Class 12th bst

CLASS 12
SUBJECT-BUSINESS STUDIES
CHAPTER 02 TOPIC-PRINCIPLES OF MANAGEMENT
Concept of Principles of Management

-Managerial principles are the general guidelines for decision-making and behavior.
-Framed on the basis of standard human behavior patterns but applied as per the need
or demand of a situation.
-Help managers to perform managerial activities more effectively and efficiently.
Principles of management v/s Principles of Pure Science

-Management principles are flexible and updated to meet the changing demands of the
environment.
-Management principles are related to human behavior thus they need to be used creatively.
-Management principles cannot be tested in any laboratory.
-Application of same principle may give different results in different situations.
Principles of Management v/s, Techniques of Management

Management principles are the guidelines to take decisions whereas techniques are
procedures to implement decisions.
Principles of Management v/s, Values

-Values are the acceptable or desirable behavior of individuals whereas Principles of
Management are the guidelines for human behavior.
-Values are related to individual behavior in society but the Principles of
Management are the Technical rules related to work situations.
-Values are part of Principles of Management but Values may not include Principles of
Management.
Nature of Principles of Management

Management principles are based on observations, experimentations and the personal
experiences of managers. The nature of principles of management can be stated as:
(1) Universal Applicability
Principles of Management are applicable at all levels of an organisation and in all types of
organizations.
(2) General Guidelines
Principles of Management provide broad guidelines to solve business problems in general.
(3) Formed by practice and experimentation
The principles of management are formed on the basis of experiences, observations and
analysis of events in the past.
(4) Flexible
The principles of management are the guidelines or tools which managers may use as their
discretion.
(5) Mainly behavior
Principles of Management though explain the relationship between human and material
resources but they influence human behavior the most while accomplishing organizational
goals.
(6) Cause and effect relationship
Principles of management intent to provide the cause and effect relationship of
the principles ifapplied in a specific situation.
(7) Contingent
The application of principles of management are dependent on situations and time at which
such situations happen.
Fayol’s Principles of Management
1- Divisionof work- The entire work of the organization should be divided into
small specialized tasks and each task should be performed by a specialist or a
trained employee.
2- Authority and Responsibility-Authority means the right to give orders and
obtain obedience. Responsibility means obligation of a subordinate to properly
perform the assigned task .
3-Discipline-Discipline is the obedience to organizational rules and employment

agreement which are necessary for the working of the organisation.
4- Unityof command-lt means that there should be one and only one boss for every
individual employee. Dual subordination should be avoided.
5- Unityof direction-lt means that all the units of an organisation should be moving
towards the same objectives through coordinated and focused efforts.
6- Centralisation and Decentralization-The concentration of decision-making

authority is called centralization. The dispersal of decision-making authority among
more than one person is known as decentralization.
7- ScalarChain-The formal lines of authority from highest to lowest ranks are known as
scalar chain. Gang plank-Gang plank is a shorter route and has been provided so that
communication.is not delayed in an emergency.
8- Order-lt means that a place for everything (everyone) and everything (everyone) in its
(his/her) place.
9-lnitiative-lnitiative means taking the first step with self-motivation. lt is thinking out
and executing the plan.
10- Remuneration- Principle of remuneration implies that every employee in the
organization should be given fair and adequate remuneration for their works.
11- Equity-Principle of equity implies similar treatment with all the employees in the
organization.
12- Subordination of individual interest to general interest-In the organization, there
are personal interest of individuals as general interest of the organization as a whole. This
principle means the interest of the must be given preference over the individual interest.
13- Stability
of Tenure-Personnel should be selected and appointed after due and rigorous
(Extremely through/carefully) procedures. Employees once selected to kept at their post
for a minimum fixed period.
14-Esprit De corps-Management should promote a team spirit of unity and harmony
among employees.
Significance of Principles of Management

(1) Providing managers with useful insights into reality-They provide ideas, hints
or guidelines to solve similar problems.
(2) Optimum utilization of resources and effective administration-The cause-and-effect
relationship helps managers to foresee the effect of their decisions and actions thus, enables
them to use resources most effectively.
(3) Scientific decisions-Principles based on experiments, observations and logic
provide objective assessment of a situation.
(4) Meeting changing environment requirements-The managers can modify principles to
meet the needs of dynamic business environment.
(5) Fulfilling social responsibility-By incorporating values as part of principles has
enabled businesses to fulfill social responsibilities.
(6) Management training, education and research-The principles of management and
the managerial experiences are used as case studies to train employees or for further
modification or development of principles already applied.
F.W.Taylor's
Principles of Scientific Management
(1) Science Not Rule of Thumb
This principle states that maximum productivity can be achieved only by following standard
methods of production and the standard methods must be developed by evaluating the
different methods followed in the past and selecting the best possible method. Production
techniques cannot be followed using hit and trial method.
(2) Harmony, Not Discord

This principle states that management and workers must have good understanding and
faith amongst each other. The combined efforts of management and workers help an
organisation to achieve its goals.
(3) Cooperation, Not individualism
This principle states that each individual in the organisation must work with the final
aim of achieving organizational goals. Management and workers must work as a team
to be effective and efficient.
(4) Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity
This principle states that organizations must appoint such people who possess the mental,
physical and intellectual capabilities required for the job. It must also provide continuous on
the job training for employees to improve their productivity and achieve growth.
Taylor's Techniques of Scientific Management
(1) Functional Foremanship

As per this technique, the planning and execution should be treated as two separate
functions and each function should be handled by a separate in-charge. Each in-charge
must be assisted by four specialized personnel who would give instructions to workers.
Assistants of Planning in-charge would be-
i-Instruction card clerk-For drafting instructions for
workers. ii-Route clerk-To specify the production
route.
iii-Time and cost clerk-For preparing time and
cost sheet. iv-Disciplinarian-For maintaining
discipline in the factory. Assistants of Production
in-charge would be-
i- Speed Boss-Will ensure that jobs is completed accurately and on time.
ii- Gang Boss-Responsible to keep machines and tools ready for operations.
iii- Repair Boss-Responsible for keeping the machines and tools in proper
working conditions iv-Inspector-Responsible to maintain the quality of work.
(2)Standardization of work means setting standards with respect to process followed,

time taken, raw material used, working conditions for each business activity.
Objectives of standardization:
-To produce products of fixed types, sizes and characteristics.
-To establish interchangeability of manufactured parts and products.
-To establish standards of excellence and quality in materials.
-To establish standards of performance of men and machines.
Simplification of work means simplifying work by eliminating needless varieties, sizes,

dimensions etc. ofproducts produced to utilize resources optimally and reduce labour and
overhead costs.
Work-Study Techniques
(3) Method Study

-Finds the best possible way of doing a particular job
-Decides sequence of operations and placement of human and physical resources while producing
goods.
-Aims to minimize cost of production and maximize efficiency, quality, productivity
and customer satisfaction.
(4) Motion Study

-It is a study of movements undertaken while doing a job like lifting, putting
objects, sitting and changing positions etc.
-It designs the best method to perform repeated jobs.
-It eliminates unnecessary movements to complete the task in minimum time with greater
efficiency.
-Body motions can be (i) productive motions (ii) incidental motions and (iii) unproductive
motions. Through motion study the unproductive motions can be eliminated.
(5) Time Study

-It determines the standard time for performing a well-defined job or a repeated activity.
-Standard time is fixed by using the average of time taken to perform same activity several times.
(6) FatigueStudy
-It determines the amount and frequency of rest intervals required to complete a task
without getting physically or mentally tired.
-The breaks in between work help workers to regain stamina to work with the same energy.
(7) Differential Piece Wage System

-It suggests that workers should be paid wages at different rates to recognize and
reward efficiency and penalize inefficiency.
-Under this system different wage rates are determined to make payments
to workers for performance as per standard output, above standard output
and below standard output.
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CLASS 12

CHAPTER 02 TOPIC-PRINCIPLES OF MANAGEMENT

Concept of Principles of Management

Principles of management v/s Principles of Pure Science

Principles of Management v/s, Techniques of Management

Principles of Management v/s, Values

Nature of Principles of Management

Fayol’s Principles of Management

3-Discipline-Discipline is the obedience to organizational rules and employment

6- Centralisation and Decentralization-The concentration of decision-making

Significance of Principles of Management

(2) Harmony, Not Discord

Taylor's Techniques of Scientific Management

(1) Functional Foremanship

(2)Standardization of work means setting standards with respect to process followed,

Simplification of work means simplifying work by eliminating needless varieties, sizes,

(3) Method Study

(4) Motion Study

(5) Time Study

(7) Differential Piece Wage System

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