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 updated for CBSE session 2025-26. Get here all very short, short answer type and long answers questions point wise to prepare for exams. All the answers are written step by step format.

Very Short Answer Type

Q. 1. What makes principles of management flexible?

Ans.

Principles of management are flexible as they can be modified as per the changes in business environments i.e., new technologies, diverse cultures, and evolving organizational needs.

Q. 2. State the main objective of time study.

Ans.

The main objective of time study is to determine standard time required to do a well-defined job. This time is then set as the standard time for the job completion. It helps to determine the number of resources required to complete a job and also determine its wages.

Q. 3. Name the principle that is an extension of the ‘harmony, not
discord’.

Ans.

Cooperation, Not Individualism

Q. 4. State any two causes of fatigue that may create hindrance in
the employee’s performance.

Ans.

The two causes of fatigue are:

1. Long working hours without breaks;

2. Doing unsuitable work

Q. 5. SanakLal and Gagan started their career in Wales Limited
(a printing press) after going through a rigorous recruitment
process. Since they had no prior work experience, the firm
decided to give them one year to prove themselves. Name the
principle of management followed by Wales Limited.

Ans.

Wales Limited followed the Principle of ‘Stability of Personnel’.

Q. 6. Which technique is used by Taylor for distinguishing efficient
and inefficient workers?

Ans.

Tylor used Differential Piece Wage System technique. Under this technique the workers who performed better were given higher wages than the workers who performed below the standard

Short Answer Type

Q. 1. How is the Principle of ‘Unity of Command’ useful to
management? Explain briefly.

Ans.

Unity of command is a principle stating that an individual should receive orders from and be accountable to only one superior. If someone receives instructions from multiple superiors simultaneously, it breaches unity of command, causing confusion about tasks and reporting.

To ensure smooth workflow and organizational stability, unity of command is vital for management. Without it, employees face uncertainty regarding their tasks and supervisors, disrupting work flow, leading to delays and inefficiency.

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

Ans.

Scientific Management

Scientific management refers to the use of specialized tools, techniques, and personnel to achieve better quality and cost reduction in tasks. This theory was developed by Frederick Taylor in 1911 and focuses on accomplishing work in the most efficient and cost-effective manner.

Three Principles of Scientific Management

1. Science, Not Rule of Thumb:

Taylor emphasized that management should rely on scientific methods rather than the ‘Rule of Thumb’ approach, which involves trial and error. By following scientific methods, organizations can save significant time and resources.

2. Cooperation, Not Individualism:

There should be a spirit of cooperation between workers and management, rather than individualism. Both parties should work together harmoniously. Management should consider valuable suggestions from employees, and employees should refrain from unreasonable demands.

3. Harmony, Not Discord:

This principle advocates for a harmonious work environment between managers and workers. Positive relationships between them lead to better organizational performance. Workers should feel valued and essential for the organization’s growth, and management should address their needs. This mutual understanding, termed as a mental revolution by Taylor, enhances harmony and drives the organization towards common goals.

Q. 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.

Principle of ‘Order is violated. It may lead to following consequences:

(i) Inefficient use of resources due to loss of time and energy in search of resources.

(ii) Lack of discipline in the organisation.

Fayol’s principle of order means placing people and materials in the right spots at the right time for best efficiency. This organized approach reduces obstacles, increases productivity, and boosts efficiency in business operations. Essentially, everything and everyone should be in their designated places for smooth functioning.

Q. 4. Explain any four points regarding significance of principles
of management.

Ans.

Following are the four points explaining the significance of principles of management.

1. Providing managers with useful insights into reality:

Management principles offer managers valuable insights into real-world situations. By following these principles, managers enhance their knowledge, skills, and understanding, enabling them to learn from mistakes and quickly solve recurring issues. This increases efficiency as managers can delegate routine decisions to subordinates, focusing on exceptional situations requiring their expertise.

2. Optimum Utilisation of Resources and Effective Administration

Resources are limited and must be optimally used to maximize benefits and minimize costs. Management principles help foresee decision impacts, reducing trial-and-error wastage. Effective administration requires unbiased conduct, ensuring decisions are guided by organizational objectives, not personal preferences or biases.

3. Scientific Decisions:

Decisions should be fact-based, thoughtful, and justifiable for their purposes. They must be timely, realistic, and measurable. Management principles enhance decision-making, emphasizing logic over blind faith. Such decisions are free from bias and prejudice, relying on objective assessment of situations.

4. Meeting Changing Environment Requirements:

Management principles, though general guidelines, adapt to dynamic business environments. They emphasize work division and specialization. Today, companies focus on core competencies, outsource non-core activities, and even core processes like R&D. Examples include Hindustan Lever Limited divesting non-core businesses and the rise of BPO and KPO industries.

Q. 5. Explain the principle of ‘Scalar Chain’ and gang plank.

Ans.

Scalar Chain:

Managers must follow a well-defined chain of communication flowing from top to bottom. In a scalar chain, information passes in a specific and organized manner to avoid any communication ambiguity.

Gang Plank:

This exception to the scalar chain allows two managers at the same level to communicate directly in emergencies, ensuring quick decisions and communications.

Example:

• A heads two teams: B and F are at the same level, C and G at the same level, and D and H at the same level.
• Line of communication: B – C – D and F – G – H. According to the scalar chain principle, D and H cannot directly contact each other.
• In emergencies, following the prescribed flow may take too much time.
• To avoid delays, the ‘Gang Plank’ system allows employees like D and H at the same level to communicate directly when urgent needs arise.

Q. 6. A production manager at top level in a reputed corporate,
Mr. Rathore holds the responsibility for ordering raw material for the firm. While deciding on the supplier for the financial year 2017-18, he gave the order to his cousin at a higher price per unit instead of the firm’s usual supplier who was willing to lower the rates for the order. Which principle of management was violated by Mr. Rathore? What
are the positive impacts of following the above identified principle?

Ans.

Subordination of Individual Interest to General Interest:

This principle states that individuals should prioritize organizational goals over personal interests. Violation of this principle leads to conflicts.

Positive Impacts:

• Better alignment of personal and organizational goals.
• Maintenance of peace and harmony within the organization.
• Increased employee productivity as efforts focus on achieving organizational goals, benefiting personal goals in turn.
• Employees feel connected to the organization.
• Helps in achieving organizational objectives.

Long Answer Type/Essay Type:

Q. 1. Explain the Principles of Scientific management given by Taylor.

Ans.

Here are the Principles of Scientific Management by Taylor:

Science, Not Rule of Thumb:-

Management should use scientific methods instead of trial and error to find solutions, saving time and materials, and making work simpler and easier.

Cooperation, Not Individualism:-

Workers and management should cooperate rather than work individually. Both should collaborate to achieve organizational goals. Management should consider employees’ suggestions, and employees should avoid unreasonable demands.

Harmony, Not Discord:-

A peaceful and harmonious relationship between management and workers is crucial for smooth operations. Managers should share profits to motivate workers, and workers should accept beneficial changes. During conflicts, both should adopt a positive mentality towards each other, called mental revolution.

Development of Each Person to Their Greatest Efficiency and Prosperity:-

Employees should have access to training and opportunities to improve their skills and performance, helping them achieve career growth and efficiency.

Q. 2. Explain the following Principles of management given by Fayol with examples:

a. Unity of direction
b. Equity
c. Espirit de corps
d. Order
e. Centralisation and decentralisation
f. Initiative

Ans.

(a) Unity of Direction:

According to this principle, the efforts of each unit of the organization with a similar head and plan should aim to achieve the same objectives. Each division should have its own in-charge and resources to prevent overlapping activities.

For example, a company manufacturing two different products should have separate in-charges for each product, creating distinct departments and divisions. If there is a single in-charge, it may lead to duplication and poor resource utilization.

(b) Equity:

Ans:

According to this principle, all employees should be treated equally and fairly. There should be no discrimination based on caste, religion, complexion, gender, nationality, etc.

Example: Men and women should be treated equally in a company.

(c) Esprit de Corps:

Ans:

It means unity is strength. According to this principle, management should promote a spirit of mutual trust and belongingness among team members. It focuses on the word ‘We’ instead of ‘I’.

For example:

In the military, all soldiers work together with trust and confidence in each other to collectively achieve their goals.

(d) Order:

Ans:

According to this principle, there should be a place for everyone and everything, and each person or thing should be found in its designated place. This helps in carrying out activities on time and smoothly.

For Example:

In a plant layout, if production is to be carried out on Machine 1 and Machine 2 in sequence, both machines should be arranged near each other. If they are far apart, it can cause delays in the production process, leading to reduced productivity and higher costs.

(e) Centralisation and Decentralisation:

Ans:

Centralisation is the concentration of power in the hands of selected individuals within an organization. Decentralisation involves sharing authority with middle and lower levels of the organization. A balance should exist between complete centralisation and decentralisation.

For Example:

When all decision-making powers are held by top management, it is centralisation, suitable for situations like the military. If decision-making power is shared with middle and lower levels, it is decentralisation, suitable when these levels have the necessary knowledge and skills.

(f) Initiative:

Ans: According to this principle, workers should be provided with incentives to keep them motivated to achieve organizational goals. They should be encouraged to implement their improvement plans, which will make them more comfortable taking initiatives for the organization’s development.

For example:

Considering workers’ suggestions and feedback while making decisions will motivate them and make them feel integral to the organization.

Q. 3. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’ as enunciated by Taylor.

Ans.

Functional Foremanship

Functional Foremanship extends the principle of division of labor. In this system, each worker reports to eight foremen, each specializing in a particular function of production.

Taylor divides the eight foremen into two in-charges:

Planning In-Charge:

• Instruction Card Clerk: Gives instructions to workers.
• Route Clerk: Specifies the production route.
• Time and Cost Clerk: Prepares time and cost sheets.
• Disciplinarian: Ensures discipline.

Production In-Charge:

• Speed Boss: Ensures timely and accurate completion of work.
• Gang Boss: Keeps machines and tools ready for work.
• Repairs Boss: Maintains machines and tools in proper working condition and arranges repairs when needed.
• Inspector: Checks the quality of work.

Mental Revolution

Mental revolution aims to transform the mindset and attitude of workers and management towards each other. Management should strive to meet employees’ needs, and workers should give their best to help the organization grow. Both should recognize each other’s importance and cooperate.

For example:

In the military, all soldiers work together with trust and confidence in each other to collectively achieve their goals.

Q. 4. Discuss the following techniques of Scientific Work Study:

a. Time Study
b. Motion Study
c. Fatigue Study
d. Method Study
e. Simplification and standardisation of work

Ans.

(a) Time Study:

Time study helps determine the standard time required for a well-defined job. It assists in setting wages, drafting incentive schemes, and estimating manpower requirements.

(b) Motion Study:

It examines movements like lifting and positioning objects while doing a job. The goal is to eliminate unnecessary movements, completing tasks in less time.

(c) Fatigue Study:

It determines the amount and frequency of rest intervals needed to increase productivity. Proper rest is essential for maintaining work capacity, and this study identifies standard break intervals for workers to regain energy.

(d) Method Study:

The objective is to find the best way to do a job, minimizing production costs and maximizing customer satisfaction and product quality.

(e) Simplification and Standardisation of Work:

Standardisation sets benchmarks for business activities to achieve quality work and products. For example, standards like gold (hallmark), agricultural products (Agmark), and industrial products (ISI) assure quality. Simplification reduces product diversity, saving costs and increasing turnover with standardized sizes like M, L, and XL for clothing.

Q. 5. Discuss the differences between the contributions of Taylor
and Fayol.

Ans.

Basis of Comparison	Taylor’s Contributions	Fayol’s Contributions
Contribution	It was conceptualised by Frederick Taylor in 1911.	It was conceptualised by Henry Fayol in 1916.
Concept	Scientific theory of management	It is a general theory of administration
Personality	Taylor was a practising mechanical engineer	Fayol was working as a mining engineer.
Principles and Techniques	Techniques like functional foremanship and scientific management were introduced along with the different studies such as motion study, time study etc. were introduced by Taylor.	Principles of management such as equity, spirit de corps, etc., were introduced by Henry Fayol in his theory of 14 principles of management.
Application of Principles	Principles suggested by Taylor are applicable in specialised situations	Principles suggested by Fayol are universal in their accplicability.
Emphasis and Focus	Emphasis was on low-level management	Emphasis was on top-level management.
Approach	The approach is that of an engineer	The approach is that of a manager.

Q. 6. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.

Ans.

Principles of Taylor and Fayol in Contemporary Business:

Act as Guidelines:

These principles guide managers in making decisions and taking appropriate actions.

Flexible:

The principles can be adapted to different situations, helping managers solve problems accordingly.

Applicable in Various Situations:

Decisions based on these principles are backed by facts and logic, making them widely applicable.

Provide Lessons:

They help managers learn from past mistakes by offering insights into real-world business.

Universally Applicable:

These principles are universally applicable, making them reliable.

Higher Efficiency:

They improve organizational efficiency and effectiveness, using minimum resources and cost.

Q. 7. ‘Bhasin’ limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was expanding due to good quality and reasonable prices. Also with more people working the market for processed food was increasing. New players were also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products.

Ans.

Following Principles of Management Violated:

Unity of Command:

Employees were working under more than one superior.

Unity of Direction:

Divisions were made to work on multiple products.

Esprit de Corps:

Workers lacked teamwork spirit.

Discipline:

Workers were losing discipline due to increased pressure.

Initiative:

Workers felt cheated and lacked initiative.

Order:

Changes were implemented without arranging proper infrastructure.

Division of Work:

Workers were made to work overtime without proper work division.

b. Explain these principles in brief.

Unity of Command:

There should be only one superior for each employee to avoid confusion.

Unity of Direction:

Efforts of each unit should aim toward the same objectives. Each division should have its own in-charge to prevent overlapping activities.

Esprit de Corps:

Management should promote mutual trust and a sense of belonging among team members. Use ‘We’ instead of ‘I’ to foster unity.

Discipline:

Everyone should follow rules and regulations necessary for the organization’s functioning.

Initiative:

Subordinates should be encouraged to make and execute plans within their authority limits.

Order:

There should be a place for everything and everyone to carry out activities smoothly and on time.

Division of Work:

Each task should be performed by a specialist or trained employee to ensure efficiency and effectiveness.

c. Steps to Restore the Company to Its Past Glory:

• Provide motivation and proper incentives to workers.
• Adopt scientific management practices.
• Promote teamwork and coordination for organizational development.
• Ensure one subordinate receives instructions from only one superior.
• Create separate divisions for different products.
• Arrange proper infrastructure before implementing changes.
• Divide work optimally and avoid overtime.