perform the same job with different costs requirements. Taylor suggested that management should find out one best way to perform the task.

  • For example – The methods of manufacturing shoes may be manual or mechanical but the cost of labour and capital to manufacture shoes according to each method may vary. Management has to decide which method to use before it starts manufacturing.

  • The objective of method study is to minimise production costs by a proper mixture of factors of production in order to achieve desired result.

  • Method study should be done right at the planning stage of the job.

What role do” motion studies” play in setting the standard task? – 2 marks

  • Motion study is the technique that closely observes the movement of the body/machines required to perform a job so that unnecessary movements can be eliminated and the best way of doing a job is determined.

  • Upon a close examination of body’s wasteful motions it is possible to find

    • which motions are productive

    • which are unproductive

    • which motions are incidental i.e. going to the store

  • Through motion study Taylor was able to design suitable tools & equipment and educate workers on their use.

Define “fatigue study” on the basis of meaning and purpose? – 2 marks

  • Fatigue study helps in setting the time interval and frequency of rest period in completing a task.

  • A person will be tired and less productive if he works without rest interval for a long period of time. If he is allowed rest intervals he will regain stamina and work with increased efficiency.

What is the role of “time study” in setting the standard task or help to improve the efficiency of workers.? Give two points in support of your answer? – 2 marks

  • Time study measures the standard time taken for a qualified worker to perform a well -defined job.

  • Time study is done with the help of a time measuring device.

  • Objective of time study is to:

    • Determine number of workers to be employed

    • Determine cost of labour

    • Frame suitable incentive schemes

  • Benefit of time study:

    • It helps to determine the fair days work of an employee

    • It creates time consciousness in a worker

    • It eliminates idle time

    • It helps in reducing costs

Distinguish between Time Study and Motion Study – 3 marks (Pre Semester 2003)



It measures the standard time taken for a qualified worker to perform a well defined job.

It studies movements of body/machine to perform a job

The purpose is to decide how much time is normally required to perform a certain job

The purpose is to avoid wasteful motions and to determine the best way of doing a job

It measures the work provides a yardstick to decide between efficient and inefficient workers

It eliminates and reduces wasteful and useless motions.

What is “ Mental Revolution”
– 2 marks.

  • According to Taylor, mental revolution means that both workers and management should completely change their attitude regarding relation between themselves and their work.

  • Management and workers usually suspect each other and try to trick each other.

  • Workers all the time feel that management exploits them by extracting a lot of work from them and paying meagre wages. Management on the other hand feels that workers always grumble about the workload and deliberately slow down their work, damage equipments, tools and show indifference to quality of products.

  • Mental revolution requires that such a feeling of suspicion or prejudice should be rooted out.

  • Management should provide good working conditions and resolves all problems scientifically. Similarly workers on their part should work with discipline and loyalty.

  • Instead of fighting for dividing the surplus profit, management and workers should cooperate to increase it.

Do you agree with the view that Taylor’s principles of scientific management and Faylor’s principles of management are mutually complementary. Give any 4 reasons. (3-4 marks)


List 4 distinctions between Fayol’s contribution and Taylor’s theory (Important) 3-4 marks

Yes, they are mutually complementary since no organization can function effectively without mutual cooperation of managers and employees.

The comparative evaluation of their contributions is given below. (FEES)


  • Taylor tried to improve the productivity of workers and eliminate all kinds of wastes.

  • Fayol tried to develop the principles to ensure better management.


  • Taylor’s principles were more applicable at shop level with emphasis on tasks of workers and supervisors.

  • Fayol’s principles were more applicable at general management level with emphasis on efficiency of managers and administration


  • Taylor used the expression “scientific management”

  • Fayol used the expression “general theory of administration”.

Starting point:

  • Taylor wanted to improve the efficiency of lowest level and then move upwards while formulating the principles of scientific management.

  • Fayol began from the top level and moved downwards with emphasis on “unity of direction, command and coordination.





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