NCERT Solutions for Class 12 Business Studies Chapter 2 Principles of Management

NCERT Solutions for Class 12 Business Studies Chapter 2 Principles of Management

NCERT Solutions for Class 12 Business Studies Chapter 2 Principles of Management is designed and prepared by the best teachers across India. All the important topics are covered in the exercises and each answer comes with a detailed explanation to help students understand concepts better. These NCERT solutions play a crucial role in your preparation for all exams conducted by the CBSE, including the JEE.


1. How is the Principle of 'Unity of Command' useful to management? Explain briefly.

Ans. Principle of Unity of Command implies that each and every subordinate should have one and only one boss. Orders and instructions should come from only one head. This helps the working of any organisation in the following manner
(i) Authority responsibility relationship is clearly defined.
(ii) Subordinates are known for whom they are accountable.
(iii) Discipline and order is maintained.

2. Define scientific management. State any three of its principles.

Ans. Scientific management can be defined as knowing exactly what you want from men to do and seeing that they do it in the best and cheapest way. Scientific management aims at choosing the best. Method to get the maximum output from the workers the principles of scientific management are mainly applicable to the shop-floor level. Three principles of scientific management are as follows
(i) Science, Not Rule of Thumb When different managers use their own different methods to get the work done it is rule of thumb. Taylor believed that there was only one best method to maximise efficiency. Taylor advised that every organisation should compare the results of different methods, test them again and again and finally select one best method of getting the work done.
(ii) Harmony, Not Discord Managers are an extension of the management and serve as a link between workers and the owners. Workers have to take instructions from the managers and managers have to get the work done through the workers. Oftentimes the relation between them is spoilt which is very harmful for everyone-workers, managers and owners. This class conflict should be replaced by harmony between the two. Both should change their thinking towards each other. Both should give importance to each other. This is known as mental revolution.
(iii) Co-operation, Not Individualism There should be complete co-operation between the labour and the management instead of individualism. This principle is an extension of the principle of 'Harmony not discord.' The management and the workers should not compete with each other rather co-operate with each other. Management should consider all good suggestions made by the employees which can help in cost reduction. At the same time, workers should never think of going or stickes in order to get their unreasonable demands fulfilled.

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

Ans. The principle of order is violated if an organisation does not provide the right place for physical and human resources. If this principle is violated then
(i) Lots of time will be wasted in locating the different resources.
(ii) This will lead to delayed decisions.
(iii) Wastage of energy which will lead to in efficiency and delay in production.
(iv) Causes hindrance in the activities of business.

4. Explain any four points regarding significance of Principles of management.

Ans. Significance of principles of management
(i) Providing Managers with Useful Insights into Reality When managers follow principles it adds to their knowledge, ability and understanding of managerial situations and circumstances. This improves managerial efficiency e.g., when managers use principle of delegation then they get more time to concentrate on critical areas of working.
(ii) Scientific Decision Making management principles help in thoughtful decision making. They emphasise on logic rather than blind faith. Here, decisions are based on the objective assessment of the situation.
(iii) Optimum Utilisation of Resources and Effective Administration Principles help the managers to conceptualise the net effect of their decision rather than going for trial and error method resulting in saved time, efforts and energy thereby increased productivity.
(iv) Management Training, Education and Research Principles of management are the base for management theory. As such they are used as a basis for management training, education and research. These principles provide basic groundwork for the development of management as a subject. Professional courses like BBA, MBA also teaches these principles as part of their curriculum.

5. Discuss the relevance of Taylor and Fayol's contribution in the contemporary business environment.

Ans. Relevance of Taylor and Fayol's contribution in the contemporary business environment. Both Fayol and Taylor have given principles of management to improve efficiency in an organisation. Taylor gave us scientific principles of management which are being adopted by all organisations to improve its productivity at the shop floor level, the principles help in giving effective results. In the same manner, Henry Fayol gave in general principles of management which when implemented at any of the levels-top, middle or lower and helps in achieving better co-ordination, remove ambiguity and encourage the employees to improve their work performance.

6. Identify the principle of management (out of 14 given by Henry Fayol) that were being violated by the company.

Ans. Company violated following principles
(i) Division of work (ii) Unity of command
(iii) Unity of direction (iv) Discipline
(v) Subordination of individual interest to general interest
(vi) Order
(viii) Remuneration

7. Explain these principles in brief.

Ans. (i) Division of Work As per the case work is not divided among the workers as per their specialisation. As specialisation is the most efficient way to use human efforts and produces more and better work.
(ii) Unity of Command In the case subordinates had to work for more than one superior. This results in declining efficiency. As per Fayol's principle of unity of command there should be one boss and if it is violated it results in authority is undetermined, discipline is in jeopardy, order distributed and stability threatened. Same we are observing in the above case.
(iii) Unity of Direction The units of an organisation should be moving towards the same objective. Each group must be having same objective must have one head one plan. But in case first the producers are working on one product then moved to two or more group. Thus, this principle is also violated.
(iv) Discipline In the case, there is a lack of formalised control as the workers are working beyond there abilities. There is no rules and regulations as well as lack of employment agreement.
(v) Subordination of Individual Interest to General Interest Every individual is working better only when the organisation is giving priority to their general interest. In the case, company in only focusing over its objective not on employees.
(vi) Order People and materials must be in suitable places at appropriate time for maximum efficiency. But in case they are not following the order of anything,
(vii) Initiative It implies that workers should be self motivated, suggestions should be taken from the employees. It results in substantial cost and time reduction but here they are taking no feedbacks, no suggestions.
(viii) Remuneration The workers should get the fair wages but in case workers are performing day and night but they are not getting a fair amount for the same. This results that they are feeling cheated.

8. Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome.

Ans. Though scientific management is the best solution but still it will not be able to give very effective results as it has its own limitations.
(i) As competition has increased market research now will not help much.
(ii) Appointing professionals which increase the cost.
(iii) Principle of initiative will not help if functional foremanship will also be adopted.
(iv) In differential piece wage system only efficient workers may gain, the others will be in pain as they might lose their wages if target not met. This will lead instability which is harmful.
(v) Lot of stress will be generated from top to lower level.

9. What precautions should the company undertake to implement the changes? Give your answer with regard to each technique separately as enunciated in points 1 through 6 in the case problem.

Ans. A large number of changes will not accepted by anyone. So the company should play safe while making any changes.
(i) Trained staff can be appointed for few areas and workers can be trained to improve efficiency levels.
(ii) Production planning to be done with care.
(iii) Functional foremanship can be introduced but it not lead to clear killing of initiative. Workers should be eonsulted for suggestions.
(iv) Optimum use of method, time, motion and fatigue study should be done.
(v) Standardisation can be implemented for material, machinery and features of product.
(vi) Financial incentives should be provided to workers to get more work rather than adopting differential piece wage system.

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