CHAPTER-2

PRINCIPLES OF MANAGEMENT

Q. 1: F limited was engaged in the business of food processing and selling its products
under a popular brand. Lately the business was expanding due to good quality and
reasonable prices. Also, with more people working, the market for processed food was
increasing. New players were also coming to cash in on the new trend. In order to keep its
market share in the short run the company directed its existing workforce to work overtime.
But this resulted in many problems. Due to increased pressure of work the efficiency of the
workers declined. Sometimes the subordinates had to work for more than one superior
resulting in declining efficiency. The divisions that were previously working on one product
were also made to work on two or more products. This resulted in a lot of overlapping and
wastage. The workers were becoming indisciplined. The spirit of teamwork, which had
characterised the company, previously was beginning to wane. Workers were feeling
cheated and initiative was declining. The quality of the products was beginning to decline
and market share was on the verge of decrease.
Actually the company had implemented changes without creating the required infrastructure.
(a) Identify the Principles of Management (out of 14 given by Henry Fayol) that were being
violated by the company.
(b) Explain these principles in brief.
(c) What steps should the company management take in relation to the above principles to
restore the company to its past glory?
Solution :
(a) The Principles of Management that were violated by the company are: •
(i) Division of work.
(ii) Unity of command.
(iii) Discipline.
(iv) Esprit-de-corps.
(v) Remuneration.
(vi) Subordination of individual interest to general interest.
(vii) Initiative.
(b) (i) Division of work: It states that work should be divided in small parts and each
worker should be made to perform a particular part repeatedly. .This leads to specialisation
and effective performance.
(ii) Unity of command It states that an employee in an organisation must receive instruction
from only one superior at a given point of time.
(iii) Discipline This states that all the employees and the management must adhere to rules
and employment agreements of the organisation.
(iv) Esprit-de-corps This principle promotes a feeling of team spirit among employees of the
organisation. This helps a lot in achieving organisational goals.
(v) Remuneration: This principle advocates that the employees should be paid fair wages
and salaries so that they can have a reasonable standard of living and also this level of
wage and salary should be within the paying capacity of the employer.

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(vi) Subordination of individual interest to general Interest: This principle states that the
interest of the organisation should always supersede the interest of any one individual.
(vii) Initiative: The focus of this principle is on encouraging employees to develop and carry
out plans for bringing about improvements in the functioning of the organisation.
(c) The company should take following steps immediately to restore the company to its glory:
(i) Proper division of work among the workers should be done according to their
potential/capability.
(ii) It should be ensured that one worker should receive orders from only one superior at a
given time.
(iii) Proper compensation should be paid to all the employees.
(iv) Motivating and disciplined environment should be developed in the company.
(v) Creative ideas from workers should be welcomed and their interest should be taken care
of and linked with company's objective. * 1
Q. 2: (Related to case problem: 1) The management of company F Limited now realized its
folly. In order to rectify the situation it appointed management consultant M consultants to
recommend a restructure plan to bring the company back on the rails. M consultants
undertook a study of the production process at the plant of the company F Limited and
recommended the following changes:
1. The company should introduce scientific management with regard to production.
2. Production Planning, including routing, scheduling, dispatching and feedback should be
implemented.
3 In order to separate planning from operational management 'Functional foremanship'
should be introduced.
4. 'Work study' should be undertaken to optimise the use of resources.
5. Standardisation of all activities should be implemented to increase efficiency and
accountability.
6. To motivate the workers Differential Piece Rate System' should be implemented.
The above changes should be introduced apart from the steps recommended in case
problem-1 (as an answer to question no 3 of that case problem). It was expected that the
changes will bring about a radical transformation in the working of the company and it will
regain its pristine glory.
(a) Do you think that introduction of scientific management as recommended by M
consultants will result in intended outcome?
(b) What precautions should the company undertake to implement the changes?
Give your answer with regard to each technique separately as enunciated in points 1
through 6, in the case problem.
(a) Yes, I agree that Scientific Management should be introduced. It will help in achieving the
intended outcome.
(b) The following precautions should be kept in mind while introducing Scientific
Management:
(i) Care should be taken by the company that Scientific management should be implemented
after a thorough study of various aspects of its working.

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(ii) Planning, routing and scheduling of work should be done after determining the logical
sequencing of work as it can have a major impact on the speed and flow of work. It thus
affects effectiveness and efficiency of work in a major way.
(iii) Functional foremanship though has its advantages but since it leads to having 8 foreman
on top of each worker, a lot of thought and planning needs to go into this decision. This will
violate the principle of Unity of Command and may lead to confusion, chaos and indiscipline,
if not handled properly.
(iv) Work studies should be undertake but sometimes unrealistic targets get set due to them
and workers feel pushed to work at a very hectic pace. Also the working becomes very rigid.
(v) Too much of standardisation leaves no room for customised output even if it is needed
for a particular customer.
(vi) Differential piece wage system is not taken too well by the workers and trade unions.
They feel that differentiating between more efficient and less efficient workers in this manner,
creates a class conflict within them.
(CBSE Board’s Previous Year’s Case Studies)

Q. 1: Seema, a student of management likes to relate what she learnt in class to real life
situation. She observed many situations while watching educational programmes on
television that reminded her the concepts of Scientific Management. In one such
programme, factories manufacturing components for products like automobiles, computers
and mobile phones were shown.
Name the concept of Scientific Management that should be adhered to, while manufacturing
components for such products.
Solution : Standardisation and Simplification of work.
Q. 2: Reema is one of the most successful managers of her company, Globe Ltd. She knows
that the principles of management are intended to apply to all types of organisations,
business as well as non-business, small as well as large, public sector as well as private
sector.
(a) One of the points related to the nature of management principles is being highlighted in
the above description. Identify the point.
(b) Explain any three other points of the nature of principles of management other the one
identified above. (3 Marks) [CBSE, OD COMPTT. 2017]
Solution :
(a) Universal applicability.
(b) The nature of principles of management are:
(i) General guidelines: The principles are guidelines to action which need to be adjusted and
used as per the demands of the situation.
(ii) Flexible: The principles are not rigid like science but are modified according to the
business environment needs.
(iii) Behavioural: The principles aim to influence the unpredictable, complex and dynamic
human behaviour.
Q.3: (a) Name and explain the principle of management in which workers should be
encouraged to develop and carry out their plans for improvements in the organisation.
(b) Name and explain the technique of scientific management which helps in eliminating
unnecessary diversity of products and thus results in saving cost.
Solution :

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(a) The concerned principle of management is "InitiativeIn this, workers should be
encouraged and motivated to develop and carry out their plans for improvements in the
organisation. According to this principle, management should boost the employees to take
initiative and develop new working ideas. They should be encouraged to put forward their
thoughts and accordingly the effective ideas should be duly rewarded. This in turn will help in
increasing the efficiency of the work as well as that of the whole organisation.
(b) The technique of scientific management which helps in eliminating unnecessary diversity
of products and thus results in saving cost is "Simplification"- This technique aims at fuller
utilisation of resources, reducing inventories and increasing the turnover to a large extent. It
also helps in reducing the costs of labour and machinery by eliminating the unnecessary
steps involved in a process. This further helps in attaining a higher level of efficiency.
Q. 4: (a) Name and explain the principle of management which requires judicious application
of penalties by the management.
Name and explain the technique of scientific management which helps in establishing
interchangeability of manufactured parts and products.
Solution :
(a) The principle of management which requires judicious application of penalties by the
management of an organisation is known as "Discipline". According to this principle, an
organisation should function with discipline and follow rules and policies. It is important for
both the management and the workers to honour their commitments while carrying out clear
and fair agreements. This ensures smooth working relations in the organisation and creates
a harmonious working environment.
(b) "Standardisation" is the technique of scientific management that helps in establishing
interchangeability of manufactured parts and products. "Standardisation", implies setting of
bench marks for any work or activity. It provides the standards that have to be followed
during the production process. Various other techniques of scientific management, such as
method study, fatigue study and time study, are also based on the concept of
standardisation.
Q. 5: Nikita and Salman completed their MBA and started working in a multinational
company at the same level. Both are working hard and are happy with their employer.
Salman had the habit of backbiting and wrong reporting about his colleagues to impress his
boss. All the employees in the organisation knew about it. At the time of performance
appraisal the performance of Nikita was judged better than Salman. Even then their boss,
Mohammad Sharif, decided to promote Salman, stating that being a female, Nikita will not be
able to handle the complications of the higher post.
(a) Identify and explain the principle of management which was not followed by this
multinational company.
(b) Identify the values which are being ignored quoting the lines from the above para.
Solution :
(a) The principle of management that is being violated in the given context is "Equity": This
principle focuses on treating each employee fairly equally. That is, it states that each
employee should be equal in the eyes of the manager. In addition the workers should be
regarded as equal on grounds of religion, language, gender, caste, etc. However, as the
boss is differentiating between Nikita and Salman on the basis of gender, despite the fact
that Nikita has done better than Salman, the principle of Equity is being violated by the
company.
(b) The following values are being ignored:
(i) Gender equality is being ignored by the boss as he is wrongly promoting Salman on the
basis of gender.

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(ii) A good and friendly working environment is being ignored by Salman as he backbites and
wrongly reports about his colleagues.
Q. 6: Name and explain the principle of management according to which a manager should
replace “I" with "We" in all his conversations with workers.
Solution :
The principle is “Espirit de Corps' This principle recommends that the employees of an
organisation should work in a spirit of unity and common interests. They should work as a
team. This spirit proves useful especially in large organisations, where achievement of
objectives becomes difficult without teamwork. If a manager uses "we" instead of "I", then it
evokes in each of his or her subordinates, a greater sense of belongingness. The word "we"
enhances team spirit by increasing mutual coordination and understanding among the
employees, which in turn improves efficiency and easy achievement of the organisational
goals.
Q. 7: ABC Ltd. is engaged in producing electricity from domestic garbage. There is almost
equal division of work and responsibility between workers and management. The
management even takes workers into confidence before taking important decisions. All the
workers are satisfied as the behaviour of the management is very good.
(a) State the principle of management described in the above para.
(b) Identify any two values which the company wants to communicate to the society.
Solution :
(a) The principle of Taylor described in the above para is 'Cooperation, not Individualism'.
This principle states that there should be complete cooperation between the labour and the
management. Competition should be replaced by cooperation.
(b) Values which the company wants to communicate to the society are:
(i) Good behaviour in human interaction.
(ii) Concern for the environment.
Q. 8: Voltech India Ltd. is manufacturing LED bulbs to save electricity and running under
heavy losses. To revive from the losses, the management thought of shifting the unit to a
backward area where labour is available at a low cost. The management also asked the
workers to work overtime without any additional payment and promised to increase to wages
of the workers after achieving its mission. Within a short period the company started earning
profits because both the management and the workers honoured their commitments.
(a) State the principle of management described in the above para.
(b) Identify any two values that the company wants to communicate to the society.
Solution :
(a) The principle of management described in the above para is Discipline.
Discipline is the obedience to organisational rules and employment agreement which are
necessary for the working of the organisation.
(b) Values that the company wants to communicate to the society are:
(i) Concern for the environment.
(ii) Development of backward regions.
Q. 9: Pawan is working as a 'Production Manager' in CFL Ltd. engaged in manufacturing of
CFL bulbs. There is no class conflict between the management and workers. The working
conditions are very good. The company is earning huge profits. As a policy matter,

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management is sharing the gains with the workers because they believe that prosperity of
the company cannot exist for a long time without the prosperity of the employees.
(a) State the principle of management described in the above para.
(b) Identify any two values which the company wants to communicate to the society.
Solution :
(a) The Principle discribed in above para is 'Harmony not Discord'. It advocates that there
should be complete harmony between management and the workers. To achieve this, Taylor
called for a complete mental revolution on the part of both management and
workers
(b) Values which the company wants to communicate to the society are:
(i) Sensitivity towards the environment.
(ii) Good behaviour in human interaction.
Q. 10: Telco Ltd. is manufacturing files and folders from old clothes to discourage use of
plastic files and folders. For this, they employ people from nearby villages where very few
iob opportunities are available. An employee, Harish, designed a plan for cost reduction but
it was not welcomed by the production manager. Another employee gave some suggestion
for improvement in design, but that was also not appreciated by the production manager.
(a) State the principle of management described in the above para.
(b) identify any two values that the company wants to communicate to the society.
Solution :
(a) Initiative: Workers should be encouraged to develop and carry out their plans for
improvements According to Fayol, 'Initiative means taking the first step with self- motivation'.
Initiative means eagerness to initiate action without being asked to do so. According to
Fayol, employees should be allowed to think and execute plans, to bring about
improvements in work related matters.
(b) Values which the company wants to communicate to the society are:
(i) Sensitivity towards the environment.
(ii) Creation of job opportunities.
(iii) Development of backward regions.
Q. 11: 'Aapka Vidyalaya' believes in holistic development of students and encourages team
building through a mix of curricular, co-curricular and sports. A committee of ten prefects
was constituted to plan different aspects of the function. They all decided to use recycled
paper for decoration. There was a spirit of unity and harmony and all members supported
each other. With mutual trust and belongingness the programme was systematically planned
and executed. Kartik, one of the prefects realised that unknowingly the group had applied
one of the principles of management while planning and executing the programme. He was
so inspired by the success of the function that he asked his father to apply the same
principle in his business. His father replied that he was already using this principle.
(a) Identify the principle of management applied for the success of the programme.
(b State any two features of management highlighted in the above para.
(c) Identify any two values which 'Aapka Vidyalaya' communicated to the society.
Solution :
(a) Espirit De Corps.
(b) Two features of management highlighted in the above para are:
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(i) Management is all pervasive: Management is present everywhere. Activities of
management are common to all the orgainisation whether, Social or Political. Managers of
India, USA or Germany use the same technique of management but the way of using the
technique can be different.
(ii) Management is a group activity: An organisation consist of many people. Each individual
has different needs. Their purpose for joining the organisation is also different. But all the
persons works towards a common goal thus, management is a team work or group activity.
(c) Two Values identified are:
(i) Commitment.
(ii) Concern for Environment.
Q.12: An environmental conscious multinational company "AXN Ltd." follows certain well
defined business principles that result to minimize the employee turnover. Following are
some of the important environmental factors followed by 'AXN Ltd.'
(1) Honour the law of every country in which it operates.
(2) Respect the culture and customs of all nations.
(3) Provide clean and safe products to enhance the quality of life throughout the world.
(4) Develop a culture in the company that enhances individual creativity and team work while
honouring mutual trust and respect between management and labour.
From the above:
(a) Identify and state any one general principle of management and any one dimension of
business environment.
Also, identify any two values which the above guiding principles and environmental factors
are conveying to the society.
Solution :
(a) Principle of management is 'Initiative'. 'AXN Ltd.' develops a culture in the company that
enhances individual creativity and team work while honouring mutual trust and respect
between management and labour. 'Initiative' means eagerness to initiate action without
being asked to do so. According to Fayol, employees should be allowed to think and execute
plans, to bring about improvements in work related matters.
Dimension of business environment: Social environment which includes social forces like
customs and traditions, values, social trends etc. This was because 'AXN Ltd.' provide clean
and safe products to enhance the quality of life throughout the world
(b) Values being conveyed:
(i) Respect for law. (Hi) Cleanliness and hygiene.
(ii) Raising standard of living. (iv) Secularism.
Q.13: Kanpur Leather Ltd.' is the manufacturer of leather products. It is producing on large
scale and its organisational structure is functional. In the production department various
foremen have been employed. Each foreman has been made responsible for production
planning, implementation and control. This has led to a situation of confusion and
uncertainty. Suggest a technique of scientific management to Kanpur Leather Ltd. which
may help it to effectively organise planning and its execution.
Solution : The technique of scientific management which may help Kanpur Leather Ltd. to
effectively organise and plan its execution is Functional Foremanship':
(i) Functional foremanship is a technique which aims to improve the quality of supervision at
shop floor level.

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(ii) Taylor identified a list of qualities of a good foreman or a supervisor. Since all the
qualities could not be found in a single person, Taylor proposed eight specialists.
(iii) In this technique, planning is separated from execution. Taylor suggested four foremen
for planning and four foremen for execution. It is an extension of the principle of division of
work and specialisation.
(iv) The four foremen for planning were route clerk, instruction card clerk, time and cost clerk
and disciplinarian. They would draft instructions for the workers, specify the route of
production, prepare time and cost sheet and ensure discipline, respectively.
(v) The four foremen for execution were gang boss, speed boss, repair boss and inspector.
They were responsible for timely and accurate completion of the job, keeping machines and
tools ready for operation by the workers, ensuring proper working conditions of machines
and tools and checking the quality of work respectively.
Q. 14: Nutan Tiffin Box service was started in Mumbai by Mumbai Dabbawalas. The
Dabbawalas who are the soul of entire Mumbai aim to provide prompt and efficient services
by providing tasty homemade tiffin to all office-goers at right time and place. The service is
uninterrupted even on the days of bad weather, political unrest and social disturbances.
Recently, they have started online booking system through their website 'mydabbawah.com'.
Owing to their tremendous popularity amongst the happy and satisfied customers and
members, the Dabbawalas were invited as guest lecturers by top business schools. The
Dabbawalas operate in a group of 25-30 people along with a group leader. Each group
teams up with other groups in order to deliver the tiffin on time. They are not transferred on
frequent basis as they have to remember the addresses of their customers. They follow
certain rules while doing trade - No alcohol during working hours; No leave without
permission; Wearing of white cap and carrying ID cards during business hours.
Recently, on the suggestion of a few self-motivated fellow men, the Dabbawalas thought out
and executed a plan of providing food left in tiffins by customers to slum children. They have
instructed their customers to place red sticker if food is left in the tiffin, to be fed to poor
children later.
(a) State any one principle of management given by Fayol and one characteristic of
management mentioned in the above case.
(b) Give any two values which the Dabbawalas want to communicate to the society.
Solution :
(a) Principles of management given by Fayol are:
(i) Initiative: The focus of this principle is on encouraging employees to develop and carry out
plans for bringing about improvements in ne functioning of the organisation.
(ii) Discipline: This states that all the employees and the management must adhere to rules
and employment agreements of the organisation.
(iii) Esprit-de-corps: This principle promotes a feeling of team spirit among employees of the
organisation. This helps a lot in achieving organisational goals.
The characteristics of management are:
(i) Management helps in achieving group goals: The task of a manager is to give a common
direction to the individual effort in achieving the overall goal of the organisation.
(ii) Management creates a dynamic organisation: Environment is constantly changing.
Individuals resist change as it often means moving from a familiar, secure environment into a
newer and more challenging one. Management helps people adapt to these changes so
organisation maintain its competitive edge.
(b) Values that have been communicated by the Dabbawalas are:

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(i) Fulfilling social responsibility.
(ii) Empathy towards disadvantaged children.
(iii) Team work.
Q. 15: Sanchit, after completing his entrepreneurship course from Sweden returned to India
and started a coffee shop 'Aroma Coffee Can' in a famous mall in New Delhi. The specialty
of the coffee shop was the special aroma of coffee and a wide variety of flavours to choose
from. Somehow, the business was neither profitable nor popular. Sanchit was keen to find
out the reason. He appointed Sandhya, an MBA from a reputed college, as a manager to
find out the causes for the same. Sandhya took feedback from the clients and found out that
though they loved the special unique aroma of coffee but were not happy with the long
waiting time being taken to process the order. She analysed and found out that there were
many unnecessary obstructions in between, which could be eliminated. She fixed a standard
time for processing the order.
She also realized that there were some flavours whose demand was not enough. So, she
also decided to stop the sale of such flavours. As a result with in a short period Sandhya was
able to attract the customers.
Identify and explain any two techniques of scientific management used by Sandhya to solve
the problem.
Solution : Techniques of Scientific management used by Sandhya to solve the problem
were:
(i) Motion Study: It is a technique to study the movements that are necessary for doing a well
defined job. It seeks to eliminate unnecessary and wasteful movements so that it takes less
time to complete a job efficiently.
(ii) Simplification of Work: It is a technique to eliminate superfluous varieties, sizes and
dimensions of products. It leads to reduced inventories, fuller utilisation of equipment and
increased turnover to reduce costs.
Q. 16: Principles of Taylor and Fayol are mutually complementary. One believed that the
management should share the gains with the workers, while the other suggested that
employee compensation should depend on the earning capacity of the company and should
give them a reasonable standard of living.
Identify and explain the principles of Fayol and Taylor referred to in the above para.
Solution : The two principles that are being regarded in the given paragraph are as follows:
(i) 'Harmony, Not Discord' by Taylor: This can be inferred from the line that 'management
should share gains with the workers'.
Taylor emphasised that the managers and the workers should maintain a harmonious work
environment. They should realise their interdependence and work in amity. He introduced
this principle to maintain a peaceful kinship between people Often it is found that if the
workers are deprived of their wishes or demands they generally go on strike. This affects the
productivity and the working environment. To dismiss such a situation Taylor was ardent
about a mental revolution. It implies a change in the thinking of both the workers and
managers.
(ii) 'Remuneration of Employees' by Fayol: This can be inferred from the line that 'the
employees compensation should depend on the earning capacity of the company and
should give them a reasonable standard of living'.
According to this principle, the compensation paid to the employees should be fair and just.
That is, the employees must be paid appropriately as per their work responsibility. They
must be able to lead a reasonable and a decent standard of living. It is only when the

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employees are paid adequately that they are satisfied and are encouraged to give their best
to work.
Q. 17: Principles of Taylor and Fayol are mutually complementary. One believed that the
management should scientifically select the person and the work assigned should suit his /
her physical and intellectual capabilities, while the other suggested that the work can be
performed more efficiently if divided into specialised tasks.
Identify and explain the principles of Fayol and Taylor referred to in the above para.
Solution : The two principles mentioned in the given paragraph are as follows:
(i) Development of each and every person to his/her greatest efficiency and prosperity:
Industrial efficiency depends upon efficiency and competency of workers. Efficiency should
be built in right from the process of employee selection, assignment of work on the basis of
their capabilities, giving training when needed. Employees should be recruited in a scientific
manner. They should be assigned work according to their mental and physical qualities. For
increasing the efficiency, a proper training should be given to the workers.
(ii) Division of work: It means that a given task is divided into small parts or units to ensure
that it is executed in a competent manner. These units should be assigned to each individual
based on his ability rather than giving the whole of the work to one person. Thus, division of
work promotes specialisation.
Q.18: Principles of Taylor and Fayol are mutually complementary. One believed that,
management should not close its ears to constructive suggestions made by the employees,
while the other suggested that a good company should have an employee suggestion
system, whereby suggestions which result in substantial time or cost reduction should be
rewarded.
Identify and explain the principles of Taylor and Fayol referred in the above para.
Solution : The two principles that are being regarded in the given paragraph are as follows:
(i) Co-operation and Not Individualism: "Management should not close its ears to
constructive suggestions made by the employees."
This principle is extension of the principle of harmony and not discord. According to this
principle, both management and workers should develop understanding and secure mutual
co-operation. Management should give importance to suggestions made by the workers and
workers must desist from going on strikes and making unreasonable demands.
(ii) Initiative: "A good company should have an employee suggestion system, whereby
suggestions which result in substantial time or cost reduction should be rewarded."
According to Fayol, 'Initiative means taking the first step with self-motivation'. Initiative
means eagerness to initiate action without being asked to do so. According to Fayol,
employees should be allowed to think and execute plans, to bring about improvements in
work related matters. However initiative does not imply freedom to do whatever people like.
They must observe discipline.
Q.19: Sakaar Foundation is an NGO (Non-Governmental Organisation) working to improve
the lives of children with medical needs, the homeless and victims of natural disasters. Apart
from donations in cash, they collect dry ration, old clothes, shoes, toys, books, medicines
etc. from donors. At Sakaar Foundation's office in Lucknow the material collected is
segregated, classified and put in shelves and boxes that are labelled systematically. There is
a specific place for each of these items and volunteers put everything at their respective
places.
The volunteer work is divided into specific jobs like fund raising, field visits, social media
updates and so on. Each volunteer is part of a particular team, depending on their
competency and training. Each volunteer becomes specialized in their respective field,
leading to efficient utilization of human effort.
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The management of Sakaar Foundation does not close its ears to any constructive
suggestions made by the volunteers. There is an equal division of work and responsibility
between volunteers and management. All the day long the management work side by side
the volunteers helping, encouraging and smoothing the way for them.
(a) Identify and explain one principle each of 'Scientific Management' and 'General
Management' adopted by Sakaar Foundation.
(b) State any two values that Sakaar Foundation is displaying and promoting in society
through their work.
Solution :
(a) (i) Principle of 'Scientific Management' adopted by Sakaar Foundation:
• Co-operation, not individualism: There should be complete co-operation
between the management and the workers instead of individualism. For all important
decisions taken by the management, workers should be taken into confidence. The
management should be open to any constructive suggestions made by the employees and
suitably reward them.
(ii) Principle of 'General Management' adopted by Sakaar Foundation:
• Order: The principle of order states that people and materials must be in suitable places at
appropriate time for maximum efficiency i.e., there should be a place for everything and
everyone in an organisation and that person or thing should be found in its allotted place.
Order leads to increased productivity and efficiency.
• Division of work: The principle of division of work states that work is divided into small
tasks/jobs. A trained specialist who is competent is required to perform each job. Thus,
division of work leads to specialisation.
(b) Values that Sakaar Foundation is displaying and promoting in society through their work
are:
(i) Concern for the society.
(ii) Optimum utilization of resources.
Q. 20: Karan Nath took over 'North Motor Company' from his ailing father three month ago.
In the past the company was not performing well. Karan was determined to improve the
company's performance. He observed that the methods of production as well as selection of
employees in the company were not scientific. He believed that there was only one best
method to maximise efficiency. He also felt that once the method is developed, the workers
of the company should be trained to learn that 'best method'. He asked the Production
Manager to develop the best method and carry out the necessary training. The Production
Manager developed this method using several parameters right from deciding the sequence
of operations, place for men, machines and raw materials till delivery of the product to the
customers. This method was implemented throughout the organisation. It helped in
increasing the output, improving the quality and reducing the cost and wastage.
Identify and explain the principles and the technique of scientific management followed by
the Production Manager in the above case.
Solution : The principles of scientific management followed by the Production Manager in the
above case are:
(i) Science, not rule of thumb: Taylor always believed that there was 'one best method' that
can lead to maximum efficiency and this method can be developed through observation,
analysis and repeated experimentation. He advocated that this best method should replace
rule of thumb in all operations of a business. Thus, when decisions are taken on the basis of
scientific approach instead of personal opinions and judgements, the 'Rule of Thumb' is
replaced by 'Science'.
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(ii) Development of each and every person to greatest efficiency and prosperity: Taylor was
of the view that the concern for efficiency should be built in right from the stage of selection
of employees. Each person should be scientifically selected and the work assigned to them
should suit the mental, physical and intellectual abilities of the selected employee.
They should be given proper training to increase their efficiency. This way employees would
produce more and earn more which would ensure their greatest efficiency and prosperity for
both, workers and the organisation.
The technique of scientific management followed by the Production Manager in the above
case is:
Method Study: There may be a number of possible methods of performing a job with
different cost requirements. Taylor suggests finding 'one best way' of performing a job. The
purpose of method study is to minimize production costs and use organisation's resources
such as land, labour, capital etc. for better results. For example, Taylor devised the concept
of assembly line by using the method study. This technique was used successfully by Ford
Motor Company and is used by the auto companies even today.

Vidyapeeth Academy
An Exclusive Institute For Commerce Classes….
Add. Behind Vishal Mega Mart Badshahpur (Sec. 65). Gurugram Mob. 9953137755
 Vidyapeeth Academy
An Exclusive Institute For Commerce Classes….
Add. Behind Vishal Mega Mart Badshahpur (Sec. 65). Gurugram Mob. 9953137755