BUSINESS STUDIES

XII (2023-24)

PART
PART-1
-1

VIDEO
NOTES
 NOTES
PRINCIPLES OF MANAGEMENT

OFFICIAL
SYLLABUS
CBSE 2023-24

MEANING

Management principles are the

fundamental truth which helps the
managers to take actions and decisions
 1.GENERAL GUIDELINES
Management principles are guidelines to action
but these principles do not provide ready made
solution for any problem it means blindly you
can not apply these statements in any
situations.

2.FLEXIBLE
Management Principles can be applied
differently under different conditions. Some
changes can be made in applications of
principles according to the requirement of the
company. These are not rigid statement.

3.FORMED BY PRACTICE AND EXPERIMENTS

The management principles are developed only

after and through research work. They are not
developed overnight. Proper observations and
experiments are conducted before developing them.
 4.UNIVERSAL APPLICATION
(PERVASIVE):-
The principle of management are universal in
nature that means they can be applied to all
types of organisation irrespective of their size
and nature, business or non-business, small as
well as large public sector as well as private
sector.
E.g. Principle of division of work can
be applied to any organisation.

5. BEHAVIOURAL IN NATURE
Management Principles are formed to guide and
influence the behaviour of employees. These
principles insist on improving relationship
between superior, subordinates and all the
member of organisations.

6. CAUSE AND EFFECT RELATIONSHIP

As you all know that management principles are

developed after continuous practice and research
work. So these are based on cause and effect that
means these principles tell us if a particular
principles is applied on a particular situation, what
might be the effect.
 1.SCIENTIFIC DECISIONS
Management principles are scientific
decision. It means these are made with
proper logic, reason and facts. So these
principles helps manager to take
scientific decisions.

2.PROVIDE GUIDELINES TO MANAGER

Management Principles give
guidelines to the manager. These
principles improve knowledge, ability
and understanding of manager under
various managerial situations

3.FULFILLING SOCIAL RESPONSIBILITY

Management principles plays an important

role in fulfilling the responsibilities towards
management do something for society.
 4. OPTIMUM UTILISATION
OF RESOURCES
Management principles help manager to
reduce the cost of production by optimum
utilisation of resources management
principles helps to remove the wasteful
movement and setting up of standard time
to complete a task.

5.MEETING CHANGES IN ENVIRONMENT

Every business man has to make changes in
the organisation according to change takes
place in the business environment
management principles helps manager to
adopt these changes

IN SHORT
Management Principles are those scientific
decision which provides guidelines to the
manager so that they can fulfilling social
responsibility, optimum utilisation of resources
and meeting change in environment
 BUSINESS STUDIES
XII (2023-24)

PART
PART-2
-1

VIDEO
NOTES
Henri Fayol was a French
mining engineer Born
on 29 July 1841, Istanbul,
Turkey. He wrote a
famous book “Henri
Fayol’s classic general
and
industrial management”
He became famous as
“Father of management
studies and thoughts.”
 1. DIVISION OF WORK
According to this principles the whole work
must be divided into small units and one person
is to assign only unit of work matching to his
skill, Qualification, Interest and Experience this
leads to Specialisation and improve efficiency.

Consequences of violation of this principles

a)Lack of efficiency
b)Changes of duplications of work
c)No specialisation
d)Delay in achievement of goal

2. AUTHORITY AND RESPONSIBILITY

Authority means power take decision. Responsibility
means obligation to complete the job assigned on
time. According to this principle there must be balance
or parity between the authority and responsibility.
•Excess authority leads to misuse of authority
•Excess responsibility leads to overburden
•This principle helps management to meet the
responsibility on time and there is no misuse of
authority.
Consequences of violation of this principles

a)Misuse of authority due to excess authority

b)Overburden due to excess responsibility
c)Delay in work due to less authority
 3. DISCIPLINE
Discipline means respect for the rules and
regulations of the organisation. It is required at
every level. Superior and subordinate both have
to maintain the discipline. This leads to
systematic working in the organisation and
improve efficiency sometimes organisation may
put penalties on employees when they do not
maintain discipline.

Consequences of violation of this principles

a)Delay in work due to violation of this principle
b)Waste or resources and Chaos & Confusion

4. UNITY OF COMMAND
According to this principle an employees should
receive order from one boss only because if he
receiving order from more than one boss. Then he will
confused and will not be able to understand that
whose order must complete first.

Consequence of violation of this principles

a)Confusion in the mind of employee
b)Subordinate will give excuses
c)Difficulty in maintaining discipline in this
organisation
•Ego clashes among the different superiors
 5. UNITY OF DIRECTION
(ONE HEAD/UNIT ONE PLAN)
According to this principle all the members and
employees of organisation must be directed
towards one direction that is the achievement
of organisational goal. “One Unit One Plan”
Consequence of violation this principles
a)Organisational goal is not achieved
b)Lack of coordination
c)Wastage of efforts and resources

6. SUBORDINATION OF INDIVIDUAL
INTEREST TO GENERAL INTEREST
According to this principle individual goal is to be
sacrificed for achievement of organisational goal.
Goal of individual must be directed towards the
achievement of organisational goal. Manager must
take all the decision in the organisational interest and
not his personal interest. This also improves the
coordination between individual and organisational
goal.
Consequence of violation this principles
a)No achievement of organisational goal
b)Even employee will also suffer in long run.
 7. REMUNERATION TO PERSONS
1.According to this principle employees in the
organisation must be paid fair remuneration
which gives them maximum satisfaction this
will motivate to perform with there best
ability.

Consequence of violation this principles

a)Increase in employee Turnover
b)Dissatisfaction and demotivation of
employees

8. CENTRALISATION AND DECENTRALISATION

Centralisation refers to concentration of authority or
power in few hands at the top level. Decentralisation
means every distribution of power at every level of
management. According to fayol a company must not
be completely centralised or completely decentralised,
but there must be combination of both. This leads to
achievements of organisational goal and work load of
manager reduced
Consequence of violation this principles
a)Complete Centralisation will result in delay in
decision
b)Complete decentralisation will result in misuse of
authority
 9. PRINCIPLE OF SCALAR CHAIN
Scalar chain means line of authority or chain of
superiors from highest to lowest rank. Fayol insists
that this chain must be followed strictly in the
organisation. Information must pass through
everyone no skipping is allowed but in case of any
urgent information fayol suggested a short-cut
called gang plank. This lead to systematic flow of
information and no communication barrier (or)
Gap but many delay in action.

Consequence of violation this principles

There may be communication gap
No clarity in authority responsibility relationship

10. PRINCIPLE OF ORDER

In this principle order does not mean
command but it refers to orderly arrangement
of men and material. That is a fixed place for
everything and everyone in the organisation. It
leads to save time energy in search of men
and material and smoothly working in an
organisation
 11. PRINCIPLE OF EQUITY
Equity refers to kind, fair and just treatment to
employees. Employees will put their maximum efforts
only when they are treated with kindness and justice.
If a manager is biased in dealing with employees
then employees will get dissatisfied and will not
contribute to their maximum capacity. Equity does
not mean equal salary to a peon and supervisor but
equity mean application same disciplinary rules,
leave rule in the same way irrespective of their
grade, position and gender, language, caste, belief
or nationality. If organisation follow this principle the
morale of employee and motivate level boost up.

12. STABILITY OF TENURE OF PERSONNEL

According to this principle the management must provide
the feeling job security. Among the employees. Because
with the feeling of insecurity for the job the employees
cannot contribute their maximum frequent turnover of
employees is bad for organisation and such decision must
be taken when they are almost unavoidable. Company
spend too much on a new employees by provide them
training if they leave the job after training it would be a
loss for company. Organisation should give proper time to
settle the employees.
Consequence of violation this principles
a)Wastage of resources in learning the new job
b)Frustration and dissatisfaction among employees
c)Difficult to find new employees
 13. INITIATIVE
Initiative refers to taking the first step with self-
motivation Fayol suggested that employees the
organisation must be given an opportunity to
take some initiative in making and executing a
plan. This will motivate employee. So manager
must welcome their suggestions and ideas of
employees before framing the plan. This would
create a feeling of belonginess and organisation
of goal can be achieved on time
Consequence of violation this principles
a)Demotivation among employees
b)Employees will not work with their best ability

14. ESPRIT DE CORPS

A manager should replace “I” with “We”. This will give
rise to mutual trust manager should encourage and
promote team sprit group efforts is more powerful than
individual effort. Organisation goal can be achieved
easily through group contribution.
Consequence of violation this principles
Team goal not be achieved
More stress on individualism
 BUSINESS STUDIES
XII (2023-24)

PART
PART-3
-1

VIDEO
NOTES
It means Application of
science for each and every
element of Management
Frederick Winslow Taylor was
an American Born on
20th march 1856 in
Pennsylvania, USA
He was known as “Father of
Scientific management”
Taylor formulated 4 principles
of scientific management

SCIENCE NOT RULE OF THUMB

HARMONY NOT DISCORD

CO-OPERATION NOT INDIVIDUALISM

DEVELOPMENT OF WORKERS TO
THEIR GREATEST EFFICIENCY
 1. SCIENCE NOT RULE OF THUMB
According to this principle Taylor insists that each job
performed in the organisation should be based on
scientific enquiry and not on basis of experience. Rule
of thumb means dictatorship of manager where as
scientific decisions are based on cause and effect
relationship.

For example : in rule of thumb the standard time

required to do a particular job is decided by the
manager on the basis of his past experience. But
Taylor insists that standard time for a job should be set
up scientifically be conducting time study.

2. HARMONY NOT DISCORD

E.G. SHARING THE GAINS BETWEEN MANAGERS

AND WORKERS, ORGANIZATION CLIMATE
 3. CO-OPERATION NOT
INDIVIDUALISAM
According to this principle work must be carried on in
co-operation with each other with mutual confidence
and understanding for each other. The management
must take workers in confidence before setting up the
standard task for them. Managers should welcome
suggestions and rewards also given for good
suggestion. At the time workers should not go on strike
and make unreasonable demands. Manager should
work side by side with workers.

E.g. No lunch time for today due to heavy load,

welcoming employees suggestions, No
unreasonable strikes and Demands, Paternalistic
style,Participation of workers, etc.

4. DEVELOPMENT OF WORKERS TO
THEIR GREATEST EFFICIENCY
According to this principle the efficiency of each and
every person should be, taken are of right from his
selection. A proper arrangement of every body’s
training should be made. Company should try to
update the knowledge of employees time to time.
Employees should given promotional opportunities
and also job security. This will ensure greatest
efficiency and prosperity for both workers and the
company.
 BUSINESS STUDIES
XII (2023-24)

PART
PART-4
-1

VIDEO
NOTES
 1. FUNCTIONAL FOREMANSHIP
According to Taylor factory should be divided into
two department planning and production
department. Taylor felt that workers must before
from burden of planning and they must concentrate
on work and production and planning department
should focus on planning, policy, strategy making. To
develop specialisation in both department Taylor
suggested 4 expert in each department because one
person is not expert in every field of work.
 2. STANDARDISATION AND
SIMPLIFICATION OF WORK

Scientific management always insists on maintaining

quality standard. Standard should maintain from the
beginning like selection of tools, Equipment, raw
material & machine. Standard size, weight, etc. also
keeps in mind. Simplification means elimination of
unnecessary division of product, size and types. This
also reduced cost and improves quality.

3. WORK STUDY
It ensures maximum production at minimum cost
and getting best contribution from every factor it
includes

Fatigue study
Method Study
Time study
Motion Study
 3(A) FATIGUE STUDY
It is a conducted to find out the frequency or rest
intervals, duration of rest intervals and the
number of rest intervals. A persons is bound to
get tired when he his performing a job for long
period of time. There is always need for rest
interval. These interval are decided with the help
of scientific approach. To conduct fatigue study
Taylor suggested to observe an average worker
when he is per a job and note down the time
when that worker starts getting tired and when
efficiency level starts decreasing then give him
break. Similarly rest of frequency also decided.

3(B) METHOD STUDY

The method study technique of scientific
management is conducted to find out the one
best method or way of performing the job which
keeps production cost minimum and makes
maximum use of resources of the organisation.
 3(C) TIME STUDY
The technique of time study is conducted to
determine or the objective of time study are
(i)The Standard time required to perform a job
(ii)Setting up the standard target for workers
(iii)Determining the numbers of worker required
to perform a job
(iv)Categorising the workers in efficient and
inefficient categories

3(D) MOTION STUDY

This study is conducted to determine the
productive and unproductive movements,
cutting down the unproductive and wasteful
movements to conduct motion study Taylor
suggested to observe an average worker when
he is performing the job note down all the
movement he is doing. How many times he is
getting up from his place repeat if for 100 times
with different workers, after writing all the
movements classify them in productive and
unproductive movements.
 4. DIFFERENTIAL PIECE WAGE RATE
SYSTEM (STRONGEST MOTIVATOR)

5. MENTAL REVOLUTION
The objective of this technique is to change the
negative attitude of workers and management
towards each other. There should be co-
operation between workers and management
both should realise that each one is important
for this both had to change their thought’s for
each other, this is known as mental revolution.
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