CBSE Class 12 Business Studies Case Study Principles of Management

Caselet : F limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was expanding due to good quality and reasonable prices. Also, with more people working, the market for processed food was increasing. New players were also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which had characterised the company, previously was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease.

Actually the company had implemented changes without creating the required infrastructure.

(a) Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
Answer. (a) The Principles of Management that were violated by the company are:
(i) Division of work.
(ii) Unity of command.
(iii) Discipline.
(iv) Esprit-de-corps.
(v) Remuneration.
(vi) Subordination of individual interest to general interest.
(vii) Initiative.

(b) Explain these principles in brief.
Answer. (i) Division of work: It states that work should be divided in small parts and each worker should be made to perform a particular part repeatedly. This leads to specialisation and effective performance.
(ii) Unity of command: It states that an employee in an organisation must receive instruction from only one superior at a given point of time.
(iii) Discipline: This states that all the employees and the management must adhere to rules and employment agreements of the organisation.
(iv) Esprit-de-corps: This principle promotes a feeling of team spirit among employees of the organisation. This helps a lot in achieving organisational goals.
(v) Remuneration: This principle advocates that the employees should be paid fair wages and salaries so that they can have a reasonable standard of living and also this level of wage and salary should be within the paying capacity of the employer.
(vi) Subordination of individual interest to general Interest: This principle states that the interest of the organisation should always supersede the interest of any one individual.
(vii) Initiative: The focus of this principle is on encouraging employees to develop and carry out plans for bringing about improvements in the functioning of the organisation.

(c) What steps should the company management take in relation to the above principles to restore the company to its past glory?
Answer. The company should take following steps immediately to restore the company to its glory:
(i) Proper division of work among the workers should be done according to their potential/capability.
(ii) It should be ensured that one worker should receive orders from only one superior at a given time.
(iii) Proper compensation should be paid to all the employees.
(iv) Motivating and disciplined environment should be developed in the company.
(v) Creative ideas from workers should be welcomed and their interest should be taken care of and linked with company’s objective

Caselet :
The management of company F Limited now realized its folly. In order to rectify the situation it appointed management consultant M consultants to recommend a restructure plan to bring the company back on the rails. M consultants undertook a study of the production process at the plant of the company F Limited and recommended the following changes:
1. The company should introduce scientific management with regard to production.
2. Production Planning, including routing, scheduling, dispatching and feedback should be implemented.
3. In order to separate planning from operational management ‘Functional foremanship’ should be introduced.
4. ‘Work study’ should be undertaken to optimise the use of resources.
5. Standardisation of all activities should be implemented to increase efficiency and accountability.
6. To motivate the workers Differential Piece Rate System‘ should be implemented.
The above changes should be introduced apart from the steps recommended in case problem-
1 (as an answer to question no 3 of that case problem). It was expected that the changes will bring about a radical transformation in the working of the company and it will regain its pristine glory.

(a) Do you think that introduction of scientific management as recommended by M consultants will result in intended outcome?
Answer. Yes, I agree that Scientific Management should be introduced. It will help in achieving the intended outcome.

(b) What precautions should the company undertake to implement the changes?
Give your answer with regard to each technique separately as enunciated in points 1 through 6, in the case problem.
Answer. The following precautions should be kept in mind while introducing Scientific Management:
(i) Care should be taken by the company that Scientific management should be implemented after a thorough study of various aspects of its working.
(ii) Planning, routing and scheduling of work should be done after determining the logical sequencing of work as it can have a major impact on the speed and flow of work. It thus affects effectiveness and efficiency of work in a major way.
(iii) Functional foremanship though has its advantages but since it leads to having 8 foreman on top of each worker, a lot of thought and planning needs to go into this decision. This will violate the principle of Unity of Command and may lead to confusion, chaos and indiscipline, if not handled properly.
(iv) Work studies should be undertake but sometimes unrealistic targets get set due to them and workers feel pushed to work at a very hectic pace. Also the working becomes very rigid.
(v) Too much of standardisation leaves no room for customised output even if it is needed for a particular customer.
(vi) Differential piece wage system is not taken too well by the workers and trade unions. They feel that differentiating between more efficient and less efficient workers in this manner, creates a class conflict within them.

Caselet : Seema, a student of management likes to relate what she learnt in class to real life situation. She observed many situations while watching educational programmes on television that reminded her the concepts of Scientific Management. In one such programme, factories manufacturing components for products like automobiles, computers and mobile phones were shown.

Name the concept of Scientific Management that should be adhered to, while manufacturing components for such products. 
Answer. Standardisation and Simplification of work.

Caselet : Appliances India Ltd. Is engaged in manufacturing and distribution of home appliances since 1987. It has a good name in the market as the company is producing good quality appliances. It has separate departments for manufacturing, finance, sales, maintenance services and technical services to achieve specialization.
Since the areas of operations of the company have increased and customers have become more demanding, the company decided to modify the existing principle of management to meet the changing requirements of the environment.

State the general principle of management which the company wants to modify to meet the changing requirements.
Answer. The general principle of management which the company wants to modify is principle of division of work. Division of work states that the work should be divided into small specialised tasks and performed by a trained specialist.

Caselet : Principles of management equip the managers to foresee the cause and effect relationships of their decisions and actions so that the wastages associated with a trial and error approach can be overcome.

Identify the point of significance of principles of management highlighted here.
Answer. The significance of principles of management highlighted in the case is optimum utilisation of resources and effective administration.

Caselet : Reema is one of the most successful managers of her company, Globe Ltd. She knows that the principles of management are intended to apply to all types of organisations,business as well as non-business, small as well as large, public sector as well as private sector.

(a) One of the points related to the nature of management principles is being highlighted in the above description. Identify the point.
(b) Explain any three other points of the nature of principles of management, other the one identified above.
Answer.
(a) Universal applicability.
(b) The nature of principles of management are:
(i) General guidelines: General guidelines: The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems. This is
so because real business situations are very complex and dynamic and are a result of many factors
(ii) 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 when the situation so demands. They give the manager enough discretion to do so.
(iii) Behavioural: Management principles aim at influencing behaviour of human beings.
Therefore, principles of management are behavioural in nature. Principles enable a better understanding of the relationship between human and material resources in accomplishing organisational purposes.

Caselet : Nikita and Salman completed their 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 organisation knew about it. 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, stating that being a female, Nikita will not be able to handle the complications of the higher post.

Identify and explain the principle of management which was not followed by this multinational company. 
Answer. The principle of management that is being violated in the given context is “Equity”:
This principle focuses on treating each employee fairly equally. That is, it states that each employee should be equal in the eyes of the manager. In addition the workers should be regarded as equal on grounds of religion, language, gender, caste, etc. However, as the boss is differentiating between
Nikita and Salman on the basis of gender, despite the fact that Nikita has done better than Salman, the principle of Equity is being violated by the company.

Caselet : 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 behaviour of the management is very good.

Identify and explain the principle of management described in the above para.
Answer.The principle of Taylor described in the above para is ‘Cooperation, not Individualism’.
This principle states that there should be complete cooperation between the labour and the management. Competition should be replaced by cooperation.

Caselet : 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 increase 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 and explain the principle of management described in the above para.
Answer. The principle of management described in the above para is Discipline.
Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation.

Caselet : Pawan is working as a ‘Production Manager’ in CFL Ltd. engaged in manufacturing of 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 matter, management is sharing the gains with the workers because they believe that prosperity of the company cannot exist for a long time without the prosperity of the employees.

Identify and explain the principle of management described in the above para.
Answer. The Principle discribed in above para is ‘Harmony not Discord’. It advocates that there should be complete harmony between management and the workers. To achieve this, Taylor called for a complete mental revolution on the part of both management and workers
(b) Values which the company wants to communicate to the society are:
(i) Sensitivity towards the environment.
(ii) Good behaviour in human interaction.

Caselet : Telco Ltd. is manufacturing files and folders from old clothes to discourage use of plastic files and folders. For this, they employ people from nearby villages where very few 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 that was also not appreciated by the production manager.

Identify and explain the principle of management described in the above para.
Answer. Initiative: Workers should be encouraged to develop and carry out their plans for improvements According to Fayol, ‘Initiative means taking the first step with self-motivation’. Initiative means eagerness to initiate action without being asked to do so. According to Fayol, employees should be allowed to think and execute plans, to bring about improvements in work related matters.

Caselet : ‘Aapka Vidyalaya’ believes in holistic development of students and encourages team building through a mix of curricular, co-curricular and sports. 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 members supported each other. With mutual trust and belongingness the programme was systematically planned and executed. Kartik, one of the prefects realised 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 the same principle in his business. His father replied that he was already using this principle.

(a) Identify the principle of management applied for the success of the programme.
(b) State any two features of management highlighted in the above para.
Answer.
(a) Espirit De Corps.
(b) Two features of management highlighted in the above para are:
(i) Management is all pervasive: Management is present everywhere. Activities of management are common to all the orgainisation whether, Social or Political.
Managers of India, USA or Germany use the same technique of management but the way of using the technique can be different.
(ii) Management is a group activity: An organisation consist of many people. Each individual has different needs. Their purpose for joining the organisation is also different. But all the persons works towards a common goal thus, management is a team work or group activity.

Caselet :
(a) Name and explain the principle of management in which workers should be encouraged to develop and carry out their plans for improvements in the organisation.
(b) Name and explain the technique of scientific management which helps in eliminating unnecessary diversity of products and thus results in saving cost.
Answer.
(a) The concerned principle of management is “Initiative”. In this, workers should be encouraged and motivated to develop and carry out their plans for improvements in the organisation. According to this principle, management should boost the employees to take initiative and develop new working ideas. They should be encouraged to put forward their thoughts and accordingly the effective ideas should be duly rewarded.
This in turn will help in increasing the efficiency of the work as well as that of the whole organisation.
(b) The technique of scientific management which helps in eliminating unnecessary diversity of products and thus results in saving cost is “Simplification”. This technique aims at fuller utilisation of resources, reducing inventories and increasing the turnover to a large extent. It also helps in reducing the costs of labour and machinery by eliminating the unnecessary steps involved in a process. This further helps in attaining a higher level of efficiency.

Caselet :
(a) Name and explain the principle of management which requires judicious application of penalties by the management.
(b) Name and explain the technique of scientific management which helps in establishing interchangeability of manufactured parts and products.
Answer.
(a) The principle of management which requires judicious application of penalties by the management of an organisation is known as “Discipline”. According to this principle, an organisation should function with discipline and follow rules and policies. It is important for both the management and the workers to honour their commitments while carrying out clear and fair agreements. This ensures smooth working relations in the organisation and creates a harmonious working environment.
(b) “Standardisation” is the technique of scientific management that helps in establishing interchangeability of manufactured parts and products. “Standardisation”, implies setting of bench marks for any work or activity. It provides the standards that have to be followed during the production process. Various other techniques of scientific management, such as method study, fatigue study and time study, are also based on the concept of standardisation.

Caselet : Name and explain the principle of management according to which a manager should replace “I” with “We” in all his conversations with workers.
Answer. The principle is “Espirit de Corps” This principle recommends that the employees of an organisation should work in a spirit of unity and common interests. They should work as a team. This spirit proves useful especially in large organisations, where achievement of objectives becomes difficult without teamwork. If a manager uses “we” instead of “I”, then it evokes in each of his or her subordinates, a greater sense of belongingness. The word “we” enhances team spirit by increasing mutual coordination and understanding among the employees, which in turn improves efficiency and easy achievement of the organisational goals.
(b) Values being conveyed:
(i) Respect for law. (iii) Cleanliness and hygiene.
(ii) Raising standard of living. (iv) Secularism.

Caselet : ‘Kanpur Leather Ltd.’ is the manufacturer of leather products. It is producing on large scale and its organisational structure is functional. In the production department various foremen have been employed. Each foreman has been made responsible for production planning, implementation and control. This has led to a situation of confusion and uncertainty.
Suggest a technique of scientific management to Kanpur Leather Ltd. which may help it to effectively organise planning and its execution. 
Answer. The technique of scientific management which may help Kanpur Leather Ltd. to effectively organise and plan its execution is ‘Functional Foremanship’:
(i) Functional foremanship is a technique which aims to improve the quality of supervision at shop floor level.
(ii) Taylor identified a list of qualities of a good foreman or a supervisor. Since all the qualities could not be found in a single person, Taylor proposed eight specialists.
(iii) In this technique, planning is separated from execution. Taylor suggested four foremen for planning and four foremen for execution. It is an extension of the principle of division of work and specialisation.
(iv) The four foremen for planning were route clerk, instruction card clerk, time and cost clerk and disciplinarian. They would draft instructions for the workers, specify the route of production, prepare time and cost sheet and ensure discipline, respectively.
(v) The four foremen for execution were gang boss, speed boss, repair boss and inspector.
They were responsible for timely and accurate completion of the job, keeping machines and tools ready for operation by the workers, ensuring proper working conditions of machines and tools and checking the quality of work respectively.

Caselet : 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 ‘mydabbawala.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 Dabbawalas operate in a group of 25-30 people along with a group leader. 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 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 two principle of management given by Fayol and two characteristic of management mentioned in the above case. 
Answer. Principles of management given by Fayol are:
(i) Initiative: The focus of this principle is on encouraging employees to develop and carry out plans for bringing about improvements in the functioning of the organisation.
(ii) Discipline: This states that all the employees and the management must adhere to rules and employment agreements of the organisation.
(iii) Esprit-de-corps: This principle promotes a feeling of team spirit among employees of the organisation. This helps a lot in achieving organisational goals.

The characteristics of management are:
(i) Management helps in achieving group goals: The task of a manager is to give a common direction to the individual effort in achieving the overall goal of the organisation.
(ii) Management creates a dynamic organisation: Environment is constantly changing.
Individuals resist change as it often means moving from a familiar, secure environment into a newer and more challenging one. Management helps people adapt to these changes so organisation maintain its competitive edge.

Caselet : Sanchit, after completing his entrepreneurship course from Sweden returned to India and started a coffee shop ‘Aroma Coffee Can’ in a famous mall in New Delhi. The specialty of the coffee shop 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 realized 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. 
Answer. Techniques of Scientific management used by Sandhya to solve the problem were:
(i) Motion Study: It is a technique to study the movements that are necessary for doing a well defined job. It seeks to eliminate unnecessary and wasteful movements so that it takes less time to complete a job efficiently.
(ii) Simplification of Work: It is a technique to eliminate superfluous varieties, sizes and dimensions of products. It leads to reduced inventories, fuller utilisation of equipment and increased turnover to reduce costs.

Caselet : Damini D’Souza took over the reins of ‘Kinsa Retail’ as its Managing Director in India. ‘Kinsa Retail’ with its headquarter at Japan has been in the retail business for the last 40 years. It has regional officers in many countries that take care of the shops in that region. As it is a large organisation, the regional officers have been given the powers to decide and spend funds sanctioned to them by the headquarter for the welfare of the customers of their region. ‘Kinsa Retail’ want the highest possible standards of ethical conduct being followed, for which a code of conduct is in place for putting values into practice. All employees as well as Board members are required to act in accordance with the highest standards of personal and professional integrity when acting on behalf of the company. Non-compliance involves a heavy penalty including termination of employment.

Explain any two principles of general management being followed by ‘Kisna Retail’.
Answer. The two principles of general management being followed by Kisna Retail are:
(i) 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.” In general large organisations have more decentralisation than small organisations.
(ii) Discipline: Discipline is 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.

Caselet : Principles of Taylor and Fayol are mutually complementary. One believed that the management should share the gains with the workers, while the other suggested that employee 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 para.
Answer. The two principles that are being regarded in the given paragraph are as follows:
(i) ‘Harmony, Not Discord’ by Taylor: This can be inferred from the line that ‘management should share gains with the workers’.
Taylor emphasised that the managers and the workers should maintain a harmonious work environment. They should realise their interdependence and work in amity. He introduced this principle to maintain a peaceful kinship between people. Often it is found that if the workers are deprived of their wishes or demands they generally go on strike. This affects the productivity and the working environment. To dismiss such a situation Taylor was ardent about a mental revolution. It implies a change in the thinking of both the workers and managers.
(ii) ‘Remuneration of Employees’ by Fayol: This can be inferred from the line that ‘the employees compensation should depend on the earning capacity of the company and should give them a reasonable standard of living’.
According to this principle, the compensation paid to the employees should be fair and just. That is, the employees must be paid appropriately as per their work responsibility. They must be able to lead a reasonable and a decent standard of living. It is only when the employees are paid adequately that they are satisfied and are encouraged to give their best to work.

Caselet : Principles of Taylor and Fayol are mutually complementary. One believed that the management should scientifically select the person and the work assigned should suit
his / her physical and intellectual capabilities, while the other suggested that the work can be performed more efficiently if divided into specialised tasks.
Identify and explain the principles of Fayol and Taylor referred to in the above para.
Answer. The two principles mentioned in the given paragraph are as follows:
(i) Development of each and every person to his/her greatest efficiency and prosperity:
Industrial efficiency depends upon efficiency and competency of workers. Efficiency should be built in right from the process of employee selection, assignment of work on the basis of their capabilities, giving training when needed. Employees should be recruited in a scientific manner. They should be assigned work according to their mental and physical qualities. For increasing the efficiency, a proper training should be given to the workers.
(ii) Division of work: It means that a given task is divided into small parts or units to ensure that it is executed in a competent manner. These units should be assigned to each individual based on his ability rather than giving the whole of the work to one person.
Thus, division of work promotes specialisation.

Caselet : 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 in the above para.
Answer. The two principles that are being regarded in the given paragraph are as follows:
(i) Co-operation and Not Individualism: “Management should not close its ears to constructive suggestions made by the employees.”
This principle is extension of the principle of harmony and not discord. According to this principle, both management and workers should develop understanding and secure mutual co-operation. Management should give importance to suggestions made by the workers and workers must desist from going on strikes and making unreasonable demands.
(ii) Initiative: “A good company should have an employee suggestion system, whereby suggestions which result in substantial time or cost reduction should be rewarded.” According to Fayol, ‘Initiative means taking the first step with self-motivation’. Initiative means eagerness to initiate action without being asked to do so. According to Fayol, employees should be allowed to think and execute plans, to bring about improvements in work related matters. However initiative does not imply freedom to do whatever people like. They must observe discipline.

Caselet : Sakaar Foundation is an NGO (Non-Governmental Organisation) working to improve the lives of children with medical needs, the homeless and victims of natural disasters. Apart from donations in cash, they collect dry ration, old clothes, shoes, toys, books, medicines etc. from donors. At Sakaar Foundation’s office in Lucknow the material collected is segregated, classified and put in shelves and boxes that are labelled systematically. There is a specific place for each of these items and volunteers put everything at their respective places. The volunteer work is divided into specific jobs like fund raising, field visits, social media updates and so on. Each volunteer is part of a particular team, depending on their competency and training. Each volunteer becomes specialized in their respective field, leading to efficient utilization of human effort.
The management of Sakaar Foundation does not close its ears to any constructive suggestions made by the volunteers. There is an equal division of work and responsibility between volunteers and management. All the day long the management work side by side the volunteers helping, encouraging and smoothing the way for them.
(a) Identify and explain principle of ‘Scientific Management’ adopted by Sakaar Foundation.
(b) Identify and explain two principle of ‘General Management’ adopted by Sakaar Foundation.
Answer.
(a) Principle of ‘Scientific Management’ adopted by Sakaar Foundation:
• Co-operation, not individualism: There should be complete co-operation between the management and the workers instead of individualism. For all important decisions taken by the management, workers should be taken into confidence. The management should be open to any constructive suggestions made by the employees and suitably reward them.
(b) Principle of ‘General Management’ adopted by Sakaar Foundation:
(i) Order: The principle of order states that people and materials must be in suitable places at appropriate time for maximum efficiency i.e., there should be a place for everything and everyone in an organisation and that person or thing should be found in its allotted place. Order leads to increased productivity and efficiency.
(ii) Division of work: The principle of division of work states that work is divided into small tasks/jobs. A trained specialist who is competent is required to perform each job. Thus, division of work leads to specialisation.

Caselet : Deewan Ltd. is a multinational consulting company with its headquarters at Washington D.C. It hires young people from different countries of the world.
It is a company in which people dream to work because of its work-environment, pay and growth prospectus. The company has a culture of open communication and people of various nationalities work together in a discrimination free environment. The behaviour of managers of Deewan Ltd. emphasizes kindliness and justice which ensures loyality and devotion of workers.
It also promotes mutual trust and belongingnessamong team members. In this way management of Deewan Ltd. is able to achieve its objectives by promoting team work. By doing so managers of Deewan Ltd. are following some principles of management.

Identify and explain any two such principles. 
Answer. The two principles of management followed by managers of Deewan Ltd. are:
(i) Equity: Equity states that there should be no discrimination against anyone on account of sex, religion, language, caste, belief, nationality etc. It emphasizes on kindliness and justice in the behaviour of managers towards the workers to ensure loyality and devotion.
(ii) Espirit de Corps: Management should promote team spirit of unity and harmony among employees. This will give rise to spirit of mutual trust and belongingness among team members and will minimize the need for using penalties. 

Caselet : ‘Scientific Management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way.’ Taylor developed various techniques for application of Scientific Management principles and was able to achieve a three-fold increase in productivity in Bethlehem Steel Company, where he worked. One of the techniques helps to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs. Another technique recognises those workers who are able to accomplish/exceed the fair day’s work and is based on the premise that efficiency is the result of the joint efforts of the managers and the workers.

Quoting the lines from the above paragraph, identify and explain the two techniques of Scientific Management.
Answer. The two techniques of Scientific Management highlighted above are:
(i) Time Study: It determines the standard time taken to perform a well-defined job. Time measuring devices are used for each element of task. The standard time is fixed for the
whole of the task by taking several readings. The method of time study will depend upon volume and frequency of the task, the cycle time of the operation and time measurement costs.
Lines: “One of the techniques helps to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs.”
(ii) Differential piece wage system: Taylor wanted to differentiate between efficient and inefficient workers. The workers can then be classified as efficient or inefficient on the
basis of the time standards. He wanted to reward efficient workers. So he introduced different rate of wage payment for those who performed above standard and for those who performed below standard.
Lines: “Another technique recognises those workers who are able to accomplish/exceed the fair day’s work and is based on the premise that efficiency is the result of the joint efforts of the managers and the workers.”

Caselet : Karan Nath took over ‘North Motor Company’ from his ailing father three month ago. In the past the company was not performing well. Karan was determined to improve the company’s performance. He observed that the methods of production as well as selection of employees in the company were not scientific. He believed that there was only one best method to maximise efficiency. He also felt that once the method is developed, the workers of the company should be trained to learn that ‘best method’. He asked the Production Manager to develop the best method and carry out the necessary training. The Production Manager developed this method using several parameters right from deciding the sequence of operations, place for men, machines and raw materials till delivery of the product to the customers. This method was implemented throughout the organisation. It helped in increasing the output, improving the quality and reducing the cost and wastage.

Identify and explain the principles and the technique of scientific management followed by the Production Manager in the above case.
Answer. The principles of scientific management followed by the Production Manager in the above case are:
(i) Science, not rule of thumb: Taylor always believed that there was ‘one best method’ that can lead to maximum efficiency and this method can be developed through observation, analysis and repeated experimentation. He advocated that this best method should replace rule of thumb in all operations of a business. Thus, when decisions are taken on the basis of scientific approach instead of personal opinions and judgements, the ‘Rule of Thumb’ is replaced by ‘Science’.
(ii) Development of each and every person to greatest efficiency and prosperity: Taylor was of the view that the concern for efficiency should be built in right from the stage of selection of employees. Each person should be scientifically selected and the work assigned to them should suit the mental, physical and intellectual abilities of the selected employee. They should be given proper training to increase their efficiency. This way employees would produce more and earn more which would ensure their greatest efficiency and prosperity for both, workers and the organisation.
The technique of scientific management followed by the Production Manager in the above case is:
Method Study: There may be a number of possible methods of performing a job with different cost requirements. Taylor suggests finding ‘one best way’ of performing a job. The purpose of method study is to minimize production costs and use organisation‘s resources such as land, labour, capital etc. for better results. For example, Taylor devised the concept of assembly line by using the method study. This technique was used successfully by Ford Motor Company and is used by the auto companies even today.

Caselet : Flavours Ltd. was engaged in the business of making handmade chocolates. Lately, the business was expanding due to good quality and reasonable prices. As the demand was increasing, Flavours Ltd. decided to explore bakery products as well. In order to make bakery products the company directed its workforce to work overtime but this resulted in multiple problems. Due to increased pressure the efficiency declined and the workers had to take orders from more than one superior. Workers were overburdened and their health was also affected. Gradually the quality of the products begins to decline and market share also went down. The company realized that they had implemented changes without waiting for the required infrastructure.
Identify and explain the principles/technique of Taylor/Fayol referred to in the above para.
Answer.
(i) Unity of Command: According to Fayol there should be one and only one boss for every individual employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated. The principle of unity of command states that each participant in a formal organisation should receive orders from and be responsible to only one superior. Fayol felt that if this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.
(ii) Fatigue Study: Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task. A person is bound to feel tired physically and mentally if he does not rest while working. The rest intervals will help one to regain stamina and work again with the same capacity. This will result in increased productivity.

Caselet : Style furnishings Ltd., is a concern which deals in the production of office furniture.
The company has a policy of offering 10 percent discount to their regular customers and a credit period of 30 days. Mr. Sam, their sales manager, is an efficient and effective Personnel associated with company since last 12 years.
While finalising a high value deal with an old client, Mr. Sam gets stuck in a situation as the client requests him to grant a credit period of 40 days. The client even offers to hand over a post dated cheque for the 40th day.
Mr. Sam approaches his senior manager with the request to take permission for an extended credit period as the deal is quite profitable. The senior manager refuses to grant it and the company loses the order and also disappoints an old and faithful client.
On the basis of the given information about Style Furnishings Ltd., answer the following questions:
(a) Can Mr. Sam be held responsible for losing the deal? Give reason for your answer.
(b) Explain the related principle in the above situation.
Answer.
(a) No, we cannot hold Mr. Sam responsible for losing the deal. He wasn’t given the necessary authority to carry out the assigned responsibility. This is a clear situation of
imbalance between authority and responsibility.
(b) The concerned principle in the above case is, ‘Parity of Authority and Responsibility’.
This principle states that there should be a balance between authority and responsibility i.e., authority should always be equal to responsibility.
Authority is the right to take decisions and get it implemented through subordinates, whereas responsibility refers to the obligation on the part of subordinates for doing/ completing the assigned task.

Caselet : Being a sole proprietor, Mr. Robert takes all decisions himself, without involving his team. As the business grows, additional branches are made functional throughout the country, but Mr. Robert still keeps all decision making authority in his hands. This leads to delays in decision making and lowers efficiency of business.
Suggest to Mr. Robert, a solution to improve the efficiency of business. 
Answer. Mr. Robert should follow the principle of ‘Centralisation and Decentralisation’, given by Henry Fayol.
The concentration of decision-making authority at the top management level is known as centralisation, while the dispersal of same, throughout all the levels of the organisation is called,decentralisation.
According to Fayol, “an organisation should have a balance between complete centralisation and complete decentralisation. No organisation can be completely centralised or completely decentralised.”
Major decisions like setting up goals, objectives, policies and strategies can be handled by the top management, whereas the routine jobs like, assignment of work to workers and their supervision, purchase decisions for routine raw material etc., can be handled at middle and lower levels.
When an organisation grows in size and complexity it needs to adopt a decentralised setup.People who are at the site of action should be given decision making authority to take timely decisions and improve efficiency.

Caselet : Ramesh and Ravi are office assistant in a company having the same educational qualifications. Ramesh and sense number of years of experience gets ` 13,000 per month and Ravi gets ` 17,000 per month as salaries for the same working hours. Which principle of management is being violated in this case? Name and explain the principle. 
Answer. The principle of Equity has been violated in this case.
According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.” Equity refers to fair treatment of all workers in an organisation. Fair treatment involves kindness and justice on part of the superiors on dealing with their subordinates.

Caselet : Amy and Sammy are friends and graduate from a law school together.
Amy sets up her law practice and establishes her Law Firm while Sammy joins a job with a reputed Law Firm of her city. On one of her visits to Amy’s office, Sammy notices that Amy’s office surroundings are in a mess. Files and documents are all lying in a haphazard manner.
There is no assigned place for the stationery being used by Amy.
The employees in her office do not have a fixed place to work. They sit anywhere they feel like. When someone has to be contacted, he/she has to be searched all over the office.
On the basis of the given information about Amy and Sammy, answer the following questions:
(a) What according to you is the cause of the situation of Amy’s office?
(b) What is the drawback of the situation? 
Answer.
(a) The cause of Amy’s situation is violation of principle of Order. According to Fayol, “A place for everything/everyone and everyone/everything in its place”. Essentially, it means
orderliness.
If there is a fixed place for everything (everyone) and it is there, then there will be no hindrance in the activities of the organisation. This will lead to higher productivity and efficiency.
(b) The drawback of this situation is that a lot of time and effort gets wasted when we need to locate and trace things / people which/who, are not in the assigned place.
Thus, it leads to delays and non availability of men/material, when needed. This leads to increased levels of inefficiency.

Caselet : Angel Cosmetics Pvt. Ltd. has the policy of frequent turnover of employees. The employees are removed from their jobs frequently, to avoid making them permanent and to pay them increments and higher salaries. This leads to a sense of insecurity among them. They are always on a look out for a more stable organisation. Thus, they are not able to give their maximum contribution to the job.
On the basis of the given information about Angel Cosmetics Pvt. Ltd. answer the following questions:
(a) Identify the principle which is being violated in the above situation?
(b) Explain the principle which is being violated in the above situation? 
Answer.
(a) The principle being overlooked in the above situation is, ‘Stability of Tenure’, given by
Henry Fayol.
(b) Stability of Tenure: This principle states that the employee turnover should be minimised to achieve maximum organisational efficiency. They should be selected after a rigorous procedure. After they are placed on the job they should be kept in their position for a minimum fixed tenure so that they are able to settle in the job and are able to show good results. If they are moved frequently from their jobs it will lead to a sense of insecurity and instability in their minds.

Caselet : Mr. Jacob set up a plastic ball manufacturing factory. The design of the work tables was such that the worker had to bend down to pick up the raw material, get onto a stool and put the raw material inside the machine. The machine is placed at a higher level than where the workers could reach, without getting onto the stool.
Mr. Jacob observed this and noted down all the movements being done by the workers. He realised that the movements of bending down and getting onto the stool to put the raw
material into the machine were very time consuming, led to increasing the fatigue of workers and slowed down the production process.
On the basis of the given information about Mr. Jacob, answer the following questions:

(a) Which technique has helped Mr. Jacob realise the problem with the production process?
(b) Suggest to Mr. Jacob, a solution to the above problem. 
Answer.
(a) Mr. Jacob has used the technique of ‘Motion Study’, given by F.W. Taylor, under Scientific Management.
Motion Study is a study of movements of hands, limbs and body, undertaken by a worker while performing a specific task. Movements may include lifting, putting, bending, sitting, getting up etc., these movements are observed and noted so that unnecessary movements may be eliminated. This leads to reduction in time being taken to complete a task, fatigue of workers comes down and efficiency of work goes up.

(b) The suggestions to solve the problem are:
(i) Work tables should be designed in such a manner that the raw material can be placed at the same level as that of the worker. This will eliminate the need for the workers to bend each time they need the raw material.
(ii) The machine should be placed at a level such that the workers don’t need to get onto a stool every time raw material needs to be put into the machine.

Caselet : Tiya Philip, a manager at Well Foams Pvt. Ltd., is very lax with her subordinates and colleagues. She doesn’t give them parameters of rules for reporting to work and achievement of targets. With the result, the subordinates do not follow the organisational rules. The agreements between workers and management are also not clear and fair.

On the basis of the given information about Tiya Philip, answer the following questions:
(a) Identify the principle which is being violated in the above situation?
(b) Explain the principle which is being violated in the above situation? 
Answer.
(a) ‘Principle of Discipline’, given by Henry Fayol, is being overlooked in the above
situation.
(b) Discipline: This principle states that, discipline is the obedience to organisational rules and employment agreements, which are necessary for the working of the organisation.
The principle of discipline requires:
(i) Good superiors at all levels,
(ii) Clear and fair agreements.
(iii) Judicious application of penalties.

Caselet : Monty, a manager at the middle level in the production department, often speaks to people working at different levels in various departments, passing information / instructions regarding his department and also other departments.

On the basis of the given information about Monty answer the following questions:
(a) Identify and explain the principle being overlooked.
(b) What are the drawbacks of overlooking this principle?
Answer.
(a) The principle being overlooked above is ‘Principle of Scalar Chain’.
Scalar chain: In an organisation the formal lines of authority from highest to lowest level of all superiors and subordinates is known as scalar chain. According to Fayol,
“Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and subordinates at all times.” The scalar chain serves as a chain of command as well as communication
(b) The drawbacks of overlooking the principle of scalar chain are:
(i) Disorderly flow of information leading to communication gap.
(ii) Problems in superior subordinate relationships if the management hierarchy is not followed.
(iii) Chaos and indiscipline in the organisation.

Caselet : Martin Sammy after completing his B.Com course and joins M.B.A. for further studies. After his classes begin he realises that he is being taught the concepts of Principles of Management which he had already studied, in class 12th. When he discusses this with his lecturer, he’s told that these principles of management form the core of management studies and are a base for all courses related to the field of management. The lecturer also tells him that the principles of management differ from those of science.
On the basis of the given information about Martin Sammy answer the following questions:
(a) Outline the concept of principles of management.
(b) How are the principles of management different from those of science?
(c) Why did the lecturer say that these principles form the core of management studies?

Explain any two points highlighting the importance of principles of management.
Answer.
(a) Principles of management serve as a broad and general guideline for the managerial decision making and action.
(b) Principles of management are not as rigid as the principles of pure science. In the field of management we deal with human beings and their behaviour is not static or uniform, thus the principles have to be modified and applied creatively to suit the requirements of the given situation.
(c) Principles of management form the core of management studies as they are used as the basis for management training, research and education.
The importance of Principles of Management is listed below:
(i) Provide useful insight into reality: The principles of management increase managerial efficiency by increasing their knowledge, ability and understanding of managerial situations and circumstances. They help the managers to learn from past mistakes and also help to solve recurring problems more efficiently.
(ii) Meeting changing environment requirements: Principles of management help managers to meet changing requirements because they can be moulded to suit the changing environmental needs. This is because management principles are flexible by nature and can be modified as per the requirements.

Caselet : Peter Harris wants to set up a factory of manufacturing decorative lamps and lights. He decides to use recycled material for the lights and packaging, wherever possible. He proposes to use a scientific and rational approach in all the decisions that he takes for setting up and for running the factory rather than using hit and trial methods or personal likes and dislikes. He wants to adopt a paternalistic approach towards the workers he appoints so that class-conflicts can be avoided between workers and management. He also decides that he will involve his workers in decision making and offer incentives to them in case their suggestions are valuable and lead to value addition in the working of the business.
Identify and explain the principles of scientific management that Peter Harris is planning to adopt in his organisation.
Answer. Principles of Scientific Management that Peter Harris plans to apply are:
(i) Science, not rule of thumb: Taylor always believed that there was ‘one best method’ that can lead to maximum efficiency. And this method can be developed through observation, analysis and repeated experimentation. He advocated that this best method should replace rule of thumb in all operations of a business.
(ii) Harmony, not discord: In the paternalistic style of management, the employees are taken care of, by the employer as a father would take care of his kids. Taylor emphasised that both, management and workers, have to bring about a complete Mental Revolution for each other. Both sides have to realise that each one is important and rather than fighting over dividing the gains of higher output they should work as a team and aim to increase the gains jointly.

Caselet : Flame Automotives are producers of cars and mobikes. They offer a wide range of varieties in their products due to heavy competition in the market. They are offering ten different models of cars in the mid size range and five different models of mobikes in 125 cc and another five in 150 cc range. Although there isn’t much of a difference in the basic product being offered. For each of their models of cars and bikes, they have to procure different raw material and other inputs, maintain inventories, have separate advertising campaigns and carry out different production processes.
After running this model of business for a few years the company starts running into losses.
The directors of the company consult a specialist to seek advice to find out the reasons for falling profits. The specialist analysis the situation and suggests that the company should cut down on extra varieties being offered so as to cut down on costs. This will help to improve the situation of falling profits.

On the basis of the given information about Flame Automotives, answer the following questions:
(a) Identify and explain the technique that was suggested by the specialist.
(b) Explain two other techniques of the same category. 
Answer.
(a) The specialist suggested that the company should follow the technique of ‘Simplification of Work’. This technique was suggested by F.W. Taylor under Scientific Management. It aims at eliminating unnecessary diversity of products.
The adoption of this technique results in following benefits:
(i) Savings of cost of labour, tools and machines.
(ii) Savings due to reduced inventories, fullest utilisation of resources and increased turnover.
(b) Two more techniques of scientific management are:
1. Time Study: This study helps to determine the standard time taken by an average worker to complete a given task. An average worker is chosen and with the help of a stop watch, time taken by him to perform a job is recorded. This exercise is conducted repeatedly with different average workers for the specified job and then standard time for that job is fixed.
The objective of time study is:
(i) To ascertain the number of workers needed to be employed to complete a given task.
(ii) To determine labour costs.
(iii) To determine suitable incentive schemes for rewarding and motivating above average or efficient workers.
2. Motion Study: This study refers to the study of movement of workers, like lifting, sitting, bending, putting, etc. which they undertake while doing a typical job. Video cameras are used to record their movements and then three types of movements are identified – productive, incidental and unproductive.
The objective of motion study is to eliminate the unproductive movements so that the workers are able to complete their tasks in minimum possible time and also to increase their efficiency.

Caselet : Suzanne owns a factory of producing costume jewellery and has a team of 10 women employees who she has hired from a backward village from a nearby area. She gives preference to women when selecting employees. She takes good care of her team of workers and provides them with free meals and a comfortable, hygienic and safe work environment. Over the past few weeks Suzanne observes that Tina, one of her most efficient workers, is showing a decline in productivity as well as initiative. After waiting for a few more days, when things don’t improve, Suzanne decides to confront Tina about her changed behaviour towards work. On being asked, Tina confesses that she was deliberately being slow in work as other team members used to question her that what was the need to be more efficient. All were being paid the same amount of salary irrespective of the output given by them.
If Suzanne approaches you for a solution to the given situation, what would be your analysis
and solution?
Answer. If Suzanne approaches me for the solution, I would advise her to follow the technique of Differential Piece Wage System given by F.W. Taylor.
This is an incentive bonus plan used to differentiate between efficient and inefficient workers. Under this plan, wages are based on performance shown by each worker. A standard of performance is set and those workers who perform above that standard are paid at a higher wage rate as compared to a lower wage rate paid to less efficient workers. This difference in the wage rate motivates the efficient workers to work even better and also encourages the less efficient ones to at least reach the standard.
For example, Suzanne may fix the standard output at 50 pieces per day and those who produced standard or more than standard will be paid ` 10/- per piece. Those who produce less than 50 units will get paid at the rate of ` 8/- per piece.
Now, an efficient worker who produces, say 55 pieces will get 55 × 10 = ` 550/-, whereas a less efficient worker who produces 48 units will get 48 × 8 = ` 384/-. According to Taylor this difference of wages will be a strong motivator for the efficient workers to further improve and for the inefficient ones to at least touch the standards.

Caselet : Ronit is working as a supervisor in a basket making factory. His production manager tells him to make the workers work overtime and pay them extra wages, to complete an urgent order. While the finance manager stops him from doing this as this would lead to increased cost.
Ronit also feels that since the baskets are made by two methods, machine and hand, there should be separate divisions for the two processes. Each division should have its own incharges,resources, objectives and plans. Currently both the processes are being managed under one division leading to over lapping and wasteful efforts.

Identify and explain the principles being violated in the situation described above and what are the drawbacks of this violation
Answer. In the above situation following principles are being violated:
1. Unity of command: This principle states that an employee should receive orders from one and only one superior, at any given point of time. Dual subordination should be
avoided.
The drawbacks of violation of Unity of Command are:
(i) Authority is undermined. (ii) Discipline is in jeopardy.
(iii) Order is disturbed. (iv) Stability is threatened.
2. Unity of Direction: This principle states that all units/divisions of an organisation should be moving towards same objectives through coordinated and focused efforts.
Each group of activities, having the same objectives, must have one head and one plan.
This will lead to unity of action and coordination.
The drawbacks of violation of Unity of Direction are:
(i) Overlapping of activities. (ii) Wasteful efforts.
(iii) Decline in efficiency. (iv) Difficulty in fixing responsibility.

Caselet : One of the principles of Scientific Management, given by F.W. Taylor, emphasised that each and every worker of the organisation should be selected scientifically and a suitable job should be assigned to him to suit his mental, physical and intellectual abilities. Essential training should also be provided to all of them to get the maximum from each worker.

On the basis of the given information about principles of Scientific Management answer the following questions:
(a) Identify and explain the above mentioned principle.
(b) Explain the advantages of above mentioned principle. 
Answer.
(a) The above mentioned principle is ‘Development of each and every Person to Greatest
Efficiency and Prosperity’.
Taylor was of the view that the concern for efficiency should be built in right from the stage of selection of employees. Each person should be scientifically selected and the work assigned to them should suit the mental, physical and intellectual abilities of the selected employee.

They should be given proper training to increase their efficiency. This way employees would produce more and earn more which would ensure their greatest efficiency and prosperity for both, workers and the organisation.
(b) The advantages of this principle are:
(i) High morale of employees.
(ii) Increased productivity.
(iii) Higher job satisfaction.
(iv) Less labour turnover and absenteeism.

Caselet : Impex Furniture Pvt. Ltd. is in the business of manufacturing office tables for bulk orders. Earlier the business worked with a model where each worker had to produce a
table right from the stage one till the end when they were polished and finished and was ready for delivery. This lead to standards of quality not being met and uniformly in all pieces of output. Some tables had better finish than the others.
Seeing this the proprietor decided that instead of assigning the whole job of making a table such as cutting the planks to a uniform size, fixing the pieces as per the design, treating them with the required chemicals, paint and polish and finishing the piece etc., to an individual, the above mentioned tasks were given to specialised people independently. Efforts of all the employees were directed towards achieving common goals of the organisation, though each was working in his area of specialisation. As a result each employee improved his performance and showed a higher efficiency. The output thus given now was also of standard and uniform quality.

On the basis of the given information about Impex Furniture Pvt. Ltd. answer the questions:
Identify the principle being followed by Impex Furniture Pvt. Ltd. and also explain the advantages of the same. 
Answer. The principle being followed by Impex Furniture Pvt. Ltd. is ‘Division of Work’,
given my Henry Fayol.
Fayol suggested that the work in an organisation should be broken up or divided into small parts or jobs. These parts/jobs should be assigned to individual employees.
The advantages of division of work are:
(i) When the workers repeatedly perform the same task, they become specialist of that job.
(ii) The speed and quality of work also improves.
(iii) Efficiency also goes up as cost and wastages are minimised.

Caselet : Thomas is working as a manager of United Bearings Ltd. He has the authority to make purchases for the organisation and also to appoint employees.
Thomas misuses his authority and grants an order of office stationery to his brother’s concern while the same products were available at a cheaper rate with other suppliers. While appointing two office executives he gives preference to Michael over Mamta because Michael is a Christian, like Thomas himself is and also because he prefers male employees over females.
Thomas also has a habit of not letting the employees put forward any suggestions for improvement in work and productivity. He expects them to just follow his orders. Employees are also dissatisfied as they don’t get fair wages for the work they put in.
The production activities of United Bearings Ltd. lead to water pollution as the waste from the factory is disposed off in the nearby river.

On the basis of the given information about United Bearings Ltd. answer the following question:
Identify and explain various principles of management that are being violated in United Bearings Ltd., by quoting the relevant lines from the case to support your answer. 
Answer. Following principles are being violated in United Bearings Ltd.
(i) Subordination of individual interest to general interest: This principle states that the interest of the organisation should always supersede the interest of any individual. A manager or any employee should not misuse his power/authority for individual/ family benefits at the cost of larger general interest of the workers / company. Lines: “Thomas misuses his authority and grants an order of office stationery to his brother’s concern while the same products were available at a cheaper rate with other suppliers.”
(ii) Equity: This principles stresses on the need for managers to ensure kindliness and justice while dealing with workers. There should be no discrimination on the basis of caste, religion, sex, language, nationality etc. this will ensure loyalty and devotion and cordial relations between workers and management.
Lines: “While appointing two office executives he gives preference to Michael over
Mamta because Michael is a Christian, like Thomas himself is and also because he prefers male employees over females.”
(iii) Initiative: According to this principle, subordinates should be encouraged to come up with suggestions/take initiative, which results in substantial cost/time reduction. They
should be encouraged to take the first step with self-motivation, within the prescribed limits of authority.
Lines: “Thomas also has a habit of not letting the employees put forward any suggestions for improvement in work and productivity. He expects them to just follow his orders.”
(iv) Remuneration of employees: According to this principle, remuneration of employees should be just and equitable so that both employees and the organisation get the maximum satisfaction. The wages should give at least a reasonable standard of living to the workers. And at the same time they should be within the paying capacity of the
organisation.
Lines: “Employees are also dissatisfied as they don’t get fair wages for the work they put in.”

Source Based Questions

Caselet : Read the source given below and answer the question that follows: Human behaviour is never static and so also technology, which affects business. Hence, all the principles have to keep pace with these changes. For example, in the absence of Information and Communications Technology (ICT), a manager could oversee only a small work force that too within a narrow geographical space. The advent of ICT has expanded the capability of the managers to preside over large business empires spread across the globe. Infosys headquarters in Bangalore boast of the Asia’s largest flat screen in their conference room from where their managers can interact with their employees and customers in all parts of the world:

(a) Outline the concept of principles of management.
(b) How are the principles of management different from those of science?
(c) Why did the lecturer say that these principles form the core of management studies?
Explain any two points highlighting the nature of principles of management. 
Source: NCERT Book.
Answer.
(a) Principles of management serve as a broad and general guideline for the managerial decision making and action.
(b) Principles of management are not as rigid as the principles of pure science. In the field of management we deal with human beings and their behaviour is not static or uniform, thus the principles have to be modified and applied creatively to suit the requirements of the given situation.
(c) Principles of management form the core of management studies as they are used as the basis for management training, research and education.
The Nature of Principles of Management is listed below:
(i) Universal Applicability: The principles of management are intended to apply to all types of organisations, business as well as non-business, small as well large, public sector as well as private sector, manufacturing as well as the services sectors. However, the extent of their applicability would vary with the nature of the organisation, business activity, scale of operations and the like.
(ii) General Guidelines: The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems. This is so because real business situations are very complex and dynamic and are a result of many factors.
However, the importance of principles cannot be underestimated because even a small guideline helps to solve a given problem.

Caselet : Read the source given below and answer the question that follows:

The story of Dr. Kiran Mazumdar Shaw is very inspiring. She foresaw the tremendous potential of biotechnology when no one dared to think about it. She started her own company Biocon India in her garage with a meagre capital of ` 10,000 in collaboration with Biocon Biochemicals limited of Ireland. When she wanted to take loans no financial institution was willing to help her because of three reasons: biotechnology was a new area of operation; her company lacked assets and thirdly women entrepreneurs were a rarity at that time in 1978. She even faced problems recruiting people. The initial operation of the company consisted of extracting an enzyme from papaya. Now Biocon limited is an integrated biotechnology enterprise focused on the development of biopharmaceuticals, custom research, clinical research and enzymes. It delivers products and solutions to partners and customers in over 50 countries. According to the company’s website, “At Biocon our success has been our ability to develop innovative technologies and products and to leverage them to adjacent domains. This unique ‘integrated innovation’ approach has yielded a host of patented products and technologies that have enabled multilevel relationships with our global clientele”. It has two subsidiary companies. The first one is Syngene International Private limited, which provides chemistry and molecular based custom research services in early stage drug discovery and development. The second subsidiary company is Clinigene International Private Limited, which conducts longitudinal research in diabetes and offers a wide range of comprehensive services in drug development and clinical trials. Biocon was the first biotechnology company of India to receive ISO 9001 certification.

“Biocon Limited is what it is today due to adherence to the principles underlying good management practices and principles.” Do you agree. Highlight the key benefits derieved
from application of management principles. 
Source: in.biocon.com
Answer. Biocon Limited is what it is today due to adherence to the principles underlying good management practices and principles. The importance of Principles of Management is listed
below:
(i) Provide useful insight into reality: The principles of management increase managerial efficiency by increasing their knowledge, ability and understanding of managerial situations and circumstances. They help the managers to learn from past mistakes and also help to solve recurring problems more efficiently.
(ii) Meeting changing environment requirements: Principles of management help managers to meet changing requirements because they can be moulded to suit the changing environmental needs. This is because management principles are flexible by nature and can be modified as per the requirements.
(iii) Scientific decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. They must be timely, realistic and subject to measurement and evaluation. Management principles help in thoughtful decision-making. They emphasise logic rather than blind faith. Management decisions taken on the basis of principles are free from bias and prejudice. They are based on the objective assessment of the situation.
(iv) Meeting changing environment requirements: Although the principles are in the nature of general guidelines but they are modified and as such help managers to meet changing requirements of the environment. You have already studied that management principles are flexible to adapt to dynamic business environment.