CHAPTER :2

“PRINCIPLES OF MANAGEMENT”
I. Mr Mukesh used to manufacture shoes by employing labour who were easily available.
When his son after completion is MBA joined the business. He analysed that if we use
capital intensive method by using a machine it will reduce the cost and the quality of shoes
will also improve. Answer the following questions. Based on the above case studies.
1. Which technique of scientific management is used by his son.
(a) Fatigue study (c) Method study
(b) Motion study (d) Work study
2. What is the objective of that technique?
(a) Finding the best way of doing thing
(b) Finding the rest interval
(c) Finding the minimum cost
(d) All of the above.
II. Mr Rajiv is the owner of “Laxmi Diary”.He is producing various milk products. He
always tests various ways of producing different products and chooses the best and
most economical way of production. He is also very particular about fixing a place for
everything and he makes sure that all the employees are given a fixed place so that
there is no wastage of time and delay in production
Answer the following questions.
3. Which technique of scientific management is applied by Mr. Rajiv?
(a) Motion study (c) Method study
(b) Fatigue study (d) None of the above
4. Which principle of HenryFayol is followed by him?
(a) Principle of equity (c) Principle of discipline
(b) Principle of order (d) All of the above.
III. Principles of Taylor and Fayol are mutually complementary. One believed that the
management should share the gain with the workers while the other suggested that
employee’s compensation should depend upon the earning capacity of the company and
should give them a reasonable standard of living
Answer the following questions
5. Which principle of Fayol is applied here?
(a) Remuneration (c) Equity
 (b) Discipline (d) Esprit the corps
6. Which principle of Taylor is applied here?
(a) Harmony not discord (c) science not rule of thumb.
(b) Cooperation not individualism (d) None of the above
7. Manager of ABC ltd. does not allocate work as per the capability of workers.Which
principle is violated by them.
(a) Principle of equity (c) Principle of order
(b) Principle of discipline (d) Principle of Division of work
8. The salesman of ABC ltd. could not achieve his sales target of 1000 units, on enquiry it
was found that he was not allowed to take decision related to give discount or credit to any
of his customer. State the principle of Management violated in this case.
(a) Principle of Division of work (c) Principle of authority and responsibility
(b) Principle of order (d) None of these
9. Suraj was engaged in the business of carpet making. Since company was making
handmade carpet as well as machine made carpet. There were lot of overlapping of
activities, so the Production manager advised there should be two separate division for both
of them. Where in each division should have its own in charge plans and execution. Identify
the principle of management insisted by production Manager.
(a) Unity of command (c) order
(b) Unity of direction (d) Equity
10. Mr. Malhotra, Finance manager of ABC ltd. Applied for leave to attend a family function
in Amritsar. The director of the company requested him to cancel his leave as there is an
important meeting schedule on that date. Mr. Malhotra immediately agreed and cancelled
his trip as he thought attending meeting is more import for company’s benefit.
Which principle of Fayol is applied by Mr. Malhotra?
(a) Principle of subordination of individual interest to general interest.
(b) Principle of equity
(c) Principle of order
(d) Principle of Discipline.
11. The principles of management are said to be flexible as:
(a) They aim at influencing behavior of human beings.
(b) They are general guidelines to action, but do not provide readymade solutions to
management problems.
 (c) They can be modified by the manager when the situation so demands.
(d) Their application is dependent upon the prevailing situation at a particular point of
time.
12. “Management principles are not as rigid as principles of pure science.” Which of the
following best describes the given statement?
(a) Management principles deal with human behaviour and, thus, are to be applied
creatively
given the demands of the situation.
(b) Principles of management are formed after research in work situations, which are
technical in nature. .
(c) Principles of management contribute towards the development of management
both as a
science and as an art. .
(d) None of the above
13. The principles are guidelines to action but do not provide readymade, straitjacket
solutions to all managerial problems. This is so because .
(a) The applications of principles has to be changed as per requirements. '
(b) Real business situations are very complex and dynamic and are a result of many
factors.
(c) Principles are like different tools serving different purposes, the manager has to
decide which tool to use under what circumstances.
(d) All the above
14. “The principles of management are not rigid prescriptions, which have to be followed
absolutely.” Which of the following best describes the given statement?
(a) Management principles aim at influencing behaviour of human beings.
(b) Management principles enable a better understanding of the relationship between
human and material resources in accomplishing organisational purposes.
(c) Management principles are flexible and can be modified by the manager when the
situation
so demands.
(d) None of the above.
15. The application of principles has to be changed as per requirements. For example,
employees deserve fair and just remuneration. But what is just and fair is determined by
multiple factors. They include contribution of the employee, paying capacity of the employer
and also prevailing wage rate for the occupation under consideration.
Identify the nature of principles of management highlighted above.
(a) General Guidelines (b) Flexible
(c) Mainly Behavioral (d) Contingent
16. A manager should have the right to punish a subordinate for wilfully not obeying a
legitimate order but only after sufficient opportunity has been given to a subordinate for
presenting her/his case. Identify the principle of management highlighted above.
(a) Authority and Responsibility (b) Discipline
(c) Equity (d) Stability of Personnel
17. According to Fayol, discipline requires .
(a) Good superiors at all levels (b) clear and fair agreements
(c) Judicious application of penalties (d) All of these
18. is an extension of the principle of division of work and specialization to the shop
floor; and it violates the principle of Unity of command.
(a) Cooperation, not individualism (b) Functional foremanship
(c) Unity of Direction (d) Standardisation and Simplification of work
19. Which of the following technique of scientific management violate‘s the principle of
Equity?
(a) Functional foremanship (b) Standardisation and Simplification of work ‘
(c) Differential Piece Wage System (d) Method Study
20. A worker directly contacts the CEO of the company with a complaint regarding working
conditions in the factory. Which of the following principles is being violated here?
(a) Unity of Command (b) Discipline (c) Scalar Chain (d) Unity of Direction
21. Same battery can be used in different mobile phones of a particular brand. This is an
example of which of the following techniques of scientific management?
(a) Standardisation of work (c) Simplification of work
(b) Method Study (d) Functional Foremanship
22. “She/he keeps machines, materials, tools etc., ready for operations by concerned
workers’. Whose work is described by this sentence under functional foremanship?
(a) Route Clerk (b) Repair Boss (c) Gang Boss (d) Instruction Card Clerk
23. Which one of the following statements best describes ‘Mental Revolution’ as described
by F.W. Taylor?
(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..
24. In an organisation, each person should be scientifically selected. Then work assigned
should suit his physical, mental and intellectual capabilities. To increase efficiency, they
should be given the required training. Efficient employees would produce more and earn
more. Which of the following principle of management is highlighted above?
(a) Science, not rule of thumb
(b) Division of work.
(c) Development of each and every person to his/her greatest efficiency and
prosperity.
(d) Remuneration of employees.
25. According to this principle of management, there should be obedience to organisational
rules and contract of employment, clear and fair decisions and judicious application of
penalties which are necessary for the working of the organisation. The principle of
management referred to above is:
(a) Authority and Responsibility (b) Discipline
(c) Unity of Command (d) Subordination of Individual Interest to General Interest
26. Sanak and Gagan started their career in Wales Limited (a printing press) after going
through a rigorous recruitment process. Since they had no prior work experience, the firm
decided to give them one year to prove themselves. The principle of management followed
by Wales Limited is
(a) Authority and Responsibility (b) Discipline
(c) Equity (d) Stability of Personnel
27. Match the principle of management in Column I with their respective explanation in
Column II:
 (a) (i), (ii), (iii), (iv) (b) (ii), (i), (iii), (iv)
(c) (iii),(ii),(i),)iv) (d) (iii),(i),(ii),(iv)
28. Match the technique of scientific management in Column I with their respective
explanation in Column II:

(a) (iii), (ii),(i), (iv) (b) (ii), (i), (iii), (iv)

(a) (i), (ii), (iii), (iv) (b) (ii), (iii), (iv), (i)
(c) (ii), (iv), (i), (iii) (d)(i), (iii), (ii), (iv)
30. Match the technique of scientific management in Column I with their respective
explanation in Column II:
 (a) (iii), (iv), (i), (ii) (b) (i), (ii), (iii), (iv)
(c) (ii), (iv), (i), (iii) (d) (iii), (i), (ii), (iv)
In the given questions (31 to 38) a statement of assertion followed by a statement of reason is
given. Choose the correct answer out of the following choices.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true but Reason (R) is not correct
explanation of Assertion (A)
(c) Assertion (A) is true but reason (R) is false.
(d) Assertion (A) is false but reason (R) is true
31. Assertion (A) : Taylor’s technique of functional foremanships is based on fayol’s
principle of division of work.
Reason (R): Taylor advocated separation of planning and execution functions of a foreman
through a planning and production in-charge under him. Each of the in-charge will have four
personnel working under him according to their specialisation.
32. Assertion (A) : A principal refers to a statement which reflects the fundamental truth
about some phenomenon based on cause and effect relationship.
Reason (R) Management principles are broad and general guidelines for decision marking
and
behaviour of managers.
33. Assertion (A) : Managerial Principles are guidelines for managerial action.
Reason (R): Values are not guidelines for human behaviour.
34. Assertion (A): Management principal can not be applied differently under different
conditions
Reason (R): Some changes can be made in application of principles according to the
requirement of the company.
35. .Assertion (A) : Management principles provides managers with useful insight into
reality.
Reason (R): Management principles improve knowledge, ability and understanding of
managers under various managerial situations.
36. Assertion (A): Fayol suggested that employees in the organisation must be given an
opportunity to take some initiative in making and execution a plan.
Reason (R): It dose not help to develop feeling of belongingness in the employees
37. .Assertion (A) : Taylor insists that each job performed in the organisation should be
based on intuition and not on scientific enquiry.
Reason (R) Taylor insists that standard time for a job should be set up scientifically by
performing time study in the organisation and then the day’s target should be fixed.
38. Assertion (A) : Technique of “Simplification of Work” eliminate superfluous verities.
Sizes and dimensions of products.
Reason (R) Technique of “Simplification of work” reduced inventories, fuller utilisation of
equipment and increased turnover to reduce cost.
Answer the Question (39 to 42), Based on below Paragraph
Rajat Joined as a CEO of Bharat Ltd. a firm manufacturing computer hardware. On
the first day he addressed the employees. He said that he believed that a good company
should have an employee suggestion system and he wished to minimize employee turnover
to maintain organisational efficiency. He informed all employees that he would ensure that
all agreements were clear, fair and there was judicious application of penalties. However, he
said that he believed that lazy personnel should be dealt with sternly to send the message
that everyone was equal in the eyes of management. Also that he would want to promote a
team spirit of unity and harmony among employees, which would give rise to a spirit of
mutual trust and belongingness among team members and eventually minimize need for
using penalties. He told all present that the interests of the organization should take priority
over the interests of any one individual employee.
39. Identify the principal of management in the following line. “ He said that he believed that
a good company should have an employee suggestion system”
(a) Unity of command (c) discipline
(b) Unity of direction (d) initiative
40. Identify the principal of management in following line. “He wished to minimize
employee
turnover to maintain organizational efficiency.”
(a) Stability of personnel (c) Centralization and Decentralization
(b) Discipline (d) Remuneration of employees
41. Identify the principal of management in the following lines. “He informed all employees
that he would ensure that all agreements were clear, fair and there was judicious application
of penalties.”
(a) Initiative (c) Discipline
(b) Equity (d) Esprit de corps.
42. Identify the principal of management in the following lines “Which would give rise to a
spirit of mutual trust and belongingness among team members.
(a) Discipline (c) Initiative
(b) Unity of command (d) Esprit de corps.
Answer the questions (43 to 46) on the basis of the following paragraph:
Radhika opens a jewellery showroom in Jaipur after completing a course in jewellery
designing. She has employed eleven persons in her showroom. For greater productivity, she
divides the work into small tasks and each employee is trained to perform his/ her
specialised job. The sales persons are allowed to close a deal with a buyer by giving a
maximum of 10% discount, whereas the decision to give any further discounts rests with
Radhika as the final authority. In the earlier days of starting of the business, five of her
employees were asked the put in extra hours of work. In return she had promised to give
them a special incentive within a year. Therefore, after six months when the business was
doing well, she awarded a cash bonus to each of these employees to honour her commitment.
However, when it comes to settling the conflicts among her employees, she tends to be more
biased towards her female employees.
43. Identify the principal of management in “She divided the work into small tasks and each
employee is trained to perform his/her specialised job”
(a) Unity of command (c) Division of work
(b) Unity of direction (d) Discipline
44. Identify the principal “The sales persons are allowed to close a deal with a buyer by
giving a maximum of 10% discount, whereas the decision to give any further discount rests
with Radhika as the final authority”
(a) Division of work (b) Discipline
(c) Initiative (d) Centralisation and decentralisation
45. Identify the principal of management in the following lines. “Therefore after six months
when the business was doing well, she awarded a cash bonus to each of these employees to
honour her commitment.
(a) Discipline (b) Initiative
(c) Scalar chain (d) Remuneration
46. Which principle is violated in the following lines. “However when it comes to setting the
conflicts among her employees, She tends to be more biased towards her female employees.”
(a) Discipline (b) Equity
(c) Division of work (d) Justice

Answer the following questions (47 to 50) on the basis of given case study.
As students of a management course Karan and Kunal were asked to prepare a project report
on applicability of principles of management in real business situations. In order to conduct
the survey Kunal had selected an outlet of a popular chain of fast food restaurant whereas
Karan visited a nearby department store. When Kunal presented his report to class, Karan
realised that their observations were matching on various grounds. In both the business units,
work is divided into small tasks and each is performed by a trained employee. A set of rules
are predetermined and communicated to employees for compliance and these is a fixed place
for every thing and all employees have been allotted individual space. Moreover, the
manager encourage a spirit of mutual trust and belongingness among the employees so that
need for imposing penalties is reduced.
47. Identify the principal of management in the following lines “work is divided into small
tasks and each is performed by a trained employee.”
(a) Unity of direction (b) Unity of command
(c) Division of work (d) Initiative
48. Identify the principal of management in following lines “A set of rules are predetermined
and communicated to the employees for compliance.”
(a) Discipline (b) Scalar chain
(c) Unity of command (d) Unity of direction
49. Identify the principles of management in the following lines: “There is a fixed place for
everything and all employees have been allotted individual space”
(a) Unity of direction (b) Order
(d) Scalar chain (d) Equity
50. Identify the principle of management in the following lines: “Managers encourage a
spirit of mutual trust and belongingness among the employees”
(a) Unity of command (b) order
(c) Equity (d) Esprit de corps