12th OCM 1st Chapter Notes (Principles of Management) Maharashtra Board – Free Solution

12th OCM 1st Chapter Notes

Chapter 1 – Principles of Management

Q.1 A) Select the correct option and rewrite the sentences.

1) ______ was regarded as Father of Scientific Management.
a) Henry Fayol
b) F W Taylor
c) Philip Kotler

2) Principle of ______ is based on ‘A place for everything and everything in its place.
a) discipline
b) order
c) Equity

3) Members of the organization should receive orders from ______.
a) many superior
b) one superior
c) all superiors

4) Scalar chain means the hierarchy of ______ from the top level to the lower level for the purpose of communication.
a) discipline
b) unity
c) authority

5) Taylor recommended total ______ foremen to control the various aspects of production.
a) eight
b) three
c) two

Q.1 B) Match the pairs.

Group A	Group B
a) Henry Fayol	1) Eight Foremen
b) Principle of Unity of Direction	2) F.W. Taylor
c) Principles of Management	3) Proper division of all activities
d) Scientific Management Theory	4) General guidelines
e) Functional Organization	5) A place for everything and everything in its place
	6) One head-one plan
	7) Low wage rate
	8) Harmony between the employees and management
	9) German engineer
	10) Modern Management

Answers.
a. 10) Modern Management
b. 6) One head-one plan
c. 4) General guidelines
d. 2) F.W. Taylor
e. 1) Eight Foremen

Q.1 C) Give one word/phrase/term for the following statements.

1) The study of movement of an employee as well as a machine while completing particular task.
Answer: Motion Study

2) The technique of observing and recording the time required by an employee to complete a given task.
Answer: Time Study

3) Study consists of an organized, systematic and critical assessment of various activities.
Answer: Work Study

4) The principle which deals with ‘to do work with innovative way’.
Answer: Principle of Initiative

5) The principle which is based on ‘a place for everything and everything in its place’.
Answer: Principle of Order

Solution of other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.1 D) State whether the following statements are true or false.

1) The principles of management are universal in nature. (True)
2) Management principles are applied differently under different situations. (True)
3) Only some principles of management are important. (False)
4) Henry Fayol has given different techniques of management. (False)
5) F W Taylor has proposed 14 principles of management. (False)
6) Each member of an organization should receive orders only from one superior. (True)

Q.1 E) Find the odd one.

1) Principle of Authority and Responsibility, Motion Study, Principle of Division of Work, Principle of Discipline.
2) Fatigue Study, Principle of Unity of Command, Work-Study, Motion Study.

Q.1 F) Answer in one sentence.

1) What is principle of unity of command?
Answer: Each member of organization should receive orders from only one superior. This principle helps in managing conflicts and solving disputes among people in organization.

2) What is the standardization of tools and equipments?
Answer: Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of production, fatigue among the workers and it improves quality of work.

3) What is differential wage rate?
Answer: Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system.

4) What is Subordination of individual interest to organizational interest?
Answer: According to this principle the interest of an individual must be given less importance than the interest of the organization.

5) What is the meaning of principle?
Answer: Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.

Q.1 G) Correct the underlined word and rewrite the following sentences.

1) Security in job always affects adversely on the efficiency of employees.
Answer: Insecurity

2) Esprit de corps means ‘division is strength’.
Answer: Unity

3) Each member of organization should receive orders from only one subordinate.
Answer: Superior

4) Decentralization means concentration of powers and authorities at a specific position.
Answer: Centralization

5) Management techniques are applied differently under different conditions.
Answer: Principles

Q.2 Explain the following terms/concepts.

1) Motion Study
Answer: The study of required motion means movement of an employee as well as of machine while completing a particular task is very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particular job. It also helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can be eliminated or their sequence can be changed for smooth flow of task.

2) Differential Piece Rate System
Answer: Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e. remuneration at higher rate.

3) Fatigue Study
Answer: Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions result into physical and mental stress i.e. fatigue. It has an adverse effect on the health and efficiency of the employees. The study of fatigue and steps to reduce the level of fatigue is very important to maintain the operational efficiency of the employees.

4) Time Study
Answer: It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of time study, the precise time required for each element of work is determined. It is the technique used for fixing the standard time required to do a particular task under a given condition. It is useful to measure the efficiency of an employee and to control the cost of work.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.3 Study the following case/situation and express your opinion.

(1) Mr. Harshad is an entrepreneur and engaged in production of eco-friendly utensils. Both male and female workers are working in his factory. All male employees are directly working on machines whereas female employees are working in Packaging Department. Mr. Sharath is working as Finance Manager while Mrs. Naina is working as HR Manager who is responsible for recruiting employees in the factory. On this basis:

i) Identify any one principle of management in above case.
Answer: One principle of management in the above case is the Principle of Division of Work.

ii) What is the designation of Mrs. Naina in this organization?
Answer: The designation of Mrs. Naina in this organization is Human Resource Manager.

iii) Who is responsible for overall planning of the organization?
Answer: Mr. Harshad is responsible for the overall planning of the organization.

(2) In ‘Fine Diamonds Ltd.’ 200 employees are working in three shifts. In first shift 60 employees, in second shift 60 employees and in third shift 80 employees are working without sufficient breaks except lunch break and shift change break. No employee is able to complete the work in designated time due to inappropriate time management which results into delay for next shift employees.

i) Identify which scientific principle needs to be followed by the company.
Answer: In the above case, the Principle of scientific management called Science, Not Rule of Thumb needs to be followed.

ii) Suggest two scientific techniques which can be used for smooth flow of work in ‘Fine Diamonds Ltd.
Answer: Work-study based on Fatigue study and Scientific task setting can be used for smooth flow of work in ‘Fine Diamonds Ltd.

iii) Why the work is not being completed in time?
Answer: Following are the reasons for non-completion of work on time are:
a) Long working hours without sufficient breaks reduce the efficiency of labour.
b) Due to inappropriate time management which results in delays for the next shift employees.
c) Standard required output and standard time are not defined by Management of Fine Dimond Ltd.

Q.4 Answer in brief.

1) Explain any five principles of management of Henry Fayol.

Answer: Refer to question number 7 (2) – Write any 5 to 6 points with an explanation.

2) Describe any four techniques of scientific management.

Answer: Refer to question number 7 (1) – Write any 5 to 6 points with an explanation.

Q.5 Justify the following statements.

1)Principles of management are flexible in nature.

Answer:
a) Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.
b) Management principles are flexible in nature. It means they can be changed or modified according to the situation.
c) Managers can be flexible while implementing principles to suit the requirement.
d) The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organization according to its need.
e) Thus it is rightly justified that, Principles of management are flexible in nature.

2) Management principles are helpful in optimum utilization of resources.

Answer:
a) In every organization two types of resources are used i.e. physical resources (material, machines, money etc.) and human resources (manpower).
b) The basic function of management is to make proper balance between these resources by putting them to optimum use and control on wastage of resources.
c) While maintaining discipline and healthy working environment, management always uses techniques and principles.
d) It helps in establishing a cordial relationship between management and employees which increases the efficiency level of employees and also affects effective administration.
e) Therefore, management principles are helpful in optimum utilization of resources.

3) Principle of equity is important.

Answer:
a) Management should be fair as well as friendly to the subordinates.
b) While dividing the work, delegating the authorities, deciding the monetary terms, etc. there should not be any discrimination between the employees.
c) It is also suggested that the remuneration should not depend on the department but at the level on which subordinates are working.
d) The employees working on the same level but in different departments should be paid same wages. This equity will help in avoiding conflicts in the organisation.
e) Therefore, the Principle of equity is important.

4) Taylor emphasized on standardization of tools and equipment.

Answer:
a) Taylor’s management theory is based on scientific experiments. This theory involves the application of scientific approach to decision making and solving them at the same time.
b) With the result of experiments conducted at workplace, Taylor advocated standardization of tools and equipments.
c) Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of production, fatigue among the workers and it improves quality of work.
d) Therefore, Taylor emphasized on standardization of tools and equipment.

5) Differential piece wage rate plan is necessary.

Answer:
a) Remuneration should be fixed in such a way that average worker is motivated to attain a standard output.
b) Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system.
c) On the other hand if an employee is performing below the standard; he shall be given lower rate of wages.
d) This technique motivates the employees to attain higher standard performance and earn wages i.e. remuneration at a higher rate.
e) Thus, a Differential piece wage rate plan is necessary.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

Q.6 Attempt the following.

1) Explain in detail any five Henry Fayol’s principles of management given by Henry Fayol.

Answer: Refer to question number 7 (2) – Write any 5 to 6 points with an explanation.

2) Describe different techniques of scientific management.

Answer: Refer to question number 7 (1) – Write any 5 to 6 points with an explanation.

3) Elaborate principles of scientific management.

Answer:
Definition of Scientific Management by Fredrick Taylor: “Scientific Management consists of knowing what you (i.e. management) want men to do exactly; and seeing it that they do it in the best and the cheapest manner.”

Principles of Scientific Management:
These principles are as follows:

1) Science, Not Rule of Thumb

In order to increase organizational efficiency, the ‘Rule of Thumb’ method should be substituted with the methods developed through scientific analysis of work. Rule of thumb decisions are based on personal judgments of the manager. Taylor insisted upon scientific method for every small work. This principle is concerned with selecting the best way of performing a job after scientific analysis of that job and not by trial and error methods. Standard required time and standard output should be defined by the manager. This will help in saving time and human energy and will result into expected standard output. .

2) Harmony, Not Discord

According to this principle, there should be harmony between the employees and management. This coordination will help in minimizing conflicts between them. Perfect understanding between employees and management will be helpful in creating healthy work environment for achieving the desired goal i.e. success.

3) Mental Revolution

Taylor introduced the concept of “Mental Revolution”. This principle focuses on change in the attitude of employees and management towards each other. Both should realize their equal importance in organization. They should give full cooperation for achieving goal of the organization. This will increase productivity and profits.

4) Cooperation, Not Individualism

This principle emphasizes on mutual cooperation between workforce i.e. employees and management. Due to cooperation, trust, team spirit etc. internal competition will turn into a healthy working environment. Management should always consider the suggestions given by employees in decision-making process. Employees should be treated as an integral part of organization in all respects.

5) Division of Responsibility

Proper division of work should always be accompanied with division of responsibilities between the managers and employees. Major planning is done by the top and middle level management authorities whereas employees are concentrating on its execution. The reporting is done as per the instructions given by their superiors.

6) Development of employer and employees for greater efficiency and maximum prosperity

The best performance of any organization always depends on the skills and capabilities of its, employees to a great extent. Thus, providing training and development programmes to the employees whenever required, is very essential. It ultimately affects the profitability of the organization. Each employee should be given the proper opportunity to attain greater efficiency and maximum prosperity

4) Explain nature of principles of management.

Answer:
Management principles are formed to guide and influence the behavior of employees. These principles insist on improving efficiency of organizational resources in terms of profit. These principles also focus on best coordination between superior, subordinates, and all the members of the organization.

The nature of management principles is given below:

1) Universal application

The principles of management are universal in nature. That means they can be applied to all types of organizations, irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organizations. Similarly, they are applicable to all levels of management.

2) General guidelines

Management principles provide general guidelines in tackling organizational situations wisely as well as in solving problems. They are not rigid. Which management principles are to be applied depends upon the situation, size, and nature of the organization. For example, when we say fair remuneration, then the term ‘fair’ can vary as per the nature, size, and financial condition of the organization.

3) Principles are formed by practice and experiments

The management principles are developed gradually with thorough research work. Systematic observations and experiments are conducted before developing them. The results of such experiments have been developed as a principle after its practice in organizations.

4) Flexibility

Management principles are flexible in nature. It means they can be changed or modified according to the situation. Managers can be flexible while implementing principles to suit the requirement. The business situations keep on changing. Management principles can be adjusted or modified and can be used in the organization according to its need.

5) Behavioral in nature

Management is a group activity. Management aims at achieving certain goals through a group of a human beings. Management principles are designed to influence human beings. These principles control a group of persons and direct them to achieve the objectives.

6) Cause and effect relationship

Principles of management are the basis for taking decisions. They determine the cause or reason for a particular effect. For example, payment of good wages and incentives helps in increasing the output of workers or making effective advertisement increases the sale of a product.

7) All principles are of equal importance

All principles of management are of equal importance. Those are to be practiced simultaneously to get the best results in the form of achievement of predefined goals. If any specific principle is focused more and others are not followed with same focus, then it affects the working of organization.

Q.7 Answer the following.

1) What are the techniques of scientific management? Explain in detail.

Answer:
Taylor’s management theory is based on scientific experiments. This theory involves the application of a scientific approach to decision-making and solving them at the same time. According to Taylor, problems should be solved by scientific techniques rather than the rule of thumb and a trial and error approach.

Definition of Scientific Management by Fredrick Taylor: “Scientific Management consists of knowing what you (i.e. management) want men to do exactly, and seeing it that they do it in the best and the cheapest manner.”

Techniques of Scientific Management
Some of the major techniques of scientific management are as follows:

1) Work Study

Before assigning the work to the available workforce, proper work study should be done by management. Work study consists of an organized, systematic, and critical assessment of the various activities or functions. Work-study is based on the techniques such as time study, motion study, method study, and fatigue study.

A) Time Study

It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of time study, the precise time required for each element of work is determined. It is the technique used for fixing the standard time required to do a particular task under given condition. It is useful to measure the efficiency of an employee and to control the cost of work.

B) Method Study

There are always various methods of completing the task. For best quality and cost-effectiveness, identifying the best method of doing a particular job is very important but challenging task for a manager. It helps in reducing the wastage of time, raw material and in improving the utility of all resources as per predefined objectives.

C) Motion Study

The study of required motion means movement of an employee as well as of machine while completing a particular task is very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particular job. It also helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can be eliminated or their sequence can be changed for smooth flow of task.

D) Fatigue Study

Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions result into physical and mental stress i.e. fatigue. It has an adverse effect on the health and efficiency of the employees. The study of fatigue and steps to reduce the level of fatigue is very important to maintain the operational efficiency of the employees.

2) Standardization of Tools and Equipments

With the result of experiments conducted at the workplace, Taylor advocated standardization of tools and equipment. A standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of production, and fatigue among the workers and it improves quality of work.

3) Scientific Task Setting

Taylor emphasized the need for fixing a fair day’s work. Scientific work setting is important to prevent the employees from doing work much below their capacity. By using this technique, employees will complete the task according to standards given and management can keep proper control on optimum utilization of workforce.

4) Scientific Selection and Training

Management can select right persons for the right jobs by using scientific selection procedures. It needs to fix job specifications as per requirement. Employees are selected according to pre-determined standards in an impartial way. After selection, management should provide the proper training programmes to increase their efficiency.

5) Functional Organization

In this concept of Taylor, planning is separated from implementation. That means, planning is done by different people and actual work is supervised by different people. Thus, every worker will be supervised by two different sets of supervisors. He recommended total of eight foremen to control the various aspects of production. They are categorized as follows:
A) At Planning Level:
a) Route Clerk- tells how work moves from one machine to other.
b) Instruction Clerk- records instructions to complete the work.
c) Time and Cost Clerk- determines time in which work should be completed and workout the cost
d) Discipline- ensures that the workers are working as per factory rules.

B) At Implementation Level:
a) Gang Boss-actually gets the work done.
b) Speed Boss- ensures that the work is completed in specified time.
c) Repair Boss- handles security and maintenance of mechanism
d) Inspector- ensures that the work is done as per the specified standards.

6) Differential Piece-Rate Wage Plan

Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e. remuneration at a higher rate.

2) Explain 14 principles of Henry Fayol in detail.

Answer:
Henry Fayol (1841-1925) was a French mining engineer who turned into a leading industrialist and a successful manager. He started his career as a mining engineer in a French mining company and rose to the position of Chief Managing Director.

Fayol suggested 14 principles of management. These statements serve as a guideline for decision-making and management actions.

1) Principle of Division of Work

According to this principle, the work is divided into different kinds such as technical, financial, commercial, security operations, accounting and managerial. It is assigned to employees as per their qualities and capabilities. It helps in improving efficiency and expertise of employees which ultimately turns into expected productivity level.

2) Principle of Authority and Responsibility

Authority is the right to take decisions. It is necessary to get things done appropriately by subordinates. Authority always comes with responsibility. If the manager is given the authority to complete a task within a given time, he should be held responsible if he does not complete the work in given time. Manager should have proper authority to take managerial decisions on his own with respect to the goal.

3) Principle of Discipline

According to Fayol, discipline is the most essential thing in the organization. Employees must obey and respect the rules that govern the organization. Discipline helps to achieve the goals of the organization. Good discipline is the result of effective leadership. There must be a clear understanding between the management and workers regarding the organization’s rules. Basic discipline should be observed at all levels of management.

4) Principle of Unity of Command

Each member of the organization should receive orders from only one superior. This principle helps in managing conflicts and solving disputes among people in organization. It also helps in avoiding confusion. If an employee receives commands from more than one authority, he will get confused and will not be able to take decisions about whose orders should be followed. This is the wrong approach.

5) Principle of Unity of Direction

This principle states that ‘there should be one head and one plan’ in every organization. Each group in the organization should have the same objective and the group should be directed by one manager using single plan.

6) Principle of Subordination of Individual Interest to Organisational Interest

According to this principle, the interest of an individual must be given less importance than the interest of the organization. While taking decisions in the organization the manager should always consider the interest of the whole group rather than the interest of a single employee. Similarly, the employee should protect the interest of the organization first and his personal interest should be subordinated. For example, in every game, the players are always thinking about winning the match as a team rather than their individual records.

7) Principle of Centralization

Centralization refers to the concentration of powers and authorities. In some organizations, this power is vested in one hand or a few hands. This situation occurs in small organizations. But, if the size of the organization is large then there is a decentralization of the power or authority. According to this principle, there must be a proper balance between centralization and decentralization in the organization.

8) Principle of Remuneration

Appropriate remuneration to staff or employees is the principle to keep them satisfied financially as well as retain them for a long span of time within the organization. Fair remuneration affects the productivity and efficiency level in total. The remuneration should be fixed by taking into consideration the skill, expertise, knowledge, tenure, cost of living, market trend, profitability of organization etc.

9) Principle of Scalar Chain

Scalar chain means the hierarchy of authority from the top level to the lower level for the purpose of communication. This helps to ensure the orderly flow of information and communication. Traditionally, organizations used to frame large scalar chains which is time-consuming. For example, a General Manager informs the decision to respective Functional Manager, then Functional Manager will pass it to supervisor, the supervisor will inform it to Foreman and so on according to level of authority. For avoiding this longer chain and to take speedy decisions cross-communication or direct communication is followed by various organizations which is known as Gang Plank.

10) Principle of Order

This principle is based on ‘A place for everything and everything in its place. Human resources and materials should be in the right place at the right time for maximum efficiency. Human resources should be placed at right place and on right job. The principle focuses on the proper utilization of physical and human resources.

11) Principle of Equity

Management should be fair as well as friendly to the subordinates. While dividing the work, delegating the authorities, deciding the monetary terms, etc. there should not be any discrimination between the employees. It is also suggested that the remuneration should not depend on the department but on the level at which subordinates are working. The employees working on the same level but in different departments should be paid same wages. This equity will help in avoiding conflicts in the organization.

12) Principle of Stability of Tenure

At the time of recruitment of employees, the management should assure them about the stability of tenure or job security. It plays a very important role in creating a sense of belongingness among the employees. Insecurity in job always affects the efficiency of employees adversely whereas job security minimizes the employee turnover ratio.

13) Principle of Initiative

The initiative refers to volunteering to do the work in an innovative way. The freedom to think and work on new ideas encourages employees to take initiative while working on given tasks. This initiative should be welcomed by the manager including a thorough discussion on those new ideas. It also helps in creating healthy organizational culture.

14) Principle of Esprit de corps (Team work)

Henry Fayol has given the emphasis on teamwork. Esprit de corps means union is strength. Running any organization is a group activity and human resources are a valuable asset of the organization. If all employees are working as a union and with mutual trust, the difficulties can be solved quickly. Therefore, as a leader, manager should create a spirit of teamwork and understanding among employees to achieve organizational goals easily.

Above 14 principles of Henry Fayol are very useful to manage the organization efficiently and effectively. These are also supportive to functions of management. These principles are very logical and therefore are applicable in modern management era.

Balbharti Textbook Solutions for other subjects
Solution of all Chapters of OCM
1 – 2 – 3 – 4 – 5 – 6 – 7 – 8

12th Commerce OCM Textbook Solutions

Chapter Name	Solution Link
1) Principles of Management	Click Here
2) Functions of Management	Click Here
3) Entrepreneurship Development	Click Here
4) Business Services	Click Here
5) Emerging Modes of Business	Click Here
6) Social Responsibilities of Business	Click Here
7) Consumer Protection	Click Here
8) Marketing	Click Here

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