NCERT Solutions For Class 12 Business Studies Chapter 2 Principles of Management

Principles of Management Class 12 NCERT Solutions

NCERT Books Solutions For Class 12 Business Studies Chapter 2 Principles of Management

Principles of Management Class 12 Takshila Learning’s NCERT Solutions for Business Studies are an advanced and next stage of Class 11 NCERT Solutions in business studies. We provide the basic fundamentals of the subject in Class 11 and then move on to an advanced degree of concepts in Class 12. The business studies topics are related to our practical life and dealt with in an easy way for understanding.


NCERT Solutions For Class 12 Business Studies Chapter 2 Principles of Management
NCERT Solutions For Class 12 Business Studies Chapter 2 Principles of Management


NCERT Solutions For Class 12 Business Studies Chapter 2 Principles of Management provides us with all-inclusive information on all concepts. As students would have to learn the basics about the subject in class 12, this curriculum for class 12 is a comprehensive study material, which explains the concepts in a great way.

Questions Covered In NCERT Solutions For Class 12 Business Studies Chapter 2 : 


  1. Principles of management are NOT
  • (a) Universal
  • (b) Flexible
  • (c) Absolute
  • (d) Behavioural

Ans: The principles of management are not absolute. They are just guidelines for decision making in the course of management. That is, management principles are not applied as it is in real business situations, rather they need to be modified by the manager according to the situation and requirement.

  1. How are principles of management formed?
  • (a) In a laboratory
  • (b) By experiences of managers
  • (c) By experiences of customers
  • (d) By propagation of social scientists

Ans: The principles of management were developed over the years by the experiences and observations of managers. Each manager faces different situations in real business organizations. Based on these experiences, they draw general conclusions and conclusions that guide them in their action and decision making under similar circumstances. That is, managers’ experiences form the basis of management principles.

  1. The principles of management are significant because of
  • (a) Increase in efficiency
  • (b) Initiative
  • (c) Optimum utilisation of resources
  • (d) Adaption to changing technology

Ans: The optimal use of resources drives limited resources (such as capital and labor) to their best possible use so that maximum benefits are achieved with the lowest possible cost. Management principles help to predict the cause-and-effect relationship of managers’ decisions. Thus, waste of resources that may be associated with the hit and trail method can be avoided. Thus, the principles of management are important because of the optimal use of resources. The increase in efficiency, initiative, and adaptation in changing technology comes at a later stage, with resources being fully utilized.

  1. Henry Fayol was a
  • (a) Social Scientist
  • (b) Mining Engineer
  • (c) Accountant
  • (d) Production engineer

Ans: Henry Fayol (1841-1925) was a French mining engineer who started his work in the mining industry at the age of nineteen. Based on his own experience, he developed the theory of business administration. He gave the concept of ‘Administrative Principles’.

  1. Which of the following statement best describes the principle of ‘Division of Work’
  • (a) Work should be divided into small tasks
  • (b) Labour should be divided
  • (c) Resources should be divided among jobs
  • (d) It leads to specialisation

Ans: According to the principle of ‘work department’, work should be divided into small jobs. This is due to the fact that any complex task can be executed efficiently if it is divided into small units and performed by experts.

  1. ‘She/he keeps machines, materials, tools, etc., ready for operations by concerned workers’. Whose work is described by this sentence under functional foremanship
  • (a) Instruction Card Clerk
  • (b) Repair Boss
  • (c) Gang Boss
  • (d) Route Clerk

Ans: In the given sentence, the work of the gang boss is being described. The gang boss is tasked with keeping the machines and equipment ready for operation. That is, he has to take care of the materials that are to be used by the working people. On the other hand, the repair owner ensures that these machines are in proper working condition. The route clerk is on the route to production and the instruction card clerk assigns the duties of the workers.

  1. Which of the following is NOT a Principle of management given by Taylor?
  • (a) Science, not rule of Thumb
  • (b) Functional Foremanship
  • (c) Mamum not restricted output
  • (d) Harmony not discord

Ans: Of the options given above, functional foremanship is not a theory of management, rather it is a technique of scientific management given by Taylor. It consists of methods or steps to be taken to achieve the desired goal. On the other hand, the other three are management principles that serve as guidelines for decision making in the actual practice of techniques.

  1. Management should find ‘One best way’ to perform a task. Which technique of Scientific management is defined in this sentence?
  • (a) Time Study
  • (b) Motion Study
  • (c) Fatigue Study
  • (d) Method Study

Ans: The technique described in the given sentence is ‘method study’. According to a method study, one way is always the best way to complete a task. Every task can be done through the best method to achieve efficiency. The basic objective of this study is to minimize costs and maximize productivity. The purpose of time studies, motion studies and fatigue studies is to standardize deadlines, eliminate unwanted actions, and limit breaks, respectively.

  1. Which of the following statements best describes ‘Mental Revolution’?
  • (a) It implies change of attitude
  • (b) The management and workers should not play the game of one upmanship.
  • (c) Both management and workers require each other.
  • (d) Workers should be paid more wages.

Ans: Mental Revolution ‘, a term given by Taylor, means that management and workers must change their attitude and thinking towards harmony. Management, on the other hand, should take care of the needs and suggestions given by workers and workers, working to the best of their ability. This will create a harmonious work environment in the organization.

  1. Which of the following statements is FALSE about Taylor and Fayol?
  • (a) Fayol was a mining engineer whereas Taylor was a mechanical engineer
  • (b) Fayol’s principles are applicable in specialised situations whereas Taylor’s principles have universal application.
  • (c) Fayol’s principles were formed through personal experience whereas Taylor’s principles were formed through experimentation.
  • (d) Fayol’s principles are applicable at the top level of management whereas Taylor’s principles are applicable at the shop floor.

Ans: The incorrect statement is ay Fayol’s principles apply in special situations while Taylor’s theories have universal applications’. In its place the correct statement is, ‘The principles of Fayol apply universally while Taylor’s principles apply only in a special situation’.


Short Answer Type:

  1. How is the principle of ‘Unity of Command’ useful to management? Explain briefly.

Ans: The principle of the ‘Command of Unity’ states that no person should be accountable to only one boss. If a person receives orders from two or more people, this principle is violated. According to Fayol, this principle plays an important role in management. If this principle is violated, it creates confusion in the mind of the employee which leads to instability and unrest. For example, suppose that A (sales manager) gives B a task that has to be completed in 5 days. On the other hand, C (Finance Manager) asks B to complete the same task in 3 days. This will cause confusion in terms of goals.

  1. Define Scientific Management. State any three of its principles.

Ans: The term ‘Taylor Scientific Management’ was developed in 1911 by Frederick Taylor (1856–1915). It refers to the classical approach to management that focuses on devising the best methods of doing work and thereby increasing the effectiveness and efficiency of the work. Scientific management refers to working according to standardized techniques and equipment and improving quantity with the help of specialized personnel as well as reducing product quality and at the same time costs. Scientific management is also known as Taylorism.Following are the three principles of scientific management.

  1. Harmony, Not Discord: According to this theory, managers and workers must maintain a harmonious work environment. They need to realize that they depend on each other. Only if they work at Amity, will they be able to perform better. Taylor emphasized the complete mental revolution. That is, workers must change their attitude and each realize the importance of the others. Management should take care of the needs of the workers and on the other hand the workers should work to their best efficiency. Both should work in harmony with the general goals of the organization.



ii. Science, Not Rule of Thumb: According to Taylor, scientific management practices should be followed rather than a rule of thumb. Under the rule of thumb, each Mars handles a situation when they arise. He used the trial and error method to find a solution to a problem. Taylor proposed that practices should be scientific rather than this management. He suggested that various traditional methods should be studied and the best method / solution should be adopted among them and followed by all managers in the organization. Such scientific management reduces costs and improves efficiency.


iii. Personnel Development: The overall efficiency of the organization depends on the personal competencies of the employees. The objective of scientific management is to improve the working capabilities of employees to their maximum level. It focused on training and development of laborers to increase their productivity.

  1. If an organisation does not provide the right place for physical and human resources in an organisation, which principle is violated? What are the consequences of it?

Ans: In the mentioned situation, the principle of order is violated. According to the theory, there should be proper arrangement of things. Everything and everyone should be ‘in the right place and at the right time’ among the little people. This helps in running the tasks smoothly. If this principle is violated, it leads to chaos and delay in work. For example, if files are not kept in a certain order, So this will cause difficulty in locating a file when necessary. This will further delay the work.

  1. Explain any four points regarding significance of Principles of Management.

Ans: Principles of management play an important role in managerial practices. They guide the managers in taking actions and decisions. The following points highlight the significance of Principles of Management

(a) Insights to Reality: Management principles are based on years of experimentation and experience. Thus, these principles guide managers when they face real-world problems. Managers can use them in various situations to solve recurring problems. (b) Logistic Decisions: Decisions about management must be taken carefully. They should be based on reasons and evidence rather than beliefs and ignorance. Since management principles were developed from real-life problems, they stand the test of logic and reasoning. Thus, management principles help managers to make logical decisions that are free from personal bias.


(c) Basic Education of Management: These principles form the basic roots of management education. Without them, management as a discipline could not develop. That is, they form an important part of the management curriculum. In addition, they also form the basis of further research on management techniques and methods.


(d) Optimal use of Resources: Management principles help in optimum utilization of available resources. The exact cause-and-effect relationship of managers’ decisions with management principles can be inferred. Causing waste of resources to be associated with the hit and trail method.Thus, following the principles of management makes the best possible use of resources possible, so that maximum benefit can be achieved with the lowest possible cost.

  1. Explain the principle of ‘Scalar Chain’ and gang plank.

Ans: Scalar chains refer to a pre-defined, formal route of authority and the order of communication from highest to lowest. For example- If A is the CEO of an organization and has two routes of officers. One, A-B-C and the other A-D-E. Everyone in the organization follows this chain of authority for communication. For example, if C wants to approach E, he has to follow this formal path, because C → B → A → D → E., C must first contact the higher authorities (C → B → A). Have to do. Which then leads the communication to E (A → D → E). However, in case of emergency, one can directly contact E through ‘gang planks’. Gang planks are a short emergency route through which fewer employees in the authority chain can directly contact individuals of higher authority or those working in other scaling chains.

Long Answer Type:

  1. Explain the Principles of Scientific management given by Taylor.

Ans: Scientific management refers to knowing what to do and devising the best ways to do it. The term was coined in 1911 by Frederick Taylor (1856–1915). It suggests that work should be done according to standardized techniques and equipment and with the help of specialized personnel to improve the quantity as well as the quality of the product. Reducing costs at the same time. That is, scientific management improves the effectiveness and efficiency of work.


The following are the principles of scientific management.

(a) Science, not a rule of thumb: Before Taylor developed the management of theories, the rule was a widely used concept. Under the rule of thumb, each Mars controls a situation or problem when it arises using the trial and error method. It was an easily implemented process but a very vague and inaccurate technique for solving problems. Taylor promoted introduction scientific methods. He believed that there is only one best way to do it for every job. He wanted managers to make decisions based on logic and science rather than a rule of thumb. He proposed that various traditional methods used by managers should be studied and the best method / solution adopted by all managers in the organization should be adopted. With such scientific management, he was able to increase efficiency to a great extent.

 (b) Harmony, not Discord: Taylor emphasized that managers and workers must maintain a harmonious work environment. They should realize their interdependence and work. He was well aware of the fact that a favorable working environment would help develop the relationship between them. He introduced this principle to maintain a peaceful kinship among the people. It is often found that if workers are deprived of their wishes or demands they usually go on strike. It affects productivity and work environment. Taylor was concerned about a mental revolution to dismiss such a situation. This means a change in the thinking of both workers and managers. for example,

If a worker is having a problem with working hours, they should talk to the manager about it instead of affecting production (going on strike). Similarly, managers should listen rather than ignore the employee’s suggestions and demands.

 (c) Cooperation, not Individualism: This theory emphasized cooperation between managers and workers over individualism. This theory was ‘an extension of the principle of harmony, not discord’. According to this, workers and manager should work with mutual understanding of each other. The manager should take care of the workers. He should share the company’s profits with workers; Rewarding them with enough incentive to work. Similarly, the workers should work voluntarily while giving their best contribution to the company. This will build mutual trust and belonging within both. Work and responsibility should be divided equally and a sense of cooperation and coordination should be established.


 (d) Personnel Development: Any organization should focus on the development of its workers along with the growth of the company. This is because if workers will have high efficiency, they will be able to increase their contribution to the development of the organization. They should introduce ways and incentives to build their competition. Efforts to increase efficiency must start in the first phase i.e. by keeping workers at work. Employees should be recruited in a scientific manner. They should be assigned work according to their mental / physical qualities. To increase efficiency, workers should be given a proper training.


  1. Explain the following Principles of management given by Fayol with examples:

(a) Unity of direction

(b) Equity

(c) Espirit de corps

(d) Order

(e) Centralisation and decentralisation

(f) Initiative

Ans: (a) Unity of Direction: According to this principle, each unit of the organization must work towards a common purpose. According to this, units having the same goals should have the same head and plan. This principle helps eliminate overlapping of work. For example, if an organization is engaged in manufacturing two products, each should have its own separate department and division with its respective heads and plans.

 (b) Equity: This principle focuses on treating each employee equally. That is, it states that each employee must be equal in the eyes of the manager. Although this principle invokes mercy in the behavior of the manager, sometimes force can also be used to set an example for other employees. In addition, workers should be considered as equal basis for religion, language, caste etc. This helps to create a favorable environment. For example- if there are activists from different religions or nationalities working in the same organization then there should be no discrimination against anyone.


 (c) Espirit de Corps: This principle recommends that employees should work in unity with each other. They should work as a team. In other words, team spirit should be promoted by the manager. Every employee should have a sense of belonging. This proves particularly useful in large organizations where, without team work, it becomes difficult to achieve objectives. Team spirit enhances coordination and mutual understanding among employees and thereby improves efficiency.


(d) Order: Order theory focuses on the correct arrangement of things. Everything and everyone should be ‘in the right place and at the right time’ among the little people. This helps in running the tasks smoothly. For example, if files are kept in a certain order it will help to easily locate the file if needed. Violation of this principle leads to chaos and delay in work.

 (e) Centralisation and Decentralisation: Centralization refers to consolidation of power and authority with one or only a few hands. Here, decision-making power becomes reserved for the focal point of an organization. Decentralization, on the other hand, refers to delegation of authority over one level. According to Fayol, managers’ involvement should be balanced with higher authority by decentralizing authority. For example, if the CEO of a company is responsible for making decisions for the entire organization, it is centralization of power. On the other hand, if decision-making power is delegated to managers at the middle and lower levels, it will be called decentralization.


 (f) Initiative– According to this theory, workers should be given sufficient motivation and encouragement to work. They should be motivated to come up with suggestions regarding the work. Although initiatives should be encouraged, they must be consistent with the organization’s practices and rules. For example, managers may ask workers for their input to increase efficiency. Also, good suggestions can be rewarded.


  1. Explain the technique of ‘Functional Foremanship’ and the concept of ‘Mental Revolution’ as enunciated by Taylor.

Ans: Functional Foremanship: A foreman refers to a person who is in charge of operational level workers. Taylor suggested that to increase efficiency, Foreman’s performance should be improved. That is, Taylor focused on the importance of foremen in an organization. Taylor observed and recognized certain qualities, such as intelligence, tact, judgment, etc., which a foreman must possess. He found that no one person can have all the necessary qualities. Thus, he suggested that there should be eight persons instead of one person, through which the functions of a foreman should be completed. This technique was named functional foremanship. Accordingly, planning and production tasks should be separated. Namely, the manager will have a planning in-charge and a production in-charge. Each in-charge will have four personnel under him.


The following are the four persons that worked under the planning incharge.

  1. Instruction Card Clerk– To give instructions to the workers.
  2. Route Clerk– To show the route of production.

iii. Time and Cost Clerk– To take care about the time and costs.

  1. Disciplinarian- To ensure that discipline is being maintained.

The following are the four persons that worked under the production incharge.

  1. Speed Boss– To ensure timely completion of tasks
  2. Gang Boss– To keep the machines and tools ready for the workers.

iii. Repair Boss– To ensure proper working of the machines.

  1. iv. Inspector– To control the quality of work done.

Mental Revolution: Mental revolution means changing the attitude of workers and managers. The two together encouraged the mental revolution with the aim of improving the working environment. Workers and managers must change their perspective and each realize the importance of the others. Both should work towards the common goals of the organization. Management should take care of the needs of the workers and share the profit with them. On the other hand, workers must put in their best efforts. Thus, the concept of mental revolution was based on cooperation and mutual trust between workers and managers.

  1. Discuss the following techniques of Scientific Work Study:

(a) Time Study

(b) Motion Study

(c) Fatigue Study

(d) Method Study

(e) Simplification and standardisation of work.

Ans: (a) Time Study– In this technique, Taylor insisted on setting a standard time limit for accomplishing a particular task. With the help of time measuring instruments, considerable readings were taken for the time taken to complete a task. Based on this, a standard time limit is set for each task. It helped in determining the number of workers to be employed for the work, set their wages, etc. For example, if, based on the comments, it is determined that a person can make 1 shirt in two hours, So in one work. 8 hours a day, each worker must make 4 shirts.

 (b) Motion Study– As the name suggests, motion study refers to the study of the motions (movements) involved when performing a task. The purpose of this technique is to remove unwanted tasks / motions so that the work can be completed in a short time. Taylor followed the intentions of an activist with his colleague Frank Gelberth and classified them as productive, casual and unproductive. He demonstrated that productivity can be increased by eliminating unproductive movements. For example, in brick layering, he showed that by reducing the speed from 18 to 5, productivity increased nearly 4 times.


 (c) Fatigue Study–

This technique is about the need for rest or breaks during work. If a worker continuously works out physical and mental fatigue. This reduces its efficiency. Thus, the worker needs a rest or a break. Fatigue studies identify the required gaps when completing a task. It states that standard break timings should be fixed to improve the working performance of workers. (d) Method Study– The purpose of this study is to find out the best method to accomplish any task. It takes into account every activity involved in the task. This helps to reduce costs and maximize customer satisfaction. Assembly line production, which is used by Ford Motors, is a popular example of method study.

 (e) Simplification and Standardization of Work– Taylor adopts standardization as the basis of scientific management techniques. The term standardization means setting milestones or benchmarks for any task or activity. Various other techniques by Taylor, such as method studies, fatigue studies, and time studies, are also based on the concept of standardization.

Simplification, on the other hand, means eliminating any unnecessary variations in the product. It aims to make full use of resources, reduce inventions and grow businesses. It helps in reducing the cost of labor and machines. This technology helps in optimal utilization of resources and eliminates unnecessary work-related costs.

  1. Discuss the differences between the contributions of Taylor and Fayol.


Basis of Difference Taylor’s Contributions Fayol’s Contributions
Contribution Scientific Management or ‘Taylorism’ Theory was given by Taylor in 1911. General Theory of Administration or ‘Fayolism’ was given by Fayol in 1916
Personality Taylor was a mechanical engineer/scientist. Fayol was a mining engineer/practitioner.
Principles and Techniques Taylor introduced Principles of Scientific Management and Functional Foremanship along with the techniques such as method study, motion study, etc. Fayol introduced 14 Principles of Management such as Order, Equity, Espirit de Corps, etc.
Application of Principles Principles are applicable to specialized situations. Principles are accepted everywhere and are universal in nature.
Perspective Taylor’s principles are based on improving the conditions of floor level workers first. Fayol’s principles are based on the functions of the higher level managers.
Emphasis and Focus Focus was on improving the overall administration of an organization. Focus was on increasing the productivity along with the worker’s efficiency.
Title Taylor is called ‘Father of Scientific Management’ Fayol is called ‘Father of General Management’
  1. Discuss the relevance of Taylor and Fayol’s contribution in the contemporary business environment.

Ans: Taylor and Fayol’s theories play an important role in the contemporary business environment. Taylor’s scientific management theory and Fayol’s administrative theory provide managers with guidelines for action and decision making. They help explain and predict business situations and, thus, guide managerial behavior. Although they cannot be used, they prove to be important guidelines in complex real business situations. Managers can use them in various situations to solve recurring problems. Decisions taken on the basis of these principles are based on facts and logic and are therefore more appropriate. They are developed from time to time by a continuous process of observations and experimentation.Thus, they provide useful insights into real business situations. These principles have universal applicability and are used by all organizations regardless of size, nature, region. Furthermore, since these principles are based on human behavior, they help establish the relationship between human and material resources in an organization. The applicability of these principles helps in the overall development of the organization.These principles aim to increase overall efficiency in the organization with optimal utilization of resources. He also highlighted the importance of collaboration between employees and managers while maintaining a harmonious work environment.


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