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 R. Gupta's ®
Popular Master Guide

NATIONAL TESTING AGENCY (NTA)

CUET-UG
Common University Entrance Test for
Under Graduate Courses/Programmes

SECTION-II
DOMAIN SPECIFIC SUBJECT

Business Studies
by
RPH Editorial Board
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 EXAMINATION STRUCTURE

SECTION-II: DOMAIN SPECIFIC SUBJECTS

No. of Questions Subject Time

40 Questions  Input text can be used for
to be MCQ Based Questions 45 minutes for
attempted out  MCQs based on NCERT Class XII each Domain
of 50 Syllabus only Specific Subjects

 Mode of the Test : Computer Based Test (CBT)

 Test Pattern : Objective type with Multiple Choice Questions
 Medium of Exam : 13 Languages (Tam il, Telugu, Kannada,
Malayalam, Marathi, Gujarati, Odiya, Bengali,
Assamese, Punjabi, English, Hindi and Urdu)

(iii)
 CONTENTS

SAMPLE PAPER

CUET (UG) – Business Studies ......................................................................................... 1-8

BUSINESS STUDIES (1-116)

 Principles and Functions of Management—Nature and Significance of

Management; Principles of Management; Business Environment; Planning;
Organising; Staffing; Directing; Controlling.

 Business Finance and Marketing—Business Finance; Financial Markets;

Marketing; Consumer Protection; Entrepreneurship Development.

 Multiple Choice Questions

    

(iv)
 SAMPLE PAPER (SOLVED) Sample Paper 1

CUET-UG

BUSINESS STUDIES*

SECTION-II : DOMAIN SPECIFIC SUBJECT

1. Gabbar is a wholesaler of food grains. He categorises A. Time study B. Method study

his stock into different groups on the basis of their C. Motion study D. None of the above
quality and also fixes up the prices accordingly.
5. ‘Twinkle Stars’ is a well-known resort for organising
Identify the type of marketing function being parties, especially for children. However, in past
mentioned in the given line. 6 months its popularity has reduced considerably as
A. Physical distribution a new resort with better ambience and facilities has
B. Transportation opened within its vicinity.
C. Warehousing
Name the related feature of business environment
D. Standardisation and grading which has influenced the business of ‘Twinkle Stars’
2. According to the modern marketing concept, which adversely.
of the following statements is true? A. Totality of external forces
A. It refers to the group of people who do not have B. Dynamic nature
the ability but willingness to buy a particular C. Interrelatedness
product. D. Uncertainty
B. It refers to only the set of people who have the
6. Agile Limited has launched a new range of air
purchasing power to buy a particular product. conditioners in order to add value to the usability of
C. It refers to the set of actual and potential buyers
the product. The new range of air conditioners have
for a product.
an inbuilt air purifier and are available in attractive
D. It refers only to the people who show interest in colours.
a particular product.
Identify the type of marketing philosophy being
3. According to Taylor, “even a small production activity
described in the above lines.
like loading figures of iron into boxes can be
A. Product concept
scientifically planned and managed. This can result B. Production concept
in tremendous savings of human energy as well as
C. Marketing concept
wastage of time and materials.”
D. Societal marketing concept
Identify the related principle of scientific manage-
7. Which of the following is the correct matching
ment. pair?
A. Harmony, not discord
A. Helps in product protection — Branding
B. Science, not rule of thumb
B. Helps in product designing — Packaging
C. Development of each and every person to get his/ C. Helps in identifying the — Product
her greatest efficiency and prosperity
product Development
D. None of the above
D. Helps in providing information — Labelling
4. This technique of scientific management aims to to the customer Packaging
determine the amount and frequency of rest intervals 8. Which principle of general management advocates
that should be provided to the employees during
that, “Employee turnover should be minimised to
working hours.
maintain organisational efficiency”?

*40 Questions to be attempted out of 50 1 4000 (SP)—1

 2 Sample Paper
A. Stability of personnel
B. Remuneration of employees
C. Equity
D. Esprit De Corps
9. Make the correct order of following marketing
functions:
I. Market planning
II. Gathering and analysing marketing information
III. Standardisation and grading
IV. Product designing and development
A. I, II, IV, III
B. I, IV, II, III
C. II, I, IV, III
D. IV, I, II, III
10. DigiLocker is the country’s first secured cloud-based
platform for the storage, issuance and verification of
documents with the Driving Licence & Vehicle
Registration System of the Road Transport Ministry.
The integration of a government department with
DigiLocker since its launch last year is one of the
biggest of its kind. It will spare 1 people the trouble
of carrying licences & vehicle papers, which can be
accessed on phones using the DigiLocker app.
Identify the related dim ension of business
environment.
A. Economic dimension
B. Technological dimension
C. Social dimension
D. Political dimension
11. Management is equally important to run a political
organisation as it is to run an economic organisation.
Which feature of management is being reflected in
the given statement?
A. Management is goal oriented
B. Management is multidimensional
C. Management is all pervasive
D. Management is a group activity
12. I. Delegation of authority is inevitable and decentra-
lisation is voluntary.
II. Scope of delegation of authority is limited and
the scope of decentralisation is broad.
Both the above statements are:
A. True
B. False
C. Statement (I) is True and Statement (II) is False
D. Statement (I) is False and Statement (II) is True
13. India continues to be a lower-middle-income country
along with 46 others, while Sri Lanka has climbed to
the upper-middle-income group for the fiscal year
(FY ) 2020, according to the World Bank’s
classification of countries by income levels, released
on July 1, 2019.
Identify the related dim ensions of business
environment.
A. Social dimension
B. Technological dimension
C. Economic dimension
D. Political dimension
14. Which of the following is not a designation related to
top level management?
A. President
B. Vice-President
C. Chairman
D. Production Manager
15. Two friends—Ramesh Singh and Krishan Gopal—are
working as managers in different companies. One
Sunday, both of them together set off on travelling.
Both of them began talking about the activities going
on in their respective companies. Mr Ramesh said
that during those days he was busy with the job of
planning function of management. Also he told that
he was planning in such a way that the other
managerial functions should be completed under the
framework of plans prepared by him.
Identify the feature of planning described in the above
discussion.
A. Planning focuses on achieving objectives
B. Planning is a primary function of management
C. Planning is pervasive
D. Planning is continuous
16. Which of the following is not an element of
delegation?
A. Responsibilty
B. Authority
C. Accountability
D. Decentralisation
Directions (Qs. No. 17-19): Read the following information
carefully and answer these questions.
Anil is a Managing director in a toy manufacturing
company. He decided to set up a new manufacturing unit
of his company in a rural area of Bihar where job oppor-
tunities are very less. He believes in using environmental
friendly methods of production and aims at giving
employment opportunities to the disadvantaged section of
the community. As a manager he aims at reducing costs
and increasing productivity through better planning,
organizing, directing staffing and controlling the activities
of the organization. Anil considers human resources as the
greatest asset of any organization. Getting work done
through others is a major task of a manager as per the views

of Anil. As a manager Anil believes that his task is to
make workers work towards achieving the organizations’
goals.
17. Identify the level of management at which Anil is
working.
A. Top level management
B. Middle level management
C. Lower level management
D. Supervisory level management
18. Identify the objective of management discussed in
the given case (Choose the correct alternative)
A. Economic objective
B. Organizational objective
C. Social objective
D. Personal objective
19. “As a manager, he aims at reducing costs and
increasing productivity”.
Name the importance of management highlighted in
the given statement.
A. Management helps in achieving group goals
B. Management creates a dynamic organization
C. Management increases efficiency
D. M anagem ent helps in achieving personal
objectives
20. Mr Sanjiv Gupta decided to double the production of
his company. Now he is going to translate his decision
into reality. Here, he is also thinking how many
additional/extra machines and workers will be required
to achieve the production target. His dream will be
possible to be realised only after the arrangement for
these extra sources is done.
Which stage of ‘Planning Process’ is being completed
by Mr Gupta in the above event?
A. Evaluating alternative courses
B. Selecting an alternative
C. Implementing the plan
D. Follow-up action
21. Indigo Limited has a staff of 300 people which is
grouped into different departments. The organisational
structure depicts that 100 people work in Production
department, 150 in Finance department, 20 in
Technology department and 30 in Human Resource
department.
Identify the type of organisational structure being
followed by the company.
A. Functional structure
B. Divisional structure
C. Informal structure
D. None of the above
Sample Paper 3
22. Shaukeen Ahmed is working as a leading employee
at the low level management in ‘Balaji Udyog Ltd.’
According to one plan, he has to prepare 100 units of
high quality of one item in a day, and every unit
should not cost more than ` 500. When the work
actually started, it was learnt that the desired goods
could be prepared within a day, but due to the sudden
inflation in the raw material, every unit was to cost
` 550. Now Mr Shaukeen is in a fix what to do and
what not to do.
Identify the ‘limitation of planning’ in the event given
above.
A. Planning leads to rigidity
B. Planning may not work in a dynamic environment
C. Planning reduces creativity
D. Planning involves huge costs
23. Making assumptions for future is called:
A. Making derivative plans
B. Making policy
C. Setting planning premises
D. All of the above
24. Span of management refers to:
A. Number of managers
B. Length of term for which a manager is appointed
C. Number of subordinates under a superior
D. Number of members in top management
Directions (Qs. No. 25-27): Read the following information
carefully and answer these questions.
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 per cent 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 honoured
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 solving the conflicts among
employees.
25. Aditi has divided the work in smaller units and each
employee is well trained to perform his/ her task
efficiently.
 4 Sample Paper
Which principle of management is being followed
here?
A. Centralization and Decentralization
B. Division of work
C. Discipline
D. Order
26. “The sales persons are allowed to close a deal with a
buyer by giving a maximum of 5 per cent 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
27. “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
B. Order
C. Remuneration to Employees
D. Unity of Direction
Directions (Qs. No. 28-30): There are two statements marked
as Assertion (A) and Reason (R). Read the statements and
choose the appropriate option from the options given
below:
A. Both (A) and (R) are true and (R) is the correct
explanation of (A)
B. Both (A) and (R) are true, but (R) is not the
correct explanation of (A)
C. (A) is true, but (R) is false
D. (A) is false, but (R) is true
28. Assertion (A) : Planning involves huge costs.
Reason (R) : Plans require scientific calculations
to ascertain facts, figures and a
number of incidental costs as well,
like expenses on boardroom meet-
ings, discussions with professional
experts etc.
29. Assertion (A) : M arketing Planning helps in
collecting inform ations about
consumers, their requirements and
expectations.
Reason (R) : These planning are m ade for
increasing the level of production,
sales and promotion of products etc.
30. Assertion (A) : Coordination ensures unity of action.
Reason (R) : It gives a common focus to the effort
of people with diverse interest.
31. Which of the following function is performed by the
middle-level management?
A. A nalysis of business environment and its
implication for survival of organisation
B. Maintenance of quality output and minimisation
of wastage
C. Formulation of organisational goals and strategies
D. Interpretation of the policies framed by the top
management
32. Assertion (A) : Branding is the most important
technique in the m odern days
globalized business.
Reason (R) : Companies are decided to sell its
products with name of the company
or a special brand name to cover a
major share in the market.
A. Both (A) and (R) are true and (R) is the correct
explanation of (A)
B. Both (A) and (R) are true, but (R) is not the
correct explanation of (A)
C. (A) is correct, but (R) is incorrect
D. (A) is incorrect, but (R) is correct
33. The responsibility flows:
A. In all directions B. Downwards
C. Upwards D. None of the above
34. The form of organisation known for giving rise to
rumours is called:
A. Centralised organisation
B. Decentralised organization
C. Informal organisation
D. Formal organisation
35. Prem Kamboj is working as the top level manager in
a business organisation. He has been given the job
of preparing the plans for the whole company.
Mr Kamboj is an expert in making a correct forecast.
At first, he looks for the different options to complete
every job, and then on the basis of their evaluation
selects the most suitable option. In this way, by taking
correct decision and beating his competitors, he is
moving forward.
To which particular point of the ‘importance of
planning’ is the above event related?
A. Planning provides direction
B. Planning promotes innovative ideas
C. Planning establishes standards for controlling
D. Planning facilitates decision making
2715 (SP)—3-II

36. Assertion (A) : Packaging ensures safety of the
products.
Reason (R) : It helps in promoting the product in
the market.
Codes:
A. Both (A) and (R) are true and (R) is the correct
explanation of (A)
B. Both (A) and (R) are true, but (R) is not the
correct explanation of (A)
C. (A) is correct, but (R) is incorrect
D. (A) is incorrect, but (R) is correct
37. Identify the correct sequence of steps to be followed
in an organising process.
A. Departmentalisation, Establishing reporting
relationships, Assignment of duties, Identification
and division of work
B. Identification and division of work, Depart-
mentalisation, Assignment of duties, Establishing
reporting relationships
C. Identification and division of work, Assignment
of duties, Departmentalisation, Establishing
reporting relationships
D. Identification and division of work, Establishing
reporting relationships, Departmentalisation,
Assignment of duties.
38. Which of the following is not a demerit of functional
structure?
A. It places more emphasis on the objectives pursued
by a functional head than on overall enterprise
objectives
B. It may lead to conflict of interests among
departments due to varied interests
C. It leads to occupational specialisation
D. It may lead to difficulty in co-ordination among
functionally differentiated departments
39. Make the correct order of following marketing
functions:
I. Market planning
II. Gathering and analysing marketing information
III. Standardisation and grading
IV. Product designing and development
A. I, II, IV, III
B. I, IV, II, III
C. II, I, IV, III
D. IV, I, II, III
40. Assertion (A) : Packaging is know n as a silent
salesman.
Reason (R) : Attractive and innovative package can
attract a lot of customers to purchase
the product.
Sample Paper 5
Codes:
A. Both (A) and (R) are true and (R) is the correct
explanation of (A)
B. Both (A) and (R) are true, but (R) is not the
correct explanation of (A)
C. (A) is correct, but (R) is incorrect
D. (A) is incorrect, but (R) is correct
41. The process of grouping activities into units for the
purpose of administration may be referred to as
A. Departmentalisation
B. Decentralisation
C. Co-ordination
D. Specialisation
42. Span of control means that
A. an organisation consists of various departments
B. each person’s authority is clearly defined
C. every subordinate has one superior
D. a manager can supervise only a limited number of
subordinates
43. If a general manager asks the sales manager to
recruit some sales men on his behalf, it is an instance
of:
A. division of authority
B. decentralisation of authority.
C. delegation of authority
D. delegation of responsibility
44. Which one of the following principles states that
recurring decisions should be handled in a routine
manner by lower level managers whereas problems
involving unusal matters only should be referred to
higher levels?
A. Principle of unity of command
B. Scalar principle
C. Principle of exception
D. Principle of commitment
45. MBO is a technique which requires that the objectives
of the enterprise:
A. be written and defined in board terms
B. lay down the time period for achieving the results
C. include a plan of action for achieving the desired
results
D. be defined in terms of measurable results
46. In the field of management some of the important
techniques, relate to budgeting, cost accounting,
planning and control are through
A. Operational research
B. PERT & CPM
C. Budgetary control
D. Financial Administration
 6 Sample Paper

47. Which of the following management functions are 49. The famous book “The Philosophy of Management”
closely related? was written by:
A. Planning and organising A. Henery Fayol
B. Staffing and control B. Oliver Sheldon
C. Planning and control C. F. W. Taylor
D. Planning and staffing D. Urwick
48. “Human Relating Approach” to management was 50. Policy making is an important part of the process
origined by: of:
A. Henery Fayol A. Planning
B. Winslow Taylor B. Co-ordinating
C. Elton Mayo C. Organising
D. Peter F. Drucker D. Motivating

ANSWERS
1 2 3 4 5 6 7 8 9 10
D C B D B A D A C B
11 12 13 14 15 16 17 18 19 20
C A C D B D A C C C
21 22 23 24 25 26 27 28 29 30
A A C C B A A A D B
31 32 33 34 35 36 37 38 39 40
D A C C D B B C C A
41 42 43 44 45 46 47 48 49 50
A D C C D B C C B A
 7 Sample Paper 7

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1 (2715) Business Studies—1
2 Business Studies

Nature and Significance of Management
DEFINITIONS OF MANAGEMENT
“Management is the process of designing and maintaining
an environment in which individuals, working together in
groups, efficiently accomplish selected aims.”
—Harold Koontz and Heinz Weihrich
“Management is defined as the process of planning,
organising, actuating and controlling an organisation’s
operations in order to achieve coordination of the human
and material resources essential in the effective and efficient
attainment of objectives.”
—Robert L. Trewelly and M. Gene Newport
“Management is the process of working with and
through others to effectively achieve organisational
objectives by efficiently using limited resources in the
changing environment.” —Kreitner
CONCEPT
Management is a very popular term and has been used
extensively for all types of activities and mainly for taking
charge of different activities in any enterprise. Management
aims at guiding their efforts towards achieving a common
objective—a goal. Thus, management has to see that tasks
are completed and goals are achieved (i.e., effectiveness)
with the least amount of resources at a minimum cost (i.e.,
efficiency).
Management, has therefore, been defined as a process
of getting things done with the aim of achieving goals
effectively and efficiently. We need to analyse this
definition. There are certain terms which require elaboration.
These are (a) process, (b) effectively, and (c) efficiently.
Being effective or doing work effectively basically
means finishing the given task. Effectiveness in management
is concerned with doing the right task, completing activities
and achieving goals. In other words, it is concerned with the
end result.
But it is not enough to just complete the tasks. There
is another aspect also, i.e., being efficient or as we say doing
work efficiently.
Efficiency means doing the task correctly and with
minimum cost. There is a kind of cost-benefit analysis
involved and the relationship between inputs and outputs.
3
Business Studies 3
If by using less resources (i.e., the inputs) more benefits are
derived (i.e., the outputs) then efficiency has increased.
Efficiency is also increased when for the same benefit or
outputs, fewer resources are used and less costs are incurred.
Input resources are money, materials, equipment and persons
required to do a particular task. Obviously, management is
concerned with the efficient use of these resources, because
they reduce costs and ultimately lead to higher profits.
CHARACTERISTICS OF MANAGEMENT
The Characteristics of Management are:
(i) Management is a goal-oriented process: An
organisation has a set of basic goals which are the
basic reason for its existence. These should be simple
and clearly stated. Different organisations have
different goals. For example, the goal of a retail
store may be to increase sales, but the goal of The
Spastics Society of India is to impart education to
children with special needs. Management unites the
efforts of different individuals in the organisation
towards achieving these goals.
(ii) Management is all pervasive: The activities
involved in managing an enterprise are common to
all organisations whether economic, social or
political. A petrol pump needs to be managed as
much as a hospital or a school. What managers do
in India, the USA, Germany or Japan is the same.
How they do it may be quite different. This difference
is due to the differences in culture, tradition and
history.
(iii) Management is multidimensional: Management is
a complex activity that has three main dimensions.
These are:
(a) Management of work: All organisations exist
for the performance of some work. In a factory,
a product is manufactured, in a garment store a
customer’s need is satisfied and in a hospital a
patient is treated. Management translates this
work in terms of goals to be achieved and
assigns the means to achieve it. This is done in
terms of problems to be solved, decisions to be
made, plans to be established, budgets to be
prepared, responsibilities to be assigned and
authority to be delegated.
4 Business Studies
(b) Management of people: Human resources or
people are an organisation’s greatest asset.
Despite all developments in technology “getting
work done through people” is still a major task
for the manager. Managing people has two
dimensions:
(i) it implies dealing with employees as indi-
viduals with diverse needs and behaviour;
(ii) it also means dealing with individuals as a
group of people.
The task of management is to make people
work towards achieving the organisation’s goals,
by making their strengths effective and their
weaknesses irrelevant.
(c) Management of operations: No matter what
the organisation, it has some basic product or
service to provide in order to survive. This
requires a production process which entails the
flow of input material and the technology for
transforming this input into the desired output
for consumption. This is interlinked with both
the management of work and the management
of people.
(iv) Management is a continuous process: The process
of management is a series of continuous, composite,
but separate functions (planning, organising,
directing, staffing and controlling). These functions
are simultaneously performed by all managers all
the time. We may have observed that Smita at
Namchi Designer Candles performs several different
tasks in a single day. Some days she may spend
more time in planning a future exhibition and on
another day, she may spend time in sorting out an
employee’s problem. The task of a manager consists
of an ongoing series of functions.
(v) Management is a group activity: An organisation
is a collection of diverse individuals with different
needs. Every member of the group has a different
purpose for joining the organisation but as members
of the organisation they work towards fulfilling the
common organisational goal. This requires team work
and coordination of individual effort in a common
direction. At the same time management should
enable all its members to grow and develop as needs
and opportunities change.
(vi) Management is a dynamic function: Management
is a dynamic function and has to adapt itself to the
changing environment. An organisation interacts
with its external environment which consists of
various social, economic and political factors. In
order to be successful, an organisation must change
itself and its goals according to the needs of the
environment. We probably know that McDonalds,
the fast food giant made major changes in its menu
to be able to survive in the Indian market.
(vii) Management is an intangible force: Management
is an intangible force that cannot be seen but its
presence can be felt in the way the organisation
functions. The effect of management is noticeable
in an organisation where targets are met according
to plans, employees are happy and satisfied, and
there is orderliness instead of chaos.
IMPORTANCE OF MANAGEMENT
The follow ing points highlight the importance of
management in an organisation:
(i) Management helps in achieving group goals:
Management is required not for itself but for
achieving the goals of the organisation. 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 increases efficiency: The aim of a
manager is to reduce costs and increase productivity
through better planning, organising, directing,
staffing and controlling the activities of the
organisation.
(iii) Management creates a dynamic organisation: All
organisations have to function in an environment
which is constantly changing. It is generally seen
that individuals in an organisation 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 that the organisation is able to maintain
its competitive edge.
(iv) Management helps in achieving personal
objectives: A manager motivates and leads his team
in such a manner that individual members are able
to achieve personal goals while contributing to the
overall organisational objective. Through motivation
and leadership the management helps individuals to
develop team spirit, cooperation and commitment
to group success.
(v) Management helps in the development of society:
An organisation has multiple objectives to serve the
purpose of the different groups that constitute it. In
the process of fulfilling all these, management helps
in the development of the organisation and through
that it helps in the development of society. It helps
to provide good quality products and services,
creates employment opportunities, adopts new
technology for the greater good of the people and
leads the path towards growth and development.

NATURE OF MANAGEMENT
Management is as old as civilisation. Although modern
organisations are of recent origin, organised activity has
existed since the time of the ancient civilisations. In fact,
organisations may be considered the distinguishing feature
that separated civilised society from uncivilised ones. The
earliest management practices were a set of rules and
regulations that grew out of the experiences of governmental
and commercial activities. The development of trade and
commerce gradually led to the development of management
principles and practices.
The term ‘management’ today has several different
connotations that highlight the different aspects of its nature.
The study of management has evolved over a period of time
along with the modern organisations; based both on the
experience and practice of managers and a set of theoretical
relationships. Over a period of time, it has grown into a
dynamic subject with its own special characteristics.
However, one question that needs to be addressed pertaining
to the nature of management is whether it is a science or an
art or both? In order to answer this let us examine the
features of both science and art to see how far management
fulfills them.
MANAGEMENT AS AN ART
What is art? Art is the skillful and personal application of
existing knowledge to achieve desired results. It can be
acquired through study, observation and experience. Since
art is concerned with personal application of knowledge
some kind of ingenuity and creativity is required to practice
the basic principles learnt.
The basic features of an art are as follows:
(i) Existence of theoretical knowledge: Art presupposes
the existence of certain theoretical knowledge.
Experts in their respective areas have derived certain
basic principles which are applicable to a particular
form of art. For example, literature on dancing, public
speaking, acting or music is widely recognised.
(ii) Personalised application: The use of this basic
knowledge varies from individual to individual. Art,
therefore, is a very personalised concept. For
example, two dancers, two speakers, two actors, or
two writers will always differ in demonstrating their
art.
(iii) Based on practice and creativity: All art is practical.
Art involves the creative practice of existing
theoretical knowledge. We know that all music is
based on seven basic notes. However, what makes
the composition of a musician unique or different is
his use of these notes in a creative manner that is
entirely his own interpretation.
Business Studies 5
Management can be said to be an art since it satisfies
the following criteria:
(i) A successful manager practices the art of management
in the day-to-day job of managing an enterprise
based on study, observation and experience. There
is a lot of literature available in various areas of
management like marketing, finance and human
resources which the manager has to specialise in.
There is existence of theoretical knowledge.
(ii) There are various theories of management, as
propounded by many management thinkers, which
prescribe certain universal principles. A manager
applies these scientific methods and body of
knowledge to a given situation, an issue or a
problem, in his own unique manner. A good manager
works through a combination of practice, creativity,
imagination, initiative and innovation. A manager
achieves perfection after long practice. Students of
management also apply these principles differently
depending on how creative they are.
(iii) A manager applies this acquired knowledge in a
personalised and skillful manner in the light of the
realities of a given situation. He is involved in the
activities of the organisation, studies critical
situations and formulates his own theories for use in
a given situation. This gives rise to different styles
of management.
The best managers are committed and dedicated
individuals; highly trained and educated, with personal
qualities such as ambition, self-motivation, creativity and
imagination, a desire for development of the self and the
organisation they belong to. All management practices are
based on the same set of principles; what distinguishes a
successful manager from a less successful one is the ability
to put these principles into practice.
MANAGEMENT AS A SCIENCE
Science is a systematised body of knowledge that explains
certain general truths or the operation of general laws. The
basic features of science are as follows:
(i) Systematised body of knowledge: Science is a syste-
matic body of knowledge. Its principles are based
on a cause and effect relationship. For example, the
phenomenon of an apple falling from a tree towards
the ground is explained by the law of gravity.
(ii) Principles based on experimentation: Scientific
principles are first developed through observation
and then tested through repeated experimentation
under controlled conditions.
(iii) Universal validity: Scientific principles have
universal validity and application.
 6 Business Studies
Based on the above features, we can say that
management has some characteristics of science.
(i) Management has a systematised body of knowledge.
It has its own theory and principles that have
developed over a period of time, but it also draws
on other disciplines such as Economics, Sociology,
Psychology and Mathematics. Like all other
organised activity, management has its own
vocabulary of terms and concepts. For example, all
of us discuss sports like cricket and soccer using a
common vocabulary. The players also use these
terms to communicate with each other. Similarly
managers need to communicate with one another
with the help of a common vocabulary for a better
understanding of their work situation.
(ii) The principles of management have evolved over a
period of time based on repeated experimentation
and observation in different types of organisations.
However, since management deals with human
beings and human behaviour, the outcomes of these
experiments are not capable of being accurately
profession. However, it does have some of the features of a
predicted or replicated. Therefore, management can
profession:
be called an inexact science. Despite these
limitations, management scholars have been able to
identify general principles of management. For
example, scientific management principles by F.W.
Taylor and Functional Management principles by
Henri Fayol which you will study in the next chapter.
(iii) Since the principles of management are not as exact
as the principles of science, their application and
use is not universal. They have to be modified
according to a given situation. However, they provide
managers with certain standardised techniques that
can be used in different situations. These principles
are also used for training and development of
managers.
We must have understood from the foregoing discussion
that management has features of both art and science. The
practice of management is an art. However, managers can
work better if their practice is based on the principles of
management. These principles constitute the science of
management. Management as an art and a science are
therefore not mutually exclusive, but complement each other.
MANAGEMENT AS A PROFESSION
A profession has the following characteristics:
(i) Well-defined body of knowledge: All professions
are based on a well-defined body of knowledge that
can be acquired through instruction.
(ii) Restricted entry: The entry to a profession is restricted
through an examination or through acquiring an
educational degree. For example, to become a
chartered accountant in India a candidate has to
clear a specified examination conducted by the
Institute of Chartered Accountants of India.
(iii) Professional association: All professions are
affiliated to a professional association which regulates
entry, grants certificate of practice and formulates
and enforces a code of conduct. To be able to practice
in India lawyers have to become members of the Bar
Council which regulates and controls their activities.
(iv) Ethical code of conduct: All professions are bound
by a code of conduct which guides the behaviour of
its members. All doctors, for example, take the oath
of ethical practice at the time they enter the
profession.
(v) Service motive: The basic motive of a profession is
to serve their client’s interests by rendering dedicated
and committed service. The task of a lawyer is to
ensure that his client gets justice.
Management does not meet the exact criteria of a
(i) All over the world there is marked growth in
management as a discipline. It is based on a
systematic body of knowledge comprising well-
defined principles based on a variety of business
situations. This knowledge can be acquired at
different colleges and professional institutes and
through a number of books and journals. The subject
of management is taught at different institutions.
Some of these have been set up with the specific
purpose of providing management education such
as the Indian Institutes of Management (IIMs) in
India. Entry to different institutes is usually through
an examination.
(ii) There is no restriction on anyone being designated
or appointed as manager in any business enterprise.
Anyone can be called a manager irrespective of the
educational qualifications possessed.
Unlike professions such as medicine or law which
require a practicing doctor or lawyer to possess valid
degrees, nowhere in the world is it mandatory for a
manager to possess any such specific degree. But
professional knowledge and training is considered
to be a desirable qualification, since there is greater
demand for those who possess degrees or diplomas
from reputed institutions. Therefore, as such the
second criterion has not been strictly met.
(iii) There are several associations of practising managers
in India, like the AIMA (All India Management
Association) that has laid down a code of conduct

to regulate the activities of their members. There is,
however, no compulsion for managers to be members
of such an association nor does it have any statutory
backing.
(iv) The basic purpose of management is to help the
organisation achieve its stated goal. This may be
profit maximisation for a business enterprise and
service for a hospital. However, profit maximisation
as the objective of management does not hold true
and is fast changing. Therefore, if an organisation
has a good management team that is efficient and
effective it automatically serves society by providing
good quality products at reasonable prices.
LEVELS OF MANAGEMENT
Management is a universal term used for certain functions
performed by individuals in an enterprise who are bound
together in a hierarchy of relationships. Every individual in
the hierarchy is responsible for successful completion of a
particular task. To be able to fulfill that responsibility he is
assigned a certain amount of authority or the right to take
a decision. This authority-responsibility relationship binds
individuals as superiors and subordinates and gives rise to
different levels in an organisation. Generally speaking there
are three levels in the hierarchy of an organisation.
Top Management
They consist of the senior-most executives of the
organisation by whatever name they are called. They are
usually referred to as the chairman, the chief executive
officer, chief operating officer, president and vice-president.
Top management is a team consisting of managers from
different functional levels, heading finance, marketing etc.
For example chief finance officer, vice president (marketing).
Their basic task is to integrate diverse elements and
coordinate the activities of different departments according
to the overall objectives of the organisation. These top
level managers are responsible for the welfare and survival
of the organisation. They analyse the business environment
and its implications for the survival of the firm. They
  
Business Studies 7
formulate overall organisational goals and strategies for
their achievement. They are responsible for all the activities
of the business and for its impact on society. The job of the
top manager is complex and stressful, demanding long hours
and commitment to the organisation.
Middle Management
Middle Management is the link between top and lower
level managers. They are subordinate to top managers and
superior to the first line managers. They are usually known
as division heads, for example production manager. Middle
management is responsible for implementing and controlling
plans and strategies developed by top management. At the
same time they are responsible for all the activities of first
line managers. Their main task is to carry out the plans
formulated by the top managers. For this they need to:
(i) interpret the policies framed by top management,
(ii) ensure that their department has the necessary
personnel,
(iii) assign necessary duties and responsibilities to them,
(iv) motivate them to achieve desired objectives, and
(v) cooperate with other departments for smooth
functioning of the organisation. At the same time
they are responsible for all the activities of first line
managers.
Supervisory or Operational Management
Foremen and supervisors comprise the lower level in the
hierarchy of the organisation. Supervisors directly oversee
the efforts of the workforce. Their authority and
responsibility is limited according to the plans drawn by
the top management. Supervisory management plays a very
important role in the organisation since they interact with
the actual work force and pass on instructions of the middle
management to the workers. Through their efforts quality of
output is maintained, wastage of materials is minimised and
safety standards are maintained. The quality of workmanship
and the quantity of output depends on the hard work,
discipline and loyalty of the workers.
 8 Business Studies
Business Environment
CONCEPT & ELEMENTS OF BUSINESS
ENVIRONMENT
Business Environment means a collection of all individuals,
entities and other factors, which may or may not be under
the control of the organisation, but can affect its perfor-
mance, profitability, growth and even survival.
Every business organisation operates in a distinctive
environment, as it cannot exist in isolation. Such an
environment influence business and also gets affected by its
activities.
Features of Business Environment
(i) Totality of External Forces: Business environment
is the sum total of all things external to business
firms and, as such, is aggregative in nature.
(ii) Specific and General Forces: Business environment
includes both specific and general forces. Specific
forces (such as investors, customers, competitors and
suppliers) affect individual enterprises directly and
immediately in their day-to-day working. General
forces (such as social, political, legal and
technological conditions) have impact on all business
enterprises and thus may affect an individual firm
indirectly only.
(iii) Dynamic Nature: Business environment is dynamic
in nature. It keeps on changing whether in terms of
technological improvement, shifts in consumer
preferences or entry of new competition in the
market.
(iv) Uncertainty: Business environment is largely
uncertain as it is very difficult to predict future
happenings, especially when environment changes
are taking place too frequently as in the case of
information technology or fashion industries.
(iv) Relativity: Business environment is a relative
concept since it differs from country to country and
even region to region. Political conditions in the
USA, for instance, differ from those in China or
Pakistan. Similarly, demand for sarees may be fairly
high in India whereas it may be almost non-existent
in France.
8
(v) Multi-faceted: Business environment changes are
frequent and depend on knowledge and existence of
business person. Changes may be viewed differently
by different individuals. It may be an opportunity
for some or a threat for others.
Importance of Business Environment
(i) First Mover Advantage: Early identification of
opportunities helps an enterprise to be the first to
exploit them instead of losing them to competitors.
For example, Maruti Udyog became the leader in
the small car market because it was the first to
recognize the need of small cars in India.
(ii) Identification of Threats: Identification of possible
threats helps in taking corrective and improving
measures to survive the competition. For instance;
if an Indian firm finds that a foreign multinational
is entering the Indian market, it can meet the threat
by adopting measures like, by improving the quality
of the product, reducing cost of the production,
engaging in aggressive advertising, and so on.
(iii) Coping with Rapid Changes: All types of enterprises
are facing increasingly dynamic environment. In
order to effectively cope with these significant
changes, firms must understand and examine the
environment and develop suitable course of action.
(iv) Improving Performance: The enterprises that
continuously monitor their environment and adopt
suitable business practices are the ones which not
only improve their present performance but also
continue to succeed in the market for a longer period.
(v) Giving Direction for Growth: The interaction with
the environment leads to opening up new frontiers
of growth for the business firms. It enables the
business to identify the areas for growth and
expansion of their activities.
TYPES OF BUSINESS ENVIRONMENT
There are mainly two types of business environment, internal
and external. A business has absolute control in the internal
environment, whereas it has no control on the external
environment. It is therefore, required by businesses, to
modify their internal environment on the basis of pressures
from external.

Internal Environment
The internal environment has received considerable attention
by firms. Internal environment contains the owner of the
business, the shareholders, the managing director, the non-
managers, employees, the customers, the infrastructure of
the business organization, and the culture of the
organization.
It includes ‘6 M’ i.e.
 Man (Human Resource)
 Money (Financial Factors)
 Marketing Resources
 Machinery (Physical Assets)
 Management Structure and Nature
 Miscellaneous Factors (Research and Development,
Company Image and Brand Equity, Value System,
Competitive Advantage)
Human Resource (MAN)
The human resource is the important factor for any
organization as it contributes to the strength and weakness
of any organization. The human resource in any organization
must have characteristics like skills, quality, high morale,
commitment towards the work, attitude, etc. The involvement
and initiative of the people in an organization at different
levels may vary from organization to organization. The
organizational culture and over all environment have bearing
on them. It is an internal factor and an organisation has
absolute control on changing this factor as per the needs of
the enterprise and other forces.
Financial Factors (MONEY)
Factors like financial policies, financial positions and capital
structure are another important internal factor which has a
substantial impact on business functioning and performance.
Financial facilities are required to start and operate the
organisation. The sources of finance are share capital,
banking and other financial institutions and unorganised
capital markets. The recent changes in the Indian capital
market indicate the availability of plenty of finance, both
from the financial institutions as well as from the general
public. The availability of finance coupled with various
incentives attached is a facilitating internal factor.
Marketing Resources
Resources like the organization for marketing, quality of
the marketing men, brand equity and distribution network
have direct impact on marketing efficiency of the company
and thereby, affecting the decision making component of
the management. This, in lieu has great impact on the
internal environment of business.
Business Studies 9
Physical Assets and Facilities
Facilities like production capacity, technology are among
the factors which influences the competitiveness of the firm.
The proper acquisition and working of the assets is indeed
essential for efficient working of the organization. An
organisation invests money in plant and machinery because
it expects a positive rate of return over cost in future. The
revenue from the use of plant and machinery should be
sufficient so as to cover the invested money, operating
costs, and generate enough profit to satisfy the organisation.
The availability of plant and machinery is dependent on
technological development of the country and the
government’s approach tow ards foreign technical
collaboration.
Management Structure and Nature
The structure of the organization also influences the business
decisions. Being internal forces, the organizational structure
like the composition of board of directors influences the
decisions of business. The structure and style of the
organization directly has an impact on the decision making
decisions of a firm. These needs to be appropriately managed
for smooth functioning and operations. The strategies
available to an organisation are determined by its structure.
Different strategies are better suited to different environments.
Thus, if an organisation has to thrive, its structure must fit
its business environment in which it develops. Some markets
and environments change faster than others. A firm working
in high technological environment, for example, needs to
have a fast reaction time because its competitors are
introducing new products all the time. In rapidly changing
environments, organizations may find it difficult to stay up
to date on all the changes and implications of their own
operations and activities. Organizations in slow markets
tend to have rigid, hierarchical structures, while those in
changing markets are more adaptive. They can create new
divisions in their management structure, to deal with
emerging issues.
Miscellaneous Factors
The other internal factors that contribute to the business
environment are as follows:
(i) Research and Development: Though Research and
Development needs are mostly outsourced from the
external environment but it has a direct impact on
working, operations and decision making of the
organization. This aspect mainly determines the
company’s ability to innovate and compete. R&D
mainly results in technological improvements of
the Business environment. The technological
environment refers to the sum total of knowledge
(2715) Business Studies—2
 10 Business Studies
providing ways of doing things. It may include
inventions and techniques which affect the way of
doing things that is, designing, producing and
distributing products. A given technology affects an
organisation, in the manner it is organised and faces
competition.
(ii) Company Image and Brand Equity: The image of
the company in the outside market has the impact
on the internal environment of the company. It helps
in raising the finance, making joint ventures, other
alliances, expansions and acquisitions, entering sale
and purchase contracts, launching new products, etc.
Brand equity also helps the company in similar
manner.
(iii) Value System: The principles of right and wrong
that are accepted by an individual or organisation
are what comprise value system. The value system
of the founders and those at the helm of affairs has
important bearing on the choice of business, the
mission and the objectives of the organization,
business policies and practices. These values helps
guide the basic principles of business for a period
of time which moulds an impression of positivism
among people dealing with the business. The values
are independent of business purposes and are integral
part for success of business.
(iv) Competitive Advantage: Competitor analysis is a
critical aspect of analyzing the internal business
environment. Competitor’s actions affect the ability
of the business to make profits, because competitors
will continually seek to gain an advantage over
each other, by differentiating their product and
service, and by seeking to provide better value for
money. It involves: – identifying the actual
competitors – assessing competitors’ objectives,
strategies, strengths & weaknesses, and reaction
patterns – selecting the strategies to deal with
competitors.
The internal analysis of strengths and weaknesses
focuses on internal factors that give an organization certain
advantages and disadvantages in meeting the needs of its
target market thereby gaining the competitive edge over the
competitors.
Technological Environment
Rapid developments in technology exert a powerful
influence on all the organisations and not just on those
operating in a high-tech environment, say, microprocessor
manufacture, pharmaceuticals, fibre-optic technology and
so on. The combined impact of computer, digital technology
and telecommunications affects most of private and public
sector undertakings.
As rightly called by none other as Mr. J. Schumpeter “a
perennial gate of creative destruction.” Change of technology
is both creative and destructive process in that it is
responsible for building new by destroying the old. Thus,
the heart of any progress is destruction.
External Environment
The external environment of an organisation comprises of
all entities that exists outside its boundaries, but have
significant influence over its growth and survival. An
organisation has little or no control over its external
environment but needs to constantly monitor and adapt to
these external changes. A proactive or reactive response
leads to significantly different outcomes. There are two
types of external environment
(a) Micro/Operating Environment
(b) Macro/General Environment
(a) Micro Environment
The micro environment is also known as the task
environment and operating environment because the micro
environmental forces, though are external factors, still have
a direct bearing on the operations of the firm. The micro
environment consists of the factors in the company’s
immediate environment that affects the performance and
working of the company. The micro environmental factors
are more intimately linked with the company than the macro
factors. The micro forces need not necessarily affect all the
firms in a particular industry in the similar ways. Some of
the micro factors may be particular to any given type of
organisation.
Micro environmental factors, internal factors close to a
business that have a direct impact on its strategy includes:
 Customers  Employees
 Suppliers  Shareholders
 Media  Competitors
Customers and Consumers: Customers are people who
buy an organization’s products/services. In simple words,
an organization cannot survive without customers. A
consumer, on the other hand, is the ultimate user of the
product/service. For example, a husband might purchase a
product for his wife. In this case, the husband is the customer
and the wife is the consumer.
Competitors: Every business has com petition.
Competitors are other organizations that compete with each
other for both resources and markets. Hence, it is important
that an organization is aware of its competitors and in a
position to analyze threats from its competition. A business
must be aware of its competitors, their strengths and
weaknesses, and the most aggressive and powerful
competitors at all times.

Organization: One of the most important aspects of the
micro environment of an organization is the self-analysis of
the organization itself. It must understand its own strengths
and weaknesses, objectives and goals of the business, and
resource availability. The following non-specific elements
of an organization can affect its performance:
 Owners: People who have a major shareholding in
the organization and have vested interests in the
well-being of the company.
 Board of Directors: The board of directors is elected
by the shareholders for overseeing the general
management of the business and ensuring that the
shareholder’s interests are met.
 Employees: People who work in the organization
are major contributors to its success. It is important
that all employees embrace the organization’s goals
and objectives.
Market: The market is much more than the sum of all
the customers. The organization must study the market in
terms of its actual size, the potential for growth, and its
attractiveness. Some important issues are:
 The cost structure of the market
 Price Sensitivity of the market
 Technological structure of the market
 The existing distribution system of the market
 The maturity of the market
Suppliers: Suppliers are another important component
of the micro environment. Organizations depend on many
suppliers for equipment, raw material, etc. to maintain their
production. Suppliers can influence the cost structure of the
industry and are hence a major force.
Intermediaries: Intermediaries are also a major
determining force in business. Most customers are unaware
of the manufacturer of the products they buy since they
approach retailers, departmental store, chain stores or online
stores for their purchase.
(b) Macro Environment
Macro environment is also known as general environment
and remote environment. Macro factors are generally more
uncontrollable than micro environment factors. When the
macro factors become uncontrollable, the success of
company depends upon its adaptability to the environment.
This environment has a bearing on the strategies adopted
by the firms and any changes in the areas of the macro
environment are likely to have a far-reaching impact on
their operations.
The macro environment is primarily concerned with
major issues and upcoming changes in the environment.
The acronym for the macro analysis is “STEEP.” The five
areas of interest are:
Business Studies 11
 Socio-Cultural and Demographics
 Technology
 Economic Conditions
 Ecology and Physical Environment
 Political and Legal
ECONOMIC ENVIRONMENT
The economic environment is the sum total of the economic
conditions and the nature of the economy in which the
business has to operate and compete.
This will include the nature of the economy, the direction
in which it is progressing, the availability:
(i) Socio Cultural and Demographics: Societal values
and lifestyles change over time, and the most
important of these; directly or indirectly leave an
impact on the business environment. For example,
over the past generation, it has become acceptable
for women to work; people are not retiring at 65;
and people are more aware of the environment etc.
The changes in culture and lifestyle may come from
many sources: medical (smoking, healthy eating,
exercises); science (global warming, going ‘green’);
economic (people working longer, women in the
workforce); cultural diversity (music preferences,
foods, living accommodations, medicine); and
technologies (biodegradable plastic) are just a few
examples.
These changes will be important to the industry and
to the business. The social environment of business
includes social factors like customs, traditions,
values, beliefs, poverty, literacy, life expectancy rate
etc. The social structure and the values that a society
cherishes have a considerable influence on the
functioning of business firms. For example, during
festive seasons, there is an increase in the demand
for new clothes, sweets, fruits, flower, etc. Due to
increase in literacy rate, the consumers are becoming
more conscious of the quality of the products. Due
to change in family composition, more nuclear
families with single child concepts have come up.
This increases the demand for the different types of
household goods. It may be noted that the
consumption patterns, the dressing and living styles
of people belonging to different social structures
and culture vary significantly.
Demographics refer to the size, density, distribution
and growth rate of population. All these factors have
a bearing on the demand for various goods and
services. For example, a country where population
rate is high and children constitute a large section
of population, and then, there will be more demand
12 Business Studies
for such products. Similarly, the demand of the
people of cities and towns are different than that of
people of rural areas. The high rise of population
indicates the easy availability of labour. These
encourage the business enterprises to use labour
intensive techniques of production. Moreover,
availability of skilled labour in certain areas
motivates the firms to set up their units in such area.
For example, the business units from America,
Canada, Australia, Germany, UK, are coming to India
due to easy availability of skilled manpower. Thus,
a firm that keeps a watch on the changes on the
demographic front and reads them accurately will
find opportunities knocking at its doorsteps.
(ii) Technology: Technology is understood as the
systematic application of scientific or other organised
knowledge to practical tasks. Technology changes
fast and to keep the pace with the dynamics of
business environment; organisation must be on its
toes to adapt to the changed technology in their
system. The business in a country is greatly
influenced by the technological development. The
technology adopted by the industries determines
the type and quality of goods and services produced.
Technological environment influences the business
in terms of investment in technology, consistent
application of technology and the effects of
technology on markets. Technological environment
include the methods, techniques and approaches
adopted for production of goods and services and
its distribution. The varying technological
environments affect the designing of products in
different countries. Technology encompasses
something more than computers. Technology comes
in many forms such as medical devices, new plastics,
and production techniques.
(iii) Economic Conditions: The economic conditions of
a country refer to a set of economic factors that have
great influence on business organizations and their
operations. These include gross domestic product,
per capita income, markets for goods and services,
availability of capital, foreign exchange reserve,
growth of foreign trade, strength of capital market
etc. All these help in improving the pace of economic
growth.
(iv) Ecology and Physical Environment: The ecology
and physical environment plays a large part in many
businesses – especially for those which carry out
production and manufacturing activities. Infact,
business are affected on daily basis due to
  
enviornmental and ecological changes. For example,
the impact of climate change must be considered:
water and fuel costs could change dramatically, if
the world warms by only a couple of degrees. The
natural environment includes geographical and
ecological factors that influence the business
operations. These factors include the availability of
natural resources, weather and climatic condition,
location aspect, topographical factors, etc. For
example, sugar factories are set up only at those
places where sugarcane can be grown. It is always
considered better to establish manu-facturing unit
near the sources of input. Further, government’s
policies to maintain ecological balance, conservation
of natural resources etc. put additional responsibility
on the business sector.
(v) Political and Legal: Political environment refers to
three political institutions viz. legislature, executive
and the judiciary in shaping, directing, developing
and controlling business activities. The political
environment of a country is influenced by the
political organisations such as philosophy of
political parties, ideology of government or party in
power, nature and extent of bureaucracy influence
of primary groups. The political environment of the
country influences the business to a great extent.
The political environment includes the political
system, the government policies and their attitude
towards the business community. All these aspects
have a bearing on the strategies adopted by the
business firms. The stability of the government also
influences business and related activities to a great
extent. It sends a signal of strength, confidence to
various interest groups and investors. Further,
ideology of the political party also influences the
business organisation and its operations. Political
changes are closely tied up with legal changes. Legal
environment includes flexibility and adaptability of
law and other legal rules governing the business. It
may include the exact rulings and decision of the
courts. These affect the business and its managers to
a great extent. This refers to set of laws, regulations,
which influence the business organisations and their
operations. Every business organisation has to obey,
and work within the framework of law. Additionally,
an industry may have specific laws and regulations.
For example, a pet store would deal with federal
animal welfare and prohibited pet laws as wells as
state laws concerning animal cruelty, housing,
veterinary care and so on.

Principles of Management
PRINCIPLES AND PRACTICES OF MANAGEMENT
PRINCIPLES OF MANAGEMENT
A principle can be defined as a fundamental statement or
truth providing a guide to thought or action. The
fundamental statement tells what results are expected when
the principle is applied. Principles of management are to the
manager as a table of materials’ strengths and weaknesses
is to a civil engineer. The table gives fundamental truths,
expressed as quantitative data based on years of experience
and testing. The engineer can predetermine the safe,
allowable load for a steel girder of a building simply by
using the table and analyzing the design drawings and
specifications. Similarly, management principles also have
been developed from years of experience and testing, in
public and private, in big and small organizations.
The principles emerge based on certain qualities/
characteristics that have relevance to management theory
and practice. Good management principles should be:
(i) practical, which means they can be applied almost
anytime in the organization’s life and be appropriate;
(ii) relevant to the broad forms of organizational
structure;
(iii) consistent in the sense that for similar sets of
circumstances, similar results will occur; and
(iv) flexible in that their application should take into
account particular differences or changes in the
conditions that affect the organization. For example,
consider the statement: “For maximum managerial
efficiency, total costs should be kept to a minimum”.
Although this is usually a valid principle for most
organizations, it might be reassessed or abandoned in cases
of emergency such as defending our country against a nuclear
attack. The use of management principles is intended to
simplify, guide and facilitate management work.
Therefore, the management principles act as keys to
what actions should be taken in what contexts and in what
manner. They provide the benchmarks from which one can
further one’s understanding of the subject and they can be
viewed as capsules of what is believed to be major
considerations in current management thought.
13
Business Studies 13
Given below are the im portant principles of
management that will help you in using them as the keys
for your better understanding of the management (Kumar,
1982).
1. Management is purposeful: Management deals with
the achievement of something specific, expressed as
an objective or goal. Managerial success is
commonly measured by the extent to which
objectives are achieved. Management exists because
it is an effective means of getting needed work
accomplished. The fact that some executives have
subordinates reporting to them does not ipso facto
make them managers.
2. Management makes things happen: Managers,
focus their attention and efforts on bringing about
successful action. They know where to start, what to
do to keep things moving, and how to follow
through. Successful manager has an urge for
accomplishment and the members of the group
respect the manager and get along with people firmly
expecting the best.
3. Management is an activity, not a person or group
of persons: Management is not people; it is an
activity like walking, reading, swimming, running
or doing any specific activity. People involved in
management can be designated as managers, members
of management, or executive, leaders who actually
manage a distinct activity/activities. It can be studied,
and the knowledge about an activity is obtained,
and skill in its application acquired.
4. Management is accomplished by, with and through
the efforts of others: To participate in management
necessitates relinquishing the normal tendency to
perform all things oneself and get tasks accomplished
by, with and through the efforts of group members.
This is far more difficult than it sounds.
Normally a person acquires ability in a specialized
type of work and wins Concept and Theories of
promotions through increasing knowledge and skill
in that field of Management: Their Relevance to
Extension specialization. However, the time comes
14 Business Studies
when further promotion requires shifting from the
role of a specialist to that of a management member.
The prime measure of success becomes setting or
securing agreement on the proper goals and getting
all others to accomplish these goals. How successfully
this deliberate shift is made determines the potential
of the new manager. This characteristic merits
recognition by the ambitious specialist when he
turns to be a manager. Likewise, the employee with
expertise in training when advanced to assistant
personnel manager may continue to be a training
expert, thus not succeeding in the new managerial
post.
5. Management is usual & associated with the efforts
of a group: It is common to associate management
with a group. However, management is also
applicable to an individuals’ efforts as members of
the group. For example, a person manages many
personal affairs. However, the group emphasis stems
from the fact that an enterprise comes into existence
to attain goals, and these are achieved more readily
by a group than by one person alone. People become
members of an enterprise to satisfy their needs and
because they feel their gains will outweigh their
losses or burdens as members of a group.
6. Management is intangible: It has been called the
unseen force, its presence evidenced by the results
of its efforts - orderliness, enthusiastic employees,
buoyant spirit, and adequate work output. Strange
as it may seem, in some instances the identity of
management is brought into focus by its absence or
by the presence of its direct opposite, mismanage-
ment. The result of mismanagement also becomes
clear.
7. Management is an idea, not replaced by the
computer: The computer is an extremely powerful
tool of management. It can widen a manager’s vision
and sharpen insight by supplying more and faster
information for making key decisions. The computer
has enabled the manager to conduct analyses for
beyond the normal human’s analytical capacities. It
has forced managers to reexamine their analytical
processes and judgement in view of the almost
unbelievable data processing and feedback facilities
of the modern computer.
However, a manager must supply judgement and
imagination as well as interpret and evaluate what
the data mean in each individual case. For example,
it is doubtful that General George Washington would
have crossed the Delaware River if he had relied on
a computer to help him decide. The data of using
leaky boats at night during a snowstorm to face a
numerically superior enemy would have indicated a
low probability of success. However, despite such
rationale, Washington believed he could succeed,
seized the initiative, assumed the large risk, and
won his objective.
8. Management is an outstanding means for exerting
real impact on human life: A manager can do much
to improve the work-environment, to stimulate
people to do things better, and to make favourable
actions to take place. Personal frustrations and
disappointments need not be accepted and may be
viewed passively as inevitable. A manager can
achieve progress, bring hope, and help group
members acquire the better things in life.
DEVELOPMENT OF MANAGEMENT
THOUGHT
The earliest contribution to the management theories can be
traced back to the periods of the Greeks, the Romans and
the Egyptians. The use of the principle of specialisation and
division of labour was evident in China as early as 1650
B.C. The Roman Catholic Church with its hierarchy of
management has greatly contributed to the management
thoughts. The development of management thought has
been evolutionary in nature. The present status and position
of management can, therefore, be best appreciated and
understood in the light of its evolution over the years.
Much of the development in this field has taken place
during the last 100 years. The time periods in which different
management concepts have evolved and developed can be
divided into the following five segments:
1. Pre-Scientific Management Era (Before 1880)
2. Scientific Management (1880-1930)
3. Human Relations Era (1930-50)
4. Management Science Era (1950-1960)
5. Systems approach (1960-1970).
6. Contingency approach (1970 onwards).
The above time periods are only suggestive. They only
signify the dominance of a management thought during a
particular time period.
The main schools of management thoughts are:
1. Management process school: The Management
Process School has developed during the scientific
management era. Frederick Taylor and Henry Fayol
were the founders of this school of thought. They
perceived the management theory as a process of
getting things done through and with people
operating in organised groups. The process was
considered to be universal regardless of the type of
enterprise or the level in a given enterprise.

2. Human behaviour school: Human behaviour
approach is the outcom e of the Haw thorne
Experiments in the early 1930 conducted by Elton
Mayo and his associates. Abraham Maslow, Douglas
McGregor, Keith Davis, Chester Barnard and Kurt
Lewin are the other who made a significant
contribution to the school. The advocates of human
behaviour school view ed an organisation
collectively as a social system of inter-personal and
inter-group relationships.
3. Empirical school: The Empirical School started
around 1952, i.e. in the social science era. Earnest
Dale, the founder of this school identified
management as a study of experience rather than the
general principles as believed by the founders of the
management process school. This approach was
adopted by the Graduate School of Business
Administration at the Harvard University for
imparting management instruction and education to
its students.
4. Social science school: Chester Barnard is considered
to the father of the Social Science School. According
to him, management is a social system, a system of
co-operative relationships, and co-operation and team
work among the organisational system is necessary
for the achievement of organisational objectives.
This approach seeks to identify the nature of cultural
relationships of various social groups and attempts
to integrate them into a social system.
5. Decision theory school: Decision theory approach
revolves round the basic problem of management,
i.e. decision-making, the selection of a suitable course
of action out of the given alternatives. The major
contribution to this approach was made by Herbert
A. Simon. According to him, the manager is a
decision-maker and the organisation is a decision-
making unit. Therefore, the basic problem in
managing is to make rational decisions.
6. Quantitative school: The Quantitative School of
management thoughts is just an extension of the
Decision Making Approach. This approach is also
known as Operations Research School as it envisages
the use of mathematical relationships, theories and
models for making logical and rational decisions.
The main contributors to this school of thoughts are
Richard Cyert, Russel Ackoff, William Churchman
and Forrester.
7. Systems school: Systems Approach to management
views an organization as a single, unified and
purposeful system which is composed of many inter-
related sub-systems. It studies the organisational
system as a whole and inter-relation between its
Business Studies 15
various sub-systems and external environment.
Kenneth Boulding, R.A. Johnson, F.E. Cast and Trist
were the major contributors to the Systems Approach
of Management.
8. Contingency school: Joan Woodward, P.R. Lawrence,
Hickson and Fiedler are the major contributors to
the Contingency Approach. According to them, there
is no universal technique of management. The
management action is contingent upon the situation.
Thus, a manager’s task is to identify which technique
will, in a particular situation, under particular
circumstances and at a particular time, best contribute
to the attainment of the organisational goals.
CONTRIBUTION OF F.W. TAYLOR
The concept of scientific management was introduced by
Frederick Winslow Taylor in the USA in the beginning of
20th century. This concept was further carried on by Frank
and Lillian Gilbreth, Henry Gantt, George Berth Edward
Felen and others.
Scientific management was concerned essentially with
improving the operational efficiency at the shop floor level.
“Scientific management is the art of knowing exactly
what you want your men to do and then seeing that they
do it in the best and cheapest way.”—F.W. Taylor
Taylor joined Midvale Steel Company in the U.S.A as
a worker and later on became a supervisor. During this
period, he continued his studies and eventually completed
his Master of Engineering (M.E.). Subsequently, he joined
Bethlehem Steel Company. At both these places, he
undertook several experiments in order to improve the
efficiency of people at work. On the basis of his experiments,
he published a book entitled as ‘Scientific Management’.
Some of the major contributions of Taylor under
scientific management are as follows:
1. Time and motion study: Time study is the art of
observing and recording the time required to do
each detailed element of an industrial operator.
Motion study refers to the study and analysis of the
movements of an operator in performing a job so that
attempts can be made to remove useless movements
from the process. Time and motion study together
help in determining the best method of performing
a job and the standard time allowed for it.
2. Functional foremanship: Taylor evolved the concept
of functional foremanship based on the specialisation
of functions. He identified eight types of foreman to
direct the activities of workers. Of these, the
following four foremen are concerned with planning:
(a) Route clerk.
 16 Business Studies
(b) Instruction card clerk.
(c) Time and cost clerk.
(d) Disciplinarian.
The remaining four foremen are concerned with the
execution of work. These are:
(a) Speed boss.
(b) Inspector.
(c) Maintenance foreman.
(d) Gang boss.
3. Differential payment: Taylor introduced a new
payment scheme called differential piece wage plan.
Under this scheme, a worker received low price rate
if he produced the standard number of pieces. On
the other hand, the worker received high rate if he
surpassed the standard. Workers were motivated to
work hard and earn more.
4. Reorganization of supervision: Taylor introduced
the concept of functional foremenship. Taylor
suggested that the work should be planned by a
foreman and not the workers. Under functional
foremanship, he suggested employing four, six or
eight foremen who would give orders to an
individual worker depending on their specialization.
5. Scientific selection and training: The selection of
workers by scientific methods would not alone serve
the purpose, unless their placement on right jobs is
earned. Appropriate training would prepare the
workers to accept challenging job, and avail of
promotion opportunities arising in the organisation.
Taylor thought of entrusting the task of selection
and training to a central personnel department.
6. Cordial relations between management and
workers: In its essence, scientific management is a
complete ‘mental revolution’ on the part of workers
as well as management. According to Taylor, it
involves an immense change in the attitude of both
the sides. Both the parties must realize that their
prosperity is dependent on each other and none
should try to prosper at the cost of the other.
Taylor’s concept of scientific management developed
into a movement and dominated the industrial management
science for several decades after him.
CONTRIBUTION OF HENRY FAYOL
Henry Fayol was a French mining engineer who later turned
a leading industrialist and a successful manager. His life-
long experience, in the field of managing, was produced
in the form of a monograph titled ‘Administration
Industrielleet-Generale’ in 1916 in the French language.
This monograph was reprinted in French several times but
was never translated in English until 1929. Henry Fayol has
been rightly called the ‘father of administrative management’
for his practical approach to management theory. He has
identified fourteen fundamental principles of management.
These fourteen principles are:
1. Division of labour and specialisation: Division of
labour is a famous principle of economics, put forth
by the classical economists like Adam Smith. Fayol
applied this principle to management theory.
Division of labour leads to specialisation, which in
turn improves the efficiency of the employees.
2. Authority and responsibility: According to Fayol,
authority and responsibility must flow in the same
direction. Responsibility is the natural outcome of
authority. A proper balance between authority and
responsibility helps to prevent the misuse of
authority and promotes a fair fixation of
responsibility.
3. Discipline: Discipline means observation of certain
rules and regulations. People in the organisation
should be bound to accept certain code of conduct.
The three basic requisites of discipline are
disciplined supervisors at all the levels, clear and
fair agreement on goals and judicious application of
penalties.
4. Unity of command: According to this principle, an
employee should receive orders only from one
superior. If more than one superior exercise their
authority over the same employee then the latter
will always be in a state of confusion and a confused
employee will never be able to perform to the best
of his ability.
5. Unity of direction: Unity of direction is essential
for achieving unity in action, in the pursuit of
common goals by a group of persons. For this Fayol
advocates ‘one head and one plan’. Unity of
direction (one head, one plan) is not same as unity
of command (one employee receives orders from
one superior).
6. Subordination of individual interest to general
interest: According to this principle, the fulfilment
of individual objectives in the long run is contingent
upon the attainment of common objectives in the
short run. Thus, in case the need arises, an individual
must sacrifice, in favour of larger group objectives.
7. Remuneration: Remuneration is the price paid to
people, managers and workers, for the services
rendered by them. According to Fayol, the system of
rem unerating personnel should be fair and
satisfactory to both the employees and employer. It
should be attractive in order to employ and retain
the best personnel.

8. Centralisation: Everything that goes to increase the
importance of subordinates’ role is decentralisation
and everything which goes to reduce it, is
centralisation. There should be a fair balance between
the degree of centralisation and decentralisation in
order to achieve the best results.
9. Scalar chain: Scalar chain refers to the line of
authority from the highest to the lowest executive
for the purpose of communication. However in the
routine course of business, employees at the same
level can communicate with each other following
the principle of ‘Gang Plank’.
10. Order: Fayol has classified order into two categories:
(a) Material order: Material order is described as
‘a place for everything and everything in its place’.
(b) Social order: Social order demands the employ-
ment of a right person in the right place.
11. Equity: The principle of equity implies a sense of
fairness and justice to all. Observance of equity
alone makes personnel, loyal and devoted. Loyalty
and devotion must be elicited from the personnel
through a combination of kindness and justice while
dealing with them.
12. Stability of tenure: An employee needs time to
adjust with the new work, its environment and
demonstrate efficiency. Therefore, stability of tenure
is a desirable principle for ensuring efficiency.
Unnecessary employees’ turnover is the cause and
effect of a bad management.
13. Initiative: Initiative is the freedom to propose and
execute a plan. To have freedom in this respect is
the greatest satisfaction for an intelligent person. A
manager, who induces his subordinates to think and
act on their own, is always better and more successful
than the one who does not.
14. Espirit-de-Corps: Espirit-de-Corps is a French phrase
which means “union is strength”. It means the spirit
of loyalty and devotion to the group, to which one
belongs. It is the foundation of a sound organisation.
This can be achieved by avoiding the dirty policy
of ‘divide and rule’ and promoting effective
communication.
These principles are flexible and require suitable
adjustment and modification in the view of situational factors
operating in the different enterprises.
CONTRIBUTION OF ELTON MAYO
Human Relations Movements actually started with the series
of experiments conducted by George Elton Mayo, professor
of Industrial Research at the Harvard Graduate School of
Business and his colleagues at the Hawthorne plant of
Western Electric Company.
Business Studies 17
At the time of the experiments, there was an acute
problem of employee dissatisfaction at the plant. It was also
quite evident that the employees were not producing up to
their fullest capability. This happened in spite of the fact
that it was one of the most progressive companies with
pension schemes, sickness benefit schemes, and numerous
other facilities offered to its employees.
The company sought help from the group of university
professors to tackle the issue when the earlier attempts of
the experts produced in conclusive findings. The study
continued for an extended period of time and had gone
through various phases, which is briefly described here.
1. Phase I: Illumination Experiments: In order to test
the traditional belief that better illumination will
lead to higher level of productivity, two groups of
employees were selected. In one, the control group,
the illumination remained unchanged throughout
the experiment while in the other the illumination
was increased. As had been expected, the
productivity went up in the latter or what was known
as the experimental group. But what baffled the
experimenters was the fact that the output of the
control group also went up. The investigators then
started to reduce the illumination for the test group.
But in this case as well, the output went up again.
Thus, the researchers had to conclude that
illumination affected production only marginally
and there must be some factor which produced this
result.
2. Phase II: Relay Assembly Test Room: In this phase,
apart from illumination, the possible effects of other
factors such as length of the working day, rest pauses
and their duration and frequency and other physical
conditions were probed. It was found that the
productivity and morale of the group increased
consistently during the period of experiment.
Surprisingly, here also the researchers found that the
production of the group had no relation with the
working conditions. The outcome of the group went
increasing at an all-time high even when all the
improvements in the working conditions were
withdrawn. The researchers, thus, concluded that
socio-psychological factors such as feeling of
importance, recognition, attention and participation,
small informal cohesive work group, non-directive
supervision, etc. played a key role in increasing the
productivity.
3. Phase III: Interviewing Program: From the Relay
Assembly Test Room, the researchers for the first
time became aware about the existence of informal
groups and the importance of social context of the
organizational life. To probe deeper into this area in
(2715) Business Studies—3
 18 Business Studies
order to identify the factors responsible for human
behaviour, they interviewed more than 20,000
employees. The direct questioning was later replaced
by non-directive type of interviewing. The study
revealed that the workers’ social relationship inside
the organizations has a significant influence on their
attitude and behaviour. It was also found that merely
giving a person an opportunity to talk and air his
grievances has a beneficial effect on his morale.
4. Phase IV: Bank Wiring Test Room: It had been
discovered that social groups in an organization
have considerable influence on the functioning of
the individual members. Observers noted that in
certain departments, output had been deliberately
restricted by the workers. Mayo decided to
investigate one such department which was known
as the bank wiring room where there were fourteen
men working on an assembly line.
It was found that the group evolved its own production
norms which were much lower than that set by the authority.
This was done deliberately by the group to protect the slow
workers and because of the apprehension that if the pace of
production were increased, a sizeable number of the workforce
would eventually be redundant. The group norm was so
strictly adhered to by most of the group members that
nobody dared to violate it for the fear of being ostracized
by the group. An individual who had emerged as the informal
leader controlled the group.
Thus, the Hawthorne study pointed out the following:
1. A business organization is a socio-technical entity,
where the social interactions among its members is
extremely important.
2. There is not necessarily a direct correspondence
between working conditions and high production.
3. Economic motives are not the only motive for an
employee. Social needs can also significantly affect
their behaviour.
4. Employee-centered leaders always tend to be more
effective than the task-oriented leaders.
5. The informal groups and not the individuals are the
units of analysis in a group.
Later on people like Douglas McGregor, Abraham
Maslow, Kurt Lewin, Chester Bernard, Rensis Likert, Chris
Argyris, Warren Bennis etc. from more formal behaviour
science background developed an approach which later
came to be known as behavioural science approach.
However, the Human Relation movements and the
Behaviourist Schools also had their share of criticisms. These
are:
1. It is diagonally opposite to the classical schools. It
focuses on the human side of the organization and
certainly ignored other critical factors.
2. At times some hard decisions have to be taken in an
organization and it is impractical to try to please
every one all the time.
3. Though it is true that individuals do have other
than economic motives, the importance of financial
incentives cannot be ignored.
4. There is hardly any empirical support for the view
‘happy workers are more productive’, which seems
to be the focal theme of this school.
CONTRIBUTION OF MARY PARKER
FOLLETT (1868–1933)
She was a social philosopher whose ideas had clear
implications for management practice. Her contribution
towards the understanding of group is of immense value.
She believed that groups were the mechanisms through
which people could combine their differing talents for the
greater good of the organization, which she defined as the
community in which managers and subordinates could work
in harmony. The Mangers and workers should view
themselves as partners and as a part of common group. She
was convicted that the traditional and artificial distinction
between the managers who give the orders and the workers
who take the orders obscured their natural relationships.
Manager should rely more on their expertise and knowledge
to lead subordinates than on the formal authority of their
position. Thus, her humanistic ideas influenced the way we
look at motivation, leadership, power and authority. The
Follett Behavioural Model of control being sponsored by
an oriented towards the group, while self-control exercised
by both individuals and the group ultimately result in both
sharing the power. In the Follett Holistic Model of Control,
Follett captured the interactive, integrative nature of self-
control groups being influenced by the forces within the
work environment.
CONTRIBUTION OF CHESTER BARNARD
(1886–1961)
Chester Barnard, President of Bell Telephone Company,
developed theories about the functions of the manager as
determined by constant interaction with the environment.
Barnard saw organizations as social systems that require
human cooperation. He expressed his view in his book The
Function of the Executive. He proposed ideas that bridged
classical and human resource view points. Barnard believes
that organizations were made up of people with interacting
social relationships. The manager’s major functions were to
communicate and stimulate subordinates to high level of
efforts.
He saw the effectiveness of an organization as being
dependent on its ability to achieve cooperative efforts from
(2715) Business Studies—3-II

a number of employees in a total, integrated system. Barnard
also argued that success depended on maintaining good
relations with the people and institutions with whom the
organization regularly interacted. By recognizing the
organization’s dependence on investors, suppliers, customers,
and other external stakeholders, Barnard introduced the
idea that managers had to examine the external environment
and then adjust the organization to maintain a state of
equilibrium. Barnard also developed set of working
principles by which organizational communication systems
can maintain final authority for the management team. These
principles are:
 Channels of communication should be definitely
known.
 Objective authority requires a definite formal channel
of com munication to every mem bers of an
organization.
 The line of communication must be as direct or short
as possible.
 The complete line of communication should usually
be used.
 Competence of the persons serving at communication
centers that is officers, supervisory heads, must be
adequate.
 The line of communication should not be interrupted
during the time the organization is to function.
CLASSICAL APPROACH TO
MANAGEMENT THEORY
Classical management thought can be divided into three
separate schools - scientific management, administrative
theory and bureaucratic management. Classical theorists
formulated principles for setting up and managing
organizations. These views are labelled “Classical” because
they form the foundation for the field of management
thought. The major contributors to the three classified
schools of management thought viz. scientific management,
administrative theory and bureaucratic management are
Frederick W. Taylor, Henry Fayol and Max Weber
respectively.
Scientific Management
Frederick Winslow Taylor (1856–1915) is considered to
be the father of scientific management. Taylor was supported
in his efforts by Henry Gantt, Frank and Lillian Gilberth and
Harrington Emerson. All these disciples of Taylor became
famous in their own right. Together with Taylor they
revolutionised management thinking. Scientific management
is the name given to the principles and practices, that grew
out of the work of Frederick Taylor and his followers and
that are characterised by concern for efficiency and
Business Studies 19
systematisation in management. Four basic parts of a series
of ideas developed by Taylor are as follows:
(i) Each person’s job should be broken down into
elements and a scientific way to perform each
element should be determined.
(ii) Workers should be scientifically and trained to do
the work in the designed and trained manner.
(iii) There should be good cooperation between
management and workers so that tasks are performed
in the designed manner.
(iv) There should be a division of labour between
managers and workers. Managers should take over
the work of supervising and setting up instructions
and designing the work, and the workers should be
free to perform the work themselves.
Taylor did a lot of work on improving management of
production operations. He demonstrated in the classic case
of the pig iron experiment at the Bethlehem Steel Company,
how both output per worker and the daily pay of worker
could be increased by employing scientific method.
The two major managerial practices that emerged from
Taylor’s approach to management are: the piece-rate
incentive system, and the time-and-motion study.
 Piece-rate incentive system: Taylor felt that the
wage system was one of the major reasons for
soldiering. To resolve this problem, he advocated
the use of a piece-rate incentive system. The aim of
this system was to reward the workers who produced
the maximum output.
 Time and Motion study: Taylor tried to determine
the best way to perform each and every job. To do
so, he introduced a method called “time-and-motion”
study in which jobs are broken down into various
small tasks or motions and unnecessary motions are
removed to find out the best way of doing a job.
Among the other significant contributors to scientific
management was Henry L Gantt. Gantt was a contemporary
and an associate of Taylor. He emphasised the psychology
of the worker and the importance of morale in production.
Gantt insisted that willingness to use correct methods and
skills in performing a task was as important as knowing the
methods and having the skills. Thus he saw the importance
of the human element in productivity and propounded the
concept of motivation as we understand today. Gantt devised
a wage-payment system and developed a charting stem or
control chart for scheduling production operation which
became the basis for modern scheduling techniques like
CPM and PERT.
After Taylor, Frank and Lillian Gilbreth made numerous
contributions to the concepts of scientific management.
Frank Gilbreth (1868–1924) is considered the “father of
 20 Business Studies
motion study”. Lillian Gilbreth (1878–1972) was associated
with the research, pertaining to motion studies. Motion
study involves finding out the best sequence and minimum
number of motions needed to complete a task. Frank and
Lillian were mainly involved in exploring neb ways for
eliminating unnecessary motions and reducing work fatigue.
Limitations of scientific management
Scientific management has provided many valuable insights
in the development of management thought. In spite of the
numerous contributions it made, there are a few limitations
of scientific management. They are as follows:
 The principles of scientific management revolve
round the problems at the operational level and do
not focus on the management of an organization
from a manager’s point of view. These principles
focus on the solutions of problems from an
engineering point of view.
 The proponents of scientific management were of
the opinion that people were rational and were
motivated primarily by the desire for material gain.
Taylor and his followers overlooked the social needs
of workers and overemphasized their economic and
physical needs.
 Scientific management theorists also ignored the
human desire for job satisfaction. Since workers are
more likely to go on strike over factors like working
conditions and job content rather than salary,
principles of scientific management, which were
based on the “rational worker” model, became
increasingly ineffective.
Administrative Theory
While the proponents of scientific management developed
principles that could help workers perform their tasks more
efficiently, the administrative management theory focused
on principles that could be used by managers to coordinate
the internal activities of organizations. The most prominent
of the administrative theorists was Henri Fayol.
Henry Fayol (1849–1925), a prominent European
management theorist, developed a general theory of
management. Fayol believed that with scientific forecasting
and proper methods of management, satisfactory results were
inevitable. Fayol was unknown to American managers and
scholars until his most important work, “General and
Industrial Management,” was translated into English in 1949.
Many of the managerial concepts that we take for granted
today were first articulated by Fayol.
Other prominent exponents include Chester I Barnard
and Colnel Lyndall Urwick (a British management
expert).
Fayol’s Unified Concept
As the managing director of a mining company, Fayol
developed a unified concept of management and broad
administrative principles applicable to general and higher
managerial levels. He used the word ‘administration’ for
what we call management. Fayol focused on managerial
levels and the organisation as a whole. His perspective
extended beyond the shop level and the physical production
processes and was macro in nature. In his French book
‘Industrial and General Management’, he writes that all
activities of business enterprises could be divided into six
groups: technical, commercial, financial, accounting, security
and administrative (or managerial). He focused on the
managerial activity and propounded that fundamental
functions of any manager consists of planning, organising,
commanding, coordinating and controlling. He emphasised
that the process of management is the same at any level of
an organisation and is common to all types of organisations.
He also presented the following 14 principles of management
as general guidelines for management practice:
(i) Division of Labour: Specialisation in the nature of
work leads to division of labour. This results in
efficiency in the use of labour.
(ii) Authority and Responsibility: These are directly
related. Responsibility flows from authority. This
authority is derived from the official position in the
organisation and the personal factors such as
intelligence, work attitude, personal traits, experience
and the moral worth of the person holding the
position.
(iii) Discipline: It is the respect for following laid down
norms for achieving obedience, application, involve-
ment as well as an outward mark of respect. Without
discipline no unit can function properly. Authority,
discipline and personality are closely related.
(iv) Unity of Command: This means that employees
should receive orders from one superior authority
only, i.e., accountability to one authority only. This
authority is distributed among various levels in the
hierarchy of positions in the organisation.
(v) Unity of Direction: Activities in an enterprise must
be organised to achieve set goals. Each group of
activities with the same objective must have one
authority and one plan.
(vi) Subordination of Individual to Organisational
Interest: If this is not so it results in the
malfunctioning of the organisation and gives rise to
conflicts.
(vii) Remuneration: Employees work for remuneration;
therefore, remuneration must be fair. It is an important
motivating factor.

(viii) Centralization: Depending on the situation, an
organization should adopt a centralized or
decentralized approach to make optimum use of its
personnel.
(ix) Scalar chain: This refers to the chain of authority
that extends from the top to the bottom of an
organization. The scalar chain defines the
communication path in an organization.
(x) Order: This refers to both material and social order
in organizations. Material order indicates that
everything is kept in the right place to facilitate the
smooth coordination of work activities. Similarly,
social order implies that the right person is placed
in the right job (this is achieved by having a proper
selection procedure in the organization).
(xi) Equity: All employees should be treated fairly. A
manager should treat all employees in the same
manner without prejudice.
(xii) Stability of tenure of personnel: A high labour
turnover should be prevented and managers should
motivate their employees to do a better job.
(xiii) Initiative: Employees should be encouraged to give
suggestions and develop new and better work
practices.
(xiv) Espirit de corps: This means “a sense of union.”
Management must inculcate a team spirit in its
employees.
Apart from a list of basic management principles, for
achieving good organisation and dealing with the numerous
facets of managing an organisation, he laid tremendous
emphasis on logic, rationality and consistency. Taylor
worked from the bottom of the hierarchy upward, whereas
Fayol worked from the apex downwards, with 4 management
centered’ philosophy.
Chester Barnard, who held a number of important
public service posts including President of New Jersey Bell
Telephone, has significantly influenced the theory and
practice of management for nearly half a century, through
his ideas expressed in his classic book ‘the functions of the
executive’. He believed that the most important function of
a manager is to promote cooperative effort towards goals of
the organisation. Cooperation depends on effective
communication and a balance between rewards to, and
contributions by, each employee.
Colonel L Urwick was a distinguished executive and
management consultant in U.K. He wrote a book entitled
‘the elements of administration’ in which he tried to assemble
the concepts and principles of Taylor, Fayol, Mooney, Railey
and other early management theorists.
Inspired by Fayol, Harold Koontz and Cyril O’Donnell
propounded a new school of thought known as the
management process school. They believe that management
Business Studies 21
is a dynamic process of performing the functions of planning,
organising, staffing, directing and controlling. These
‘functions’ and the principles, on which they are based, are
believed to have general and universal applicability.
Managers perform the same functions irrespective of their
levels and the difference, if any, will be in the degree of
complexity. These functions are applicable to all organisa-
tions wherever group effort is involved and the management
theory is not culture bound. In other words these functions
are all pervasive. For the same reason the management
process approach is also called the universal approach.
Limitations of Administrative Management
Like the scientific management school, the administrative
management school is also criticised on some grounds.
Many of the principles of this school, including those of
Fayol, are contradictory and have dilemmas. These principles
are no better than proverbs, which give opposite messages.
For example, the principle of unity of command contradicts
the principle of specialization or division of labour and the
principle of limited span of control, contradicts that the
number of organizational levels should be kept at a
minimum.
Further the principle of specialization is internally
inconsistent; for purpose, process, and place are competing
modes of specialization and to secure the advantages of
anyone mode, the organizer must sacrifice the advantages
of the other three modes. All modes cannot be followed
simultaneously while pursuing specialization.
Secondly, these principles are based on a few case
studies and they are not empirically tested. Thirdly, these
principles are stated as unconditional statements and valid
under all circumstances, which is not practicable. More and
more conditional principles of management are needed.
Fourthly, these principles result in the formation of
mechanistic organization structures, which are insensitive
to employees’ social and psychological needs. Such
structures inhibit the employees’ self-actualization and
accentuate their dependence on superiors.
BEHAVIOURAL APPROACH TO
MANAGEMENT THEORY
The behavioural school of management emphasized what
the classical theorists ignored i.e. the human element. While
classical theorists viewed the organization from a production
point of view, the behavioural theorists viewed it from the
individuals point of view—their attitudes, behaviours and
group process in the work place.
The behavioural approach emerged primarily as an
outcome of the Howthorne studies. Mary Parker Follett,
Elton Mayo and his associates, Abraham Maslow, Douglas
McGregor and Chris Argyris were the major contributors to
 22 Business Studies
this school. They emphasized the importance of the human
element. These theories could easily be applied to the
management or organisations.
Abraham H. Maslow (1908-1970), psychologist,
theorized that people were motivated by a hierarchy of
needs. Maslow (1943) focused on human needs. His theory
rested on three assumptions. First, all of us have needs
which are never completely fulfilled. Second, through our
acts we try to fulfil our unsatisfied needs. Third, human
needs occur in the following hierarchical manner:
(i) physiological needs;
(ii) safety or security needs;
(iii) belonging needs or self-fulfilment needs.
According to Maslow, once needs at a specific level
have been satisfied, they no longer act as motivators of
behaviours. Then the individual strives to fulfill needs at
the next level. Managers who accepted Maslow’s hierarchy
of needs attempted to change their management practices so
that employees’ needs could be satisfied.
Human-Relations School
Elton Mayo is considered as the father of the human relations
movement, which later become organisational behaviour.
The other two important co-researchers of this school are
F.J. Roethlisberger and William J Dickson. They believed
that organisations always involve inter-relationships among
members and that it is the manager’s role to see that
relationships are as conflict-free as possible, in order to
accomplish the organisation’s objectives. They believed
that the human aspect of business organisations had been
largely ignored. They felt that satisfaction of psychological
needs should be the primary concern of the management.
Mayo, Roethlisberger and Dickson conducted studies,
at the Hawthorne, Illinois plant of Chicago Western Electric
Company, which became famous as the Hawthorne
experiments or studies later. They felt that, if the best work
environment could be determined (just as the best way to
perform the job could be determined by scientific
management), then workers would be more efficient and
become less tired. They also felt the importance of evaluating
the attitudes and reactions of workers to their jobs and their
environment. They attempted through several experiments
to determine the relationship between working conditions
and productivity. They set up test groups, for which changes
were made in lighting, frequency of rest periods, and working
hours and control groups for which no changes were made.
Mayo and others, in their initial lighting experiment,
came to the conclusion that some factors other than light
were responsible for increased productivity. From a follow
up interview of employees, they realised that people were
not leaving their feelings, attitudes, and emotions at home,
and employees were not at work simply for economic benefit.
But other dimensions also affected their performance. In a
final experiment they discovered that the workers had
developed their own idea of the level of output that was
fair. This informal standard of behaviour, called a norm, was
enforced by the work group to the point that output was
restricted. Any worker who produced more than that number
was pressurised by coworkers to comply with the norm.
Mayo and his colleagues arrived at two important
conclusions: (i) existence of strong informal groups (ii)
employees’ behaviour at work is affected by pan economic
factors. They revealed some inadequacies of the rational
and structured approaches of classical theory and the fallacy
of viewing all workers as rational and economic beings.
Thus evolved a social person view of employees from the
Hawthorne studies.
As against the rational economic view, the social person
view is that:
(i) individuals are motivated by social needs;
(ii) people obtain their sense of identity through
Interpersonal relationships;
(iii) because of industrial progress and routinisation, the
work has become dissatisfying;
(iv) employees are more responsive to the social forces
of peer groups than to incentives and controls of
management;
(v) employees respond to provisions for their social
needs and acceptance offered by management. The
social person view of human relations school has
necessitated managerial strategies for improving the
human skills of the supervisors, replacing individual
incentive plans by group incentive plans; focusing
on employees’ feelings and attitudes, and their effect
on productivity rather than managerial functions.
The concept of social manager has evolved, and the
social manager assumes the role of helper and coach,
and carries out human relations programs shunning
a stem and aloof attitude.
This theory, virtually, looked beyond organisational
factors (i.e., environmental factors) and aimed at as conflict-
free inter-relationships, as possible, among members of the
organisation. Drawing heavily from social psychology and
individual psychology, this theory expected the manager to
be a leader and supervisor of a rather tolerant (democratic
and participative) type and considered every employee to
be a unique socio-psychological being. The lesson of
Hawthorne experiments was that the psychological needs of
individuals have a significant impact on group performance
and that employees often mis-state their concerns.
As a corollary it was also learnt that when employees
are given special attention, output is likely to increase
regardless of the actual changes in the working conditions
(Hawthorne Effect). In other words, the result supported the

thesis that reasonable satisfaction of the needs and desires
of employees will lead to greater output.
Human relations approaches laid greater emphasis on
the work group and need for better communication between
supervisors and workers. The Human relations movement is
looked as a trend towards power equalisation.
It is an attempt for reduction in the power and status
differential between supervisors and subordinates. It is
looked upon as a continuing reaction against the emphasis
of programmed work, rigid hierarchical control and a high
degree of specialisation of Taylorism. However, they did
not reject all the classical ideas. The neoclassical writers
believed that treating employees like individuals (neo-
classical) would make them act according to the principles
(classical). They said “treat employees as if they are important
and give the workers the feeling of participation.”
Limitations of Human Relation School
Human relations school has several limitations as well. It is
considered to be a swing in the opposite direction of classical
theory. In other words, they saw only human variables as
critical and ignored other variables. Every organisation is
made of a number of diverse social groups with incompatible
values and interests. These groups might cooperate in some
spheres and compete and clash in others. It is practically
impossible to satisfy everybody and turn the organisation
into a big happy family.
This approach over-emphasises the importance of
symbolic rewards which may not be appreciated by
recipient’s ‘significant others’ and underplays the role of
material rewards. Further, the assumption about formation
of informal groups is unrealistic and not very common.
Informal groups can only make the worker’s day more
pleasant and not his repetitive, monotonous and uncreative
task. Workers do not come to the organisation to seek
affection and affiliation. Techniques of human relations
school try to play a trick on workers to create a false sense
of happiness, and are not really concerned with their real
well being.
There is a difference between allowing workers to
participate in making decisions and letting workers think
that they are participating. In this sense, this approach is
also production-oriented and not employee-oriented. The
unqualified application of these techniques in all situations
is not possible.
For example, where secrecy of decision is required and
when decisions have to be made quickly on emergent basis,
this approach may not work. This approach makes an
unrealistic demand on the supervisor and expects him to
give up his desire for power. The assumptions, that the
satisfied workers are more productive, and that improved
working conditions and human relations lead to increased
Business Studies 23
output may, not always be true. Above all, human behaviour
is not the total field of concern of the manager.
Hum an relations m ovement accepted scientific
management’s central goal of efficiency, but focused on
individuals and on small-group processes rather than large
organisations. It stressed communication, leadership and
interpersonal relations, particularly between employees and
their bosses.
Like scientific management efforts, research in human
relations, focused on the lower levels of organisation rather
than on the middle and upper groups, and hence lacked
comprehensive scope. Behaviour scientists became interested
in companies as research sites, but they tended to use their
findings to build their own disciplines, or to establish a
science of human relations rather than a science of
management.
Thus the human relations movement accepted many of
the assumptions of the scientific management thinkers, and
it did not achieve a major breakthrough in management
theory.
QUANTITATIVE APPROACHES TO
MANAGEMENT THEORY
The management perspective emerged during the world
war II. During the war, the army (in the U.S and U.K)
brought together managers, government officials and
scientists to help it deploy its resources more efficiently and
effectively. These experts used some of the mathematical
approaches to management devised earlier by Taylor and
Gantt to solve the logistical problems encountered by the
army during the war.
The quantitative approach to management includes the
application of statistics, optimization models, information
models and computer simulation. More specifically, this
approach focuses on achieving organizational effectiveness
through the application of mathematical and statistical
concepts. The three main branches of the quantitative
approach are:
(i) management science,
(ii) operations management, and
(iii) management information system.
(i) Management science: The management science
approach stresses the use of mathematical models
and statistical methods for decision-making. It
visualizes management as a logical entity, the action
of which can be expressed in terms of mathematical
symbols, relationships and measurement data.
Another name commonly used for management
science is operations research. Recent advances in
computers have made it possible to use complex
mathematical and statistical models in the
24 Business Studies
management of organizations. Management science
techniques are widely used in the following areas.
Capital budgeting and cash flow management: It
includes the following.
 Production scheduling.
 Developing product strategies.
 Planning for human resources development
programs.
 Maintenance of optimal inventory levels.
 Aircraft scheduling.
Various mathematical tools like the waiting-line
theory or queering theory, linear programming, the
Program Evaluation Review Technique (PERT), the
critical path method (CPM), the decision theory, the
stimulation theory, the probability theory, sampling,
time series analysis, etc., have increased the
effectiveness of managerial decision-making. To
apply a quantitative approach to decision-making,
individuals with mathematical, statistical, engineer-
ing, economics and business background and skills
are required. Since one person cannot have all these
skills the quantitative method requires a team
approach to decision-making.
This approach has been criticized for its overemphasis
on mathematical tools. Many managerial activities
cannot be quantified because they involve human
beings who are governed by many irrational elements
as well.
(ii) Operations Management: Operations management
is an applied form of management science. It deals
with the effective management of the production
process and the timely delivery of an organization’s
products and services. Operations management is
concerned with:
(i) inventory management,
(ii) work scheduling,
(iii) production planning,
(iv) facilities location and design, and
(v) quality assurance.
The tools used by operations managers are fore-
casting, inventory analysis, materials requirement,
planning systems, networking models, statistical
quality control methods, and project planning and
control techniques.
(iii) Management information systems (MIS):
Management information system focuses on
designing and implementing computer-based
information systems for business organizations. In
simpler term, the MIS converts raw data into
information and provides the needful information to
each manager at the right time in the needed form.
MODERN APPROACHES TO
MANAGEMENT THEORY
Besides the classical and behavioural approaches to
management, there are certain modern approaches to
management, viz. the systems theory and the contingency
theory. These two approaches have significantly shaped
modern management thought and are discussed below.
System Approach
The Systems Approach to management was developed
during 1950. Management thinkers such as Kenneth
Boulding, Bertalanffy, R.A. Johnson and Chester Barnard
made a significant contribution to the development of the
Systems Approach to management.
The term ‘system’ may be defined as a composite entity
consisting of a number of elements which as inter-dependent
and inter-acting. These elements are referred to as the sub-
systems. Each system is distinguished from the other systems
by a boundary, which defines its outer limits. The boundary
of a system is determined by the intensity of interactions
and inter-dependencies of its elements. The world outside
the boundary of the system is known as its environment.
Considering the relationship between a system and its
environment, the systems may be classified into two
categories:
1. Closed system: A closed system interacts least with
its environment. It is self-contained and does not
depend much on the other systems. It does not
receive any input from the other systems. It is a non-
adaptive system.
2. Open system: An open system actively interacts
with the other systems and establishes exchange
relationships. Such systems are often forced to adapt
themselves with the external environment in order
to survive and grow.
Under the systems approach, the management can be
best described in the following way:
1. Management is a social system: Management is an
art of getting things done through others. It is
practised by the people (managers), through the
people (operating staff) and for the people
(consumers and the society at large). Thus, the
importance of human factor in management cannot
be ignored. Hence, management is a social system.
2. Management is an open system: Management, like
any other social system, is an open system. Being an
open system, it interacts with its environment. Out
of this interaction, it avails various resources and
allocates and combines them to produce desirable
output, which is supplied to the environment.

3. Management is an adaptive system: Management
seeks to maintain a continuous equilibrium of an
enterprise with the external environment - economic,
social, political, cultural and technological, in order
to ensure not only the survival and growth of the
enterprise but also to make it fulfil the aspirations
of the society, in the best possible manner.
4. Management is a dynamic system: Nothing ever is
permanent except change. The environment, in which
management functions, is dynamic in nature. Thus,
management needs to continuously adjust to the
changing environment. Thus, the success of a
management can be best evaluated in terms of its
adaptability to the environment.
5. Management system is probabilistic: Management
system is probabilistic and not deterministic. This is
because the application of theories and principles as
laid down by the management theorists will not
always yield the same results. These principles do
not have universal applicability, since human
behaviour is dynamic and differ from person to
person.
6. Management system is multi-dimensional:
According to the systems theory, management has
both, micro and macro approach. At the macro level,
it can be applied to suprasystem, i.e., a business
system as a whole and at the micro level; it can be
applied to an organisation. It can also be applied to
the sub-systems of an organisation.
7. Management is an integrated system: Systems
approach to management takes an integrated view
of the function of managing. There is no simple
cause-effect relationship in management, rather each
managerial phenomena is the result of a number of
inter-related and inter-dependent factors. The
management integrates these factors in order to view
these phenomena in totality.
Systems approach to management provides an integrated
of managing. It considers the management in its totality in
relation to its environment. Thus, it permits both - analysis
and synthesis, differentiation and integration - right from
primary sub-system level to the macro system level. However,
the systems philosophy has been criticised as being too
abstract, vague and over-conceptual.
Contingency Approach
The contingency approach, also called situational approach,
was developed by managers, consultants and researchers
who tried to apply the concepts of the major schools of
thought to the real-life situations. When methods, highly
effective, in one situation failed to work in other situations,
they sought an explanation. Why did an organizational
Business Studies 25
development program work brilliantly in one situation and
fail miserably in another? The advocates of the contingency
approach had a logical answer - results differ because
situations differ; a technique that works in one case will not
necessarily work in all the cases.
“When a sub-system in an organisation behaves in
response to another system or sub-system, we say that
response is contingent on the environment. Hence, a contin-
gency approach is an approach where the behaviour of one
sub-unit is dependent on its environmental relationship to
other units or sub-units that have control over the
consequences desired by that sub-unit.”—Tosi and Hammer
As per the above statement, contingency approach has
the following features:
1. Management action is contingent on certain action
outside the system or sub-system of an organisation,
as the case may be.
2. Organisational action should be based on the
behaviour of action outside the system so as to inte-
grate the organisation with its external environment.
3. Since the organisation-environment relationship is
not static, no action can be universal. It varies from
situation to situation.
In conclusion it can be said that the managerial action
largely depends upon the total strength and weakness of the
organisation and opportunities and threats which lie out in
the environment of each organisation.
According to the contingency approach, a manager’s
task is to identify which technique will, in a particular
situation, under particular circumstances and at a particular
time, best contribute to the attainment of management goals.
Managers have to find a “best fit’ between the demands of:
1. The tasks; 2. The people; and 3. The environment.
For example, where workers need to be encouraged to
increase productivity, a classical theorist may prescribe a
work simplification scheme while a behavioural scientist
may seek to create a psychologically motivating climate
and recommend some approach like job enrichment. But
the manager trained in the contingency approach will ask,
“Which method will work best here?”
1. If the workers are unskilled and training facilities
and resources are limited, then work simplification
will be the best option.
2. On the other hand, with skilled workers driven by
pride in their abilities, a job-enrichment program
might be more effective.
On the whole, contingency approach represents an
important turn in modern management theory, because it
portrays each set of organizational relationships in its unique
circumstances.
(2715) Business Studies—4
 26 Business Studies
FUNCTION OF MANAGEMENT
PLANNING
Introduction and Meaning
When management is reviewed as a process, planning is the
first function performed by a manager. The work of a manager
begins with the setting of objectives of the organization
and goals in each area of the business.
Planning is a tool in the hands of a manager who wants
to face problems created by change. Successful managers
deal with foreseen problems and unsuccessful managers
struggle with unforeseen problems. The difference lies in
planning. Every enterprise which strives to survive and
grow must place heavy emphasis upon planning.
A planner foresees opportunities and devises ways and
means to take advantage from them. There may be cases
where little bit of planning helps in achieving objectives.
This may happen in favourable situations. In a competitive
business world a manager cannot wait for favourable
circumstances, he has to decide in the face of uncertainties.
There is no place for guesswork or chance. The need is for
proper planning.
Planning means looking ahead. It is deciding in advance
what is to be done. Planning helps in determining the
course of action to be followed for achieving various
organisational objectives. It is a decision in advance; what
to do, when to do, how to do and who will do a particular
task. Planning is a process which involves ‘thinking before
doing’. It is concerned with a mental state of the manager.
He thinks before undertaking a work. Other functions of
management like organising, controlling and directing are
also undertaken after proper planning.
In the past four decades every type of enterprise has
shown a tremendous interest in planning. In the present
economic, technological, political and social set up planning
is essential for the survival of an enterprise. The change and
growth bring new opportunities but they also bring more
risks. The task of planning is to minimise risk while taking
advantage of opportunities.
Definitions
The words ‘planning’ and ‘a plan’ may also be taken as
similar but their meanings are different. A plan is a
commitment to particular course of actions whereas planning
is an activity consisting of a process.
To clear the meaning of planning further, some
definitions have been discussed:
George Terry, “Planning is the selecting and relating
of facts and the making and using of assumptions regarding
the future in the visualization and formulation of proposed
activities believed necessary to achieve desired results.’’
According to Terry planning is based on certain assumptions
which are required to formulate policies of the business.
The purpose of planning is to achieve business objectives.
Hart, “The determination in advance of a line of action
by which certain results are to be achieved.” Planning is the
deciding of a course required for reaching organisational
goals. The line of action is decided in advance so that
actual execution becomes easy later on.
Koontz and O’Donnell, “The selection from among
alternatives for future courses of action for the enterprise as
a whole and each department with it.” Although the exact
future can seldom be predicted and factors beyond control
may interfere with the best-laid plans, unless there is
planning, events are left to chance. It is an intellectually
demanding process and requires the selection of a course of
action.
Alfred and Beaty, “Planning is the thinking process,
the organised forecast, the vision based on fact and
experience that is required for intelligent action.” Planning
is a process in which decisions are taken in advance. The
pros and cons of the decisions and their implications in the
future are discussed beforehand. A wrong decision may
create difficulties for the management and may result in
financial loss too.
Louis A. Allen, “Management planning involves the
development of forecasts, objectives, policies, programmes,
procedures, schedules and budgets.” According to Allen,
planning is essentially deciding about future. The ways and
means required to achieve organisational goals form the
essential part of planning.
George B. Galloway, “Planning is the opposite of
improvising. In simple words, it is organised foresight plus
corrective hindsight,... Conceived as a process, planning
embraces a series of steps:
(i) the determination of objectives to be sought;
(ii) research to understand the problem;
(iii) the discovery of alternative solutions;
(iv) policymaking, choosing between alternatives,
including the frequent choice of doing nothing;
(v) the detailed execution of the chosen alternative
known in physical planning as layout or design.”
As per this view, planning starts with setting up of
objectives and leads to the execution of various policies. A
good planner chooses the best method of doing a thing for
achieving the desired results.

Nature of Planning
1. Planning is goal-oriented: Every plan must
contribute in some positive way towards the
accomplishment of group objectives. Planning has
no meaning without being related to goals.
2. Primacy of Planning: Planning is the first of the
managerial functions. It precedes all other
management functions.
3. Pervasiveness of Planning: Planning is found at all
levels of management. Top management looks after
strategic planning. Middle management is in charge
of administrative planning. Lower management has
to concentrate on operational planning.
4. Efficiency, Economy and Accuracy: Efficiency of
plan is measured by its contribution to the objectives
as economically as possible. Planning also focuses
on accurate forecasts.
5. Co-ordination: Planning co-ordinates the what, who,
how, where and why of planning. Without co-
ordination of all activities, we cannot have united
efforts.
6. Limiting Factors: A planner must recognise the
limiting factors (money, manpower etc.) and
formulate plans in the light of these critical factors.
7. Flexibility: The process of planning should be
adaptable to changing environmental-conditions.
8. Planning is an intellectual process: The quality of
planning will vary according to the quality of the
mind of the manager.
Importance of Planning
As a managerial function planning is important due to the
following reasons:
1. To manage by objectives: All the activities of an
organisation are designed to achieve certain
specified objectives. However, planning makes the
objectives more concrete by focusing attention on
them.
2. To offset uncertainty and change: Future is always
full of uncertainties and changes. Planning foresees
the future and makes the necessary provisions for it.
3. To secure economy in operation: Planning involves,
the selection of most profitable course of action that
would lead to the best result at the minimum costs.
4. To help in co-ordination: Co-ordination is, indeed,
the essence of management, and planning is the
base of it. Without planning it is not possible to co-
ordinate the different activities of an organisation.
5. To make control effective: The controlling function
of management relates to the comparison of the
Business Studies 27
planned performance with the actual performance.
In the absence of plans, a management will have no
standards for controlling other’s performance.
6. To increase organisational effectiveness: Mere
efficiency in the organisation is not important; it
should also lead to productivity and effectiveness.
Planning enables the manager to measure the
organisational effectiveness in the context of the
stated objectives and take Notes further actions in
this direction.
Advantages of Planning
 All efforts are directed towards desired objectives or
results. Unproductive work and waste of resources
can be minimised.
 Planning enables a company to remain competitive
with other rivals in the industry.
 Through careful planning, crisis can be anticipated
and mistakes or delays avoided.
 Planning can point out the need for future
change and the enterprise can manage the change
effectively.
 Planning enables the systematic and thorough
investigation of alternative methods or alternative
solutions to a problem. Thus we can select the best
alternative to solve any business problem.
 Planning maximises the utilisation of available
resources and ensures optimum productivity and
profits.
 Planning provides the ground work for laying down
control standards.
 Planning enables management to relate the whole
enterprise to its complex environment profitably.
Disadvantages of Planning
 Environmental factors are uncontrollable and
unpredictable to a large extent. Therefore planning
cannot give perfect insurance against uncertainty.
 Planning is many times very costly.
 Tendency towards inflexibility to change is another
limitation of planning.
 Planning delays action.
 Planning encourages a false sense of security against
risk or uncertainty.
Planning Process
The planning process involves the following steps:
1. Analysis of External Environment: The external
environment covers uncontrollable and unpredictable
factors such as technology, market, socio-economic
28 Business Studies
climate, political conditions etc., within which our
plans will have to operate.
2. Analysis of Internal Environment: The internal
environment covers relatively controllable factors
such as personnel resources, finance, facilities etc.,
at the disposal of the firm. Such an analysis will
give an exact idea about the strengths and weakness
of the enterprise.
3. Determination of Mission: The “mission” should
describe the fundamental reason for the existence of
an organisation. It will give firm direction and make
out activities meaningful and interesting.
4. Determination of Objectives: The organisational
objectives must be spelled out in key areas of
operations and should be divided according to
various departments and sections. The objectives
must be clearly specified and measurable as far as
possible. Every member of the organisation should
be familiar with its objectives.
5. Forecasting: Forecasting is a systematic attempt to
probe into the future by inference from known facts
relating to the past and the present. Intelligent
forecasting is essential for planning. The management
should have no stone unturned in reducing the
element of guesswork in preparing forecasts by
collecting relevant data using the scientific
techniques of analysis and inference.
6. Determining Alternative course of Action: It is a
common experience of all thinkers that an action
can be performed in several ways, but there is a
particular way which is the most suitable for the
organisation. The management should try to find
out these alternatives and examine them carefully in
the light of planning premises.
7. Evaluating Alternative Courses: Having sought out
alternative courses and examined their strong and
weak points, the next step is to evaluate them by
weighing the various factors.
8. Selecting the Best: The next step - selecting the
course of action is the point at which the plan is
adopted. It is the real point of decision-making.
9. Establishing the sequence of activities: After the
best programme is decided upon, the next task is to
work out its details and formulate the steps in full
sequences.
10. Formulation of Action Programmes: There are
three important constituents of an action plan:
 The time-limit of performance.
 The allocation of tasks to individual employees.
 The time-table or schedule of work so that the
functional objectives are achieved within the
predetermined period.
11. Reviewing the planning process: Through
feedback mechanism, an attempt is made to secure
that which was originally planned. To do this we
have to compare the actual performance with the
plan and then we have to take necessary corrective
action to ensure that actual performance is as per the
plan.
Principles of Planning
A number of fundamental principles have been devised
over the years for guiding managers undertaking planning.
Some of these principles are discussed as under:
1. Principle of Contribution to Objectives: All types
of plans are prepared to achieve the objectives of
the organization. Both major and derivative plans
are prepared to contribute to the objectives of the
enterprise. Planning is used as a means to reach the
goals.
2. Principles of Primacy of Planning: This principle
states that planning is the first or primary function
of every manager. He has to plan first and then
proceed to carry out other functions. Other
managerial functions are organised to reach the
objectives set in planning.
3. Principle of Planning Premises: In order to make
planning effective, some premises or presumptions
have to be made on the basis of which planning has
to be undertaken. Plans are, generally not properly
structured the reason being that planning premises
are not properly developed. This principle lays
emphasis on properly analysing the situation which
is going to occur in future.
4. Principle of Alternatives: Planning process involves
developing of many alternatives and then selecting
one which will help in achieving desired business
goals. In the absence of various alternative, proper
planning will be difficult.
5. Principle of Timing: Plans can contribute
effectively to the attainment of business goals if
they are properly timed. Planning premises and
policies are useless without proper timing.
6. Principle of Flexibility: This principle suggests
flexibility in plans if some contingencies arise. The
plans should be adjusted to incorporate new
situations. The dangers of flexibility should be kept
in mind. The changes may upset the earlier
commitments. So the cost of changes should be
compared to the benefits of flexibility.
7. Principle of Commitment: There should be a time
frame for meeting the commitments made. This will
ensure the achievement of targets in time.

8. Principle of Competitive Strategies: While
formulating own plans a manager should keep in
mind the plans of competitors. The plans should be
framed by thinking of what the competitors will do
in similar situations.
Types of Planning
There are three types of planning. These are identified on
the following dimensions:
1. On the basis of coverage of activities
(i) Corporate planning
(ii) Functional planning
2. On the basis of Importance of Contents.
(i) Strategic Planning.
(ii) Operational Planning
3. On the basis of time period involved.
(i) Long term planning.
(ii) Short-term Planning
1. Corporate Planning and Functional Planning
We have seen earlier that planning activity is pervasive and
can be undertaken at various levels of an organization. It
may be for the organization as a whole or for its different
functions. Thus, based on the coverage of activities, there
may be planning for the organization as a whole, known as
corporate planning or for its different functions, known as
functional planning.
(a) Corporate Planning: Corporate planning is
undertaken at the top level, also known as Notes
corporate level, and covers the entire organizational
activities. It is of integrative nature and integrates
entire planning process of the organization. The
basic focus of corporate planning is to determine
the long-term objectives of the organization as a
whole and to generate plans to achieve these
objectives bearing in mind the probable changes
in the environment. Corporate planning, generally,
has long-term orientation and provides basis for
functional planning.
(b) Functional Planning: Functional planning is of
segmental nature and is undertaken for each major
function of the organization like production/
operations, marketing, finance, human resource, etc.
At the second level, functional planning is
undertaken for subfunctions within each major
function. For example, marketing planning is
undertaken at the level of marketing department
and to put marketing plan in action, planning at
subfunctions of marketing like sales, product
promotion, marketing research, etc. is undertaken.
Business Studies 29
A basic feature of functional planning is that it is
derived out of corporate planning and, therefore, it
should contribute to the latter. This contribution is
achieved by integrating and coordinating
functional planning with corporate planning.
2. Strategic Planning and Operational Planning
On the basis of importance of contents, planning may be
divided into strategic planning and operational planning.
(a) Strategic Planning: Strategic planning involves
setting long-term direction of the organization in
which it wants to proceed in future. It is the process
of deciding long-term objectives of the organization
and defining where the organizational resources
and efforts should be put to achieve organizational
objectives. Strategic planning deals with strategic
issues like type of business to be undertaken,
diversification of business into new lines, type of
products to be offered, and so on.
This way, strategic planning encompasses all the
functional areas of business and is effected within
the existing and long-term framew ork of
environmental factors. Strategic planning also
involves rigorous analysis of various environmental
factors to relate the organization relates to its
environment.
(b) Operational Planning: Operational planning, also
known as tactical planning, is the process of
deciding the most effective use of the resources
already allocated through strategic planning and
to develop a control mechanism to ensure effective
implementation of the actions so that organizational
objectives are achieved. Usually operational
planning covers one year or so. It aims at sustaining
the organization in its production/generation and
distribution of current products (goods and services)
to the existing markets. Operational planning
answers the questions about a particular action as
follows:
(i) Why is the action required?
(ii) What action is to be taken?
(iii) What will the action accomplish?
(iv) What are the likely results of the action?
(v) What conditions must be met in putting the
action in operation?
Operational planning is undertaken within the
framework of the strategic planning. Examples of operational
planning are adjustment of production within given capacity,
increasing the efficiency of operating activities through
analysis of past performance, budgeting future costs, specific
details of future short-term operations, and so on.
 30 Business Studies
Difference between Strategic Planning and
Operational Planning
Apart from the period of time involved in strategic planning
and operational planning, there are certain differences
between the two. The major differences between the two are
as follows:
(a) Range of Choice: Strategic planning guides the
choice among the broad directions in which the
organization seeks to move and allocation of its
financial, physical, and human resources over future
specified period of time. Operational planning, on
the other hand, focuses on the ways and means in
which each of the individual functions may be
programmed so that progress may be made towards
the attainment of organizational objectives.
(b) Type of Environment: The type of environment
for two types of planning is different. Strategic
planning takes into account the external
environment and tries to relate the organization
with it. The nature of external environment, thus,
is of prime concern of strategic planners.
Operational planning mostly focuses on internal
organizational environment so as to make the
effective use of given resources.
(c) Focus: Strategic planning focuses on setting long-
term trend and direction for managerial actions.
Focus of operational planning is on making
effective use of organizational resources allocated
by strategic planning process.
(d) Sequence of Formulation: Strategic planning
precedes operational planning and the latter is
primarily concerned with the implementation of
the former. Therefore, operational planning is based
on strategic planning.
(e) Level of Formulation: Strategic planning is
formulated by top-level management with the
support of specified planning staff in the
organization. At this level, managers can take an
overall view of the organization and have necessary
capability to relate the organization with its
environment.
Operational planning is usually spread over a wide
range within the organization and is generally
performed by operating managers with the help of
the subordinate staff.
3. Long-term Planning and Short-term Planning
Planning is concerned with future course of action. This
may be of long term or short term. Thus, there are long-term
planning and short-term planning
(a) Long-term Planning: Long-term planning is of
strategic nature and involves more than one year
period, usually 3-5 years though period of 5 years
is more common in Indian context. Long-term
planning usually covers all the functional areas of
the business and is undertaken within the existing
and long-term future environmental scenario. In
the long-term planning process, high emphasis is
placed on analysis of environmental factors.
Sometimes, basic changes in the organization like
change in organizational vision and mission, major
change in organization structure, change in key
personnel of the organization, etc. become the
significant factor for long-term planning.
(b) Short-term Planning: Short-term planning usually
covers one year. This aims at making effective use
of organizational resources—financial, physical, and
human resources. Short-term planning directly and
immediately affects functional areas—production,
marketing, finance, etc.
Business Forecasting
In order to formulate accurate plans, managers have to find
out the likely behaviour of relevant factors in future. This
is done to some extent by making suitable forecast through
business forecasting (simply known as forecasting) which is
defined as follows:
Forecasting is the process of estimating the relevant
events of future, based on the analysis of their past and
present behaviour. On the basis of the definition, the
following features of forecasting can be identified:
1. Forecasting is related to future events.
2. Forecasting defines the probability of happening of
future events. Therefore, happening of future events
can be precise only to a certain extent.
3. Forecasting is made by analyzing the past and
present relevant events, that is, taking those factors
which are relevant for the functioning of an
organization.
4. The analysis of various factors may require the use
of various statistical tools and techniques. However,
personal observations can also help in the process.
DECISION MAKING
Meaning and Definition
The word decision has been derived from the Latin work
“decider” which means “cutting off”. Thus, decision involves
cutting off of alternatives between those that are desirable
and those that are not desirable. A decision is the selection
from among alternatives. It is a solution selected after

examining several alternatives and decisive because the
decider foresees that the course of action he selects will be
more than the others to further his goals and will be
accompanied by the few est possible objectionable
consequences. Decision is a kind of choice of a desirable
alternative.
A few definitions of decision making are given
below:
In the words of Ray A Killian, “A decision in its
simplest form is a selection of alternatives”.
Dr. T.G. Glover defines decision “as a choice of
calculated alternatives based on judgement”.
In the words of George R. Terry, “Decision making is
the selection based on some criteria from two or more
possible alternatives”.
Felix M. Lopez says that “A decision represents a
judgement; a final resolution of a conflict of needs, means
or goals; and a commitment to action made in face of
uncertainty, complexity and even irrationally”.
According to Rustom S. Davar, “Decision-making may
be defined as the selection based on some criteria of one
behaviour alternative from two or more possible alternatives
to decide means to cut off or in practical content to come
to a conclusion”.
Fremont A. Shull, Andrew L Delbecq and Larry L
Cummings define decision making as “a conscious human
process involving both individual and social phenomenon
based upon factual and value premises which concludes
with a choice of one behavioural activity from among one
or more alternatives with the intention of moving toward
some desired state of affairs”.
From the above definitions, we can conclude that,
Decision Making involves the process of establishing goals,
tasks and searching for alternatives for a decision problem.
Types of Decisions
Programmed and Non-programmed Decisions: Herbert
Simon has grouped organizational decisions into two
categories based on the procedure followed. They are:
Programmed decisions: Programmed decisions are
routine and repetitive and are made within the framework
of organizational policies and rules. These policies and
rules are established well in advance to solve recurring
problems in the organization. Programmed decisions have
short-run impact. They are, generally, taken at the lower
level of management.
Non-programmed Decisions: Non-programmed
decisions are decisions taken to meet non-repetitive
problems. Non-programmed decisions are relevant for solving
unique/ unusual problems in which various alternatives
Business Studies 31
cannot be decided in advance. A common feature of non-
programmed decisions is that they are novel and non-
recurring and therefore, readymade solutions are not
available. Since these decisions are of high importance and
have long-term consequences, they are made by top level
management.
Strategic and Tactical Decisions: Organizational
decisions may also be classified as strategic or tactical.
Strategic Decisions: Basic decisions or strategic
decisions are decisions which are of crucial importance.
Strategic decisions a major choice of actions concerning
allocation of resources and contribution to the achievement
of organizational objectives. Decisions like plant location,
product diversification, entering into new markets, selection
of channels of distribution, capital expenditure etc. are
examples of basic or strategic decisions.
Tactical Decisions: Routine decisions or tactical
decisions are decisions which are routine Notes and
repetitive. They are derived out of strategic decisions. The
various features of a tactical decision are as follows:
 Tactical decision relates to day-to-day operation of
the organization and has to be taken very frequently.
 Tactical decision is mostly a programmed one
therefore, the decision can be made within the context
of these variables.
 The outcome of tactical decision is of short-term
nature and affects a narrow part of the organization.
 The authority for making tactical decisions can be
delegated to lower level managers because: first, the
impact of tactical decision is narrow and of short-
term nature and Second, by delegating authority for
such decisions to lower-level managers, higher level
managers are free to devote more time on strategic
decisions.
Decision Making Process
The decision making process is presented in the figure
below:
Specific Identification Search for Evaluation of
Objectives of Problems alternatives alternatives
Choice of
Results Action
alternatives
Fig. Decision Making Process
Specific Objective: The need for decision making arises
in order to achieve certain specific objectives. The starting
point in any analysis of decision making involves the
determination of whether a decision needs to be made.
 32 Business Studies
Problem Identification: A problem is a felt need, a
question which needs a solution. In the words of Joseph L
Massie “A good decision is dependent upon the recognition
of the right problem”. The objective of problem
identification is that if the problem is precisely and
specifically identified, it will provide a clue in finding a
possible solution.
A problem can be identified clearly, if managers go
through diagnosis and analysis of the problem.
1. Diagnosis: Diagnosis is the process of identifying a
problem from its signs and symptoms. A symptom
is a condition or set of conditions that indicates the
existence of a problem. Diagnosing the real problem
implies knowing the gap between what is and what
ought to be, identifying the reasons for the gap and
understanding the problem in relation to higher
objectives of the organization.
2. Analysis: Diagnosis gives rise to analysis. Analysis
of a problem requires:
(a) Who would make decision?
(b) What information would be needed?
(c) From where the information is available?
Analysis helps managers to gain an insight into the
problem.
Search for Alternatives: A problem can be solved in
several ways; however, all the ways cannot be equally
satisfying. Therefore, the decision maker must try to find
out the various alternatives available in order to get the
most satisfactory result of a decision. A decision maker can
use several sources for identifying alternatives:
(a) His own past experiences
(b) Practices followed by others and
(c) Using creative techniques
Evaluation of Alternatives: After the various
alternatives are identified, the next step is to evaluate them
and select the one that will meet the choice criteria, the
decision maker must check proposed alternatives against
limits, and if an alternative does not meet them, he can
discard it. Having narrowed down the alternatives which
require serious consideration, the decision maker will go for
evaluating how each alternative may contribute towards the
objective supposed to be achieved by implementing the
decision.
Choice of Alternative: The evaluation of various
alternatives presents a clear picture as to how each one of
them contribute to the objectives under question. A
comparison is made among the likely outcomes of various
alternatives and the best one is chosen.
Action: Once the alternative is selected, it is put into
action. The actual process of decision making ends with the
choice of an alternative through which the objectives can
be achieved.
Results: When the decision is put into action, it brings
certain results. These results must correspond with objectives,
the starting point of decision process, if good decision has
been made and implemented properly. Thus, results provide
indication whether decision making and its implementation
is proper.
Characteristics of Effective Decisions
An effective decision is one which should contain three
aspects. These aspects are given below:
1. Action Orientation: Decisions are action-oriented
and are directed towards relevant and controllable
aspects of the environment. Decisions should
ultimately find their utility in implementation.
2. Goal Direction: Decision making should be goal-
directed to enable the organization to meet its
objectives.
3. Effective in Implementation: Decision making
should take into account all the possible factors not
only in terms of external context but also in internal
context so that a decision can be implemented
properly.
Rationality in Decision Making
A rational decision is one that is based on logical reasons
and facts. Thus, it involves appropriate means for achieving
appropriate ends. In establishing means-ends relationship,
two concepts may be applied: maximization and
optimization. These concepts are contrasting. As a result,
two models of decision making have emerged which put
different emphasis on rationality in decision making. These
are economic man model and administrative man model.
1. Economic Man Model
The classical approach to decision making in economics
uses economic man model and treats the decision maker as
an economic man who is completely rational.
Decision making based on economic man model has
the following features:
(a) The decision making is completely rational in the
means-ends sense. Economic man always identifies
clearly the ends to which he wants to reach and the
means which are available for the purpose.
(b) Economic man is rational in that he can order his
various preferences according to his Notes hierarchy
of values and make his choice so as to maximize
some desired value. In organizational context, this
desired value would be equivalent to achievement
of organizational objectives to the maximum extent.
Another random document with
no related content on Scribd:
raison,—vous aurez de fortes rentes;—mais, si vous donnez peu,
cela vous nuira.
—C’est moins beau chez les évêques,—car ils écorchent la peau
—aux prêtres qui ont des revenus.—Ils vendent leur sceau—sur un
peu de papier.—Dieu sait s’il leur faut des gratifications!—et ils font
tellement de mal—qu’à un simple métayer—ils donnent la tonsure
pour de l’argent.—Le mal est le même—dans leur cour temporelle;—
elle y perd sa droiture—et l’Église en devient plus affligée.
—Maintenant il y aura beaucoup plus de clercs—pasteurs, dit-on,
—qu’il n’y a de brebis.—Chacun trompe les siennes.—On assure
qu’ils sont bien lettrés,—je ne puis jamais l’avouer.—Tous sont en
faute,—puisqu’ils vendent les sacrements—et de plus en plus les
messes.—Quand ils confessent les gens—laïques qui n’ont pas fait
du mal,—ils leur infligent de grandes pénitences—qu’on ne saurait
prévoir.
[74] Traduction.—Pendant cet heureux temps où les fleurs se
mêlent à la verdure, je m’en allais un jour tout seul, m’abandonnant
aux joyeuses pensées que fait naître l’amour, lorsque tout à coup
j’aperçus vers un endroit écarté un berger et une vive pastourelle,
jeune et belle. Ils étaient beaux et bien mis l’un et l’autre.
Je me cachai près d’eux, de manière que ni l’un ni l’autre ne pût
me voir. La jeune fille parla la première et dit: «Vraiment, Gui, mon
père veut me donner un mari vieux et cassé, mais riche.—Ce sera un
mauvais parti, dit Gui, si vous vous décidez à l’épouser, dame Flore,
et si vous oubliez celui sur qui était tombé votre choix.—Las, Gui,
depuis que je vous vois pauvre, j’ai changé de pensée.—Dame Flore,
un jeune homme pauvre est riche quand il est heureux, et bien plus
riche encore que ce vieil opulent qui, toute l’année, ne fait que se
plaindre; son or et son argent ne pourraient lui donner le bonheur, à
lui.—Ne vous chagrinez pas, mon cher Gui, et malgré ce que je viens
de vous dire, je vous porte un véritable amour. Ami, mon cœur vous
est tendre et fidèle.»
De l’endroit où j’écoutais, je m’avançai doucement près d’eux et
les trouvai enlacés dans les bras l’un de l’autre, s’embrassant, navrés
d’amour et de joie. En me montrant, je les saluai: mais sachez qu’ils
ne me rendirent même pas mon salut. La blonde bergère me dit d’un
air de fort mauvaise humeur: «Que Dieu confonde, Monsieur, ceux
qui viennent ainsi troubler les plaisirs de jeunes jouvenceaux.»
Mais, dis-je, pourquoi donc, dame Flore, êtes-vous plus irritée
contre moi que Gui lui-même?—Comment donc savez-vous ainsi nos
noms, Monsieur?—Eh! mon Dieu, Madame, parce que j’étais ici près
et que je les ai entendus, ainsi que votre conversation.—Monsieur,
nous ne sommes coupables ni de folie ni de trahison!—Bergère qui
se tient sur ses gardes s’en trouve toujours bien.» Je dis et me retirai
sans vouloir troubler plus longtemps leur doux accord.
 IX
DE LA PRÉÉMINENCE DES TROUBADOURS
SUR LES TROUVÈRES ET
LA LITTÉRATURE ÉTRANGÈRE

Les Cours d’amour.—Code d’amour.—Jugements des Cours d’amour.—

Les Cours d’amour en Provence.—Leur influence sur les mœurs.

Tels furent les principaux genres que les Troubadours créèrent et

que nous retrouvons dans leurs œuvres antérieures à l’éclosion de
la littérature française, qui se les appropria. Nous les retrouvons
également dans la poésie lyrique étrangère. Cela prouve, comme
nous venons de le dire, que les étrangers, aussi bien que les
Trouvères, les ont copiés. Circonstance heureuse, en somme, car, si
les Troubadours eurent le mérite d’être les initiateurs de la prosodie
et de la littérature poétique et lyrique sous leurs différentes formes,
les Trouvères eurent celui de les faire passer dans la langue d’oïl,
qui les transmit au français plus tard. Et cet héritage littéraire a
puissamment contribué à former des poètes incomparables comme
Corneille, Racine, Molière, Lamartine, Victor Hugo et tant d’autres
qui ont enrichi notre langue de chefs-d’œuvre et ont élevé le génie
littéraire de la France à son apogée.
L’influence de la poésie provençale sur les premiers essais de la
poésie française proprement dite se reconnaît: 1o à de nombreux
emprunts de mots et d’expressions; 2o à l’imitation complète de
presque toutes les formes de poésie lyrique employées par les
Troubadours. C’est surtout par la similitude des idées et des
sentiments en matière d’amour et de courtoisie que cette influence
s’affirme. Plus anciennement consacrés dans le Midi de la France,
ces sentiments faisaient le fond de cet ensemble d’opinions et de
mœurs qu’on appela l’esprit de la Chevalerie. A ce sujet, Albertet de
Sisteron, dans sa dispute avec le moine de Montaudon, revendique
pour le Midi la prééminence en fait de civilisation et la supériorité
dans l’art de bien dire et de s’exprimer purement:
Monges, d’aisso vos aug dir gran errausa
Que ill nostre son franc e de bel solatz,
Gent acuilleus e de gaia semblansa
Los trobaretz e dejus e dinatz;
E per els fo premiers servirs trobatz, etc...

Ces allégations, de même que l’antériorité de l’œuvre des

Troubadours, sont confirmées par les récits de Dante et de
Pétrarque, qui n’ont jamais fait aucune mention des poètes du Nord,
alors qu’ils citent à chaque instant ceux du Midi.
Enfin, les Espagnols, les Portugais, les Italiens, en parlant de la
littérature chevaleresque, la qualifient de limousine et de provençale,
jamais de champenoise ou de française. Nouvelle preuve du même
fait: que l’on ouvre un recueil de poètes français du XIIIe siècle, celui
d’Auguis ou tout autre, Leroux de Lincy ensuite, et l’Allemand
Matzner également, on sera frappé des emprunts de mots et des
expressions absolument provençales qui se trouvent dans les vers
des poètes du Nord. C’est dans les terminaisons que l’imitation est
surtout apparente. Évidemment, la popularité qu’avaient acquise les
œuvres des Troubadours avait gagné les provinces septentrionales
de la France, et ainsi s’expliquent les adaptations et les copies
même qui en furent faites un peu partout. Nous insistons sur cette
dernière remarque, parce que ce que nous disons du Nord de la
France peut s’appliquer également à l’Italie, à l’Espagne et à
l’Angleterre; les Provençaux peuvent justement se flatter, à ce sujet,
d’avoir été des modèles presque universels, et d’avoir été regardés
comme les classiques de la France littéraire du XIIIe siècle. Les
exemples suivants en donnent la preuve convaincante.
En ce qui concerne la langue anglaise, le poète Geoffroy
Chaucer[75] en fut le rénovateur. Allié à la famille royale, sa situation
lui permit de visiter les cours étrangères, d’y suivre l’influence
exercée par les Troubadours sur les mœurs, les usages et le
langage, et d’en faire profiter son pays. Dans son voyage en France,
il s’occupa principalement de la traduction des œuvres de nos
poètes et, plus tard, assistant en Italie au mariage de Violente, fille
de Galéas, duc de Milan, avec le duc de Clarence, il se trouva en
rapport avec Pétrarque, Froissart et Boccace. Il est évident que les
conversations de ces hommes célèbres devaient avoir la littérature
pour sujet. De là des échanges de vues, des observations, des
notes prises et conservées, dont plus tard Chaucer fera son profit.
On en retrouve la trace dans sa Théséide, empruntée à Boccace, et
dans la traduction du Roman de la Rose qu’il fit d’après l’original de
Guillaume de Lorris. Mais la composition qui se ressent le plus des
emprunts faits aux Troubadours et à la poésie provençale est son
Palais de la Renommée, qui fut imité ensuite par Pope. Dans le
poème la Fleur et la Feuille, il se rapproche de l’institution des jeux
floraux et des cours d’amour. On y trouve en effet la Dame de la
Fleur et la Dame de la Feuille qui président chacune un groupe de
jeunes filles couronnées de feuillages différents. Comme
rapprochement, on peut citer un arrêt de Cour d’amour, rapporté par
Fontenelle, où le juge est appelé Marquis des fleurs et violettes. La
trace de l’influence provençale se retrouve encore dans une
traduction, par Chaucer, du Troïlus et Cresséide de Boccace, qui,
comme Dante et Pétrarque, a pris au Provençal son esprit; on
pourrait ajouter que le poète anglais en a surtout pris les formules.
La paix et la guerre apportent, chacune par des moyens
différents, leur contingent à la civilisation. Un échange constant de
produits commerciaux ou industriels amène dans les mœurs, les
usages et les langues une assimilation qui, pour n’être pas toujours
générale, n’en pénètre pas moins sur certains points et devient
réciproque. La guerre contribue au même résultat, les conquérants
imposant aux vaincus leurs lois, leurs usages ou leurs idiomes.
Dans la première partie du moyen âge, la France a dominé le
monde par toutes les formes de l’imagination. Ses Troubadours, qui
ont créé la Canso, le Sirvente, la Tenson, le Sonnet, ont enseigné à
l’Europe romaine la poésie et les mètres lyriques. Ses Trouvères ont
obtenu de grands succès par leurs récits épiques et leurs histoires si
pathétiques dont on retrouve les traces dans tous les mondes. Les
premières théories modernes sur l’art de parler et d’écrire ont été
rédigées par nos Troubadours, dont les grammaires et les
dictionnaires ont été copiés, étudiés et commentés à Tolède, à
Barcelone, à Florence et dans nombre d’autres pays. Plus tard,
l’Espagne, le Portugal et l’Italie, qui avaient puisé aux sources vives
de la Provence lettrée les principes et les formes les plus pures de
notre littérature, purent produire à leur tour des maîtres en l’art
d’écrire et de penser. C’est à partir de cette époque que leur
littérature se forme et que nous constatons les succès des Quevedo,
des Antonio Pérez, des d’Alorcon, des Lope de Véga, des Guilhem
de Castro, des Cervantès, dont les chefs-d’œuvre inspirèrent à leur
tour Voiture, Corneille, Molière, Le Sage, Beaumarchais et tant
d’autres qui n’ont pas su résister aux beautés de la littérature
espagnole. Pour l’Italie, on peut citer Dante, Boccace, Pétrarque,
Malaspina, Giorgi, Calvo, Cigala, Doria, Sordel, etc. Il n’est rien de
plus glorieux pour les Troubadours que d’avoir eu de tels disciples.
Si, après les avoir égalés, ces derniers les ont surpassés par la
suite, nous en dirons la cause dans le courant de cet ouvrage. Nous
verrons comment les Troubadours, poursuivis, persécutés, chassés
par la croisade contre les Albigeois, ne purent continuer leurs études
et virent le cours de leurs travaux brutalement interrompu.

LES COURS D’AMOUR

Alors que la courtoisie la plus délicate rendait les hommes

esclaves de la beauté, et que les Troubadours célébraient les
mérites et les vertus de la femme, celle-ci consacra cette suprématie
par la création des gracieuses Cours d’amour. Ce tribunal, devant
lequel étaient appelés les amants coupables, où se jugeaient les
questions les plus délicates en matière de sentiment, donnait bien
l’idée des mœurs, des usages et de l’esprit de l’époque.
 Une Cour d’amour.

A certaines dates, les châtelaines d’une province se réunissaient;

la plus noble d’entre elles présidait l’assemblée, formée en docte
aréopage. On discutait les articles d’un Code d’amour, on délibérait
sur les cas qui étaient soumis, on jugeait et souvent on condamnait à
des peines sévères.
On peut se demander quelles étaient l’autorité de ces tribunaux et
la sanction appliquée à leurs arrêts. L’autorité ressortait de leur
composition même, qui n’admettait que l’élite de la noblesse après
une sage sélection; quant à la sanction, il n’y en avait qu’une: l’opinion
publique. Mais cette sanction était d’autant plus redoutable que les
jugements librement sollicités étaient rendus de même. Si affaiblie
qu’elle puisse être de nos jours, on ne peut nier la force morale de
l’opinion publique qui flétrit les indignes, alors qu’assez habiles pour
éluder la loi ils ne peuvent, judiciairement, être condamnés. C’est
l’opinion qui ne permet pas de refuser un duel, défendu cependant par
le Code; c’est l’opinion également qui force à payer, comme sacrée,
une dette de jeu, que la loi ne veut pas reconnaître. C’est, enfin,
l’opinion publique qui contraint les tyrans eux-mêmes à reculer devant
certains actes odieux. Au moyen âge, époque des Cours d’amour,
cette force devait être d’autant plus grande que le scepticisme qui, de
nos jours, envahit peu à peu la société ne pouvait être alors
qu’exceptionnel et que, par conséquent, l’opinion faisait loi.
Avant de citer quelques exemples des questions soumises au
jugement des Cours d’amour, il est essentiel de connaître les
principales dispositions du Code amoureux appliqué dans le Nord,
suivant l’ouvrage d’André le Chapelain; il repose sur une légende que
nous rapportons textuellement, d’après cet auteur.
«Un chevalier breton s’était enfoncé seul dans une forêt, espérant
y rencontrer Artus; il trouva bientôt une damoiselle, qui lui dit: Je sais
ce que vous cherchez; vous ne le trouverez qu’avec mon secours.
Vous avez requis d’amour une dame bretonne, et elle exige de vous
que vous lui apportiez le célèbre faucon qui repose sur une perche
dans la cour d’Artus. Pour obtenir ce faucon, il faut prouver par le
succès d’un combat que cette dame est plus belle qu’aucune des
dames aimées par les chevaliers qui sont dans cette cour.
«Après bien des aventures romanesques, il trouva le faucon sur
une perche, à l’entrée du palais, et il s’en saisit. Une petite chaîne d’or
tenait suspendu à la perche un papier écrit; c’était le Code des
amoureux que le chevalier devait prendre et faire connaître, de la part
du roi d’amour, s’il voulait emporter paisiblement le faucon.»
La cour, composée d’un grand nombre de dames et de chevaliers,
adopta les règles de ce Code qui leur avait été présenté, en ordonna
fidèlement l’observation à perpétuité sous les peines les plus graves et
le fit répandre dans les diverses parties du monde. Ce Code contient
trente et un articles, et des considérations qu’il serait trop long
d’énumérer ici.
Un grand nombre d’historiens ont attribué au mariage du roi Robert
avec Constance, fille de Guillaume Ier, vers l’an 1000, l’introduction à
la cour de France des Troubadours provençaux, dont l’influence se fit
sentir rapidement. En effet, ce fut à partir de cette époque que les
manières agréables, les mœurs polies, les usages galants de la
France méridionale commencèrent à se propager. Le mariage
d’Eléonore d’Aquitaine avec Louis VII, en 1137, fut une nouvelle
occasion pour les poètes de Provence de répandre et faire apprécier
l’art du gai savoir. Petite-fille du célèbre comte de Poitiers, Eléonore
d’Aquitaine reçut les hommages des Troubadours, les encouragea et
les honora. Bernard de Ventadour, un des plus célèbres, lui consacra
ses vers et continua même de lui adresser ses œuvres lorsqu’elle fut
reine d’Angleterre.
L’extension que prit bientôt la langue Romane sous l’impulsion des
Troubadours explique la création de Cours d’amour au-delà de la
Loire, et les noms d’Eléonore d’Aquitaine, de la comtesse de
Champagne, de la comtesse de Flandres et d’autres, qui les
présidaient.
En Provence, les Cours d’amour les plus célèbres furent celles de
Pierrefeu et de Signe, de Romanin et d’Avignon.
Les dames qui présidaient les Cours de Pierrefeu et de Signe
étaient:
Stéphanette, dame de Baulx, fille du comte de Provence;
Adalazie, vicomtesse d’Avignon;
Alalete, dame d’Ongle;
Hermyssende, dame de Posquières;
Bertrane, dame d’Urgon;
Mabille, dame d’Yères;
La comtesse de Dye;
Rostangue, dame de Pierrefeu;
Bertrane, dame de Signe;
Jausserande de Claustral.
La Cour de Romanin était présidée par:
Phanette de Gantelmes, dame de Romanin;
La marquise de Malespine;
La marquise de Saluces;
 Clarette, dame de Baulx;
Laurette, de Saint-Laurens;
Cécille Rascasse, dame de Caromb;
Hugonne de Sabran, fille du comte de Forcalquier;
Hélène, dame de Mont-Pahon;
Isabelle des Berrilhans, dame d’Aix;
Ursynes des Ursières, dame de Montpellier;
Alaette de Méolhan, dame de Curban;
Elys, dame de Meyrargues.
La Cour d’amour d’Avignon était présidée par:
Jehanne, dame de Baulx;
Huguette de Forcalquier, dame de Trest;
Briaude d’Agoult, comtesse de la Lune;
Mabille de Villeneuve, dame de Vence;
Béatrix d’Agoult, dame de Sault;
Ysoarde de Roquefeuilh, dame d’Anseys;
Anne, vicomtesse de Talard;
Blanche de Flassans, surnommée Blankaflour;
Doulce de Moustiers, dame de Clumane;
Antonette de Cadenet, dame de Lambese;
Magdalène de Sallon, dame de Sallon;
Rixende de Puyverd, dame de Trans.
Les Cours d’amour brillèrent du plus vif éclat depuis le XIIe siècle
jusqu’à la fin du XIVe. Vers cette époque, il se créa dans les provinces
du Nord de la France, à Lille, en Flandre et Tournay, des institutions à
peu près semblables, mais avec cette particularité qu’elles étaient
présidées par un prince d’amour. Sous Charles VI, il a existé à la Cour
de France une Cour amoureuse. Elle était organisée d’après la mode
des tribunaux du temps et se composait:
Des auditeurs;
Des maîtres de requêtes;
 Des conseillers;
Des substituts du procureur général;
Des secrétaires, etc...
Mais les femmes n’y siégeaient pas[76].
En Provence, nous voyons enfin, comme une réminiscence des
cours d’amour, le roi René instituer un prince d’amour qui figurait dans
la procession de la Fête-Dieu, à Aix. Ce prince jouissait même de
certains droits, puisqu’il imposait une amende nommée Pelote à tout
cavalier qui faisait aux demoiselles du pays l’affront d’épouser une
étrangère, et à toute demoiselle qui, en épousant un cavalier étranger,
semblait signifier que ceux de la région n’étaient pas dignes d’elle.
Des arrêts du Parlement d’Aix avaient maintenu le droit de Pelote.
Pour apprécier les Cours d’amour, il faut non pas les juger avec
l’esprit de notre temps, mais se reporter à l’époque où elles furent
instituées. Vivantes images des mœurs et des idées du moyen âge,
elles ont eu leur raison d’être et ont affirmé les principes de l’amour
pur, libre et sincère. N’auraient-elles obtenu que ce résultat, qu’il
suffirait amplement à leur renommée. Mais elles nous ont aussi
transmis l’amour et le respect de la femme, sans lesquels toute
société est bientôt vouée à la grossièreté des mœurs, à la barbarie et
à l’oubli de toute dignité personnelle. La galanterie française,
proverbiale dans le monde entier, ne nous vient-elle pas un peu des
Cours d’amour? Ce titre seul les justifierait aux yeux de ceux qui ne
les ont tenues que pour frivoles.

NOTES:
[75] G. Chaucer, né en 1328, avait épousé la sœur de Catherine
Swynford, veuve du duc de Lancastre, dont le fils régna sous le nom de
Henri IV. Il mourut en 1400.
[76] Cité par Renouard d’après un manuscrit de la Bibliothèque
Nationale, no 626.
 X
DE L’INFLUENCE DE
LA LITTÉRATURE ROMANE SUR
LES PREMIERS ESSAIS DU THÉATRE
EN FRANCE

Croisade contre les Albigeois.—Décadence de la langue Romane.

Il y a toujours eu des histrions, des bateleurs, des montreurs

d’animaux savants et des comédiens; mais il faut attendre un état
social assez avancé pour trouver chez un peuple un théâtre régulier.
C’est que le goût des spectacles dramatiques ne se développe
largement que lorsque la littérature est arrivée à un degré de
perfection qui lui permet d’exposer, dans une langue épurée, les
grands faits de l’histoire, les traits héroïques des guerriers, les actions
des hommes illustres. La Grèce a été la première nation qui soit
entrée dans cette voie. Sa civilisation était assez développée pour que
les œuvres de ses grands poètes fussent goûtées de tous les
citoyens. Quand Rome fut devenue la capitale du monde, que les
sciences et les arts lui eurent porté les plus nobles tributs du génie, ce
fut un besoin pour les Romains d’assister à des spectacles
dramatiques. Cependant, moins lettrés que les Grecs, les jeux du
cirque les attiraient de préférence. La population oisive se ruait aux
portes des amphithéâtres et demandait à grands cris du pain et des
jeux. Le pain était noir, mais les spectacles étaient les plus splendides
de l’Univers.
En France, après l’ignorance qui a signalé les premiers siècles de
monarchie, ce furent les Troubadours suivis de leurs jongleurs et
d’une nombreuse troupe d’artistes, musiciens, chanteurs, montreurs
de bêtes savantes, qui, visitant les cours et les châteaux, donnèrent
un avant-goût de notre art dramatique. D’après une légende
provençale du XIe siècle sur sainte Foy d’Agen, vierge et martyre, il y
avait dès cette époque des jongleurs ambulants, qui allaient de ville en
ville chantant des légendes, non seulement en France, mais aussi en
Aragon et en Catalogne, où ils avaient pénétré. Il y a même à leur
sujet un édit de saint Louis, qui règle le droit de péage pour leur entrée
dans Paris. Il était ainsi conçu: «Tout marchand qui entrera dans la
ville avec un singe paiera, s’il l’apporte pour le vendre, la somme de
quatre deniers; tout bourgeois le passera gratis s’il l’a acheté pour son
plaisir, et enfin tout jongleur qui vivra des tours qu’il lui fait faire
acquittera l’impôt en le faisant jouer devant le péager.» D’où est venu
le proverbe payer en monnaie de singe.
Peu à peu les jongleurs se perfectionnèrent, à ce point que
plusieurs d’entre eux passèrent du rôle d’interprètes à celui d’auteurs.
Il arrivait alors que, protégés par un puissant seigneur, ils amassaient
de véritables fortunes, et parfois même, justifiant leur renommée par
un talent réel, ils étaient faits chevaliers et de droit pouvaient
prétendre au titre de Troubadours. Il en est quelques-uns parmi eux
que l’on peut citer comme exemples.
Gaucelm Faydit, dont les œuvres gracieuses sont pleines de noble
galanterie, était le fils d’un bourgeois d’Uzerches, près de Limoges.
Après avoir dissipé l’héritage de sa famille, il tomba dans la misère,
épousa une fille de mauvaise vie, d’Alais, et fut réduit pour vivre à se
faire jongleur. Il courait les fêtes et les villages, composant des
chansons que sa femme, Guillelmette Monja, chantait aux
applaudissements de la foule qui lui jetait quelques sous. Enfin, après
vingt ans de cette vie nomade et misérable, sa renommée
grandissant, il acquit le titre de Troubadour et trouva son puissant
protecteur dans Richard, comte de Poitou, qui l’appela à sa cour. A
l’inverse de beaucoup de ses confrères, qui obtenaient les bonnes
grâces des femmes de haut rang, Faydit ne paraît pas avoir réussi
dans ses entreprises amoureuses; mais l’échec qu’il éprouva auprès
de Marie de Ventadour et de Marguerite, comtesse d’Aubusson, qui se
jouèrent de sa folle tendresse, fut largement compensé par les faveurs
et les biens dont il fut comblé par Richard, devenu roi d’Angleterre.
Giraud Riquier (de Béziers), célèbre par sa requête au roi
Alphonse de Castille, fut le premier à rédiger une sorte de Code des
Troubadours et des jongleurs. Il les plaçait par ordre de mérite et sut
obtenir de son protecteur, le roi Alphonse, une déclaration conforme à
sa demande. Les pastourelles de ce troubadour l’ont placé au premier
rang des poètes de son temps, et lui ont mérité du roi de Castille le
titre de Docteur en l’art de trouver.
Giraud de Calanson qui se place après ces deux premiers, comme
troubadour et jongleur, se distingue de Riquier en ce que, plus
pratique que celui-ci, il enseignait à ses élèves et à ses amis qu’il faut
avant tout faire de bons vers et capter la faveur du public pour arriver
à la fortune et à la renommée. Les titres étaient par lui relégués au
second plan, et il pensait qu’ils ne pouvaient d’ailleurs manquer
d’échoir à ceux qui avaient du succès.
«Va, dit-il à un jongleur, applique-toi à bien trouver et rimer, sache
proposer avec grâce un jeu parti; apprends à faire retentir le tambour
et les cymbales; jette et rattrape avec adresse des petites pommes
avec des couteaux; imite le chant des oiseaux; fais des tours avec des
corbeilles; saute à travers quatre cerceaux; joue de la cithare[77] et de
la mandore[78]; pince convenablement de la manicorde[79] et de la
guitare[80] si douces à entendre, de la harpe et du psaltérion[81]; garnis
la roue (la vielle) de dix-sept cordes... Va, jongleur, aie neuf
instruments de dix cordes et, si tu sais en bien jouer, ta fortune sera
bientôt faite... apprends comment l’amour court et vole, comment on le
reconnaît, nu ou couvert d’un manteau; comment il sait repousser la
justice avec des dards aigus et ses deux flèches dont l’une d’or éblouit
les yeux et l’autre d’acier fait de si profondes blessures qu’on ne peut
en guérir. Apprends de l’amour les privilèges et les remèdes, et sache
expliquer les divers degrés par où il passe. Dis bien d’où il part, où il
va, ce dont il vit, les cruelles tromperies qu’il exerce et comment il
détruit ses serviteurs.
«Quand tu seras bien instruit de toutes ces choses, alors, jongleur,
va trouver le jeune roi Aragon, car je ne connais personne qui soit
meilleur juge du mérite.»
Outre le talent poétique, qui ne verra, dans ces conseils aux
jongleurs, une haute leçon de philosophie? Giraud de Calanson
connaît l’âme humaine, il l’a étudiée dans les foules aussi bien que
dans les châteaux et les cours princières. La forme extérieure que
donnent l’éducation et la condition sociale n’est pour lui qu’un
manteau sous lequel se cache la vérité, une pour tous, partout et en
tout semblable. La logique, qui se complaît moins dans les hautes
régions de la poésie idéale que dans la réalité des faits, nous montre
l’homme tel que la nature l’a créé, avec un égoïsme personnel doublé
d’un sentiment de vanité dont notre Troubadour sait se servir au mieux
de ses intérêts. Il connaît le monde et en joue assez habilement pour
en tirer honneurs et profits.
Ses élèves profitèrent de ses conseils. Ils établirent parmi eux une
certaine discipline, appliquée à maintenir le rang et les fonctions de
chacun, ils cherchèrent et trouvèrent à varier leurs spectacles. Le
public prit alors plaisir à les voir et à les entendre. C’est ainsi que ces
jongleurs, en représentant des pantomimes, en exécutant des tours de
force et d’adresse, en composant des morceaux de musique, des
chants d’amour, de guerre et de politique, et enfin en introduisant à la
scène les pantomimes parlées dont les sujets appelés mystères
étaient tirés des dogmes principaux du christianisme, furent en France
les fondateurs de la comédie et les pères des comédiens.
Peu à peu le cercle dramatique s’élargit; chaque province eut ses
poètes qui, s’inspirant des chroniques religieuses du pays,
composèrent des pièces spéciales.
Les premiers théâtres de ce genre de spectacles furent les églises,
et les prêtres, autant qu’ils le purent, retinrent la direction exclusive
des mystères et fêtes religieuses. Ils en arrivèrent même, pour
conserver ce monopole, à tolérer des représentations absurdes et
quelquefois inconvenantes.
Telles furent les fêtes burlesques de l’enterrement, de la déposition
de l’Alleluia, la Messe de l’Ane ou des fous, les Offices farcis, les
Mystères de sainte Catherine, etc... Le mystère des Vierges sages et
des Vierges folles[82] présente un cas assez curieux pour être noté. Il
est écrit en trois idiomes différents. Dans cette pièce, Jésus-Christ
parle en latin; les vierges sages et les marchands, en français, et les
vierges folles, en provençal. On se demande comment un tel poème
pouvait être utilement écouté par un public peu lettré, qui devait
forcément perdre le bénéfice d’une audition aussi confuse.
Les Mystères vinrent à la mode et furent même adoptés à
l’étranger. On cite entre autres l’œuvre de Guillaume Herman, poète
anglo-normand, qui vivait au XIIe siècle. Son mystère, qui avait pour
titre la Rédemption, eut un certain succès. Etienne de Langtow,
évêque de Cantorbéry en 1207, en a aussi laissé un sur le même
sujet. Enfin, un mystère sur la Résurrection du Sauveur, écrit en vers
anglo-normands et dont le texte remonte au XIIe siècle, marque un
progrès notable; on y trouve des indications relativement importantes
sur la mise en scène:
«Avant de réciter la Sainte Résurrection, disposons d’abord les
lieux et les demeures.—Il y aura le crucifix et puis, après, le tombeau,
—il devra y avoir aussi une geôle pour enfermer les prisonniers,—
l’enfer sera d’un côté et les maisons de l’autre, puis le ciel et les
étoiles. Avant tout, on verra Pilate accompagné de six ou sept
chevaliers et de ses vassaux, Caïphe sera de l’autre côté et avec lui la
nation juive, puis Joseph d’Arimathie. Au quatrième lieu, on verra don
Nicodème, puis les disciples et les trois Maries. Le milieu de la place
représentera la Galilée et la ville d’Emmaüs où Jésus reçut
l’hospitalité, et, une fois que le silence régnera partout, don Joseph
d’Arimathie viendra à Pilate et lui dira, etc., etc[83].»
La vogue croissante des mystères amena entre les jongleurs
spécialement désignés pour les jouer une association particulière qui
prit le titre de Confrères de la Passion. Ce furent les premiers acteurs
tragiques. Charles VI les prit sous sa protection et les autorisa à établir
leur théâtre à Paris, dans la grande salle de l’hôpital de la Charité[84].
Ils y obtinrent un succès tel que le clergé, dans la crainte de voir
déserter les églises, changea et avança l’heure des vêpres. Dans ce
local, mieux approprié, on joua très longtemps le Grand Jeu de la
Passion, spectacle qui durait plusieurs jours, et d’autres mystères,
dont l’un, dit de la Vengeance, représentait le Christ triomphant et
vengé à travers les temps; des spectacles préparatoires ou parades,
appelés pois-pilés, attiraient également le public en foule. Mais le
genre dramatique ne devait pas se borner à ces premiers essais. Dès
le XIIIe siècle, on constate l’apparition d’une sorte de comédie appelée
jeu, dont Adam de la Halle, dit le bossu d’Arras, a laissé des
spécimens curieux; ce sont: li Jus de la Feuillée, li Jus des pèlerins,
les Giens de Robin et Marion. D’autres de Jean Bodel nous sont
également parvenus.
 A côté des Confrères de la Passion, se forma une seconde
société, plus complète et aussi plus instruite, composée des Clercs de
la Basoche. Elle s’organisa hiérarchiquement. Le chef se para du titre
de roi des Basochiens et octroya à ses officiers ceux de maîtres des
requêtes, chanceliers, avocats, procureurs, référendaires, secrétaires,
huissiers, etc. Il présidait aux études et aux jeux de la jeunesse, il
reçut le droit de porter la toque royale, et ses chanceliers la robe de
chancelier de France. Les sceaux, sur lesquels étaient gravées ses
armes, étaient d’argent, et le blason portait trois écritoires d’or sur
champ d’azur timbrées de casques. Cette troupe, aussi gaie que la
première était tragique, ne représentait que des pièces burlesques
appelées soties, dont les interprètes peuvent passer à bon droit pour
les premiers acteurs comiques. Peu après la création de la confrérie
bouffonne de la Basoche se formèrent les corporations des Enfants
Sans-Souci, de la Mère folle de Dijon, et d’autres associations
dramatiques de bourgeois, d’écoliers et d’artisans, qui s’adonnèrent
sous différents noms aux divertissements de la poésie, de la musique
et du théâtre. Leur concours était demandé pour les fêtes et les
réceptions royales, ce qui n’empêchait pas les clercs de la Basoche
de s’attaquer, dans leurs satires, aux princes et au clergé; hardiesse
qu’ils payèrent, à plusieurs reprises, de la suspension de leurs jeux.
Dans leurs folles inventions, ainsi que dans les soties et les moralités,
les Enfants Sans-Souci, présidés par le prince des sots, dépensaient
en improvisations fugitives beaucoup de talent, d’observation et
d’esprit. On pourrait trouver dans ces manifestations scéniques l’idée
embryonnaire de notre théâtre satirique, et dans leurs interprètes les
précurseurs de nos acteurs comiques.

CROISADE CONTRE LES ALBIGEOIS

D ÉC AD EN C E D E L A L A N G U E R O MA N E

Ainsi qu’on a pu le remarquer d’après les chapitres précédents, les

mœurs du clergé en Provence, c’est-à-dire dans toute la partie
méridionale de la France, pouvaient malheureusement être critiquées.
L’Église avait perdu sa force et son prestige, et la vénération dont elle
avait été honorée jusque-là se changeait en raillerie. Les Troubadours
furent les premiers à dénoncer la conduite des moines et des prêtres,
qui en furent réduits, lorsqu’ils sortaient, à ramener leurs cheveux sur
la tonsure dans la crainte d’être reconnus.
D’autre part, la Gaule méridionale, comprenant l’Aquitaine, la
Gascogne, la Septimanie, la Provence et le Dauphiné, avait secoué le
joug de leurs oppresseurs et, depuis près de trois siècles
indépendante, était devenue étrangère à la France. Sa nationalité et
sa langue, absolument différente de celle des peuples soumis aux
Capétiens, avaient favorisé l’éclosion et le développement d’idées et
de sentiments auxquels ceux-ci répugnaient.
Les Méridionaux accueillaient facilement les Juifs et les savants
arabes; ils cultivaient les arts, la poésie et la musique; ils aimaient la
vie facile et les plaisirs. Toutes choses mal vues au delà de la Loire.
D’autre part, le régime féodal n’avait pu s’implanter chez eux que
partiellement; un grand nombre d’alleux s’y étaient conservés. Les
villes avaient gardé d’antiques libertés républicaines, et la bourgeoisie
riche y marchait à peu près de pair avec la chevalerie. De ces
dispositions opposées d’esprit et de mœurs, les deux régions du Midi
et du Nord de la France avaient vu naître une certaine antipathie
réciproque. Le dépit et la haine que le clergé avait voués aux
populations méridionales, sur lesquelles il avait perdu tout prestige et
toute domination, achèvent d’expliquer le rapprochement qui se fit
entre la papauté et la noblesse française. De cette entente surgit une
alliance monstrueuse dont le prétexte était le châtiment des
hérétiques, mais dont le but réel était: pour l’Église, de ramener sous
son joug des populations dont l’obéissance lui était d’autant plus
précieuse que leur générosité était sans limites; pour la noblesse de
France, les grands profits à tirer d’une expédition peu périlleuse.
Les croyances des hérétiques variaient beaucoup, mais toutes
leurs sectes étaient réunies par un sentiment commun, la haine de
l’Église. Le pape, avant de déchaîner les hordes du Nord sur la
Provence, voulut tenter un effort spirituel, afin de donner au monde
catholique l’illusion que toutes les concessions compatibles avec
l’esprit de devoir et de charité chrétienne avaient été faites. Saint
Bernard fut chargé de ramener au bercail les brebis égarées. Vertfeuil
lui ayant été signalé comme un des foyers les plus ardents de
l’hérésie, il s’y rendit, et dans son premier sermon eut le tort d’attaquer
les personnes les plus considérables du pays. Celles-ci sortirent de
l’église et le peuple les suivit. Saint Bernard, resté seul, s’achemina
vers la place publique et continua de prêcher. Connaissant mal les
Méridionaux, dont on peut tout obtenir par la douceur et la persuasion,
le saint homme se trompa complètement en employant la terreur pour
ramener à Dieu ceux qui avaient souffert de ses ministres et de leurs
exigences toujours plus dures et plus âpres. Après leur avoir fait
entrevoir les supplices de l’enfer, il les menaça des armes
vengeresses des hauts barons catholiques. Leurs biens seraient
confisqués et partagés, leurs maisons incendiées, eux-mêmes ainsi
que leurs femmes et leurs enfants livrés aux bourreaux qui sauraient
bien, en leur appliquant la torture, leur faire renier les nouveaux
dogmes. A son grand étonnement, ses paroles produisirent une
seconde fois le vide autour de lui, la place devint déserte. L’envoyé du
pape, humilié dans sa dignité, plein de dépit et de colère, partit en
secouant la poussière de ses pieds et en maudissant la ville en ces
termes: «Vertfeuil, que Dieu te dessèche[85]!»
L’échec subi par saint Bernard ne fit que raffermir Innocent III dans
la résolution de continuer la lutte, il ne pouvait tolérer cet état de
révolte ouverte contre le Saint-Siège. Cependant il n’en vint pas
encore à l’emploi des moyens violents. Il envoya tour à tour, pour
combattre les hérétiques par la parole, d’abord les disciples de saint
Bernard, les moines de Cîteaux, puis l’évêque d’Osma et le vicaire de
sa cathédrale, le sombre et déjà célèbre saint Dominique, enfin un
légat, Pierre de Castelnau. Tous ces efforts restèrent impuissants
contre l’obstination de gens qui en voulaient plus au clergé qu’à la
religion elle-même. Alors les prédicateurs tournèrent leur colère contre
les Albigeois et leurs seigneurs, qui toléraient sur leurs terres cette
révolution dirigée contre l’Église.
Raymond VI, comte de Toulouse, fut le premier objet de la colère
et des menaces du pape. Souverain de la Gaule méridionale, sa
puissance était plus grande que celle du roi d’Aragon, son voisin. Il fut
accusé de protéger les hérétiques et les Juifs; de recevoir les savants
n’appartenant pas au culte catholique, de s’entourer enfin des
ennemis de l’Église. En présence du légat Pierre de Castelnau,
Raymond VI manqua absolument de vigueur et de résolution. Mal
préparé pour la lutte, peut-être n’ignorait-il pas l’infériorité de ses
moyens de défense. Ce sentiment devait avoir sur sa conduite une
influence funeste dont il ne tarda pas à subir les malheureux effets.
Après avoir nié toute participation aux erreurs des Albigeois, il
consentit à les poursuivre lui-même dans ses États. Il ne comprit pas
que cette soumission, loin d’apaiser ses ennemis, ne les rendrait que
plus audacieux. Le pape lui écrivit:
«Si nous pouvions ouvrir ton cœur, nous y trouverions et nous t’y
ferions voir les abominations détestables que tu as commises; mais,
comme il est plus dur que la pierre, c’est en vain qu’on le frappe avec
les paroles du salut, on ne saurait y pénétrer. Homme pestilentiel, quel
orgueil s’est emparé de ton cœur, et quelle est ta folie de ne vouloir
point de paix avec tes voisins et de braver les lois divines en
protégeant les ennemis de la foi! Si tu ne redoutes pas les flammes
éternelles, ne dois-tu pas craindre les châtiments temporels que tu as
mérités pour tant de crimes?»
Aucun prince ne s’était encore entendu menacer en pareils termes
par la cour de Rome. A ces injures, Raymond VI ne répondit que par
des paroles de soumission, tant était grande et redoutée à cette
époque la puissance de la papauté. Mais l’Église n’entendait pas se
déclarer satisfaite par un acte d’humilité de la noblesse et du peuple
suivi de l’abjuration de leurs hérésies: ce qu’elle convoitait au moins
autant, c’étaient leurs richesses et leurs territoires. La conduite de
Pierre de Castelnau fut la preuve évidente de cette arrière-pensée; la
douceur, les concessions de Raymond VI, le laissèrent inflexible, et il
se retira en lui lançant une dernière excommunication.
Ces actes et la violence de caractère du légat avaient indigné les
Provençaux. Le comte de Toulouse, pour éviter des représailles
possibles, ne le laissa pas partir comme il le désirait, seul, confiant
dans l’inviolabilité du mandat dont il était revêtu: il lui adjoignit une
escorte.
Avant de repasser le Rhône, le légat, s’étant arrêté dans une
auberge sur le bord du fleuve, s’y prit de querelle avec un des
chevaliers qui l’accompagnaient; ce dernier supporta les injures moins
patiemment que son seigneur et tua Pierre de Castelnau d’un coup
d’épée[86].
Ce meurtre, qui rappelait celui de Thomas Becket, fut le point de
départ d’une campagne armée. Innocent III confia la vengeance de
son ministre à tous les fidèles. Aux soldats de cette nouvelle croisade,