Chapter-2

Principles Of Management

1. What is differential wage system?

Ans. Taylor was a strong advocate of piece wage system. He wanted
to differentiate between efficient and inefficient workers. The
standard time and other parameters should be determined on the
basis of the workstudy discussed above. The workers can then be
classified as efficient or inefficient on the basis of these standards.
He wanted to reward efficient workers. So he introduced different
rate of wage payment for those who performed above standard and
for those who performed below standard.

2. Meaning of Authority and responsibility?

Ans. According to Fayol, “Authority is the right to give orders and
obtain obedience. Authority is both formal and informal. Managers
require authority commensurate with their responsibility. There
should be a balance between authority and responsibility. At the
same time a manager should have necessary authority to carry out
his responsibility.

3. Meaning of unity of command?

Ans. According to the principle ,there should be only one boss for
every individual employee .Each employee should be commanded by
one superior and be responsible to that one superior only .This
principle helps to avoid confusion regarding tasks to be done.
 4. Meaning of unity of direction?
Ans.According to this principle ,each group of activities having the
same objectives must have one head and one plan.It ensures unity of
action and coordination.

5. Meaning of Centralisation and decentralisation?

Ans.According to Fayol there is a need to balance subordinates
involvement in decision making through decentralisation wth
managers retaining final authority through centralisation.

6. Meaning of Scalar chain?

Ans. According to Fayol organisations should have a chain of
authority and communication that runs from top to bottom and
should be followed by managers and the subordinates .According
to Fayol this chain should not be violated in the normal course of
formal communication. However in case of emergency this can be
violated so that the communication is not delayed.
 7. Meaning of Espirit De corps?
Ans.According to Fayol ,management should promote a team spirit
of unity and harmony among employees .A manager shoul replace’I’
with ‘We’ in all his conversation with workers to foster team Spirit.

8. Explain the nature of principles of management?

Ans. (i) Universal applicability: The principles of management are
intended to apply to all types of organisations, business as well as
non-business, small as well large, public sector as well as private
sector, manufacturing as well as the services sectors. However, the
extent of their applicability would vary with the nature of the
organisation, business activity, scale of operations and the like.
(ii) General guidelines: The principles are guidelines to action but do
not provide readymade, straitjacket solutions to all managerial
problems. This is so because real business situations are very
complex and dynamic and are a result of many factors.
(iii) Formed by practice and experimentation: The principles of
management are formed by experience and collective wisdom of
managers as well as experimentation. For example, it is a matter of
common experience that discipline is indispensable for
accomplishing any purpose. This principle finds mention in
management theory.
(iv) Flexibile: The principles of management are not rigid
prescriptions, which have to be followed absolutely. They are flexible
and can be modified by the manager when the situation so demands.
They give the manager enough discretion to do so.
(v) Mainly behavioural: Management principles aim at influencing
behaviour of human beings. Therefore, principles of management
are mainly behavioural in nature. It is not that these principles do not
pertain to things and phenomenon at all, it is just a matter of
emphasis. Moreover, principles enable a better understanding of the
relationship between human and material resources in
accomplishing organisational purposes.
(vi) Cause and effect relationships: The principles of management
are intended to establish relationship between cause and effect so
that they can be used in similar situations in a large number of cases.
As such, they tell us if a particular principle was applied in a
particular situation, what would be its likely effect. The principles of
management are less than perfect since they mainly apply to human
behaviour.
(vii) Contingent: The application of principles of management is
contingent or dependent upon the prevailing situation at a particular
point of time. The application of principles has to be changed as per
requirements.

9.Explain the significance of principles of management?

Ans. The significance of principles of management can be discussed
in terms of the following points:
(i)Providing managers with useful insights into reality: The
principles of management provide their knowledge, ability and
understanding of managerial situations and circumstances. It will
also enable managers to learn from past mistakes and conserve time
by solving recurring problems quickly, and provide the managers
with useful insights into real world situations.
(ii)Optimum utilisation of resources and effective administration:
Resources both human and material available with the company are
limited. They have to be put to optimum use. By optimum use we
mean that the resources should be put to use in such a manner that
they should give maximum benefit with minimum cost.

(iii) Scientific decisions: Decisions must be based on facts, thoughtful

and justifiable in terms of the intended purposes. They must be
timely, realistic and subject to measurement and evaluation.
Management principles help in thoughtful decision-making. They
emphasise logic rather than blind faith.
(iv) Meeting changing environment requirements: Although the
principles are in the nature of general guidelines but they are
modified and as such help managers to meet changing requirements
of the environment. Management principles are flexible to adapt to
dynamic business environment.
(v) Fulfilling social responsibility: The increased awareness of the
public, forces businesses especially limited companies to fulfill their
social responsibilities. Management theory and management
principles have also evolved in response to these demands.
Moreover, the interpretation of the principles also assumes newer
and contemporary meanings with the change in time.
vi) Management training, education and research: Principles of
management are at the core of management theory. As such these
are used as a basis for management training, education and
research.

10.Explain the principles of scientific management?

Ans. (i) Science not Rule of Thumb: Taylor pioneered the
introduction of the method of scientific inquiry into the domain of
management practice. Taylor believed that there was only one best
method to maximise efficiency. This method can be developed
through study and analysis. The method so developed should
substitute ‘Rule of Thumb’ throughout the organisation.

(ii) Harmony, Not Discord: Factory system of production implied that

managers served as a link between the owners and the workers.
Since as managers they had the mandate to ‘get work done’ from the
workers, it should not be difficult for you to appreciate that there
always existed the possibility of a kind of class-conflict, the mangers
versus workers. Taylor recognised that this conflict helped none, the
workers, the managers or the factory owners. He emphasised that
there should be complete harmony between the management and
workers.
(iii) Cooperation, Not Individualism: There should be complete
cooperation between the labour and the management instead of
individualism. This principle is an extension of principle of ‘Harmony
not discord’. Competition should be replaced by cooperation. Both
should realise that they need each other .
(iv) Development of Each and Every Person to His or Her Greatest
Efficiency and Prosperity: Industrial efficiency depends to a large
extent on personnel competencies. As such, scientific management
also stood for worker development. Worker training was essential
also to learn the ‘best method’ developed as a consequence of the
scientific approach. Taylor was of the view that the concern for
efficiency could be built in right from the process of employee
selection. Each person should be scientifically selected. This will
ensure their greatest efficiency and prosperity for both company and
workers.
11.Explain the techniques of scientific management?
Ans.(i) Functional Foremanship: The foreman represents the
managerial figure with whom the workers are in face-to-face contact
on a daily basis. Taylor concentrated on improving the performance
of this role in the factory set-up. In fact, he identified a list of
qualities of a good foreman/supervisor and found that no single
person could fit them all. This prompted him to suggest functional
foremanship through eight persons. Taylor advocated separation of
planning and execution functions. This concept was extended to the
lowest level of the shop floor. It was known as functional
foremanship.

(ii) Standardisation and Simplification of Work: Standardisation

refers to the process of setting standards for every business activity;
it can be standardisation of process, raw material, time, product,
machinery, methods or working conditions. These standards are the
benchmarks, which must be adhered to during production.
Simplification aims at eliminating superfluous varieties, sizes and
dimensions while standardisation implies devising new varieties
instead of the existing ones. Simplification aims at eliminating
unnecessary diversity of products. It results in savings of cost of
labour, machines and tools. It implies reduced inventories, fuller
utilisation of equipment and increasing turnover.
(iii)Method Study: The objective of method study is to find out
one best way of doing the job. There are various methods of doing
the job. To determine the best way there are several parameters.
Right from procurement of raw materials till the final product is
delivered to the customer every activity is part of method study.
Taylor devised the concept of assembly line by using method
study. Ford Motor Company used this concept very successfully.
(iv)Motion Study: Motion study refers to the study of movements
like lifting, putting objects, sitting and changing positions, etc.,
which are undertaken while doing a typical job. Unnecessary
movements are sought to be eliminated so that it takes less time
to complete the job efficiently.
(v)Time Study:It determines the standard time taken to perform a
well-defined job. Time measuring devices are used for each element
of task. The standard time is fixed for the whole of the task by taking
several readings. The method of time study will depend upon volume
and frequency of the task, the objective of time study is to determine
the number of workers to be employed; frame suitable incentive
schemes and determine labour costs.
(vi)Fatigue Study: A person is bound to feel tired physically and
mentally if she/he does not rest while working. The rest intervals
will help one to regain stamina and work again with the same
capacity. This will result in increased productivity. Fatigue study
seeks to determine the amount and frequency of rest intervals in
completing a task.