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Maharashtra State Board · HSC Commerce · Class 12 (Std XII)

Class 12 OCM Chapter 1: Principles of Management

Short notes, key concepts, quick revision and practice MCQs with answers

This chapter explains what management principles are, their nature and significance, and two classic theories: Henry Fayol's 14 administrative principles and F. W. Taylor's scientific management with its principles and techniques.

Key concepts: Principles of Management

Principle of management
A fundamental truth that acts as a general guideline. It helps managers take decisions without depending on trial and error, and is applied with changes to suit the situation.
Nature of principles
They are universal, general guidelines, formed by practice and experiment, flexible, behavioural, based on cause and effect, and all of equal importance.
Significance of principles
They give managers insight, help use resources well, support scientific decisions, guide social responsibility, encourage R and D, aid coordination and control, and build an objective approach.
Fayol's administrative theory
Henry Fayol, a French mining engineer called the Father of Modern Management, gave 14 principles in his book General and Industrial Administration.
Scalar chain and Gang Plank
Scalar chain is the line of authority from top to bottom used for communication. A Gang Plank is a direct cross link between people at the same level, used with permission to save time.
Taylor's scientific management
F. W. Taylor, the Father of Scientific Management, replaced rule of thumb with scientific methods of work based on experiments, to get work done in the best and cheapest way.
Work study
A systematic and critical assessment of jobs that uses four techniques: time study, method study, motion study and fatigue study.
Differential piece-rate plan
A wage system giving a higher rate to workers who produce above the standard output and a lower rate to those who fall below it, so as to motivate workers.

Quick revision: important points

Practice MCQs with answers

  1. Who is regarded as the Father of Scientific Management?

    1. Henry Fayol
    2. F. W. Taylor
    3. Philip Kotler
    4. C. K. Prahalad
    Show answer

    Answer: B. F. W. Taylor
    F. W. Taylor developed scientific management from experiments in a steel works, so he is called its father.

  2. Which principle of Fayol is based on the idea 'a place for everything and everything in its place'?

    1. Discipline
    2. Equity
    3. Order
    4. Initiative
    Show answer

    Answer: C. Order
    The principle of order asks that people and materials be at the right place at the right time.

  3. According to the principle of unity of command, each member of an organisation should get orders from

    1. only one superior
    2. many superiors
    3. all the superiors
    4. the subordinates
    Show answer

    Answer: A. only one superior
    Receiving orders from one superior avoids confusion and conflicts about whose orders to follow.

  4. In which book did Henry Fayol explain his 14 principles of management?

    1. Principles of Scientific Management
    2. The Wealth of Nations
    3. Management Principles and Practices
    4. General and Industrial Administration
    Show answer

    Answer: D. General and Industrial Administration
    Fayol's 14 principles appear in his book General and Industrial Administration.

  5. By profession, Henry Fayol was a

    1. machinist in a steel works
    2. French mining engineer
    3. American chief engineer
    4. British industrialist
    Show answer

    Answer: B. French mining engineer
    Fayol began as a mining engineer in a French company and rose to be its Chief Managing Director.

All Class 12 OCM chapters

Class 12 OCM notes: all chapters