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CBSE Guess > eBooks > Class XII > Business Studies by Dorothy Mathias

Chapter – 2 Principles Of Management (3+4 =7 marks)

What do you understand by principles of management?

• They are statements of fundamental truth
• They provide guidelines which help management to take decisions and action
• They are derived by observation and experimental studies
• They establish cause and effect relationship

How are management principles derived? – 3 marks

Management principles are derived by observation and experimental studies as follows:

Observation:

Management principles are derived by observing and analysing the events management have to face in actual practice. For example the principle of division of labour was derived after it was observed that dividing the work based on the workers’ knowledge and experience, resulted in improved performance.

Experimental Studies:

By conducting experimental studies. For example – suppose we wish to conduct an experimental study to confirm the correctness of the principle of unity of command which states that no subordinates should receive orders from more than one boss, we take two groups of employees – one having only one boss and the other having two bosses. After some time it will be noted that the group with one boss is doing better than the other. This confirms that the principle of unity of command is correct.

State any 3 reasons why proper understanding of management principles is necessary?

Or

Explain briefly any 3 points establishing the NEED/IMPORTANCE of management principles?–3 marks Marking Scheme

Management principles are needed for the following reasons: (OCE)

Optimum use of resources:

The management principle of “science, not rule of the thumb” suggest that every task should be done with minimum effort and energy and additional work can be done with the saved energy. By saving time, efforts and energy activities can be made economical and enhance the productivity of the resources.

Change in technology:

The management principle of “division of labour” helps management in identifying in which activity technology has changed. If there is no division of labour then confusion may prevail about what and how much to change and the firm might find it difficult to face competition and might in extreme case run out of business.

Effective Administration:

• The principle of ‘scalar chain’ helps the enterprise to communicate with people at different levels
• ‘Unity of direction’ removes confusion in minds of employees; and
• ‘Unity of command’ avoids dual subordination.
• Thus these principles help management in managing their organisations effectively.
• Besides the above, management principles also provide guidelines to managers to:
• Effectively handle complex problems.
• Clearly understand the nature and scope of their work
• To make optimum use of the resources.
• To take scientific decisions to meet changing conditions.