SKY EDUCATION

CHAPTER 1: PRINCIPLES OF MANAGEMENT

Q.1.A) Select the correct option and rewrite the sentences.
1) ............. was regarded as Father of Scientific Management.
a) Henry Fayol. b) F W Taylor. c) Philip Kotler
2) Principle of ............. is based on 'A place for everything and everything in its place'.
a) discipline. b) order c) equity
3) Member of organization should receive orders from ............. .
a) many superior. b) one superior. c) all superiors
4) Scalar chain means the hierarchy of ............. from the top level to the lower level for the
purpose of communication.
a) discipline. b) unity. c) authority
5) Taylor recommended total ............. foremen to control the various aspects of production.
a) eight. b) three c) two

B) Match the pairs.

Group A Group B
A. Henry Fayol 1. Eight Foreman
B. Principle of Unity of Direction 2. F.W.Taylor
C. Principles of Management 3. Proper division of all activities
D. Scientific Management Theory 4. General Guidelines
E. Functional Organization 5. A place for everything and everything in its place
6. One head-one Plan
7. Low wage rate
8. Harmony between the employees and management.
9. German engineer
10. Modern Management
Answers:
A-10;. B-6;. C-4;. D-2;. E-1.

C) Give one word/phrase/term for the following statements.

1) The study of movement of an employee as well as machine while completing particular task.
Ans: Motion Study
2) The technique of observing and recording the time required by an employee to complete a given task.
Ans: Time Study
3) Study consists of an organized, systematic and critical assessment of various activities.
Ans: Work Study
4) The principle which deals with 'to do work with innovative way'.
Ans: Principle of Initiative.
5) The principle which is based on 'a place for everything and everything in its place'.
Ans: Principle of Order

D) State whether following statements are true or false.

1) The principles of management are universal in nature.
Ans: True
2) Management principles are applied differently under different situations.
Ans: True
3) Only some principles of management are important.
Ans:False
4) Henry Fayol has given different techniques of management.
Ans:False
5) F W Taylor has proposed 14 principles of management.
Ans:False
6) Each member of organization should receive orders only from one superior.
Ans: True

E) Find the odd one.

1) Principle of Authority and Responsibility, Motion Study, Principle of Division of Work, Principle of Discipline.
2) Fatigue Study, Principle of Unity of Command, Work Study, Motion Study.

F) Answer in one sentence.

1) What is principle of unity of command?
Ans: Each member of organization should receive orders from only one superior.
2) What is standardization of tools and equipments?
Ans: Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost
of production, fatigue among the workers and it improves quality of work.
3) What is differential wage rate?
Ans: If an employee is performing below the standard; he shall be given lower rate of wages. This technique motivate the
employees to attain higher standard performance and earn wages i.e. remuneration at higher rate
4) What is Subordination of individual interest into organizational interest?
Ans:According to this principle the interest of an individual must be given less importance than the interest of the
organisation.
5) What is the meaning of principle?
Ans: "Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or
behaviour or for a chain of reasoning."

G) Correct the underlined word and rewrite the following sentences.

1) Security in job always affects adversely on the efficiency of employees.
Ans: Insecurity in job always affects adversely on the efficiency of employees.
2) Esprit de corps means 'division is strength'.
Ans: Esprit de corps means 'Unity is strength'.
3) Each member of organization should receive orders from only one subordinate.
Ans: Each member of organization should receive orders from only one superior.
4) Decentralization means concentration of powers and authorities at a specific position.
Ans: Centralization means concentration of powers and authorities at a specific position.
5) Management techniques are applied differently under different conditions.
Ans: Management principles are applied differently under different conditions.

Q.2. Explain the following terms/concepts.

1) Motion Study:
The study of required motion means movement of an employee as well as of machine while completing a particular task is
very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particular job. It also
helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can
be eliminated or their sequence can be changed for smooth flow of task.
2) Differential Piece Rate System:
Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested
the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard
quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower
rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e.
remuneration at higher rate.
3) Fatigue Study:
Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions
result into physical and mental stress i.e. fatigue. It has an adverse effect on the health and efficiency of the employees. The
study of fatigue and steps to reduce the level of fatigue is very important to maintain the operational efficiency of the
employees.
4) Time Study:
It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of
time study, the precise time required for each element of work is determined. It is the technique used for fixing the
standard time required to do a particular task under given condition. It is useful to measure the efficiency of an employee
and to control the cost of work.

Q.3. Study the following case/situation and express your opinion.

1) Mr. Harshad is an entrepreneur and engaged in production of eco-friendly utensils. Both male and female workers are
working in his factory. All male employees are directly working on machines whereas female employees are working in
Packaging Department. Mr. Sharath is working as Finance Manager while Mrs. Naina is working as HR Manager who is
responsible for recruiting employees in the factory. On this basis:
i) Identify any one principle of management in above case.
Ans: Principle of Division of Work
ii) What is the designation of Mrs. Naina in this organization.
Ans: Manager
iii) Who is responsible for overall planning of the organisation?
Ans: Mr. Harshad

2) In 'Fine Diamonds Ltd.' 200 employees are working in three shifts. In first shift 60 employees, in second shift 60
employees and in third shift 80 employees are working without sufficient breaks except lunch break and shift change break.
No employee is able to complete the work in designated time due to inappropriate time management which results into
delay for next shift employees.
i) Identify which scientific principle needs to be followed by the company.
Ans: 'Science, Mot Rule of Thumb'
ii) Suggest two scientific techniques which can be used for smooth flow of work in 'Fine Diamonds Ltd.'
Ans: Work Study, Scientific Task Setting
iii) Why the work is not being completed in time?
Ans: Improper Management.

Q.4. Answer in brief.

1) Explain any five principles of management of Henry Fayol.
Answer:
1) Principle of Division of Work:
According to this principle, the work is divided into different kinds such as technical, financial, commercial, security
operations, accounting and managerial. It is assigned to employees as per their qualities and capabilities. It helps in
improving efficiency and expertise of employees which ultimately turns into expected productivity level.
2) Principle of Authority and Responsibility:
Authority is the right to take decisions. It is necessary to get the things done appropriately from subordinates. Authority
always comes with the responsibility. If the manager is given the authority to complete a task within a given time, he should
be held responsible if he does not complete the work in given time. Manager should have proper authorities to take
managerial decision on his own in respect to the goal.
3) Principle of Discipline:
According to Fayol, discipline is the most essential thing in the organisation. Employees must obey and respect the rules
that govern the organisation. Discipline helps to achieve the goals in the organisation. Good discipline is the result of
effective leadership. There must be a clear understanding between the management and workers regarding the
organisation's rules. Basic discipline should be observed at all levels of management.
4) Principle of Unity of Command:
This principle helps in managing conflicts and solving disputes among people in organization. It also helps in avoiding
confusion. If an employee receives commands from more than one authority, he will get confused and will not be able to
take decision about whose orders should be followed. This is wrong approach. For this organizational hierarchy should be
well defined. Each employee should know his immediate superior and should receive orders from him only.
5) Principle of Unity of Direction:
This principle states that 'there should be one head and one plan' in every organization. Each group in the organization
should have the same objective and the group should be directed by one manager using single plan.

2) Describe any four techniques of scientific management.

Answer:
1)Standardization of Tools and Equipment’s:
With the result of experiments conducted at work place, Taylor advocated standardization of tools and equipment’s.
Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of
production, fatigue among the workers and it improves quality of work.
2)Scientific Task Setting:
Taylor emphasized the need for fixing a fair day's work. Scientific work setting is important to prevent the employees from
doing work much below their capacity. By using this technique, employees will complete the task according to standards
given and management can keep proper control on optimum utilization of workforce.
3) Scientific Selection and Training:
Management can select right persons for the right jobs by using scientific selection procedures. It needs to fix job
specifications as per requirement. Employees are selected according to pre-determined standards in an impartial way. After
selection, management should provide the proper training programmes to increase their efficiency.
4)Differential Piece-Rate Wage Plan:
Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested
the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard
quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower
rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e.
remuneration at higher rate.

Q.5. Justify the following statements.

1) Principles of management are flexible in nature.
Ans: Yes, Principles of Management are Flexible in nature because,
1. Principles can be changed or modified according to the situation.
2. Managers can be flexible while implementing principles to suit the requirement.
3. The business situations keep on changing.
4. Management principles can be adjusted or modified and can be used in the organisation according to its need.

2) Management principles are helpful in optimum utilization of resources.

Ans: Management principles are helpful in optimum utilization of resources because,
1. The basic function of management is to make proper balance between these resources by putting them to optimum use
and control on wastage of resources.
2. While maintaining discipline and healthy working environment, management always uses techniques and principles.
3. It helps in establishing cordial relationship between management and employees which increases the efficiency level of
employees and also affects the effective administration.
3) Principle of equity is important.
Ans: Principle of equity is important because,
1. Management should be fair as well as friendly to the subordinates.
2. While dividing the work, delegating the authorities, deciding the monetary terms etc.. there should not be any
discrimination between the employees.
3. It is also suggested that the remuneration should not depend on the department but at the level on which subordinates
are working.
4. The employees working on the same level but in different departments should be paid same wages. This equity will help
in avoiding conflicts in the organisation.

4) Taylor emphasized on standardization of tools and equipment.

Ans: Taylor emphasized on standardization of tools and equipment because,
1. Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of
production, fatigue among the workers and it improves quality of work.

5) Differential piece wage rate plan is necessary.

Ans: Yes, Differential piece wage rate plan is necessary because,
1. Higher rates are offered to employees who complete the work more than the standard quantity under this system.
2. On the other hand, if an employee is performing below the standard; he shall be given lower rate of wages.
3. This technique motivate the employees to attain higher standard performance and earn wages i.e. remuneration at
higher rate.

Q.6. Attempt the following.

1) Explain in detail any five Henry Fayol's principles of management given by Henry Fayol.
Answer:
Henry Fayol (1841-1925) was a French mining engineer who turned a leading industrialist and a successful manager. He
started his career as a mining engineer in a French mining company and rose to the position of the Chief Managing
Director.After conducting many experiments and observations in organization, Fayol proposed 14 principles of management
which are explained in his famous book 'General and Industrial Administration'. Due to his contribution in development of
managerial thoughts he is called as 'Father of Modern Management'. (SHORT CODE : ADD IN)
1. Principle of Authority and Responsibility:
Authority is the right to take decisions. It is necessary to get the things done appropriately from subordinates. Authority
always comes with the responsibility. If the manager is given the authority to complete a task within a given time, he should
be held responsible if he does not complete the work in given time. Manager should have proper authorities to take
managerial decision on his own in respect to the goal.
2. Principle of Division of Work:
According to this principle, the work is divided into different kinds such as technical, financial, commercial, security
operations, accounting and managerial. It is assigned to employees as per their qualities and capabilities. It helps in
improving efficiency and expertise of employees which ultimately turns into expected productivity level.
3. Principle of Discipline:
According to Fayol, discipline is the most essential thing in the organisation. Employees must obey and respect the rules
that govern the organisation. Discipline helps to achieve the goals in the organisation. Good discipline is the result of
effective leadership. There must be a clear understanding between the management and workers regarding the
organisation's rules. Basic discipline should be observed at all levels of management.
4. Principle of Initiative:
Initiative refers to volunteering to do the work in an innovative way. The freedom to think and work on new ideas
encourages employees to take initiative while working on given task. This initiative should be welcomed by the manager
including thorough discussion on those new ideas. It also helps in creating healthy organizational culture.
5. Principle of Subordination of Individual Interest to Organisational Interest:
According to this principle the interest of an individual must be given less importance than the interest of the organisation.
While taking decision in the organisation the manager should always consider the interest of the whole group rather than
the interest of a single employee. Similarly the employee should protect the interest of the organisation first and his
personal interest should be subordinated. For example, in every game, the players are always thinking about winning the
match as a team rather than their individual records.

2) Describe different techniques of scientific management.

Answer:
Some of the major techniques of scientific management are as follows:
1) Work Study:
Before assigning the work to the available workforce, proper work study should be done by management. Work study
consists of an organized, systematic and critical assessment of the various activities or functions. Work study is based on the
techniques such as time study, motion study, method study and fatigue study.
A) Time Study:
It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of
time study, the precise time required for each element of work is determined. It is the technique used for fixing the
standard time required to do a particular task under given condition. It is useful to measure the efficiency of an employee
and to control the cost of work
B) Method Study:
There are always various methods of completing the task. For best quality and cost effective-ness, identifying the best
method of doing a particular job is very important but challenging task for a manager. It helps in reducing the wastage of
time, raw material and in improving the utility of all resources as per predefined objectives. It is helpful in determining the
methods for handling the raw materials, transportation, inspection, storage etc.
C) Motion Study:
The study of required motion means movement of an employee as well as of machine while completing a particular task is
very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particular job. It also
helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can
be eliminated or their sequence can be changed for smooth flow of task.
D) Fatigue Study:
Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions
result into physical and mental stress i.e. fatigue. It has an adverse effect on the health and efficiency of the employees. The
study of fatigue and steps to reduce the level of fatigue is very important to maintain the operational efficiency of the
employees.
2) Standardization of Tools and Equipments:
With the result of experiments conducted at work place, Taylor advocated standardization of tools and equipments.
Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of
production, fatigue among the workers and it improves quality of work.
3) Scientific Task Setting:
Taylor emphasized the need for fixing a fair day's work. Scientific work setting is important to prevent the employees from
doing work much below their capacity. By using this technique, employees will complete the task according to standards
given and management can keep proper control on optimum utilization of workforce.
4) Scientific Selection and Training:
Management can select right persons for the right jobs by using scientific selection procedures. It needs to fix job
specifications as per requirement. Employees are selected according to pre-determined standards in an impartial way. After
selection, management should provide the proper training programmes to increase their efficiency.
5) Functional Organization:
In this concept of Taylor, planning is separated from implemetation. That means, planning is done by different people and
actual work is supervised by different people. Thus, every worker will be supervised by two different sets of supervisors. He
recommended total eight foremen to control the various aspects of production. They are categorized as follows:
A) At Planning Level:
1. Route Clerk- tells how work moves from one machine to other.
2. Instruction Clerk- records instructions to complete the work.
3. Time and Cost Clerk- determines time in which work should be completed and workout the cost
4. Discipline- ensures that the workers are working as per factory rules
B) At Implementation Level:
1. Gang Boss-actually gets the work done.
2. Speed Boss- ensures that the work is completed in specified time.
3. Repair Boss- handles security and maintenance of mechanism
4. Inspector- ensures that the work is done as per the specified standards.According to Taylor, with the help of proper
division of all activities into planning and implementation; management can definitely achieve the required performance
from the employees.
6) Differential Piece-Rate Wage Plan:
Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested
the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard
quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower
rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e.
remuneration at higher rate.

3) Elaborate principles of scientific management.

Answer:
Definition of Scientific Management by Fredrick Taylor: "Scientific Management consists of knowing what you (i.e.
management) want men to do exactly; and seeing it that they do it in the best and the cheapest manner."
These principles are as follows: (Keyword: MDH SCIENCE AND COOPERATION)
1) Mental Revolution:
Taylor introduced the concept of "Mental Revolution". This principle focuses on change in the attitude of employees and
management towards each other. Both should realize their equal importance in organization. They should give full
cooperation for achieving goal of organization. This will increase productivity and profits.
2) Division of Responsibility:
Proper division of work should always be accompanied with division of responsibilities between the managers and
employees. Major planning is done by the top and middle level management authorities whereas employees are
concentrating on its execution. The reporting is done as per the instructions given by their superiors. Managers should
always help, encourage and guide the employees. It helps for best performances of managers as well as employees.
3) Development of employer and employees for greater efficiency and maximum prosperity:
Best performance of any organization always depends on the skills and capabilities of its, employees to a great extent. Thus,
providing training and development programmes to the employees whenever required, is very essential. It ultimately
affects the profitability of the, organization. Each employee should be given proper opportunity to attain greater efficiency
and maximum prosperity.
4) Harmony, Not Discord:
According to this principle, there should be harmony between the employees and management. This coordination will help
in minimizing conflicts between them. Perfect understanding between employees and management will be helpful in
creating healthy work environment for achieving the desired goal i.e. success. Organization should think about maximum
prosperity of employees also.
5) Science, Not Rule of Thumb:
In order to increase organizational efficiency, the 'Rule of Thumb' method should be substituted with the methods
developed through scientific analysis of work. Rule of thumb decisions are based on personal judgments of the manager.
Taylor insisted upon scientific method for every small work. This principle is concerned with selecting the best way of
performing a job after scientific analysis of that job and not by trial and error methods. Standard required time and
standard output should be defined by the manager. This will help in saving time and human energy and will result into
expected standard output. According to Taylor, even a small production activity like loading iron sheets into box cars can be
scientifically planned.
6) Cooperation, Not Individualism:
This principle emphasizes on mutual cooperation between workforce i.e. employees and management. Due to cooperation,
trust, team spirit etc. internal competition will turn into healthy working environment. Management should always consider
the suggestions given by employees in decision making process. Employees should be treated as an integral part of
organisation in all respects. At the same time employees should resist themselves from going on strikes and making
unnecessary demands from management. They should treat each other as two pillars of organization.

4) Explain nature of principles of management.

Answer:
"Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour
or for a chain of reasoning. “Management principles are formed to guide and influence the behavior of employees. These
principles insist on improving efficiency of organizational resources in terms of profit. These principles also focus on best
coordination between superior, subordinates and all the members of organization. The nature of management principles is
given below: (Keyword: A B C Principles, General, Flexible , Universal)
1) All principles are of equal importance:
All principles of management are of equal importance. Those are to be practiced simultaneously to get best results in the
form of achievement of predefined goals. If any specific principle is focused more and others are not followed with same
focus, then it affects the working of organization. Management principles are the principles of social science. The nature of
principles of management is not absolute like pure sciences i.e. Chemistry, Mathematics etc. With some modifications
according to requirement, organization needs to apply the principles of management.
2) Behavioural in nature:
Management is group activity. Management aims at achieving certain goal through a group of human being. Management
principles are designed to influence human beings. These principles control a group of persons and direct them to achieve
the objectives.
3) Cause and effect relationship:
Principles of management are the base for taking decisions. They determine the cause or reason for particular effect. For
example, payment of good wages and incentives helps in increasing the output of workers or making effective
advertisement increases the sale of a product.
4) Principles are formed by practice and experiments:
The management principles are developed gradually with thorough research work. Systematic observations and
experiments are conducted before developing them. The results of such experiments have been developed as a principle
after its practice in organizations.
5) General guidelines:
Management principles provide general guidelines in tackling the organizational situations wisely as well as in solving the
problems. They are not rigid. Which management principles are to be applied depends upon the situation, size and nature
of organisation. For example, when we say fair remuneration, then the term 'fair' can vary as per the nature, size and
financial condition of the organisation.
6) Flexibility:
Management principles are flexible in nature. It means they can be changed or modified according to the situation.
Managers can be flexible while implementing principles to suit the requirement. The business situations keep on changing.
Management principles can be adjusted or modified and can be used in the organisation according to its need.
7) Universal application:
The principles of management are universal in nature. That means they can be applied to all types of organizations,
irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all
kinds of organizations. Similarly, they are applicable to all levels of management.

Q.7. Answer the following.

1) What are the techniques of scientific management? Explain in detail.
Answer:
Taylor (1856-1915) was an American who started his career as a machinist in Midvale Steelworks, Philadelphia and
gradually through his hard work and progress, rose to the position of the Chief Engineer. He introduced his observations
and experiments based on scientific data. Taylor's approach towards management is termed as scientific management. For
this contribution in development of management thoughts, he is known as the "Father of Scientific Management".
Definition of Scientific Management by Fredrick Taylor: "Scientific Management consists of knowing what you (i.e.
management) want men to do exactly; and seeing it that they do it in the best and the cheapest manner. “Some of the
major techniques of scientific management are as follows:
1) Work Study:
Before assigning the work to the available workforce, proper work study should be done by management. Work study
consists of an organized, systematic and critical assessment of the various activities or functions. Work study is based on the
techniques such as time study, motion study, method study and fatigue study.
A) Time Study:
It is the technique of observing and recording the time taken by an employee to complete a given task. With the help of
time study, the precise time required for each element of work is determined. It is the technique used for fixing the
standard time required to do a particular task under given condition. It is useful to measure the efficiency of an employee
and to control the cost of work.
B) Method Study:
There are always various methods of completing the task. For best quality and cost effectiveness, identifying the best
method of doing a particular job is very important but challenging task for a manager. It helps in reducing the wastage of
time, raw material and in improving the utility of all resources as per predefined objectives. It is helpful in determining the
methods for handling the raw materials, transportation, inspection, storage etc.
C) Motion Study:
The study of required motion means movement of an employee as well as of machine while completing a particular task is
very important. It is helpful in eliminating unnecessary motions and finding the best method of doing a particular job. It also
helps in improving the efficiency of the employees. Motion technique is used to know whether some elements of a job can
be eliminated or their sequence can be changed for smooth flow of task.
D) Fatigue Study:
Generally long working hours without sufficient breaks, target pressure, heavy working tools, and poor working conditions
result into physical and mental stress i.e. fatigue. It has an adverse effect on the health and efficiency of the employees. The
study of fatigue and steps to reduce the level of fatigue is very important to maintain the operational efficiency of the
employees
.2) Standardization of Tools and Equipments:
With the result of experiments conducted at work place, Taylor advocated standardization of tools and equipments.
Standardized working environment and methods of production help to reduce spoilage and wastage of material, cost of
production, fatigue among the workers and it improves quality of work.
3) Scientific Task Setting:
Taylor emphasized the need for fixing a fair day's work. Scientific work setting is important to prevent the employees from
doing work much below their capacity. By using this technique, employees will complete the task according to standards
given and management can keep proper control on optimum utilization of workforce.
4) Scientific Selection and Training:
Management can select right persons for the right jobs by using scientific selection procedures. It needs to fix job
specifications as per requirement. Employees are selected according to pre-determined standards in an impartial way. After
selection, management should provide the proper training programmes to increase their efficiency.
5) Functional Organization:
In this concept of Taylor, planning is separated from implementation. That means, planning is done by different people and
actual work is supervised by different people. Thus, every worker will be supervised by two different sets of supervisors. He
recommended total eight foremen to control the various aspects of production. They are categorized as follows:
A) At Planning Level:
1. Route Clerk- tells how work moves from one machine to other.2. Instruction Clerk- records instructions to complete the
work.3. Time and Cost Clerk- determines time in which work should be completed and workout the cost
4. Discipline- ensures that the workers are working as per factory rules.
B) At Implementation Level:
1. Gang Boss-actually gets the work done.2. Speed Boss- ensures that the work is completed in specified time.3. Repair
Boss- handles security and maintenance of mechanism4. Inspector- ensures that the work is done as per the specified
standards. According to Taylor, with the help of proper division of all activities into planning and implementation;
management can definitely achieve the required performance from the employees.
6) Differential Piece-Rate Wage Plan:
Remuneration should be fixed in such a way that average worker is motivated to attain a standard output. Taylor suggested
the differential piece-wage system. Higher rates are offered to employees who complete the work more than the standard
quantity under this system. On the other hand, if an employee is performing below the standard; he shall be given lower
rate of wages. This technique motivate the employees to attain higher standard performance and earn wages i.e.
remuneration at higher rate.

2) Explain 14 principles of Henry Fayol in detail.

Answer:
Henry Fayol (1841-1925) was a French mining engineer who turned a leading industrialist and a successful manager. He
started his career as a mining engineer in a French mining company and rose to the position of the Chief Managing Director.
After conducting many experiments and observations in organization, Fayol proposed 14 principles of management which
are explained in his famous book 'General and Industrial Administration'. Due to his contribution in development of
managerial thoughts he is called as 'Father of Modern Management'. (KEYWORD: ADD IN SOURCE)
1. Principle of Authority and Responsibility:
Authority is the right to take decisions. It is necessary to get the things done appropriately from subordinates. Authority
always comes with the responsibility. If the manager is given the authority to complete a task within a given time, he should
be held responsible if he does not complete the work in given time. Manager should have proper authorities to take
managerial decision on his own in respect to the goal.
2. Principle of Division of Work:
According to this principle, the work is divided into different kinds such as technical, financial, commercial, security
operations, accounting and managerial. It is assigned to employees as per their qualities and capabilities. It helps in
improving efficiency and expertise of employees which ultimately turns into expected productivity level.
3. Principle of Discipline:
According to Fayol, discipline is the most essential thing in the organisation. Employees must obey and respect the rules
that govern the organisation. Discipline helps to achieve the goals in the organisation. Good discipline is the result of
effective leadership. There must be a clear understanding between the management and workers regarding the
organisation's rules. Basic discipline should be observed at all levels of management.
4. Principle of Initiative:
Initiative refers to volunteering to do the work in an innovative way. The freedom to think and work on new ideas
encourages employees to take initiative while working on given task. This initiative should be welcomed by the manager
including thorough discussion on those new ideas. It also helps in creating healthy organizational culture.
5. Principle of Subordination of Individual Interest to Organisational Interest:
According to this principle the interest of an individual must be given less importance than the interest of the organisation.
While taking decision in the organisation the manager should always consider the interest of the whole group rather than
the interest of a single employee. Similarly the employee should protect the interest of the organisation first and his
personal interest should be subordinated. For example, in every game, the players are always thinking about winning the
match as a team rather than their individual records.
6. Principle of Scalar Chain:
Scalar chain means the hierarchy of authority from the top level to the lower level for the purpose of communication. This
helps to ensure the orderly flow of information and communication. Traditionally, organizations used to frame large scalar
chain which is time consuming. For example, a General Manager informs the decision to respective Functional Manager,
then Functional Manager will pass it to supervisor, the supervisor will inform it to Foreman and so on according to level of
authority. For avoiding this longer chain and to take speedy decisions cross communication or direct communication is
followed by various organizations which is known as Gang Plank. For direct communication, proper permission of the
authorities is necessary.
7. Principle of Stability of Tenure:
At the time of recruitment of employees, the management should assure them about stability of tenure or job security. It
plays very important role in creating sense of belongingness among the employees. Insecurity in job always affect the
efficiency of employees adversely whereas job security minimizes employee turnover ratio.
8. Principle of Order:
This principle is based on 'A place for everything and everything in its place'. Human resources and materials should be in
the right place at the right time for maximum efficiency. Human resources should be placed at right place and on right job.
The principle focuses on the proper utilization of physical and human resources.
9. Principle of Unity of Command:
Each member of organization should receive orders from only one superior. This principle
helps in managing conflicts and solving disputes among people in organization. It also helps
in avoiding confusion. If an employee receives commands from more than one authority, he
will get confused and will not be able to take decision about whose orders should be followed.
This is wrong approach. For this organizational hierarchy should be well defined. Each employee should know his immediate
superior and should receive orders from him only.
10. Principle of Unity of Direction:
This principle states that 'there should be one head and one plan' in every organization. Each group in the organization
should have the same objective and the group should be directed by one manager using single plan.
11. Principle of Remuneration:
Appropriate remuneration to staff or employees is the principle to keep them satisfied financially as well as retain them for
long span of time within the organization. The fair remuneration affects on the productivity and efficiency level in total. The
remuneration should be fixed by taking into consideration the skill, expertise, knowledge, tenure, cost of living, market
trend, profitability of organization etc.
12. Principle of Centralization:
Centralization refers to the concentration of powers and authorities. In some organisations this power is vested in one hand
or few hands. This situation occurs in the small organisations. But, if the size of organisation is large then there is a
decentralization of the power or authority. According to this principle there must be a proper balance between
centralization and decentralization in the organisation. This is to be done according to the size of the organisation, nature
of the activity etc.
13. Principle of Equity:
Management should be fair as well as friendly to the subordinates. While dividing the work, delegating the authorities,
deciding the monetary terms etc.. there should not be any discrimination between the employees. It is also suggested that
the remuneration should not depend on the department but at the level on which subordinates are working. The
employees working on the same level but in different departments should be paid same wages. This equity will help in
avoiding conflicts in the organisation.
14. Principle of Esprit de corpse:
(Team work)Henry Fayol has given emphasis on team work. Esprit de corps means union is strength.Running any
organization is a group activity and human resources are the valuable asset of the organization. If all employees are working
as a union and with mutual trust, the difficulties can be solved quickly. Therefore, as a leader, manager should create a
spirit of team work and understanding among employees to achieve organizational goal easily.

Above 14 principles of Henry Fayol are very useful to manage the organization efficiently and effectively. These are also
supportive to functions of management. These principles are very logical and therefore are applicable in modern
management era.