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Class 12th Business Studies - Principles of Management Case Study Questions and Answers 2022 - 2023

By QB365 on 08 Sep, 2022

QB365 provides a detailed and simple solution for every Possible Case Study Questions in Class 12 Business Studies Subject - Principles of Management, CBSE. It will help Students to get more practice questions, Students can Practice these question papers in addition to score best marks.

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Principles of management case study questions with answer key.

12th Standard CBSE

Final Semester - June 2015

Business Studies

After completing her Bachelors in Fashion Designing from a well-known college in France, Aditi has opened a boutique in a posh market in Kolkata. She has divided the work in smaller units and each employee is well trained to perform his/her task efficiently. The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority. In the earlier period of her business venture, employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, when the business was doing well, she honour her commitment by giving bonus to her employees. She also instructed her employees that communication from top to bottom should follow the official lines of command. However, she tends to be more biased towards her female employees, when it comes to solve the conflicts among employees. 1. Aditi has divided the work in smaller units and each employee is well trained to perform his/ her task efficiently. Which principle of management is being followed here?

2. "The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority." Identify the principle of Management being followed here:

3. “Therefore, when the business was doing well, she honoured her commitment by giving bonus to her employees.” Which principle of management is being highlighted here?

4. Aditi tends to be more biased towards her female employees, when it comes to solve the conflicts among employees. Which principle is being violated here?

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Principles of management case study questions with answer key answer keys.

1. (b) Division of work 2. (a) Centralization and Decentralisation  3. (a) Discipline 4. (c) Equity

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CBSE Class 12 Case Studies In Business Studies – Principles of Management

PRINCIPLES OF MANAGEMENT Principles of Management: Definition The principles of management serve as broad and general guidelines for the managerial decision making and action.

Types of Principles of Management

• Fayol’s Principles of General Management
• Taylor’s Principles of Scientific Management.

Significance of Principles of Management

• They help to provide managers with useful insights into reality and increase their efficiency in dealing with recurring problems.
• They ensure optimum utilisation of resources as due to the presence of cause and effect relationship the outcome of the decisions and actions can be predicted. Moreover, it leads to effective administration as the principles tend to restrict the personal prejudices and biases.
• They facilitate scientific decision making as they emphasise on logical thinking rather than blind faith.
• They help to meet the changing requirements of the environment to the best advantage ofa organisation.
• They help in fulfilling social responsibility of an organisation.
• They facilitate the process of management training, education and research as they are at the core of management theory.

Features of Principles of Management

• Universal Applicability: The principles of management are deemed to apply to all types and sizes of organizations.
• General Guidelines: The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems as the real business situations are very complex and dynamic and are a result of many factors.
• Formed by practice and experimentation: The principles of management are formulated by the management experts through observation and tested through repeated experimentation.
• Flexible: The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can be modified by the manager in the light of given situation so as to achieve the desired goals.
• Mainly Behavioural: The principles of management aim at influencing behaviour of human beings in a desired manner.
• Cause and effect relationships: The principles of management seek to establish relationship between cause and effect so that they can be used in similar situations in a large number of cases.
• Contingent: The application of principles of management is contingent or dependent upon the prevailing situation at a particular point of time.

FAYOL’S PRINCIPLES OF MANAGEMENT

• Division of work: The whole organisation work, both managerial and technical, should be divided into smaller jobs and the task involved in doing each such job should be determined. It leads to specialization, speed, efficiency and accuracy of work.
• Discipline: It refers to the obedience to organizational rules and the employment agreement. It is necessary for the systematic working of the organisation. It requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
• Authority and Responsibility: There should always be a balance between the authority given and responsibility entrusted to an employee. This is because if authority is more than responsibility, the employees are likely to misuse it whereas if authority is less than responsibility, he/she will be unable to do the desired work.
• Unity of command: There should be one and only one boss for every individual employee from whom he should receive orders and be responsible to. Dual subordination should be avoided.
• Unity of Direction: All the units of an organisation should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan.
• Subordination of Individual Interest to General Interest: In all the situations, the interests of an organisation should take priority over the interests of any one individual employee .
• Remuneration of employees: The overall pay and compensation should be fair to both employees and the organization. The employees should be paid fair wages, which should give them at least a reasonable standard of living. At the same time it should be within the paying capacity of the company i.e. remuneration should be just and equitable.
• Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralization. Large organizations have more decentralization than small organizations.
• Scalar Chain: The formal lines of authority along which the communication flows from highest to lowest ranks are known as scalar chain. Gang Plank is a shorter route that has been provided so that communication is not delayed during emergencies. However, the superior has to be informed later on.
• Order: The people and materials must be in suitable places at appropriate time for maximum efficiency i.e. ‘a place for everything (everyone) and everything in its place/
• Equity: It emphasizes kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise caste, creed.
• Stability of Personnel: The employee turnover should be minimized to maintain organizational efficiency. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation.
• Initiative: Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Espirit De Corps: The management should promote a team spirit of unity and harmony among employees. A manager should replace T with ‘We’ in all his conversations with workers.

Difference between Unity of Comman and Unity fo Direction

SCIENTIFIC MANAGEMENT Scientific Management: Definition Scientific Management means knowing exactly what you want your employees to do and seeing that they do it in the best and cheapest way. Fredrick Winslow Taylor is known as the ‘Father of Scientific Management’.

Techniques of Scientific Management

• Time Study is the technique to determine the standard time taken bya worker of average skill and knowledge to complete a standard task.
• Fatigue study seeks to determine the amount and frequency of rest intervals required in completing a task.
• Method study seeks to find out one best way of doing the job.
• Motion study refers to the study of movements of limbs which are undertaken while doing a typical job.This helps to eliminate unnecessary movements so that it takes less time to complete the job efficiently.
• Standardisation refers to the process of setting standards for every business activity Simplification aims at eliminating superfluous varieties, sizes and dimensions of products.
• Instruction Card Clerk: He assigns work to all the employees.
• Route Clerk: He decides how work will progress regarding total productions. So that production is on time.
• Time and Cost Clerk: He determines what will be the total cost and how much time each job take.
• Disciplinarian: He sees that there is discipline at work place.
• Speed boss: He ensures that the work is moving at a suitable pace.
• Gang Boss: He ensures sufficient availability of raw material, tools etc.
• Repair Boss: He sees that whenever some repair is involved in any work, the work is done properly.
• Inspector: He sees that whether the quality of output is good or not.
• Differential piece wage system was introduced to reward efficient workers by paying them at a higher rate than those who performed below standard.

PRINCIPLES OF SCIENTIFIC MANAGEMENT

• Taylor believed that there was only one best method to maximise efficiency which can be developed through study and analysis and should substitute ‘Rule of Thumb’ or hit and trial method throughout the organisation.
• The scientific method involved investigation of traditional methods through work-study unifying the best practices and developing a standard method, which would be followed throughout the organisation.
• In the present context, the use of internet has brought about tremendous improvements in internal efficiencies and customer satisfaction.
• Taylor emphasised that there should be complete harmony between the management and workers instead ofa kind of class-conflict, the managers versus workers.
• To achieve this state, Taylor called for complete mental revolution on the part of both management and workers.
• The prosperity for the employer cannot exist fora long time unless it is accompanied by prosperity for the employees and vice versa.
• He advocated paternalistic style of management should be in practice.
• This principle is an extension of principle of ‘Harmony Not Discord’
• There should be complete cooperation between the labour and the management instead of individualism.
• Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management.
• Also, management should reward workers for their suggestions which results in substantial reduction in costs.
• At the same time workers should desist from going on strike and making unreasonable demands on the management
• 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 and the work assigned should suit her/his physical, mental and intellectual capabilities.
• To increase efficiency, they should be given the required training.
• Efficient employees would produce more and earn more. This will ensure their greatest efficiency and prosperity for both company and workers.

Difference between Fayol’s and Taylor’s Approach to Management

Latest CBSE Questions

Question 1. Explain ‘unity of command’ and ‘equity’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Unity of command: According to Fayol, there should be one and only one boss for every individual employee. Dual subordination should be avoided. Fayol felt that if this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.
• Equity: According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.” This principle emphasizes on kindliness and justice in the behaviour of managers towards workers. The managers should not discriminate against anyone on account of gender, religion, language, caste, belief or nationality etc.

Question 2. Sanchit, after completing his entrepreneurship course from Sweden returned to India and started a coffee shop ‘AromaCoffeeCan’ in a famous mall in New Delhi. The speciality of the coffee ship was the special aroma of coffee and a wide variety of flavours to choose from. Somehow, the business was neither profitable nor popular. Sanchit was keen to find out the reason. He appointed Sandhya, an MBA from a reputed college, as a Manager to find out the causes for the same. Sandhya took feedback from the clients and found out that though they loved the special unique aroma of coffee but were not happy with the long waiting time being taken to process the order. She analysed and found out that there were many unnecessary obstructions in between which could be eliminated. She fixed a standard time for processing the order. She also realised that there were some flavours whose demand was not enough. So, she also decided to stop the sale of such flavours. As a result with in a short period Sandhya was able to attract the customers. Identify and explain any two techniques of scientific management used by Sandhya to solve the problem. (CBSE, Delhi 2017) Answer: The two techniques of scientific management used by Sandhya to solve the problem are: (any two)

• Time study: It seeks to determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed , frame suitable incentive schemes and determine labour costs. By using time measuring devices for each element of task the standard time is fixed for the whole of the task by taking several readings.
• Simplification (Standardisation and Simplification): Simplification aims at eliminating superfluous diversity of products in terms of varieties, sizes and dimensions. It not only helps to reduce inventories but also save cost of labour, machines and tools. Thus it helps to increase turnover by ensuring optimum utilisation of resources.
• Motions which are required
• Motions which are unnecessary
• Motions which are incidental. Thus, motion study helps to eliminate unnecessary movements of a work and enables him to complete the given task efficiently.

Question 3. Explain briefly ‘discipline’ and ‘scalar chain’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Discipline: Discipline refers to the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties. .

Question 4. Explain ‘order’ and ‘initiative’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” The principle of order states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. A sense of orderliness will lead to increased productivity and efficiency in the organization.

Question 5. Explain briefly ‘Unity of Direction’ and ‘Order’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Unity of direction: According to Fayol, each group of activities having same objective must have one head and one plan. It prevents overlapping of activities. For example if a company is manufacturing handmade carpets as well as machine made carpets there is likely to be a lot of overlapping of activities. Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources.

Question 6. Explain briefly ‘Initiative’ and ‘Esprit de Corps’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Initiative: Initiative means taking the first step with self-motivation. The workers should’ be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Espirit de corps: According to Fayol, ‘Management should promote a team spirit of unity and harmony among employees.” A manager should replace T with ‘We’ in all his conversations with workers to promote teamwork. This approach is will give rise to a spirit of mutual trust and belongingness among team members. It will also reduce the need for using penalties.

Question 7. Explain briefly ‘Remuneration of Employees’ and ‘Scalar Chain’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Remuneration of employees: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management.

Question 8. What did Taylor want to communicate through mental revolution? (CBSE, Sample Paper, 2017) Answer: Through the concept of mental revolution Taylor emphasized that there should be complete transformation in the outlook of the management and workers towards each other. Managers should share surplus with workers and the workers should work with full devotion instead of indulging in any form of class conflicts.

Question 9. Briefly explain work study techniques that help in developing standards to be followed throughout the organization. Answer: The various work study techniques that help in developing standards to be followed throughout the organization are described below:

• Time study: It seeks to determine the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs. By using time measuring devices for each element of task, the standard time is fixed for the whole of the task by taking several readings.
• Method study: The objective of method study is to find out one best way of doing the job among the various methods available of doing the job. This can be done by taking into consideration several related parameters.
• Fatigue study: It seeks to determine the amount and frequency of rest intervals that should be provided to the workers for completing a task. This technique helps in increasing productivity as the rest intervals will help a person to regain stamina and work again with the same capacity.

Question 10. Nutan Tiffin Box service was started in Mumbai by the Mumbai Dabbawalas. The Dabbawalas who are the soul of entire Mumbai aim to provide prompt and efficient services by providing tasty homemade tiffin to all office goers at the right time and place. The service is uninterrupted even on the days of bad weather, political unrest and social disturbances. Recently, they have started online booking system through their website ‘mydabbawala.com’. Owing to their tremendous popularity amongst the happy and satisfied customers and members, the Dabbawalas were invited as guest lecturer by top business schools. The Dabbawalas operate in a group of 25-30 people alongwith a group leader. Each group teams up with other groups in order to deliver the tiffins on time. They are not transferred on frequent basis as they have to remember the addresses of their customers. They follow certain rules while doing trade—no alcohol during working hours; no leaves without permission; wearing white caps and carrying ID cards during business hours. Recently, on the suggestion of a few self-motivated fellow men, the dabbawalas thought out and executed a plan of providing food left in tiffins by customers to slum children. They have instructed their customers to place red sticker if food is left in the tiffin, to be fed to poor children later.

• State any one principle of management given by Fayol and one characteristic of management mentioned in the above case.
• Give any two values which the Dabbawalas want to communicated to society. (CBSE, Sample Paper 2016)
• The relevant principle of management given by Fayol is: Stability of Personnel: The employee turnover should be minimized to maintain organizational efficiency. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation. (The other correct answers are principle of Discipline / Initiative / Espirit de corps) The characteristic of management mentioned in the above case is: Management is goal oriented as it seeks to integrate the efforts of different individuals towards the accomplishment of both organizational and individual goals. (The other correct answers are management is intangible/ group activity/dynamic)
• Concern for poor/ Humanity
• Responsibility

Question 11. ‘Aapka Vidyalaya’ believes in the holistic development of students and encourages team building through a mix of curricular, co-curricular and sports activities. On its Founder’s Day, a stage performance had to be put up. A committee of ten prefects was constituted to plan different aspects of the function. They all decided to use recycled paper for decoration. There was a spirit of unity and harmony and all the members supported each other. With mutual trust and a sense of belonging, the programme was systematically planned and executed. Kartik, one of the prefects, realised that the group had unknowingly applied one of the principles of management while planning and executing the programme. He was so inspired by the success of this function that he asked his father to apply the same principle in his business. His father replied that he was already using this principle.

• Identify the principle of management applied for the success of the programme.
• State any two features of management highlighted in the above paragraph.
• Identify any two values which ‘Aapka Vidyalaya’ communicated to society. (CBSE, Delhi 2015)
• The principle of management applied for the success of the programme is Espirit De Corps.
• Management is goal oriented as it seeks to integrate the efforts of different individuals towards the accomplishment of both organizational and individual goals.
• Management is pervasive as it is applicable to all types of organizations, (economic, social, political) all sizes of organizations (small, medium, large) and at all levels of management (top, middle and lower).
• Sustainable development.

Question 12. Telco Ltd. manufactures files and folders from old clothes to discourage the use of plastic files and folders. For this, they employ people from nearby villages where very less job opportunities are available. An employee, Harish, designed a plan for cost reduction but it was not welcomed by the production manager. Another employee gave some suggestions for improvements in design, but it also was not appreciated by the production manager.

• State the principle of management that is violated in the above paragraph.
• Identify any two values that the company wants to communicate to the society. (CBSE, OD 2014)
• The principle of management that has been violated in the above case is Initiative. Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Concern for environment
• Providing job opportunities

Question 13. Pawan is working as a Production Manager in CFL Ltd. which manufactures CFL bulbs. There is no class-conflict between the management and workers. The working conditions are very good. The company is earning huge profits. As a policy, the management shares the profits earned with the workers because they believe in the prosperity of the employees.

• State the principle of management described in the above paragraph.
• Identify any two values which the company wants to communicate to society. (CBSE, OD 2014)
• The principle of management described in the above paragraph is ‘Harmony, not Discord’. Taylor emphasised that there should be complete harmony between the management and workers instead of a kind of class-conflict, the manager versus workers. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. The prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa. He advocated paternalistic style of management should be in practice.

Question 14. Voltech India Ltd. is manufacturing LED bulbs to save electricity. However, it is running under heavy losses. To revive from the losses, the management shifts the unit to a backward area where labour is available at a low cost. The management also asks the workers to work overtime without any additional payments and promises to increase the wages of the workers after achieving its mission. Within a short period, the company starts earning profits because both the management and workers honour their commitments.

• Identify any two values that the company wants to communicate to the society. (CBSE, Delhi 2014)
• The principle of management described in the above paragraph is ‘Discipline’. Discipline- It refers to the obedience to organizational rules and the employment agreement. It is necessary for the systematic working of the organization. It requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
• Sustainable development

Question 15. ABC Ltd. is engaged in producing electricity from domestic garbage. There is almost equal division of work and responsibilities between workers and the management. The management even takes workers into confidence before taking important decisions. All the workers are satisfied as the behaviour of the management is very good.

• Identify any two values which the company wants to communicate to society. (CBSE, Delhi 2014)
• The principle of management described in the above paragraph is ‘Cooperation, Not Individualism’. This principle is an extension of principle of ‘Harmony, Not Discord’. There should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management. Also, management should reward workers for their suggestions which results in substantial reduction in costs. At the same time, workers should desist from going on strike and making unreasonable demands on the management
• Participation

Question 16. The principles of Taylor and Fayol are mutually complementary. One believed that management should share the gains with the workers while the other suggested that employees’ compensation should depend on the earning capacity of the company and should give them a reasonable standard of living. Identify and explain the principles of Favol and Taylor referred to in the above paragraph. (CBSE, Delhi 2014) Answer: The principles of Fayol and Toylor referred to in the above paragraph are ‘Remuneration of employees’ and ‘Harmony, Not Discord’. Remuneration of Employes: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time, it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management. Harmony, Not Discord: Taylor emphasised that there should be complete harmony between the management and workers instead of a kind of class-conflict, the managers versus workers. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. The prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa. He advocated paternalistic style of management should be in practice

Question 17. The principles of Taylor and Fayol are mutually complementary. One believed that management should not close its ears to constructive suggestions made by the employees while the other suggested that a good company should have an employee suggestion system whereby suggestions which result in substantial time or cost reduction should be rewarded. Identify and explain the principles of Taylor and Fayol referred to in the above paragraph. (CBSE, Delhi 2014) Answer: The principles of Fayol and Taylor referred to in the above paragraph respectively are ‘Initiative’ and ‘Cooperation and Not Individualism’. Initiative: Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization. Cooperation and Not Individualism: This principle is an extension of principle of ‘Harmony, Not Discord’.There should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management. Also, management should reward workers for their suggestions which result in substantial reduction in costs. At the same time, workers should desist from going on strike and making unreasonable demands on the management.

Question 18. Nikita and Salman completed their MBA and started working in a multinational company at the same level. Both of them worked hard and were happy with their employer. Salman had the habit of back-biting and wrong reporting about his colleagues to impress his boss. All the employees in the organisation knew about it. At the time of performance appraisal, the performance of Nikita was judged to be better than Salman. Even then their boss, Mohammed Sharif, decided to promote Salman stating that being a female, Nikita would not be able to handle the complications of a higher post.

• Identify and explain the principle of management which was not followed by this, multinational company.
• Identify the values which are being ignored quoting the lines from the above paragraph. (CBSE, OD 2013)
• The multinational company didn’t follow the Principle of Equity. It emphasizes kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise.
• Honesty: “Wrong reporting about his colleagues to impress his boss.”
• Justice: “At the time of performance appraisal, the performance of Nikita was judged better than Salman. Even then their boss, Mohammad Sharif, decided to promote Salman.”

Question 19. Hina and Harish are typists in a company having the same educational qualifications. Hina gets Rs.3,000 per month and Harish gets Rs.4,000 per month as salaries for the same working hours. Which principle of management is being violated in this case? Name and explain the principle. (CBSE, Delhi 2006) Answer: The principle of Equity has been violated in this case. It emphasises kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise.

Additional Questions

Question 1. Radhika opens a jewellry showroom in Jaipur after completing a course in jewellry designing. She has employed eleven persons in her showroom. For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialised job. The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority. In the earlier days of starting of the business, five of her employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment. However, when it comes to settling the conflicts among her employees, she tends to be more biased towards her female employees. In context of the above case:

• Identify and explain the various principles of management that are being applied by Radhika by quoting lines from the paragraph.
• Identify and explain the principle of management which is being violated by Radhika by quoting lines from the paragraph.
• State any one effect of the violation of the principle of management by Radhika as identified in part(b) of the question.
• Principle of Division of Work: According to Fayol, “The intent of division of work is to produce more and better work for the same effort. Specialisation is the most efficient way to use human effort.” He advocates that the principle of division of work is applicable to all kinds of work both technical as well as managerial. “For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialised job.”
• Principle of Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.” “The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority.”
• Principle of Discipline: Discipline refers to the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties. “Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment.”
• The principle of management which is being violated by Radhika is Equity. According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.” This principle emphasizes on kindliness and justice in the behaviour of managers towards workers. The managers should not discriminate against anyone on account of gender, religion, language, caste, belief or nationality etc. “However, when it comes to settling the conflicts among her employees, she tends to be more biased towards her female employees.”
• One effect of the violation of the Principle of Equity is that it may lead to job dissatisfaction among the male workers.

Question 2. Rajveer works as a plant superintendent in a carpet making factory. In order to complete the export orders on time, the production manager asks him to make the workers work over time whereas the finance manager is strictly against this practice because it will increase the cost of production. Moreover, Rajveer feels that since the company is manufacturing handmade carpets as well as machine made carpets there is a lot of overlapping of activities. Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources. In context of the above case:

• Identify and explain the principle of management which is being violated.
• Also identify the principle of management that Rajveer feels should be implemented in the factory.
• Give any two differences between the principle of management as identified in part (a) and part (b) respectively.

Answer: The principle of management which is being violated is stated below:

• Unity of command: There should be one and only one boss for every individual employee. Dual subordination should be avoided. Fayol felt that if this principle is violated, “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.
• Unity of direction: All the units of an organization should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan. This will lead to unity of action and coordination.

Question 3. Neeraj is selected for the post of software developer in an IT Company. On the first day of his joining Mehul, his project manager tells Neeraj that during the course of his work he will come across many such opportunities which may tempt him to misuse his powers for individual or family’s benefit at the cost of larger general interest of the company. In such situations, he should rather exhibit exemplary behaviour as it will raise his stature in the eyes of the company. Also, for interacting with anyone in the company on official matters, he should adopt the formal chain of authority and communication. In context of the above case:

• Identify and explain the various principles of management that Mehul is advising Neeraj to follow while doing his job.
• List any two values that Mehul wants to communicate to Neeraj.
• Subordination of Individual Interest to General Interest: Through this principle, Fayol advocates that in all circumstances, the interests of an organisation should take priority over the interests of any one individual employee. This is essential because larger interests of the other employees and the stakeholders i.e., owners, shareholders, creditors, debtors, financers, tax authorities, customers and the society at large cannot be sacrificed for the interest of any one person. For example, Mehul tells Neeraj that he might get tempted to misuse his powers for his or his family’s benefit and so he must display exemplary behaviour to raise his stature in the eyes of the company.
• Self restraint

Question 4. Davinder is a class twelfth commerce student in a reputed school in Punjab. Satinder is his elder brother who is doing his Masters in Hospital Administration from Delhi after completing his B.Sc course. During vacations when Satinder comes home, Davinder shows him the business studies project that he is preparing on the topic ‘Principles of Management’. Satinder tells him that these principles are also a part of MBA course curriculum at the beginner’s level as they form the core of management in practice. But he finds these principles different from those of pure science. In context of the above case:

• Outline the concept of principles of management.
• Why does Satinder find the principles of management different from those of pure science?
• Why do the principles of management form the core of management in practice? Explain by giving any two points highlighting the importance of principles of management.
• The principles of management serve as a broad and general guideline for the managerial decision making and action.
• Satinder finds the principles of management different from those of pure science because the management principles are not as rigid as principles of pure science. This is due to the fact that they deal with the human behaviour and thus, need to be applied creatively in the light of given situation.
• Providing managers with useful insights into reality: The principles of management provide the managers with useful insights into real world situations and help them to enrich their knowledge, ability and understanding of the diverse managerial situations and circumstances. It also enables the managers to learn from past mistakes and conserve time by solving recurring problems quickly.
• Optimum utilisation of resources and effective administration: The knowledge of management principles enables the managers to foresee the cause and effect relationships of their decisions and actions. As a result, it leads to optimum utilisation of scarce resources by avoiding wastage associated with a trial-and-error approach. Principles of management limit the boundary of managerial discretion so that their decisions may be free from personal prejudices and biases. This facilitates effective administration within the organisation.

Question 5. Gurpreet is running a retail mart in Varanasi to provide various types of products of daily use under one roof to the buyers. The employee turnover in his business is very high and he is perpetually on a look out for new staff. The fact of the matter is that he lacks managerial skills and assigns work to his employees on adhoc basis without letting them settle down in a specific work. This approach of his creates a sense of insecurity among the employees and they tend to leave the job very quickly. However, he is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living. In context of the above case:

• Identify and explain the principle of management which Gurpreet is unable to apply and is perpetually on a look out for new staff.
• “He is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.” Name and explain the relevant principle of management will has been brought into effect by Gurpreet.
• Stability of Personnel: Stability of personnel is principle of management which Gurpreet is unable to apply and is perpetually on a look out for new staff. According to Fayol, “Employee turnover should be minimised to maintain organisational efficiency”. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation.
• Remuneration of Employees: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time, it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management.

Question 6. After finishing her BBA degree course, Tanya gets a job of Assistant Manager in a retail company through the reference of her cousin Taruna who works in the same company as a Senior Manager. Taruna decides to guide Tanya through her experience by making her aware of the important facts about management in practice. She tells her that neither the principles of management provide any readymade, straitjacket solutions to all managerial problems nor they are not rigid prescriptions, which have to be followed absolutely. In context of the above case :

• Identify the two features of principles of management mentioned in the above paragraph by quoting lines from the paragraph.
• Why do the principles of management not provide readymade, straitjacket solutions to all managerial problems?
• General guidelines: The principles of management are guidelines to action. Since the real business situations are very complex and dynamic and are a result of many factors, these principles do not provide readymade, straitjacket solutions to all managerial problems. But the importance of principles cannot be underestimated because even a small guideline may help to solve a given problem.
• 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 decide which principle should be used under what circumstances as individual principles are like different tools serving different purposes.
• As the real business situations are very complex and dynamic and are a result of many factors, the principles of management not provide readymade, straitjacket solutions to all managerial problems.

Question 7. Raj and Simran are both qualified eye surgeons and good friends. After obtaining a certificate of practice, they decide to persue a career of their own choice. Raj starts an eye care centre in the city whereas Simran joins a government hospital in a small village. They meet after a long time in a party. Raj invites Simran to visit his eye care centre and she accepts his invitation. She observes at his clinic that there is a fixed place for everything and everyone and it is present there so that there is no hinderance in the activities pf the clinic. Also, Raj always tends to replace T with ‘We’ in all his conversations with the staff members. Later on Raj shares with her that he always deals with lazy staff sternly to send the message that everyone is equal in his eyes. In context of the above case:

• Identify and explain the various principles of management that Raj is applying for the successful management of his eye care centre.
• List any two values that Simran wants to communicate to the society by taking up a job in a village.
• Espirit De Corps: According to Fayol, “Management should promote a team spirit of unity and harmony among employees.” A manager should replace T with ‘We’ in all his conversations with workers to promote teamwork. This approach will give rise to a spirit of mutual trust and belongingness among team members. It will also reduce the need for using penalties.
• Concern for poor

Question 8. Hritik is desirous of setting up a small factory to manufacture different kinds of eco-friendly packaging materials. He proposes to adopt a logical approach to his business rather than hit and trial method as he knows that this can result in tremendous saving of human energy as well as wastage of time and materials. He plans to adopt paternalistic style of management in practice in order to avoid any kind of class-conflict that may emerge between him and the workers. Moreover, he plans to seek the opinion of his workers before taking any important decisions and also offers incentives to them for providing valuable suggestions for the business. In context of the above case:

• Identify and explain the various principle of scientific management that Hritik plans to apply in his business.
• List any two values that he wants to communicate to the society by offering eco¬friendly packaging material.
• Science, not Rule of Thumb: Taylor believed that there was only one best method to maximise efficiency and it could be developed through scientific study and analysis. This is because if the managers rely on personal judgment in attending to the work related problems, it may suffer from the limitation of a trial and error approach. Therefore, it is important for them to know what works and why does it work. For this, they should adopt scientific method to substitute the ‘Rule of Thumb or hit and trial method’ throughout the organisation.
• Harmony, Not Discord: In the paternalistic style of management, the employer takes care of the needs of employees like a father. Taylor said that any kind of class conflicts between the workers and the managers were not good; rather they must realise that each one is important. Therefore, he emphasised that there should be complete harmony between the management and workers. To achieve this, Taylor called for complete mental revolution on the part of both management and workers by transforming their thinking. The management should share the gains of the company, if any, with the workers and at the same time, workers should work hard.
• Cooperation, Not Individualism: Through this principle, Taylor suggests that there should be complete cooperation between the workers and the management instead of individualism. This principle is an extension of principle of ‘Harmony, Not Discord’. Both should realise the importance of each other. In order to replace the feeling of competition with cooperation, the management should not close its ears to any constructive suggestions made by the employees. Rather, the workers should be rewarded for any of their valuable suggestions which results in substantial saving in costs. Also, the workers should be taken into confidence by the management whenever any important decisions are to be taken.
• Sense of responsibility

Question 9. ‘Study Buddy Pvt. Ltd.’ is company dealing in stationery items. In order to establish standards of excellence and quality in materials and in the performance of men and machines, the company adheres to benchmarks during production. Moreover, its products are available in limited varieties, sizes and dimensions thereby eliminating superfluous diversity of products. Identify the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’ Answer: Standardisation and Simplification of Work is the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’ Standardisation implies devising new varieties instead of the existing ones. It 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. It helps to reduce a given line or product to fixed types, sizes and characteristics, establish interchange ability of manufactured parts and products, determine standards of excellence and quality in materials and of performance of men and machines. Simplification aims at eliminating superfluous diversity of products in terms of varieties, sizes and dimensions. It not only helps to reduce inventories but also to save cost of labour, machines and tools. Thus it helps to increase turnover by ensuring ‘optimum utilisation of resources. Most large companies like Samsung, Toyota and Microsoft etc. have successfully implemented standardisation and simplification.

Question 10. Anshul owns a small scale factory where utility items are prepared from waste material like paper mache items, paper and cloth bags, decorative material etc. Over the past few weeks, he was observing that the productivity of one of his very efficient worker, Ramdas, is going down. So he decides to probe into the matter and confronts Ramdas one day. On being asked, Ramdas shares with Anshul that he has deliberately slowed down in his work as many of the less efficient workers often pull his leg saying that there is no need for him to be more efficient when everybody is being paid at the same rate. Taking a lesson from this insight, Anshul decides to implement an incentive bonus plan so as differentiate between efficient and inefficient workers. In context of the above case:

• Name and explain the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers.
• State any two values that Anshul wants to communicate to the society by setting up a special type of business.

Answer: Differential Piece Wage System is the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers. Differential Piece Wage System is a performance based wage system which was introduced by Taylor so as to distinguish between the workers who were able to achieve the standard or performed above standard from those who performed below standard. For example, it is determined that standard output per worker per day is 10 units and those who made standard or more than standard will get Rs. 40 per unit and those below will get Rs. 30 per unit. Now an efficient worker making 11 units will get 11 x 40 = Rs. 440 per day whereas a worker who makes 9 units will get 9 x 30 = Rs. 270 per day. According to Taylor, the difference of Rs. 170 should be enough for the inefficient worker to be motivated to perform better.

Question 11. Swaraj is running an office furniture showroom. Most of his clients are businessmen and they prefer to buy goods on credit. Keeping this in mind, he has given the power to the sales manager, Mr. Bhardwaj, to offer a credit period of only 20 days, while negotiating a deal with a buyer. On a specific day, Mr. Bhardwaj finds that if he can offer a credit period of 30 days as an exception to a prospective buyer, he is likely to finalise a highly profitable deal for the business. So Mr. Bhardwaj requests Swaraj to grant him additional authority for offering a credit period of 30 days in the interest of the business. But Swaraj refuses to extend his authority and as a result, the deal is not finalized. In context of the above case:

• Can Mr. Bhardwaj be held responsible for loss of the deal? Why or why not ? Give a suitable reason in support of your answer.
• Also, explain the related principle.
• No, Mr. Bhardwaj cannot be held responsible for loss of the deal in the above case as he was not given the necessary authority to carry out his responsibility. There is an imbalance in authority and responsibility.
• The name of the related principle is Authority and Responsibility. Authority is the right to give orders and obtain obedience by the virtue of one’s position in the organization. Responsibility is the obligation of a person to carry out the assigned task to the best of one’s abilities and skills. There are two types of authorities, namely the official authority, which is the authority to command, and personal authority, which is the authority of the individual manager. Authority is both formal and informal. According to Fayol, there should be balance between the authority given and responsibility entrusted to an employee so that he is able to carry out the assigned task. Any kind of imbalance in authority and responsibility is not good for the organisation. If the authority granted to an employee is less than what is required, he will ineffective in doing his work. On the other hand, if the authority delegated to an employee is more than what is required, he may tend to misuse it.

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Case Studies - Principles of Management | Business Studies (BST) Class 12 - Commerce PDF Download

Q. 1. In your school, you observe that books are kept in office, chalks in the library and office records in the staff room.

• Which principle of management is violated here and why?
• How will that affect the achievement of school objectives?
• As a manager, what steps will you take to rectify the shortcomings?           (3 marks)
• Disparate storage of resources violates "Unity of Direction" principle.
• Breeds inefficiency: Staff waste time searching for materials, reducing productivity.
• Increases mismanagement risk: Resources may be misplaced or lost, disrupting school operations.
• Creates coordination challenges: Departments struggle to implement cohesive strategies.
• Solutions: Centralize resource management; designate storage areas; implement inventory control.
• Train staff on proper resource handling.
• Foster collaboration among departments.
• Benefits: Enhances efficiency, minimizes mismanagement risks, promotes unified direction towards achieving school objectives.

Q. 2. The production manager of an automobile company asked the foreman to achieve a target production of 200 scooters per day.  But he did not give him the authority of requisition tools and materials from the stores department.  Can the production manger blame the foreman if he is not able to achieve the desired target?  Explain briefly the principle relating to the situation.               (3 marks)

Ans.  No, the production manager cannot blame the foreman because he did not give him the authority to requisition tools and materials form the stores department.  Since he has no authority, he could not fulfill his responsibility.

In this case the principle of ‘Authority and Responsibility’ is violated.  Fayol suggested tht there must be a balance between authority and responsibility.  Authority and responsibility must go hand in hand.  Responsibility without adequate authority will make the subordinate ineffective, I.e., he will not be able to perform his duties properly.  At the same time giving authority without fixing responsibility may lead to misuse of of authority.

Q. 3. S oniya Ltd. was engaged in the business of manufacturing auto components.  Lately, its business was expanding due to increased demand for cars.  The competition was also increasing.  In order to keep its market share intact, the company directed its workforce to work overtime.  But this resulted in many problems.

Due to increased pressure of work the efficiency of workers declined.  Sometimes, the subordinates had to work for more than one superiors.  The workers were becoming indisciplined.  The spirit of teamwork, which had characterized the company previously, had begun to wane.

Identify any three principles of management (as given by Henry Fayol) which were begin violated, quoting the lines from the above case.             (3 marks)

Ans.  Three principles of management by Henry Fayol that were being violated in the case of Soniya Ltd.:

Unity of Command : "Sometimes, the subordinates had to work for more than one superiors."

• This violates the principle of unity of command, which states that an employee should receive orders from only one superior to avoid confusion and conflicting instructions.

Division of Work : "Due to increased pressure of work the efficiency of workers declined."

• The increased workload and pressure on workers suggest a lack of effective division of work, leading to decreased efficiency and productivity.

Esprit de Corps (Spirit of Teamwork) : "The spirit of teamwork, which had characterized the company previously, had begun to wane."

• This indicates a decline in the spirit of teamwork among employees, which violates the principle of esprit de corps. This principle emphasizes the importance of fostering harmony and unity among workers to achieve common objectives.

Q. 4. The production manager of Harsh Ltd. instructs a salesman to go slow in selling the product, where the marketing manager is insisting on fast selling to achieve the target.  Which principle of management is being violated in this case?                           (1 mark)

Ans.  Unity of command

Q. 5. Kanika and Priyanka are typists in a company having same educational qualifications.  Kanika is getting Rs. 16000 per month and Priyanka Rs. 10000 per month as salary for the same working hours.  Which principle of management is violated in this case.  (1 mark)

Ans.  Principle of equity

Q. 6. Rishabh, a manager, very often speaks to people at all levels, passing on instructions regarding his department and also the other departments.  Which principle of management is being overlooked?                    (1 mark)

Ans.  Principle of Scalar Chain.

Q. 7. The management and workers have entered into an agreement that workers will do overtime to cover up looses of the company.  In return, the manager will increase the wages.  But management later refused to increase the wages.  Name the principle violated in this situation.             (1 mark)

Ans.  Principle of discipline

Q. 8. In Simran Ltd., an employee has the objective of maximizing his salary, but the organizational objective is to maximize output at competitive cost.  There was some dispute on this for a while.  Eventually, the organization’s interest was given priority over employees’ interest.  Name the principle related to this situation.                                       (1 marks)

Ans.  Principle of subordination of individual interest to general interest.

Q. 9. Radhika opens a jewelry showroom in Jaipur after completing a course in jewelry designing.  She has employed eleven persons in her showroom.  For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialized job.  The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to given any further discount rests with Radhika as the final authority.  In the earlier days of starting of the business, five of her employees were asked to put in extra hours of work.  In return she had promised to give them a special incentive within a year.  Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment.  However, when it comes to setting the conflicts among her employees, she tends to b e more biased towards her female employees.

In context of the above case:

• Identify and explain the various principles of management that are being applied by Radhika by quoting lines from the paragraph.
• Identify and explain the principle of management which is being violated by Radhika by quoting lines from the paragraph.
• State any one effect of the violation of the principle of management by Radhika as identified in part (b) of the question.
• The various principles of management that are being applied by Radhika are listed below:
• Principle of Division of work:

“For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialized job.”

• Principle of Centralization and Decentralization:

“The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority.”

• Principle of Discipline:

“Therefore, after six months when the business was doing well, she awarded a each bonus to each of these employees to honour her commitment.”

• The principle of management which is being violated by Radhika is Equity.

“However, when it comes to setting the conflicts among her employees, she tends to be more biased towards her female employees.”

• One effect of the violation of the Principle of Equity is that it may lead to job dissatisfaction among the male workers.

Q. 10. Neeraj is selected for the post of software developer in an IT Company.  On the first day of his joining Mehul, his project manager tells Neeraj that during the course of his work he will come across many such opportunities which may temp him to misuse his powers for individual or family’s benefit at the cost of larger general interest of the company.  In such situations, he should rather exhibit exemplary behavior as it will raise his stature in the eyes of the company.  Also, for interacting with anyone in the company on official matters, he should adopt the formal chain of authority and communication.

• Identify and explain the various principles of management that Mehul is advising Neeraj to follow while doing his job.
• List any two values that Mehul wants to communicate to Neraj.
• Subordination of Individual Interest to General Interest:
• Scalar Chain:
• Self restraint

Q. 11. Davinder is a class twelfth commerce student in a reputed school in Punjab.  Satinder is his elder brother who is doing his Masters in Hospital administration from Delhi after completing his B. Sc course.  During vacations when Satinder comes home, Davinder shows him the business studies project that he is preparing on the topic ‘Principles of Management’.  Satinder tells him that these principles are also a part of MBA course curriculum at the beginner’s level as they form the core of management in practice.  But he finds these principle different from those of pure science.

• Outline the concept of principles of management.
• Why does Satinder find the principle of management different from those of pure science?
• Why do the principles of management form the core of management in practice?

Explain by giving any two points highlighting the importance of principles of management.

• The principles of management serve as a broad and general guideline for the managerial decision making and action.
• Satinder finds the principles of management different from those of pure science because the management principles are not as rigit as principles of pure science.  This is due to the fact that they deal with the human behavior and thus, need to be applied creatively in the light of given situation.
• The importance of principles of management is described below:
• Providing managers with useful insights into reality:
• Optimum utilization of resources and effective administration:

Q. 12. Nutan Tiffin Box service was started in Mumbai by Mumbai dabbawalas.  The Dabbawalas who are the soul of entire Mumbai aim to provide prompt and efficient services by providing tasty homemade tiffin to all office goers at right time and place.  The service is uninterrupted even on the days of bad weather, political unrest and social disturbances.  Recently they have started online booking system through their website’ mydabbawals.com’.  owing to their tremendous popularity amongst the happy and satisfied customers and members, the dabbawalas were invited as guest lecturers by top business schools.  The Dabbawals operate in a group of 25-30 people along with a group pleader.  Each group teams up with other groups in order to deliver the tiffin on time.  They are not transferred on frequent basis as they have to remember the addresses of their customers.  They follow certain rules while doing trade-No alcohol during working hours; No leave without permission; Wearing of white cap & carrying ID cards during business hours.

Recently on the suggestion of a few self motivated fellow men, the dabbawalas thought out and executed a plan of providing food left in tiffins by customers to slum children.  They have instructed their customers to place red sticker if food is left in the tiffin, to be fed to poor children later.

• State any one principle of management given by Fayol & one characteristic of management mentioned in the above case.
• Given any two values which the Dabbawalas want to communicate to the society.

Ans.   One principle of management given by Fayol that can be observed in the case of Mumbai dabbawalas is "Unity of Command." This principle states that an employee should receive orders from only one superior to avoid confusion and conflict. In the case of dabbawalas, each group operates under the leadership of a group leader (group pleader), ensuring clear direction and accountability within the group.

One characteristic of management mentioned in the above case is "Adaptability." Despite facing various challenges such as bad weather, political unrest, and social disturbances, the dabbawalas continue to provide uninterrupted service by adapting their strategies and operations to overcome these obstacles.

Two values that the Dabbawalas want to communicate to society are:

1. Social Responsibility : By implementing a plan to feed slum children with leftover food from customers' tiffins, the dabbawalas demonstrate their commitment to addressing social issues and contributing to the welfare of the less fortunate in society.

2. Reliability : The dabbawalas' consistent and efficient delivery service, even in adverse conditions, reflects their value of reliability. They strive to provide prompt and dependable service to their customers, earning their trust and satisfaction.

Q. 13. ‘Aapka vidyalaya’ believes in holistic development of students and encourages team building through a mix of curricular, co-curricular and sports activities.  On its founders day a stage performance had to be put up.  A committee of ten prefects was constituted to plan different aspect of the function.  They all decided to use recycled paper for decoration.  There was a spirit of unit and harmony and all members supported each other.  With mutual trust and belongingness the programme was systematically planned and executed.  Kartik, one of the prefects realized that unknowingly the group had applied one of the principles of management while planning and executing the programme.  He was so inspired by the success of the function that he asked his father to apply to same principle in his business.  His father replied that he was already using this principle.

• Identify the principle of management applied for the success of the programme.
• State any two features of management highlighted in the above para.
• Identify any two values which ‘Aapka Vidyalaya’ communicated to the society.

Ans.  The principle of management applied for the success of the program is "Unity of Purpose" or "Unity of Objective." This principle emphasizes the importance of aligning individual and group efforts towards the achievement of common goals.

Two features of management highlighted in the paragraph are:

Teamwork : The committee of prefects demonstrates effective teamwork by collaborating to plan and execute the function. There is a spirit of unity and harmony among the members, and they support each other to achieve their goals.

Systematic Planning and Execution : The program is systematically planned and executed by the committee of prefects. They use recycled paper for decoration, indicating a thoughtful and environmentally conscious approach to organizing the event.

Two values communicated to society by 'Aapka Vidyalaya' are:

Environmental Responsibility : By choosing to use recycled paper for decoration, 'Aapka Vidyalaya' demonstrates its commitment to environmental sustainability and responsibility. This value promotes awareness and action towards protecting the environment.

Holistic Development : 'Aapka Vidyalaya' emphasizes holistic development by encouraging a mix of curricular, co-curricular, and sports activities. This value reflects a commitment to nurturing students' overall growth and well-being, beyond academic achievements alone.

Q. 14. Nikita and Salman completed the MBA and started working in a multinational company at the same level. Both are working hard and are happy with their employer.  Salman had the habit of backbiting and wrong reporting about his colleagues to impress his boss.  All the employees in the organization knew about it.  At the time of performance appraisal the performance of Nikita was judged better than Salman.  Even then their boss, Mohammed Sharif decided to promote Salman stating that being a female Nikita will not be able to handle the complications of a higher post.

• Identify and explain the principle of management which was not followed by this multinational company.
• Identify the values which are being ignored quoting the liens the above para.               (5 marks)

Ans.  The principle of management that was not followed by this multinational company is "Impartiality" or "Fairness." This principle emphasizes that decisions and actions should be fair and unbiased, without favoritism or discrimination.

In this scenario, the boss, Mohammed Sharif, decided to promote Salman over Nikita despite Nikita's better performance. The reason cited for promoting Salman, based on gender stereotypes, indicates a lack of impartiality and fairness in the decision-making process. By allowing Salman's negative behavior to influence the promotion decision and discriminating against Nikita based on her gender, the company fails to uphold the principle of impartiality.

The values being ignored in this scenario are:

Fairness and Equality : The company's decision to promote Salman over Nikita based on gender stereotypes disregards the principles of fairness and equality. Nikita's better performance should have been the sole criterion for promotion, irrespective of her gender.

Integrity and Ethical Conduct : Salman's habit of backbiting and wrong reporting about his colleagues indicates a lack of integrity and ethical conduct. By promoting him despite his negative behavior, the company sends a message that unethical conduct is tolerated and even rewarded, undermining the values of integrity and ethical behavior in the workplace.

Q. 15.  Sigma Ltd. is a large company manufacturing electric motors.  The company has several departments – Production, Marketing, Finance and HR. Mr. Shashank, CEO of the company set the target sale of 10 crore in a month.  To increase the sales, the marketing manager, Mr. Ishaan insists on offering 10% discount to customers.  But the finance manager, Mr. Mohak does not approve such discount as it would mean loss of revenue.  Because of dual subordination, the sales manager, Mr. Anshik could not achieve the sales target.

• Which concept of management Sigman Ltd. is lacking?  State it.
• Which principle of management has been overlooked by this company?   State it.
• Which principle of management has been overlooked by this company?  State it.           (6 marks)
• The company is lacking ‘ Coordination ’.

It is the process by which the activities of different departments are synchronized to ensure unity of action.

    2. Concept: Unity of Command

In Sigma Ltd., the absence of "Unity of Command" leads to dual subordination for the sales manager, Mr. Anshik.

Mr. Anshik faces conflicting directives from the marketing manager, Mr. Ishaan, who advocates for offering discounts to boost sales, and the finance manager, Mr. Mohak, who opposes the idea due to potential revenue loss.

This dual subordination hampers Mr. Anshik's ability to effectively achieve the sales target set by the CEO, Mr. Shashank, as he receives contradictory instructions from multiple superiors.

   3. Principle: Unity of Direction

In addition to lacking "Unity of Command," Sigma Ltd. also overlooks the principle of "Unity of Direction."

This principle emphasizes the importance of aligning all activities within the organization towards a common goal or objective.

While the CEO has set a sales target of 10 crore in a month, the conflicting opinions between the marketing manager and the finance manager regarding offering discounts create disunity in direction.

The marketing manager's proposal to offer discounts to increase sales conflicts with the finance manager's concern about potential revenue loss, resulting in a lack of alignment in efforts towards achieving the sales target.

This lack of unity in direction hampers the company's ability to effectively coordinate its actions and resources towards the common goal of achieving the sales target.

Q. 16. ABC Ltd. is engaged in producing electricity from domestic garbage.  There is almost equal division of work and responsibility between workers and management.  The management even takes workers into confidence before taking important decisions.

All the workers are satisfied as the behavior of the management is very good.

• State the principle of management described in the above para.
• Identify any two values which the company wants to communicate to the society.             (3 marks)
• The principle of Taylor described in the above para is Cooperation, Not Individualism.

Values communicated to society by ABC Ltd.:

Employee Empowerment : ABC Ltd. values and promotes employee empowerment by involving workers in decision-making processes and sharing responsibilities equally between workers and management. This communicates a commitment to fostering a sense of ownership and involvement among employees, empowering them to contribute meaningfully to the company's success.

Good Governance and Transparency : The company emphasizes good governance and transparency by taking workers into confidence before making important decisions. This demonstrates a commitment to open communication, trust, and fairness in organizational practices, thereby promoting transparency and accountability in its operations.

Q. 17. Voltech India Ltd. is manufacturing LED bulbs to save electricity and running under heavy losses.

To revive from the losses, the management thought of shifting the unit to a backward area where labour is available at a low cost.  The management also asked the workers to work overtime without any additional payment and promised to increased to wages of the workers after achieving its mission.  Within a short period the company started earning profits because both the management and the workers honoured their commitments.

• Identify any two values that the company wants to communicate to the society.           (3 marks)
• The principle of management described in the above para is Discipline.

Discipline is the obedience to organizational rules and employment agreement which are necessary for the working of the organization.

    2. Values communicated to society by Voltech India Ltd.:

Fairness and Social Responsibility : The company demonstrates a commitment to fairness and social responsibility by promising to increase wages for workers after achieving its mission. Despite asking workers to work overtime without additional payment initially, the company fulfills its commitment to reward their efforts once profitability is restored. This communicates a sense of fairness and social responsibility towards its employees, ensuring they are fairly compensated for their contributions.

Ethical Conduct and Integrity : Voltech India Ltd. upholds ethical conduct and integrity by honoring its commitments to both management and workers. The decision to shift the unit to a backward area where labor is available at a low cost may raise questions about ethical labor practices. However, by promising to increase wages after achieving profitability and delivering on that promise, the company demonstrates integrity and ethical conduct, ensuring transparency and trust in its dealings with both management and workers.

Q. 18. Kushal Ltd. is a leading automobile company in which the various departments are setting up their own objectives without paying any interest to the organizational objectives.

• Which aspect of management the company is lacking?  What will be its impact on the organization?
• Identify the principle of management which has been overlooked by this organization.
• State any two values neglected by the people of this organization.   (5 marks)

Ans.   Aspect of Management Lacking: Coordination

Impact on the Organization: The lack of coordination among departments in setting their own objectives without aligning them with organizational objectives can lead to inefficiency, duplication of efforts, conflicts, and ultimately hinder the achievement of overall organizational goals. Departments may pursue their own agendas, resulting in disjointed efforts, wasted resources, and decreased overall performance of the organization.

Principle of Management Overlooked: Unity of Direction

Values Neglected by the People of the Organization:

Teamwork and Collaboration : The departments' focus on setting their own objectives without considering organizational goals neglects the value of teamwork and collaboration. Instead of working together towards common objectives, departments may operate in silos, hindering synergy and cooperation within the organization.

Organizational Vision and Mission : By disregarding organizational objectives in favor of departmental goals, the people of Kushal Ltd. neglect the value of aligning individual and departmental efforts with the organization's vision and mission. This lack of alignment can lead to a loss of focus on the overarching purpose and direction of the organization, resulting in fragmented efforts and diminished organizational effectiveness.

Q. 19. Telco Ltd. is manufacturing files and folders from old clothes to discourage use of plastic fields and folders.  For this, they employ people from nearby villages where very less job opportunities are available.  An employee, Harish, designed a plan for cost reduction but it was not welcomed by the production manager.  Another employee gave some suggestion for improvement in design, but it was also not appreciated by the production manager.

• Identify any two values that the company wants to communicate to the society. (3 marks)
• Initiative.  It means eagerness to initiate action without being asked to do so.
• Values which the company wants to communicate to the society are:
• Sensitivity towards the environment
• Creation of job opportunities
• Development of backward regions.

Q. 20. Khandelwal Ltd., a tyre manufacturing concern has been established for more than ten years.  Having made good profits in the past, company wanted to expand further and hence did not declare bonus for the previous year.  The workers got agitated and trade union declared strike and demanded bonus and other facilities.  The management decided not to give into their demands.

• Which principle of scientific management is overlooked in the given case?
• State any two values overlooked/ignored by the management in the above case.
• Harmony, not Discord
• Values overlooked are:
• Mutual understanding
• Peace and stability
• Law and Order
• Sense of belongingness  (any two)

Q. 21. Hritik is desirous of setting up a small factory to manufacture different kinds of eco-friendly packaging materials.  He proposes to adopt to logical approach to his business rather than hit and trial method as he knows that this can result in tremendous saving of human energy as well as wastage of time and materials.  He plans to adopt paternalistic style of management in practice in order to avoid any kind of class-conflict that may emerge between him and the workers.  Moreover, he plans to seek the opinion of his workers before taking any important decisions and also offers incentives to them for providing valuable suggestions for the business.

• Identify and explain the various principle of scientific management that Hritik plans to apply in his business.
• List any two values that he wants to communicate to the society by offering eco-friendly packaging material.
• The various principle of scientific management that Hritik plans to apply in his business are described below:
• Science, not Rule of Thumb:
• Harmony, Not Discord:
• Cooperation, Not Individualism:
• The two values that Harit wants to communicate to the society by offering eco-friendly packaging material are:
• Concern for environment
• Sense of responsibility

Q. 22. Gaurika has been appointed as the chief organizer of a weeklong cultural event.  Being a staunch follower of scientific management, she decides to execute her work by putting into practice the various techniques of scientific management.  On the basis of several observations, she is able to determine that the standard time taken by the security officer at the gat to check the credentials of each visitor is 30 seconds.  So she decides to employ two persons on this job for every function along with the other necessary support staff.  She considers the fact that every day, the functions will take place in three shifts of four hours each, therefore it is important to give breaks to the support staff even in a single shift to take her/his lunch etc.  moreover, on introspection, she determines that the best way to distribute refreshment boxes to the visitors will be to hand it over to them at the exit gate as it would help to save time and eliminate any kind of confusion.

In the context of the above case:

• Identify and explain the various techniques of work study which have been put into practice by Gaurika.
• List any two values that Gaurika wants to communicate to the society.
• The various techniques of work study which have been put into practice by Gaurika are outlined below:
• Time Study:
• Fatigue Study:
• Method Study:
• The two values that Gaurika wants to communicate to the society are:
• Optimum utilization of resources
• Concern for employees

Q. 23. ‘Study Buddy Pvt.’ Is company dealing in stationery items. In order to establish standards of excellence and quality in materials and in the performance of men and machines, the company adheres to benchmarks during production.  Moreover, its products are available in limited varieties, sizes and dimensions thereby eliminating superfluous diversity of products.

Identify the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’

Ans.   Technique of scientific management: Standardization

• Establishing benchmarks during production.
• Limiting varieties, sizes, and dimensions of products.
• Consistency in materials and performance.
• Quality control and excellence in production.
• Efficiency in operations.
• Enhanced quality and customer satisfaction.

Q. 24. Tina and Anshu completed their MBA and started working in a multinational company at the same level.  Both are working hard.  Anshu has the habit of backbiting and wrong reporting about his colleagues to impress the boss.  All the employees in the organization know about it.  At the time of performance appraisal also Tina’s performance was rated better than Anshu.  Even then their boss decided to promote Anshu stating that being a female, Tina will not be able to handle the complications of higher post.

• Identify and explain the principle of management that was not followed by this company.
• Identify the values being ignore.
• Company is violating the “Principle of Equity.”
• The values ignored are

                  1.   Gender equality

                  2. eward for performance

                  3. Good human behavior.

Q. 25. In one of his principles, Taylor suggested that job performance should be based on scientific enquiry and not on will/wish or personal intuition of manager?

• Name that principle.
• What values can be followed by using this principle?
• Principle of “Science not rule of thumb.”
• If manager is using this technique he can follow the value of objectivity it as when decisions are taken scientifically he cannot be biased.

Q. 26. The production department of Alpha Ltd. was not performing well on detailed analysis, it was observed that the workers of that department were overburdened.  They were forced to work for longer hours without any break.  So the management planned to replace the production manager.  They appointed Mr. Hari as the new Production Manager.  He observed the average worker and note down their times.  He noted down the time they worked and the time they required to be fresh to join back the work.  Based on this observation, he set the break intervals for workers. He gave small breaks to workers to recharge their energy.

• Name and explain the technique of scientific management used by Mr. Hari.
• State the value which Mr. Hari wants to communicate to the society by allowing rest intervals to workers.
• Fatigue study.
• Value of humanity/sympathy/respect towards employees.

Q. 27. In the staff meeting the principal of the school raised objection that teachers start the teacher after 5 to 10 minutes in third floor classes.  He warned them as students are complaining about this.  The teachers explained the principal that when we climb steps from ground to third floor.  We get some tiredness and need 5 to 10 minutes rest before starting the lecture.  The principal planned to install a lift in school so that teachers do not waste their energy on wasteful activity of climbing steps.

• State the techniques of scientific management used by principal.
• State any other technique of scientific management.
• “Technique of motion study.”
• Other two techniques:
• Functional foremanship
• Time study.

Q. 28. In a factory the toolbox was kept under the table of every worker, whenever worker needs tools he had to bend tape out tool from tool box and keep it back after use.  The newly appointed supervisor observed it and suggested to keep a stool near every worker’s chain where toolbox can he placed so that workers do not waste their energy in bending again and again.

• Which technique of scientific management is used by New Supervisor.
• State the objective of motion study.
• Motion study.
• The objective of motion study is to eliminate unproductive movements of workers.

Q. 29. Mr. Mukesh used to manufacture shoes by employing labour who were easily available.  When his son after completing his MBA joined the business, he analysed that if we use capital intensive method by using a machine it will reduce the cost and the quality of shoes will also improve.

• Which technique of Scientific management is used by his son.
• What is the objective of that technique.
• Method Study
• Finding the best way of doing thing.

Q. 30. Mr. Kapoor, Finance manager of ABC Ltd. applied for leave to attend a family function in Amritsar.  The director of the company  requested him to cancel his leave as there is an important meeting schedule on that date.  Mr. Kapoor immediately agreed and cancelled his trip as he thought attending meeting is more important for company’s benefit.

• Which principle of Fayol is applied by Mr. Kapoor?
• Explain that principle.
• Principle of subordination of individual interest to general interest.
• According to this principle, the interest of organization must supersede the interest of individuals or employees.  In the organization all the employees are working with some objective and there is always an objective of organization.

Q. 31. The manager of ABC Ltd. asked his workers to work overtime to increase the production and earn more but he did not paid extra wages to workers for extra time worked.  The workers started feeling dissatisfied and stop contributing maximum.

• Which principle of Fayol is violated in the above case.
• Explain that principles.
• Principle of Remuneration.
• According to this principle, the interest of organization must supersede the interest of individuals or employees.

Q. 32. Mr. Rajiv is the owner of ‘Laxmi Dairy.’  He is producing various milk products.  He always tests various ways of producing different products and chooses the best and most economical way of production.  He is also very particular about fixing a place for everything and he makes sure that all the employees are given a fixed place so that there is no wastage of time and delay in production.

• Which technique of scientific management is applied by Mr. Rajiv?
• Which principle of Henry Fayol is followed by him?
• Principle of order

Q. 33. Mr. Rajiv the senior manager of Unique enterprise considered himself very wise and used to take all the decisions himself without consulting the employees, he never used to help any one nor he used to take help of anyone.  The employees of unique enterprise were not working efficiently and company’s profit margin started declining to tackle the problem, the company appointed a new manager from IIM Bangalore.  The new manager after joining made a policy that all the decisions will be taken after consulting employees in the meeting.  All employees must give some suggestions and best suggestions will be rewarded with financial and nonfinancial incentives.  This policy had a very positive effects on company.

• State the principle of Hencry Fayol used by new manager.
• State the technique of scientific management related to above case.
• Principle of initiative.
• “Cooperation not individualism.”

Q. 34. In a school principal makes sure that every instruction, order or information given by him must be passed to vice-principal then Head of the department and then to teachers and students must be informed by respective teachers only.  He never allows teachers to directly communicate with him.

• Stat the Principle of Henry Fayol followed by the school principal.
• In case of emergency which concept of Scalar Chain can be used by teacher to pass urgent message directly to principal.
• Scalar Chain.
• Gang-plank.

Q. 35. Pawan is working as a Production Manager in CFL Ltd. which manufactures CFL bulbs.  There is no class-conflict between the management and workers.  The working conditions are very good.  The company is earning huge profits.  As a policy, the management shares the profits earned with the workers because they believe in the prosperity of the employees.

• State the principle of management described in the above paragraph.
• Identify any two values which the company wants to communicate to society.
• The principle of management described in the above paragraph is ‘Harmony, not discord’.
• The two values that the company wants to communicate to the society are:

Q. 36. The principles of Taylor and Fayol are mutually complementary.  On believed that management should share the gains with the workers while the other suggested that employees’ compensation should depend on the earning capacity of the company and should give them a reasonable standard of living.

Identify and explain the principles of Fayol and Taylor referred to in the above paragraph.

The principles of Fayol and Taylor referred to in the above paragraph are ‘Remuneration of employees’ and ‘Harmony, Not Discord’.

• Remuneration of Employees:
• Harmony, not Discord:

Q. 37. The principles of Taylor and Fayol are mutually complementary.  One believed that management should not close its ears to constructive suggestions made by the employees while the other suggested that a good company should have an employee suggestion system whereby suggestions which result in substantial time or cost reduction should be rewarded.

Identify and explain the principles of Taylor and Fayol referred to in the above paragraph.

Ans.  The principles of Fayol and Taylor referred to in the above paragraph respectively are ‘Initiative’ and ‘Cooperation and Not Individualism’.

• Initiative:
• Cooperation and Not Individualism:

Q. 38. Hina and Harish are typists in a company having the same educational qualifications.  Hina gets Rs. 3,000 per month and Harish gets Rs. 4,000 per month as salaries for the same working hours.  Which principle of management is being violated in this case?  Name and explain the principle.

Ans.  The principle of Equity has been violated in this case.  It emphasizes kindliness and justice in the behavior of managers towards workers.  No discrimination should be made by them on the basis of caste, creed, gender or otherwise.

Q. 39. Rajveer works as a plant superintendent in a carpet making factory.  In order to complete the export orders on time, the production manager asks him to make the workers work over time whereas the finance manager is strictly against this practice because it will increase the cost of production.  Moreover, Rajveer feels that since the company is manufacturing handmade carpets as well as machine made carpets there is a lot of overlapping of activities.  Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources.

• Identify and explain the principle of management which is being violated.
• Also identify the principle of management that Rajveer feels should be implemented in the factory.
• Give any two differences between the principle of management as identified in part (a) and part (b) respectively.

The principle of management which is being violated in stated below:

• Unity of command:
• Unity of direction:
• The difference between the principle of Unity of Command and Unity of Direction is given below:

Q. 40. Gurpreet is running a retail mart in Varansi to provide various types of products of daily use under one roof to the buyers.  The employee turnover in his business is very high and he is perpetually on a look out for new staff.  The fact of the matter is that he lacks managerial skills and assigns work to his employees on adhoc basis without letting them settle down in a specific work.  This approach of his creates a sense of insecurity among the employees and they tend to leave the job very quickly.  However, he is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.

• Identify and explain the principle of management which Gurpreet is unable to apply and is perpetually ona look out for new staff.
• “He is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.”  Name and explain the relevant principle of management will have been brought into effect by Gurpreet.
• Stability of Personnel;

Also Check at EduRev:   Chapter Notes - Principles Of Management   Learn Principles of the Scientific Management: Overview  

Q. 41. After finishing her BBA degree course, Tanya gets a job of Assistant Manager in a retail company through the reference of her cousin Taruna who works in the same company as a Senior Manager.  Taruna decides to guide Tanya through her experience by making her aware of the important facts about management in practice.  She tells her that neither the principles of management provide any readymade, straitjacket solutions to all managerial problems nor they are not rigid prescriptions, which have to be followed absolutely.

• Identify the two features of principles of management mentioned in the above paragraph by quoting lines from the paragraph.
• Why do the principles of management not provide readymade, straitjacket solutions to all managerial problems?
• The two features of principles of management mentioned in the above paragraph are as follows:
• General guidelines:
• As the real business situations are very complex and dynamic and are a result of many factors, the principles of management not provide readymade, straitjacket solutions to all managerial problems.

Q. 42. Raj and Simran are both qualified eye surgeons and good friends.  After obtaining a certificate of practice, they decide to persue a career of their own choice.  Raj starts an eye care centre in the city whereas Simran joins a government hospital in a small village.  They meet after a long time in a party.  Raj invites Simran to visit his eye care centre and she accepts his invitation.  She observes at his clinic that there is a fixed place for everything and everyone and it is present there so that there is no hinderance in the activities of the clinic.  Also, Raj always tends to replace ‘I’ will ‘We’ in all his conversations with the staff members.  Later on Raj shares with her that he always deals with lazy staff sternly to send the message that everyone is equal in his eyes.

• Identify and explain the various principles of management that Raj is applying for the successful management of his eye care centre.
• List any two values that Simran wants to communicate to the society by taking up a job in a village.
• Spirit de Corps:
• Concern for poor

Q. 43. Anshul owns a small scale factory where utility items are prepared from waste material like paper mache items, paper and cloth bags, decorative material etc.  over the past few weeks, he was observing that the productivity of one of his very efficient worker, Ramdas, is going down.  So he decides to probe into the matter and confronts Ramdas one day.  On being asked, Ramdas shares with Anshul that he has deliberately slowed down in his work as many of the less efficient workers often pull his leg saying that there is no need for him to be more efficient when everybody is being paid at the same rate.  Taking a lesson from this insight, Anshul decides to implement an incentive bonus plan so as differentiate between efficient and inefficient workers.

• Name and explain the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers.
• State any two values that Anshul wants to communicate to the society by setting up a special type of business.

Differential Piece wage System is the incentive bonus plan that Ashul may implement so as differentiate between efficient and inefficient workers.

Q. 44. Swaraj is running an office furniture showroom.  Most of his clients are businessmen and they prefer to buy goods on credit.  Keeping this in mind, he has given the power to the sales manager, Mr. Bhardwaj, to offer a credit period of only 20 days, while negotiating a deal with a buyer.  On a specific day, Mr. Bhardwaj finds that if he can offer a credit period of 30 days as an exception to a prospective buyer, he is likely to finalize a highly profitable deal for the business.  So Mr. Bhardwaj requests Swaraj to grant him additional authority for offering a credit period of 30 days in the interest of the business.  But swaraj refuses to extend his authority and as a result, the deal is not finalized.

• Can Mr. Bhardwaj be held responsible for loss of the deal?  Why or why not?  Give a suitable reason in support of your answer.
• Also, explain the related principle.
• No, Mr. Bhardwaj cannot be held responsible for loss of the deal in the above case as he was not given the necessary authority to carry out his responsibility.  There is an imbalance in authority and responsibility.
• The name of the related principle is Authority and Responsibility.

Get an overview of Business Finance through this  video. Find NCERT Solutions of Financial Management  here .  

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Case Study Questions for Class 12 Business Studies Chapter 2 Principles of Management

• Last modified on: 11 months ago
• Reading Time: 10 Minutes

Case Study Question 1:

Here you will find Case Study Questions for CBSE Class 12 Business Studies Chapter 2 Principles of Management.

Laxmi opens a jewellery showroom in Delhi after completing a course in jewellery designing. She has employed eleven persons in her showroom. For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialized job. The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Laxmi as the final authority. In the earlier days of starting of the business, five of her employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment. However, when it comes to setting the conflicts among her employees, she tends to be more biased towards her female employees.

In context of the above case:

(i) Identify the principle being applied by Radhika while assigning work. a) Unity of Command c) Division of Work b) Science not rule of thumb d) Unity of Direction

(ii) Identify the principle of management which is being violated by Radhika. a) Discipline c) Equity b) Order d) Remuneration

(iii) While taking decision related to discount which principle of management is being used. a) Scalar chain c) Discipline b) Order d) Centralisation and Decentralisation

(iv) “She had promised to give them a special incentive within a year. Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honor her commitment”.

In the above statement identify the principle of management being followed by Laxmi? a) Scalar chain c) Discipline b) Order d) Centralisation and Decentralisation

Ans. (i) Division of Work (ii) Equity (iii) Centralisation and Decentralisation (iv) Discipline

Units and Chapter List:

Unit 1 – Nature and Significance of Management, Principles of Management and Business Environment

Chapter 1: Nature and Significance of Management Case Studies Chapter 2: Principles of Management Case Studies Chapter 3: Business Environment Case Studies

Unit 2 – Planning and Organising

Chapter 4: Planning Case Studies Chapter 5: Organising Case Studies

Unit 3 – Staffing, Directing and Controlling

Chapter 6: Staffing Case Studies Chapter 7: Directing Case Studies Chapter 8: Controlling Case Studies

Unit 4 – Financial Management and Financial Market

Chapter 9: Financial Management Case Studies Chapter 10: Financial Market Case Studies

Unit 5 – Marketing and Consumer Protection

Chapter 11: Marketing Case Studies Chapter 12: Consumer Protection Case Studies

How to Tackle Business Studies Case Studies in Exams

Here’s a tip on how to approach and answer case study questions for Class 12 BST (Business Studies) exams:

1. Understand the Format:

• Case study questions are designed to test your ability to analyze and apply your knowledge to real-world situations.
• These questions are usually longer in length, but your answers should be concise and to the point.

2. Careful Reading:

• Begin by carefully reading the entire case study. Don’t rush; understand the context and details provided.
• Pay attention to any data, statistics, or specific information presented in the case.

3. Examine the Question:

• Before diving into the case study, read the question(s) associated with it. This will help you focus on what to look for while reading the case.
• Identify the key concepts or issues the question is addressing.

4. Highlight Key Information:

• While reading the case, underline or highlight important facts, figures, or statements that seem relevant to the question.
• Make notes if necessary to organize your thoughts.

5. Analyze the Situation:

• Once you have a good grasp of the case and its details, analyze the situation. Consider the cause-and-effect relationships, potential solutions, and any ethical or business principles involved.

6. Structure Your Answer:

• Start your answer with a brief introduction, summarizing the main problem or situation presented in the case.
• Organize your response logically. You can use bullet points or numbered lists for clarity.
• Present your analysis, providing relevant business theories or concepts as appropriate.
• Offer solutions or recommendations based on your analysis. Be clear and concise in your suggestions.

7. Use Simple Language:

• Write your answers in clear and simple language. Avoid unnecessary jargon or complex vocabulary.
• Ensure your answers are easy to understand for the examiner.

8. Practice with Sample Papers:

• Practice case study questions from sample papers and previous year papers to get a feel for the format and types of questions that may be asked.
• Writing practice answers will help you refine your approach.

Remember to practice, and you’ll become more proficient at tackling case study questions effectively.

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End to your search for good notes!!

• MCQs – Nature & Significance of Management
• MCQs- Principles of Management
• MCQs – Chapter – Business Environment
• MCQs – Chapter Planning
• MCQs – Chapter – Organizing
• MCQs – Chapter Staffing
• MCQs – Chapter – Directing PART-1
• MCQs – Chapter – Directing – Part-2
• MCQs- Chapter Controlling
• MCQs- Chapter – Financial Management
• MCQs – Chapter – Marketing Management Part-1
• MCQs- Chapter- Marketing Management -Part-2
• MCQs – Chapter- Marketing Management – Part-3

Case Studies- Principles of Management

• Case Study – Business Environment
• Case Study-Planning
• Case Study-Organizing
• Case Study- Staffing
• Case Study-Directing
• Case Study – Chapter Controlling
• MCQs – Ch-2 – An Entrepreneur – Part-1
• MCQs – Ch-2 – An Entrepreneur – Part-2
• Ch-3 MCQs for ENTREPRENEURIAL JOURNEY
• MCQs – Ch-4 Entrepreneurship As Innovation And Problem Solving
• Ch-5 MCQs Analysis of Market Env & Market Research
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CASE STUDIES- PRINCIPLES OF MANAGEMENT

This case study is hand picked original case study. It is created keeping in mind CBSE 10+2 CBSE Students. Many students get benifit out of it. You will find these in form of simple questions and answers.

Q1: Anshul a commerce student visited a hospital . He observed that in hospital to treat different type of disease there is a separate department and each department is lead by dean of that respective department who is expert in that particular field having knowledge , training and experience of that particular area only. He could relate it to one of the principle of management. Identify and explain.

Q2; Harshita , a sales manager has to negotiate a deal with a buyer. She finds that if she can offer credit period of 60 days she is likely to clinch the deal which is supposed to fetch the company a net margin of Rs. !,00,000 . Now the company gives power to the manager to offer a credit period of 40 days due to which she could not get the deal. Identify the principle of management violated above.

Q3; In Ashu limited Management and labour union entered into an agreement whereby workers have agreed to put in extra hours without any additional payment to revive the company out of loss. In return the management has promised to increase wages of the workers when this mission is accomplished But afterwards management refused to fulfill its commitment. Identify the principle of management violated by the management of Ashu Ltd. .

Q4; Akshit a sales person is asked to clinch a deal with a buyer and is allowed to give 10% discount by marketing manager. But finance department tells him not to offer more than 5% discount. Due to which Akshit is confused. Which principle of management is violated?  Identify.

Q5; Stuti Industries is engaged in manufacturing Cars and Motorbikes. It has two separate departments for both the products. Each department has its own Incharge , plans and execution resources which leads to focused efforts of all the employees. Identify the principle of management followed by Stuti Industries.

Q6;  Udhay is working as Plant superintendent in Tanish Industries. But he is given a salary of a clerk as his compensation.  Which act as a demotivator for udhay and he does not feel like working whole heartedly for the company. Identify the principle of management violated in Tanish Limited.

Q7; Amita and Shamita are working as  typist in Ashiana Ltd. . But Amita is paid salary of Rs. 4,000 pm and Shamita is apid salary of Rs. 5,000 pm. After knowing this Amita got discouraged and started thinking of shifting the job. Which principle of Fayol is violated in above case?

Q8; Rajeev joined Anamika Ltd. As training manager . After joining he observed that employees are lacking the feeling of belongingness with the organization. To encourage the feeling of beloningingness and self motivation he decided to apply one of the principle of fayol and started employee suggestion system whereby employees are encouraged to give suggestion and whereby suggestions which result in substantial cost/ time reductions will be rewarded. Identify the principle.

Q9; In Tanya Ltd, there is discord among all the employees due which objectives are not realized and there  is no coordination among employees . there is no mutual trust and belongingness among employees . So managers have to apply penalities on employees which further increases the inefficiency. What do you is wrong with above organization . Give your answer in respect to Principle of Fayol.

Q10; In Ayesha Ltd. Losses are pouring in. So for their rescue Vishal CEO of the company decided to  hire  Aryan the cost control expert at higher salary . Maximum of the directors opposed the decision of hiring  Aryan in company’s crisis period when company is already going into losses. After taking charge of the Job Aryan advised the company to eliminate superfluous varities , sizes and dimensions . because these are the reason for undue high cost Expenditures . Which concept of principle of management is applied above.

Q11; In Model Motor Company For designing a car the assembly line production is entailed which decided the sequence od operations, place for men, machines and raw material etc. This exercise helped in minimizing the cost of production and maximize the quality of products. Identify the concept in relation to scientific management in the above case which is the reason for minimizing cost.

Q12;  On the basis of several observations it is determined that one worker can make one cardboard in 2o minutes. So in one hour he will make 3 boxes. Assuming that a worker has to put in 8 hours of work in a shift and deducting    one hour for rest and lunch, it is determined that in 7 hours a worker makes 21 boxes @ 3 boxes per hour. Now this is the standard  task workers have to do . Wages are decided accordingly. The base of above technique is one of the technique of F.W. Taylor. Identify that technique.

Q13; It si determined that standard output per worker per day is 10 units and those who made standard or mopre than standard will get Rs. 50 per unit and those below will get Rs. 40 per unit. Now an efficient worker making 11 units will get Rs. 11x 50= Rs. 550 per day whereas a worker who produces 9 units will get 9×40= Rs. 360 per day. This example is concerned with one of the technique of scientific management whose objective  is to encourage the inefficient workers to work harder. KIdentify the gtechnique.

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• Commerce Important Questions
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• Chapter 2 Principles of Management

Important Questions Class 12 Business Studies Chapter 2 - Principles of Management

Important Questions with Answers for CBSE  Class 12 Business Studies Chapter 2 – Principles of Management which is outlined by expert Business Studies teachers from the latest version of CBSE (NCERT) books.

CBSE Class 12 Business Studies Chapter – 2 Important Questions

What is meant by ‘Management Principles’?

Answer : Principles of management refers to the broad and general guidelines for managerial decision making and traits.

Name the organisational structure that assists in increasing managerial and operational efficiency.

Answer : Functional structure assists in increasing managerial and operational efficiency.

Explain why is it said that the principles of management are ‘primarily behavioural’ and ‘contingent’ in nature. Also, explain how principles of management ‘furnishes the managers with useful insights into reality’ and ‘helps is thoughtful decision making’.

Answer : Principles of management are ‘primarily behavioural’ and ‘contingent’ in nature and ‘furnishes the managers with useful insights into reality’ and ‘helps is thoughtful decision making’. These points have been justified in the below-mentioned points:

• Primarily behavioural : The principles of management are ‘primarily behavioural’ in nature as principles of management aim at affecting the individuals and their applicability differ as per human nature.
• Contingent : Their applicability relies upon the current scenario at a specific point of time. The application must be changed according to the situation.
• Formed by practice and experimentation : management principles are based on the number of years of experimentation and practice. Hence, these principles assists the managers when they confront the real-time issues.
• Cause and effect relationship : The decisions that are taken regarding the management must be taken carefully. They must certainly be based on the facts. Principles of management were developed from the real-time issues and they stand the test of reasoning and logic.

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Briefly explain ‘discipline’ and ‘scalar chain’ as the principles of general management.

• Discipline : Discipline implies that an establishment must follow the rules and regulations and make sure that the compliance to set some stipulated policies and rules. Discipline certainly requires some good supervisors at all the levels with clear and unbiased agreements and judicious application of penalties.
• Scalar chain : Scalar chain refers to a defined, established pathway of authority and communication in the order of highest to the lowest.

What are the features on Principles of management? Answer : Principles of management are the statements of fundamental truth, which possess the capability to anticipate the outcome of managerial pursuits. Below mentioned are the features:

• Universal applicability : Management principles are relevant to all sorts of establishments – business & non-business. They are applicable to all levels of management. Every business must make the best potential effectiveness by the use of management principles. Hence, they are universal or all-pervasive.
• Principles of Management have a Cause & Effect Relationship : Principles of management mean cause and effect relationship between associated variables. They imply what will be the outcome or result of some actions. Consequently, if one is known, the other can be determined.
• Principles of Management – Aims at Influencing Human Behavior : Human behaviour is complicated and unpredictable. Management principles are aimed towards controlling human behaviour so that people can contribute their best to the organization. Management is concerned with combining efforts and harmonizing them towards a purpose. But in situations, even these principles fail to understand human behaviour.
• Principles of Management are Flexible : Management principles are effective guidelines and not inactive rules. There is enough room for managerial responsibility i.e. they can be altered as per the necessities of the situation. Modification & development is a perpetual phenomenon in case of principles of management.

What is the importance of the principles of management?

Answer : The importance of the principles of management are mentioned below:

• Furnishing managers with beneficial insights : These principles of management help in raising the managerial effectiveness by adding to their knowledge, skills and ability to comprehend the various situations more equitably.
• Scientific decisions : Management principles assists the managers in taking the decisions that are based on the goal-oriented situation. Hence, the decisions taken are certainly logical, unbiased and free from any sort of prejudices.
• Fulfilling social responsibilities : These principles of management are outlined in such a way that they assist in fulfilling social responsibilities.
• Management training, education and research : These principles of management are utilised as a basis for management training, education and research.

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Critical Thinking Case

Wells fargo.

The Wells Fargo recent crisis over mismanaging customer relationships, fraudulently implementing illegal and unethical sales practices with trusted clients, has cost the company in fines, lost business, and the resignation of the CEO. The following online sources offer a narrative and factual source of what happened, when, to whom, and why. Use these sources to answer and provide evidence to the following questions to present to the class:

• What were the sources and causes the problems in the first place? Explain.
• Who were some of the primary decision makers that led to the illegal sales activities?
• What were these individuals’ motives and motivations?
• How were the illegal and fraudulent activities discovered?
• Who was to blame?
• What unethical activities occurred before the illegal actions took place?
• What would you have done, if anything, had you been one of the sales professionals pressured to engage in unethical, illegal practices there?
• How would a stakeholder approach, if taken by the company’s top leaders and board of directors, have possibly prevented the crisis?

Sources: Comrie, Harley, “Wells Fargo Fake Accounts Scandal”, Seven Pillars Institute, March 15, 2017, http://sevenpillarsinstitute.org/case-studies/wells-fargo-fake-accounts-scandal ; “Wells Fargo Banking Scandal a Financial crisis We Can Finally Understand”, The Guardian , accessed January 2, 2019, https://www.theguardian.com/business/us-money-blog/2016/oct/07/wells-fargo-banking-scandal-financial-crisis; Glazer, Emily, “Wells Fargo’s Textbook Case of Botched Crisis Management”, The Wall Street Journal, October 13, 2017, https://www.wsj.com/articles/wells-fargos-textbook-case-of-how-not-to-handle-a-crisis-1476380576.

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Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/principles-management/pages/1-introduction

• Authors: David S. Bright, Anastasia H. Cortes
• Publisher/website: OpenStax
• Book title: Principles of Management
• Publication date: Mar 20, 2019
• Location: Houston, Texas
• Book URL: https://openstax.org/books/principles-management/pages/1-introduction
• Section URL: https://openstax.org/books/principles-management/pages/5-critical-thinking-case

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Case Study - Principles of Management | Business Studies Case Study Examples with Solutions

C ase study accountancy class 12,   principles of management.

Read the following text and answer the following questions on the basis of the same:

After completing her Bachelors in Fashion Designing from a well-known college in France, Aditi has opened a boutique in a posh market in Kolkata. She has divided the work in smaller units and each employee is well trained to perform his/her task efficiently. The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount, whereas the decision to give any further discount rests with Aditi as the final authority. 

In the earlier period of her business venture, employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, when the business was doing well, she honour her commitment by giving bonus to her employees. She also instructed her employees that communication from top to bottom should follow the official lines of command. However, she tends to be more biased towards her female employees, when it comes to solve the conflicts among employees.

Question 1:

Aditi has divided the work in smaller units and each employee is well trained to perform his/ her task

efficiently. Which principle of management is being followed here?

(a) Centralization and Decentralization

(b) Division of work

(c) Discipline

Answer:   (b) Division of work

Question 2:

"The sales persons are allowed to close a deal with a buyer by giving a maximum of 5 percent discount,

whereas the decision to give any further discount rests with Aditi as the final authority." Identify the

principle of Management being followed here:

(a) Centralization and Decentralisation

(b) Authority and Responsibility

(c) Unity of Command

(d) Unity of Direction

Answer:  (a) Centralization and Decentralisation

Question 3:

“Therefore, when the business was doing well, she honoured her commitment by giving bonus to her  employees.” Which principle of management is being highlighted here?

(a) Discipline

(c) Remuneration to Employees

Answer:   (a) Discipline

Question 4:

Aditi tends to be more biased towards her female employees when it comes to solve the conflicts  among employees. Which principle is being violated here?

(d) None of these

Answer:  (c) Equity

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Principles of management case study

There are many principles of management case studies that are available via textbook and online. Focal points of these case studies include business management, HRM, SHRM, OB, and conflicts in negotiation management.

Add your answer:

Why to study principles of management?

To learn how to manage.

Why study the principles in management?

in order to meet market expectation

What is Scalar principles in principles in management?

there must be a clear and unbroken line of command or management structure.

Desribe the Principles of management by Chester Irving Barnard?

principles of management by chester irving barnard

How are principles of management developed?

Typically, Principles are developed through a controlled expriment process, how ever management principles are developed through obsevation and deduction

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