CBSE Class 12 – Business Studies | Principles of Management

43 vocabulary flashcards covering definitions, natures, significances, Taylor’s scientific management principles & techniques, and Fayol’s 14 principles, ensuring comprehensive revision of Chapter 2: Principles of Management.

Principle (general meaning)

A fundamental truth or proposition that serves as the foundation for a system of belief, behavior, or reasoning.

Principles of Management

Broad, general guidelines that direct managerial decision-making and behavior.

Universal Applicability (nature)

Management principles can be applied to all types and sizes of organizations, business or non-business.

General Guidelines (nature)

They guide action but do not offer rigid solutions for every managerial problem.

Formed by Practice & Experimentation

Derived from managers’ experience, observation, and systematic experiments.

Flexible (nature)

Can be adapted or modified by managers to suit specific situations.

Mainly Behavioral

Aim at influencing complex human behavior in organizations.

Cause-and-Effect Relationship

Establish linkages between managerial actions (cause) and expected results (effect).

Contingent

Their application depends on the prevailing situation at a particular time.

Insight into Reality (significance)

Principles help managers understand real-world situations better.

Optimum Utilization of Resources

Guidelines assist in minimizing waste and maximizing benefits at minimum cost.

Scientific Decisions

Encourage fact-based, unbiased, and measurable managerial choices.

Meeting Environmental Changes

Principles are dynamic and help firms adapt to changing external conditions.

Fulfilling Social Responsibility

Guide managers in balancing organizational goals with societal obligations.

Management Training & Research

Serve as a knowledge base for education, training, and further study.

Scientific Management (Taylor)

Managing business activities with standardized tools, methods, and trained personnel to raise output, quality, and reduce cost and waste.

Science, Not Rule of Thumb

Each job element must be studied scientifically, replacing guesswork.

Harmony, Not Discord

Promotes mental revolution and total harmony between management and workers.

Cooperation, Not Individualism

Encourages mutual cooperation and constructive employee suggestions.

Development of Each Person

Scientific selection and training to achieve each worker’s maximum efficiency and prosperity.

Functional Foremanship

Taylor’s technique of separating planning from execution with eight specialized foremen supervising workers.

Standardization & Simplification

Setting uniform standards and eliminating unnecessary product varieties to cut cost and raise efficiency.

Method Study

Finding the one best way to perform a job for maximum efficiency.

Motion Study

Analyzing and removing wasteful worker movements to save time.

Time Study

Determining the standard time needed for a task to set staffing, cost, and incentive norms.

Fatigue Study

Fixes rest intervals to help workers regain stamina and reduce accidents.

Differential Piece-Rate System

Pays higher rates to efficient workers who meet/exceed standards and lower rates to inefficient ones, linking wages to productivity.

Fayol’s 14 Principles

Comprehensive guidelines applicable to both technical and managerial activities.

Division of Work

Breaking work into specialized tasks to boost efficiency and productivity.

Authority & Responsibility

Right to give orders balanced with the duty to complete tasks.

Discipline

Obedience to organizational rules, fair agreements, and judicious penalties.

Unity of Command

Each employee receives orders from only one superior to avoid confusion.

Unity of Direction

Activities sharing the same objective should have one head and one plan.

Subordination of Individual Interest

Organizational interest takes precedence over personal interest.

Remuneration of Employees

Fair wages that match both organizational capacity and employees’ needs.

Centralization & Decentralization

Balance between concentrating and dispersing decision-making authority.

Scalar Chain

Formal chain of authority from highest to lowest; may be shortened via ‘Gang Plank’ in emergencies.

Order

A suitable place for every person and thing, and everyone/thing in its place.

Equity

Fair and kind treatment of all employees; no undue favoritism or harshness.

Stability of Personnel

Minimizing turnover; keeping employees long enough to realize results.

Initiative

Encouraging employees to conceive and execute improvement plans.

Esprit de Corps

Promoting team spirit, unity, and harmony among staff.

Gang Plank

A shortcut in the scalar chain allowing same-level employees to communicate directly with permission of superiors.

Taylor vs. Fayol – Basis

Taylor focused on shop-floor productivity through experiments; Fayol on overall administration via personal experience.