Chapter 1 Nature and Significance of Management

1. What is meant by Management?

Ans: Management refers to the process of managing people and tasks
efficiently and effectively using the right techniques and methods. It is
an integrated process which involves a series of functions like Planning,
Organising, Staffing, Directing and Controlling.

2. Name any two important characteristics of management.

Ans: The two characteristics of management are as follows:
● Management is a Goal-Oriented Process: Each and every
organisation has a set of goals to be achieved in a certain period of
time. Different organisations have different types of goals
depending upon the reason for its existence.
● Management is a Dynamic Function: The world is changing at a
very fast pace and has become very dynamic. Management has to
adapt itself as per the changing environment. Various external
factors like social, political, economic factors have to be taken into
consideration in order to survive.

3. Identify and state the force that binds all the other functions of
management.
Ans: Coordination binds all the other functions of management. It is
also considered as the essence of management. Coordination as a
process begins from the first step of management i.e planning. This is
the process through which all the activities are lined up and put to
action.

4. List any two indicators of growth of an organisation.

Ans: The two indicators are:
● Increase in the sales volume of an organisation.
● Increase in number of employees over a period of time.
5. Indian Railways has launched a new broad gauge solar power
train which is going to be a path breaking leap towards making
trains greener and more environment friendly. The solar power
DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is
expected to save about 21,000 liters of diesel and ensure a cost
saving of Rs 12, 00,000 per year. Name the objectives of
management achieved by Indian Railways in the above case.
Ans: Social objectives of the management of Indian Railways have been
achieved in the above case, as the organisation succeeded in saving
diesel and costs, by making the trains environment friendly.

6. Ritu is the manager of the northern division of a large corporate

house. At what level does she work in the organisation? What are
her basic functions?
Ans: Ritu works in the middle-level management, being the manager of
the northern division of a large corporate house.
The basic functions of the middle level managers are:
● They interpretes and explain the organisational plans and policies
to line managers.
● They recruit and select the appropriate personnel.
● They are responsible for organising required resources for effective
implementation of plans.
● They assign duties and responsibilities to first line managers.
● They motivate lower level management to achieve the best of their
potential.
● They represent the complaints and problems of lower level
management to top level management.

7. State the basic features of management as a profession.

Ans: The basic features of management as a profession are:
● Well Defined Body of Knowledge: Manager is a professional
who can acquire specialised knowledge through books for joining
specific courses.
 ● Restricted entry: Professional degree is a must to become a
professional but an individual with managerial skills can become a
manager despite having no professional degree.
● Professional Association: Professionals need to be associated
with respective professional bodies. They are professional bodies
for management as well but it is not compulsory for managers to
join.
● Ethical code of Conduct: Professionals are bound by the code of
conduct laid bi associations they are associated with. Managers are
expected to be ethical but there is no specifically laid down code of
conduct for them.
● Service Motive: A professional and a manager both aim to provide
dedicated and committed services towards the increase of their
clients.

8. Why is management considered a multi-dimensional concept?

Ans: Management is considered to be a multi-dimensional concept
because it involves:
● Management of Work: Each and every organisation has some
work to perform. The management translates the work into goals to
achieve and also the means used to achieve it.
● Management of People: Human Resource is an organisation's
greatest asset. The task of management involves making people
work, dealing and communicating with them, strengthening their
positive aspects, and working upon their weaknesses
● Management of Operations: Each and every organisation has
some basic products to serve and some services to provide for
survival. This requires a process through which the input materials
are transformed into desired output.

9. Company X is facing a lot of problems these days. It

manufactures white goods like washing machines, microwave ovens,
refrigerators and air conditioners. The company’s margins are
under pressure and the profits and market share are declining. The
production department blames marketing for not meeting sales
targets and marketing blames production department for producing
goods, which are not of good quality meeting customers’
expectations. The finance department blames both production and
marketing for declining return on investment and bad marketing.
State the quality of management that the company is lacking? What
quality of management do you think the company is lacking?
Explain briefly. What steps should the company management take
to bring the company back on track?
Ans: The given situation of declining market share and profits is a clear
indication of lack of coordination in the organisation. As each of the
departments are blaming each other rather than taking the responsibility
of acting in a better way.
Coordination is a factor or the force that binds all other functions of the
management. The coordination as a process has to be implemented in all
the departments of the organisation like the production, sales, marketing,
finance, etc to bring a good result.
The steps that the management of the company should undertake to
bring back the company on track are:
● Interdependency between the department needs to be maintained.
● The company has to recognise its weakness and improve upon the
quality of the products.
● The goals of an individual needs to be matched with the needs of
the organisation.
● Efforts should be made to settle the differences, and change the
outlook of the different departments.
● All the departments must be motivated to work hand-in-hand in
order to reach the common objective as well as achieve their
departmental goals.
● Proper communication and guidance needs to be provided in order
to avoid any scope of misunderstanding.
 ● A 360° analysis of the environment has to be done to recognise the
potential threats in the market.
● The investment decision of the company has to be improved and
the investments has to be done in an effective manner so that it can
fetch maximum return on investment.

10. Coordination is the essence of management. Do you agree? Give

reasons.
Ans: Yes, I agree. Coordination is a process that starts from the planning
process itself. Each and every activity in an organisation must be
coordinated well to reach a common objective. It links the activities of
the organisation for the achievement of a common goal.
The reasons why coordination is the essence of management are as
follows:
● Coordination Ensures Unity of Action: Coordination acts as a
binding force for all the departments. It makes all the departments
realise the common objective to be reached.
● Coordination Integrates Group Efforts: It unites the diverse
interests of all the departments to one common goal.
● Coordination is a Continuous Process: The coordination of
activities starts with planning in the organisation and continues till
controlling.
● Coordination is an All-Pervasive Function: It is required at all
the levels of the management as all the activities are
interdependent on each other.
● Coordination is a Responsibility of All The Managers: The
managers at each and every level of the management where top,
middle or bottom needs to ensure that the work is done as per the
decided course of action.

11. Ashita and Lakshita are employees working in Dazzling

enterprises dealing in costume jewellery. The firm secured an
urgent order for 1,000 bracelets that were to be delivered within 4
days. They were assigned the responsibility of producing 500
bracelets each at a cost of Rs 100 per bracelet. Ashita was able to
produce the required number within the stipulated time at the cost
of Rs 55,000 whereas, Lakshita was able to produce only 450 units at
a cost of Rs 90 per unit. State whether Ashita and Lakshita are
efficient and effective. Give reasons to justify your answer.
Ans: According to the above case:
Akshita: Ashita was effective but not efficient as she completed her task
within the set time frame but couldn't maintain the cost. Hence, she is
inefficient, but effective.
Lakshita: Lakshita was neither effective nor efficient as she wasn’t able
to complete her target on time.
Effectiveness means completing the given work in the required time,
whereas, Efficiency means completing work with minimum cost and
resources.

12. Management is considered to be both an art and a science.

Explain.
Ans: Management is considered to be both an art and a science because
it fulfills the criteria of being an art and few criterias of being a science.
Management as an Art:
1. Existence of Theoretical Knowledge: It is a set of few pre-
existing basic principles that are applicable in all types of
organisations. A successful manager manages his day to day work
based on few studies, experiences and observations.
2. Personalised Application: A manager uses the universal
principles in his own unique manner as per the requirement which
may vary from time to time and case to case.
3. Based on Practice and Creativity: A good manager applies
various theories by moulding it according to the needs of the
organisation.

Management as Science:
 1. Systemised Body of Knowledge: Like science, management is
also a systematized body of knowledge. It has its own theories that
have evolved over time. It also has a common vocabulary that is
used by the managers across the globe.
2. Principles Based on Experimentation: The principles of
management have evolved over a period of time and it is made to
tailor fit as per the time to time requirements of the managers,
whereas, Scientific principles are developed through observation,
testing, and repeated experimentation.
3. Universal Validity: In science theories are fixed and are
universally valid whereas, in management few basics are used to
train the managers. These apply to all the organisations but may
need modification to be suitable to given situation.
On comparing features of science with the management we can conclude
that management cannot be considered as accurate science like physics,
chemistry. But we can call it inexact science or soft science.

13. Do you think management has the characteristics of a full

fledged profession?
Ans: No, management does not possess the features of a full fledged
profession.
The following are the reasons:
● Well Defined Body Of Knowledge: Every profession has a
systematised body of knowledge which can be learned through
instructions. This feature of the profession is present in
management as it consists of systematic knowledge of concepts,
theories and principles.
● Restricted Entry: Professional degree is a must to become a
professional but an individual with managerial skills can become a
manager despite having no professional degree. Hence, this feature
of the profession is not applicable to management as management
is open to all individuals who want to learn skills of management.
 ● Professional Association: All professionals are affiliated to their
respective professional associations, which regulate entry, grant
certificates of practice, formulate, and develop code of conduct.
This feature is not applicable to management as it is not
compulsory for a manager to be a member of any management
association.
● Ethical Code of Conduct: A strict code of conduct exists in every
profession. This feature is not present in management as there is no
specific code of conduct for managers.
● Service Motive: A professional and a manager both aim to provide
dedicated and committed services towards the increase of their
clients. However, in the case of management, the primary aim is
generally profit maximisation, and not service motive.

14. “A successful enterprise has to achieve its goals effectively and

efficiently.” Explain.
Ans: Effectiveness means completing the given work in the required
time, whereas, Efficiency means completing work with minimum cost
and resources.
For the success of an activity it is necessary that it is completed
effectively and with efficiency. The success of a business enterprise is
measured in terms of profits earned, cost effective production
techniques, satisfied customer base, etc. All this is possible only if
business is able to complete each and every activity within the desired
deadlines and with minimum wastage of resources and at minimum cost.
Effectiveness and efficiency together leads towards achievement of
business goals and success of the business enterprise.

15. Management is a series of continuous interrelated functions.

Comment.
Ans: Management is an ongoing series of various functions that are
planning, organising, staffing, directing and controlling. Though they are
independent, most of the time they are simultaneously performed.
 ● Planning: It involves establishing organisational goals, setting
business targets and planning the process to achieve the same most
effectively and efficiently. Planning entails deciding what to
accomplish and how to do it ahead of time. It is a fundamental
managerial function.
● Organising: It involves organising human and physical resources
to implement decisions taken at the planning stage.Organising
refers to the process of the identification, classification and
coordination of work to be performed by establishing reporting
relationships between the people, setting up their responsibilities
and authorities so as to collectively integrate the human efforts for
the successful achievement of organisational objectives.
● Staffing: Staffing is a management function that entails hiring
candidates who are a good fit for the organization by evaluating
their skills and knowledge and assigning them specific roles based
on their skill set. It is involved in meeting an organization's human
resource requirements.
● Directing: Directing is the process in which a superior provides
instructions, guidance and counselling to its subordinate so as to
motivate and lead them for the successful achievement of
objectives
● Controlling: Controlling is a process that entails comparing actual
performance to the desired outcome, so as to ensure the successful
achievement of objectives. Setting standards, measuring actual
performance, and taking corrective action in case of deviations are
all part of the managerial role of controlling function.

16. A company wants to modify its existing product in the market

due to decreasing sales. You can imagine any product about which
you are familiar. What decisions/steps should each level of
management take to give effect to this decision?
Ans: The following are the steps that the each level of the management
can perform to increase the sale of product in the market:
A. Top Level Management
 ● They need to analyse the business environment and take decisions
regarding the modification to be done.
● They need to establish objectives of modification, formulate plans
and policies to implement the modification.
● They need to organise all physical and human resources required
for modification.
● Inform all departments about modification and coordinate their
activities.

B. Middle Level Management

● They must inform top level management about the possibilities of
modification, market demand or expectations required to
implement modification.
● They must interpret plans and policies and instruct lower level
management for their implementation.
● They must recruit, select and train personnel to be able to take up
modification.
● They must assign responsibilities and duties to lower level
managers.

C. Lower Level Management

● Before the modification decision is taken, they may give their
views about the kind of modification or technology is required
● They must issue orders and instructions to the workforce to
implement plans.
● They must train or guide the workforce to carry out production
activities.
● They must supervise work closely to ensure that work is done
effectively and efficiently.

17. A firm plans in advance and has a sound organisation structure

with efficient supervisory staff and control system but on several
occasions it finds that plans are not being adhered to. It leads to
confusion and duplication of work. Advise remedy.
Ans: The firm’s planning is good, but there is a problem in
implementation. The firm should take the following actions in the case
above:
● Interdependency between the department needs to be maintained.
● The goals of an individual needs to be matched with the needs of
the organisation.
● Efforts should be made to settle any differences between the
departments, if there exists any.
● All the departments must be motivated to work hand-in-hand in
order to reach the common objective as well as achieve their
departmental goals.
● Proper communication and guidance needs to be provided in order
to avoid any scope of misunderstanding.
● Timely and proper follow up and feedback should be encouraged
from the lower level to the higher level of management.
● Transparent, organized and clear work patterns should be fostered
to avoid any miscommunication.
● Meetings should be held at periodic and regular intervals to ensure
the smooth flow of operations.
● Proper training, both on the job and off the job should be provided
to the employees, so that they could perform the work with utmost
efficiency and effectiveness.
● Unity of command and unity of direction should be maintained.
Chapter 2 Principles of Management
1. What makes principles of management flexible?
Ans: The principles of management can be modified according to the
demand of the situation, hence they are not rigid, and enjoy flexibility.

2. State the main objective of time study.

Ans: To determine the standard time taken to perform a well: defined
job.

3. Name the principle that is an extension of the 'harmony, not

discord'.
Ans: Cooperation, not individualism.

4. State any two causes of fatigue that may create hindrance in the
employee's performance.
Ans: The two causes of fatigue are:
● Long working hours without breaks,

● Dissatisfactory working conditions.

5. Sanaklal and Gagan started their career in Wales Limited 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. Name the principle of management followed by
Wales Limited.
Ans: Wales Limited followed the principle of 'Stability of Personnel'.

6. Which technique is used by Taylor for distinguishing efficient and

inefficient workers?
Ans: Differential Piece Wage System was used by Taylor under which
workers are paid according to their efficiency. An efficient worker will
get higher wages as compared to an inefficient worker.

7. How is the principle of 'Unity of Command' useful to

management? Explain briefly.
Ans: Unity of command states that a person should get orders from, and
be answerable to only one superior. If a person gets orders from two or
more superiors at the same time, unity of command is violated and it
leads to confusion for the employee regarding what tasks to be done and
whom to report.
Therefore, to maintain a smooth workflow and stability in the
organization, unity of command is essential for management. If there is
no unity of command, all the employees will be confused regarding what
is to be done, and who to listen, which will consequently disrupt the
flow of work, causing delays and efficiency.

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

Ans: Scientific management means the use of tools and techniques and
specialized personnel to carry out the task for achieving better quality
and cost reduction. It is a theory of management developed by Frederick
Taylor in 1911 which focuses on the ways of getting the work done in
the best and most cost-effective way.
Three principles of scientific management
0. Science, not rule of thumb: In this principle Taylor states that the
management should follow scientific methods and not the 'Rule of
Thumb’ approach. Rule of thumb insists on finding solutions through
trial and error approach. Taylor says that following scientific methods
will result in tremendous savings of time and materials.
A. Cooperation not individualism: A spirit of cooperation should
exist between the workers and management, and not the spirit of
individualism. Both management and the workers should cooperate with
each other. Management should consider all the good suggestions made
by the employees and workers should never think of doing unreasonable
things to get their demands fulfilled.
B. Development of each and every person to his /her greatest
efficiency and prosperity: In this principle, Taylor said that adequate
opportunities and training must be available for employees, so that with
increased skills, and better knowledge about how to do a task, they can
work for the improvement of their performance, and enhancement of
efficiency and achieve greater heights in their careers.

9. If an organization does not provide the right place for physical

and human resources in an organization, which principle is
violated? What are the consequences for it?
Ans: The principle of 'order' is violated if an organization does not
provide the right place for physical and human resources in an
organization.
According to this principle there should be a place for everything and
everyone and every person or thing should be found in its/his allocated
place. If this principle is violated then the objectives will not be achieved
efficiently and effectively. Since a lot of time will be wasted in finding
out the resources, a lot of wastage of energy and delay in taking
decisions or performing the work will take place.
10. Explain any four points regarding the significance of Principles
of management.
Ans: Significance of principles of management are as follows:
0. Optimum utilisation of resources and effective administration:
Principles of management are designed in a way that they guide the
managers whenever need arises, hence they can take decisions on time
without wasting their time attempting trial and error methods. This
results in enhancement of productivity, time and cost saving as well as
optimum utilisation of resources.
A. Scientific decisions: Principles of management help in scientific
decision making because the decisions based on principles are free from
bias and prejudice. Here emphasis is on logic rather than blind faith.
B. Meeting changing environment requirements: Principles of
management help the managers in meeting the changing environmental
needs because they are flexible in nature and can be modified according
to the changes taking place in the environment.
C. Provide managers with useful insights into real world
situations: Principles of management provide useful insights into
reality, as they are made after considering the past mistakes. This helps
in saving time by solving recurring problems quickly. Principles also
increase managers knowledge, skills, ability and understanding of
managerial situations and circumstances.

11. Explain the principle of 'Scalar Chain' and gang plank.

Ans: Scalar chain requires the managers to follow a well defined chain
of communication that flows from top to bottom. That is in a scalar
chain, the information passes in a certain and defined manner from the
top to bottom so as to avoid any ambiguity in communication.
Gang plank is an exception of scalar chain that states that in the situation
of emergency where quick decisions and communications are needed,
two managers who are working at the same managerial position can
have a quick communication with one another.
For example:
● A is heading 2 teams where B and F are at the same level, C and G
are at the same level and D and H are at the same level.
● Line of communication is B - C - D and F - G - H. In this D and H
cannot directly contact each other, as per the principle of scalar
chain.
● But if an emergency arises, then using the prescribed flow may
take a lot of time to communicate with each other.
● Hence, to avoid this problem a system known as 'Gang plank'
which is an exception of the scalar chain was introduced where
employees working at the same level such as D or H could contact
each other whenever urgent need arises.

12. A production manager at top level in a reputed corporate,

Mr. Rathore holds the responsibility for ordering new material
for the firm. While deciding on the supplier for the financial
year 2017-18, he gave the order to his cousin at a higher price
per unit instead of the firm's usual supplier who was willing to
lower the rates for the order. Which principle of management
was violated by Mr. Rathore? What are the positive impacts of
following the above identified principle?
Ans: The principle of subordination of individual interest to general
interest is violated. According to this principle, an individual should
give priority to its organizational goals over any personal interest.
The positive impacts of following this principle are:
● Better coordination between personal and organizational goals.
● Maintenance of peace and harmony within the organization.
 ● Increase in employee productivity as their efforts are directed
towards the fulfilment of organizational goals, which will further
help them in achieving their personal goals.
● Employees do not feel separated from the organization.
● Helps in achieving organizational goals.

13. Explain the principles of scientific management given by Taylor.

Ans: The principles of scientific management given by Taylor are as
follows:
0. Science, not Rule of Thumb : This principle states that the
management should follow scientific methods and not the rule of thumb
method, which insists on finding solutions through trial and error
approach. According to Taylor, following scientific methods will result
in tremendous savings of time and materials, as well imparts more
simplicity and ease of performing work.
a. Cooperation, Not Individualism: A spirit of cooperation should
exist between the workers and management, and not the spirit of
individualism. Both management and workers should cooperate with
each other, and work collectively and cooperatively for the achievement
of organizational goals. Management should consider all the good
suggestions made by the employees and workers should never think of
doing unreasonable things to the management to get their demands
fulfilled.
b. Harmony, Not Discord: There must exist proper peace and
harmony between the management and the workers for the smooth flow
of the operations of the organization. As managers are the link between
workers and the owners, the management should share profits with
workers to keep them motivated and workers should also be willing to
accept the changes for the good of the company.
 During times of conflict between management and workers, both
should change their thinking and mentality towards each other, this
concept is called mental revolution.
d. Development of each and every person to his/ her greatest
efficiency and prosperity: According to this principle, adequate
opportunities and training must be made available to employees, so
that they strive to improve their performance and efficiency
through enhanced skills, and are able to achieve new heights in
their careers.

14. Explain the following principles of management given by Fayol

with examples.
(a) Unity of Direction:
Ans: According to this principle, the efforts of each unit of the
organization having a similar head and plan should move towards the
achievement of the same objectives. Each division should have its own
incharge and resources, so as to prevent overlapping of activities.
For Example: A company manufacturing two different products should
have separate incharge for both the products. Hence two different
departments and divisions needs to be created. In case there is a single
incharge, then there might be chances of duplication and poor utilisation
of resources.

(b) Equity:
Ans: According to this principle, All the employees should be treated
equally and as fairly as possible. No one should be discriminated against
on the basis of their caste, religion, complexion, gender, nationality etc.
Example: Men and women should be treated equally in a company.

(c) Esprit de Corps:

Ans: It means unity is strength. According to this principle management
should promote a spirit of mutual trust and belongingness among team
members. It focuses on the word ‘We’ Instead of ‘I’
For example: In the military all the soldiers work together with trust
and confidence for the other members so as to collectively achieve their
goal.

(d) Order :
Ans: According to this principle, there should be a place for everyone
and everything and each person or the thing should be found in its/ his
place. It helps in carrying out the activities on time, and in a smooth
manner.
For Example: In a plant layout, production is supposed to be taken on
Machine 1 and Machine 2 in a sequence, then both the machines should
be arranged near to each other. If both the machines are far away from
each other, then there can be delay in the production process, thus
causing reduced productivity, and high costs.

(e) Centralisation and Decentralisation:

Ans: Centralisation is the concentration of power in the hands of
selected persons in an organization. Decentralisation means sharing the
authority with middle and lower levels in the organization. A balance
should exist between complete centralisation and decentralisation in the
organization.
For Example: When all the decisions making powers are in the hands
of top level management, it is centralisation, it is suitable in cases like
military etc., and if the power to take decisions is shared to middle and
lower levels then it is decentralisation, it is suitable when the other level
of management have suitable knowledge and skills to take a decision.

(f) Initiative:
Ans: According to this principle, workers should be provided with
incentives to keep them motivated to work for the achievement of
organizational goals. They should be encouraged to carry out their plans
for improvement, it will make them comfortable to take more initiatives
for the development of the organization.
For example, considering the suggestions and feedback from the
workers while making decisions will make them feel motivated and a
part and parcel of the organization.

15. Explain the technique of 'Functional Foremanship' and the

concept of 'Mental Revolution' as enunciated by Taylor.
Ans: Functional Foremanship is an extension to the principle of division
of labor. In this technique each worker will work under eight foreman in
the related process or function of production.
Taylor divides the eight foreman under two incharges:
● Planning incharge

● Production incharge.

Planning incharge includes:

● Instruction card clerk: His role is to give instructions to workers.

● Route clerk: He is responsible for the specification of the

production route.
● Time and cost clerk: His role is to prepare time and costs sheets.

● Disciplinarian: His role is to ensure discipline.

Production incharge includes:

● Speed boss: His role is to ensure that the work completes in a

timely and accurate manner.

● Gang boss: He is responsible to keep machines and tools in a

ready state of work.

● Repairs boss: His role involves keeping the machines and tools in

proper working conditions, and arranging for their repairs as and

when needed.
 ● Inspector: He is responsible for checking the quality of work.

Mental revolution:
Mental revolution focuses on the transformation of the mindset and
attitude of workers and management towards each other. Management
should try their best to satisfy the needs of the employees and workers
should also do their best in order to develop the organization. Both
should realise the importance of each other and cooperate with one
another.

16. Discuss the following techniques of Scientific work Study.

(a) Time Study:
Ans: Time study helps in finding out the standard time required to
perform a well- defined job. Time study also assists in the determination
of wages, drafting incentive schemes, manpower requirements etc.
(b) Motion Study:
Ans: It refers to the study of movements like changing positions, lifting
objects, putting objects etc., which are undertaken while doing a job.
The objective of motion study is to eliminate the unnecessary
movements in order to complete a task in a shorter time.
(c) Fatigue Study:
Ans: It seeks to determine the amount and frequency of rest intervals in
completing a task to increase productivity. Rest is essential to perform
the work with full capacity. This study helps to find out the standard
intervals of break that help a worker to regain its energy.
(d) Method Study:
Ans: The objective of method study is to find out the best way of doing
the job. By determining the best method one can minimise the cost of
production and maximise the quality and satisfaction of the customer.
(e) Simplification and standardization of work:
Ans: Standardization refers to setting of standards or benchmarks for
every business activity, such as standardization of work, process, etc.
Standardization thrives to achieve quality work, and quality products by
establishing standards of performance for men and machines. For
example there are standards for gold (hallmark), agricultural products
(Agmark), industrial products(ISI) that assure that the product is a
quality product.
Simplification of work aims at eliminating the unnecessary diversity in
the products. It helps in savings of cost of labor, machine and tools and
increased turnover. There are shoe sizes, cloth sizes such as M, L, XL
etc., this is done to reduce unnecessary variations, and expenses.

17. Discuss the differences between the contributions of Taylor and

Fayol.
Ans: The differences between the contributions of Taylor and Fayol are:

Basis of Fayol’s
Taylor’s Contributions
Comparison Contributions
Scientific theory of General theory of
Concept
management administration
Personality Taylor was a practitioner Fayol was a scientist
Lower level of
Focus Top level of management
management
Applicable in specialized
Applicability Universal applicability
situations
Improving overall
Objective Increasing productivity
administration
Basis of Based on observations and Based on personal
formation experimentation experience
 The approach is that of an The approach is that of
Approach
engineer a manager

18. Discuss the relevance of Taylor and Fayol’s contribution in the

contemporary business environment.
Ans: Principles of both Taylor and Fayol play a significant role in the
contemporary business environment.
● Act as guidelines: These principles act as a guideline to managers
for making decisions and taking appropriate actions.
● Flexible: Such principles can be modified according to the demand
of the situation which helps the managers to solve the problem
accordingly.
● Can be used in a number of situations: It can be used in various
situations and the decisions based on this will be backed by facts
and logic which makes it more applicable.
● Provides lessons: These principles help the managers to learn
from their past mistakes by providing insight into real word
business.
● Universally Applicable: These principles have universal
applicability which makes them more reliable.
● Higher efficiency: It helps in development of an organization by
improving efficiency and effectiveness with minimum use of
resources and cost.

19. ‘Bhasin’ limited was engaged in the business of food processing

and selling its products under a popular brand. Lately the business
was expanding due to good quality and reasonable prices. Also with
more people working the market for processed food was increasing.
New players were also coming to cash in the new trend. In order to
keep its market share in the short run the company directed its
existing workforce to work overtime. But this resulted in many
problems. Due to increased pressure of work the efficiency of the
workers declined. Sometimes the subordinates had to work for more
than one superior resulting in declining efficiency. The divisions that
were previously working on one product were also made to work on
two or more products. This resulted in a lot of overlapping and
wastage. The workers were becoming indisciplined. The spirit of
teamwork, which had characterised the company, previously was
beginning to wane. Workers were feeling cheated and initiative was
declining. The quality of the products was beginning to decline and
market share was on the verge of decrease. Actually the company
had implemented changes without creating the required
infrastructure.
a. Identify the Principles of Management (out of 14) that were being
violated by the company.
Ans: Following principles of management were violated:
● Unity of Command: As employees were working under more
than one superior.
● Unity of Direction: As the divisions were made to work on more
than one product.
● Esprit de Corps: As the workers lacked the spirit of teamwork.
● Discipline: The workers were getting discipled due to increased
pressure.
● Initiative: As workers were feeling cheated, and were lacking any
initiative.
 ● Order: The implementation of changes were made without
arranging for proper infrastructure.
● Division of work: They were made to work overtime, without any
proper division of work.

b. Explain these principles in brief.

Ans: The principles are explained below:
● Unity of Command: There should be one and only one superior
for every individual employee as if the employees receives orders
from more than one superior, then it may lead to confusion in the
minds of employers regarding what to do and who to follow.
● Unity of Direction: According to this principle, the efforts of each
unit of the organization having a similar head and plan should
move towards the achievement of the same objectives. Each
division should have its own incharge and resources, so as to
prevent overlapping of activities.
● Esprit de Corps: According to this principle, efforts should be
made on the part of management to promote a sense of mutual trust
and belongingness among the team members. Also use of the word
‘We’ should be prioritized over the word ‘I’ to inculcate the sense
of unity among the members.
● Discipline: Everyone should follow the rules and regulations
which are necessary for the working of the organization.
● Initiative: According to Fayol, subordinates should be encouraged
to make and execute plans within the prescribed limits of authority.
● Order: According to this principle, there should be a place for
everyone and everything and each person or the thing should be
found in its/ his place. It helps in carrying out the activities on
time, and in a smooth manner.
 ● Division of work: Each task is performed by a specialist or trained
employee so that it will be completed effectively and efficiently.

c. What steps should the company management take in relation to

the above principles to restore the company to its past glory?
Ans: Steps which can be taken by the company are:
● Motivation and proper incentive should be provided to workers.
● Scientific management should be adopted.
● Teamwork and coordination should be promoted for development
of the organization.
● One subordinate should receive instruction from one superior only
for smooth functioning of the organization.
● There must be separate divisions for different products.
● Efforts should be made regarding the arrangement of proper
infrastructure.
● The work should be divided optimally, and overtime should be
avoided.

20. (Further information related to the above question) The

management of company Bhasin limited now realised its folly. In
order to rectify the situation it appointed a management consultant:
Mukti Consultants to recommend a restructure plan to bring the
company back on the rails. Mukti Consultants undertook a study of
the production process at the plant of the company Bhasin limited
and recommend the following changes:
● The company should introduce scientific management with
regard to production.
 ● Production Planning including routing, scheduling,
dispatching and feedback should be implemented.
● In order to separate planning from operational management '
Functional Foremanship' should be introduced.
● 'Work study' should be undertaken to optimise the use of
resources.
● 'Standardisation' of all activities should be implemented to
increase efficiency and accountability.
● To motivate the workers ' Differential Piece Rate System'
should be implemented.
(The above changes should be introduced apart from the steps
recommended as an answer to part c case problem above.)
It was expected that the changes will bring about a radical
transformation in the working of the company and it will regain its
pristine glory.
(a) Do you think that introduction of scientific management as
recommended by M consultants will result in intended outcome?
Ans: Yes, the scientific management techniques recommended by Mukti
Consultants will prove beneficial for the organization. It will improve
the quantity and quality of product with reduction in costs, more
simplicity and ease of work.

(b) What precautions should the company undertake to implement

the changes?
Ans: Following precautions need to be taken:
● Production planning should be implemented in a systematic way.

● Differential piece rate system should not promote unhealthy and

ugly competition between the workers.

● Functional foremanship should be introduced with proper

motivation for the employees.

 ● Standardization techniques should be implemented in different
aspects of production, and proper methods should be developed for
their training so that quality products are produced.
● Employees can be offered monetary incentives to motivate them to
work more efficiently.
● Not only work study, other methods should be introduced like
motion study, time study, and fatigue study.

(c) Give your answer with regard to each technique separately as

enunciated in points 1 through 6 in the case problem.
Ans: Each technique as specified in the case problem is:
● Scientific management

It means the use of tools and techniques and specialized personnel

to carry out the task for achieving better quality and cost reduction.
It is a theory of management developed by Frederick Taylor in
1911 which focuses on the ways of getting the work done in the
best and most cost-effective way. The firm should adopt scientific
management so as to take benefits of better division of labor, cost
reduction and increased efficiency.
● Production Plan:
It refers to the planning of production operations so that a smooth
and coordinated flow of production is made possible. It involves
elements like
o Routing: It determines the route through which the raw
materials will be transformed into finished goods.
o Scheduling: It provides a proper timeline and schedule in
respect to time, day, date, regarding the beginning and
completion of a particular operation.
o Dispatching: It involves the issuance of instructions and
orders for the commencement of the production work.
o Feedback: It refers to the identification of deviations and
errors in the production plan, based on the set standards and
current performance.
● Functional Foremanship
It is an extension to the principle of division of labor. In this
technique each worker will work under eight foreman in the related
process or function of production. Taylor divides the eight foreman
under two incharges so that there is no confusion in the minds of
workers regarding their incharges:
o Planning incharge
o Production incharge.
Hence, the company should employ functional foremanship so as
to keep the planning and operational functional separate.
● Work Study:
To enhance the efficiency, productivity and performance of the
workers, various techniques of work study could be used by the
company, such as.
o Time Study: Time study helps in finding out the standard
time required to perform a well- defined job. Time study also
assists in the determination of wages, drafting incentive
schemes, manpower requirement etc.
o Motion Study: It refers to the study of movements like
changing positions, lifting objects, putting objects etc., which
are undertaken while doing a job. The objective of motion
study is to eliminate the unnecessary movements in order to
complete a task in a shorter time.
o Fatigue Study: It seeks to determine the amount and
frequency of rest intervals in completing a task to increase
productivity. This study helps to find out the standard
intervals of break that help a worker to regain its energy.
o Method Study: The objective of method study is to find out
the best way of doing the job. By determining the best
method one can minimise the cost of production and
maximise the quality and satisfaction of the customer.
● Standardization
 To ensure proper product quality and accountability, the firm
should go for standardization.
It refers to setting of standards or benchmarks for every business
activity, such as standardization of work, process, etc so as to
achieve quality work, and quality products by establishing
standards of performance for both men and machines.
● Differential Piece Wage System
To keep the workers motivated, and raise their efficiency levels the
company should employ a differential piece wage system. It is a
system which was used by Taylor under which workers are paid
according to their efficiency. An efficient worker will get higher
wages as compared to an inefficient worker.