CH 2 Business Studies
CH 2 Business Studies
CH 2 Business Studies
Principles of
Management
Q 1. 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
Q 2. A manager should have the right to punish a subordinate for willfully not obeying a
legitimate order but only after sufficient opportunity has been given to a subordinate for
presenting her/his case.
a) Authority and responsibility
b) Discipline
c) Equity
d) Stability of personnel
Q 3. In an organization, 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
Q4. which of the following is not one of the causes for fatigue?
a) Bad working conditions
b) Unsuitable work
c) Uncordial relations with the boss
d) Job enrichment
Q 5. Match the technique of scientific management in Column I with their respective explanation in
Column II:
A. Time study i. Each specialist is to be assigned work according to her/his
qualities. For example, those with technical mastery,
intelligence and grit may be given planning work. Those with
energy and good health may be assigned execution work.
B. Method study ii. Devising new instead of the existing ones and eliminating
unnecessary diversity of products.
C. Functional foremanship iii. Fixing the standard time taken to perform a well-defined job
so as to determine the number of workers to be employed;
frame suitable incentive schemes and determine labour costs.
D. Standardization and iv. Finding out one best way of doing the job to minimize the cost
simplification of work of production and maximise the quality and satisfaction of the
customer.
Q 7. What light does the idea of ‘Gang Plank’ show about the nature of principles of
management?
a) Flexible
b) Contingent
c) Behavioral
d) General guidelines
Q 8. Why did Taylor introduce Differential piece wage system?
a) To differentiate between efficient and inefficient workers
b) To reward efficient workers
c) Both (a) and (b)
d) To punish inefficient workers
Q 9. In one of the principles of scientific management, Taylor emphasis that there should be equal
division of work and responsibility between workers and management and management should
work almost side by side with workers helping and smoothing the way for them. Identify the
principle.
a) Science, not rule of thumb
b) Harmony, not discord
c) Cooperation, not individualism
d) Development of each and every person to his/her greatest efficiency
Q 10. According to Fayol, “Good sense and experience are needed to ensure fairness to all employees,
who should be treated as fairly as possible”. However, Fayol does not rule out use of force sometimes.
Rather he says that lazy personnel should be dealt sternly to send the message that everyone is equal in
the eyes of the management. Identify the principle of management highlighted above.
a) Initiative
b) Equity
c) Remuneration of employees
d) Stability of personnel
Q 11. In the factory set-up / system, Taylor concentrated on improving the performance of the
managerial figure with whom the workers are in face-to-face contact on a daily basis. He is the pivot
around whom revolves the entire production planning, implementation and control. In fact, Taylor
identified a list of qualities of that person such as intelligence, education, tact, grit, judgement, special
knowledge, manual dexterity, and energy, honesty and good health. Taylor found that no single
person could fit them all. This prompted him to suggest a technique of scientific management which is
an extension of the principle of division of work and specialization to the shop floor. This concept was
extended to the lowest level of the shop floor. Identify the technique of scientific management discussed
in the above paragraph.
a) Functional foremanship
b) Standardization and simplification of work
c) Differential piece wage system
d) Method study
Q 12. ‘Aapka Vidyalaya’ believes in holistic development of students and encourages team building through a mix of
curricular, co-curricular and sports activities. On its founders day a stage performance had to be put up. A
committee of ten prefects was constituted to plan different aspects of the function. They all decided to use recycled
paper for decoration. There was a spirit of unity and harmony and all members supported each other. With mutual
trust and belongingness the programme was systematically planned and executed. Kartik, one of the prefects
realized that unknowingly the group had applied one of the principles of management while planning and
executing the programme. He was so inspired by the success of the function that he asked his father to apply the
same principle in his business. His father replied that he was already using this principle. Identify the principle of
management applied for the success of the programme.
a) Initiative
b) Esprit De Corps
c) Discipline
d) Subordination of individual interest to general interest
Q 13. Nikita and Salman completed their MBA and started working in a multinational company at the same level.
Both are working hard and are happy with their employer. Salman had the habit of backbiting and wrong
reporting about his colleagues to impress his boss. All the employees in the organization knew about it. At the time
of performance appraisal the performance of Nikita was judged better than Salman. Even then their boss,
Mohammed Sharif decided to promote Salman stating that being a female Nikita will not be able to handle the
complications of a higher post. Identify the principle of management which was not followed by the multinational
company.
a) Equity
b) Initiative
c) Remuneration of employees
d) Stability of personnel
Q 14. Kanika and Priyanka are typists in a company having the same educational qualifications.
Kanika is getting ₹ 20,000 per month and Priyanka ₹ 15,000 per month as salary for the same
working hours. Which principle of management is violated in this case?
a) Equity
b) Initiative
c) Remuneration of employees
d) Stability of personnel
Q 15. For the last two years, Tulip Industries is not functioning smoothly and systematically. The
relation between management and employees are becoming bitter day-by-day. After a complete
analysis, it was observed that employees are not working effectively and efficiently and
management is not fulfilling its commitment of increments and promotions. Which management
principle is being ignored in the given case?
a) Authority and responsibility
b) Esprit De Corps
c) Order
d) Discipline
Q 16. Mr. Gopal, HR Manager of a company, selects each person scientifically, assigns work to each
employee according to her/his physical, mental and intellectual capabilities. He also gives them the
required training so that they may produce more and earn more. This will ensure their prosperity for
both company and workers. Identify the principle/technique of scientific management highlighted in
the above case.
a) Method study
b) Harmony, not discord
c) Cooperation, not individualism
d) Development of each and every person to his/her greatest efficiency
Q 17. Vaibhav Sharma was working as a production manager in Crescent Pharmaceuticals Pvt. Ltd. To
get his son admitted in school he wanted to take leave from the office but on the same day, an
important meeting with the Chief Executive Officer (CEO) of the company was scheduled to discuss
about some new medicines to be manufactured. Considering the significance of the meeting, he did not
take leave. The CEO appreciated his exemplary behaviour as he gave priority to the organizational
interest over his personal interest. Identify the principle of management being followed by Vaibhav
Sharma in the above case.
a) Subordination of individual interest to general interest
b) Centralization and decentralization
c) Discipline
d) Initiative
Q 18. Nutan Tiffin box service was started in Mumbai by Mumbai Dabbawalas. The Dabbawalas who are the soul of entire
Mumbai aim to provide prompt and efficient services by providing tasty homemade tiffin to all office goers at right time
and place. The service is uninterrupted even on the days of bad weather, political unrest and social disturbances. Recently
they have started online booking system through their website ‘mydabbawala.com’. Owning to the tremendous popularity
among the happy and satisfied customers and members, the dabbawalas were invited as guest lectures by the top business
schools. The dabbawalas operate in a group of 25 - 30 people along with a group leader. Each group teams up with others
groups in order to deliver the tiffin on time. They are not transferred on frequent basis as they have to remember the
addresses of their customers, they follow certain rules while doing trade - No alcohol during working hours, No leave
without permission, Wearing of white cap and carrying ID cards during business hours. Identify the principle of
management given by Fayol, which is not discussed above.
a) Order
b) Suitability of personnel
c) Discipline
d) Esprit De Corps
Q 19. Deewan Ltd. is in multinational consulting company with its headquarters at Washington DC. It hires young people
from different countries of the world. It is a company in which people dream to work because of its work environment, pay
and growth prospectus. The company has a culture of open communication and people of various nationalities work
together in a discrimination free environment. The behavior of managers of Deewan Ltd. emphasizes kindliness and justice
which ensures loyalty and devotion of workers. It also promote mutual trust and belongingness among team members. In
this way, management of Deewan Ltd. is able to achieve its objective by promoting teamwork. By doing so managers of
Deewan Ltd. are following some principles of management. Identify two such principles.
a) Equity; Esprit De Corps
b) Order; Discipline of work
c) Equity; Order
d) Unity of Direction; Division of work
Q 20. Sanchit, after completing his entrepreneurship course from Sweden returning to India and started a coffee
shop ‘Aroma Coffee Can’ in a famous mall in New Delhi. The specialty of the coffee shop was the special aroma of
coffee and a wide variety of flavors to choose from. Somehow, the business was neither profitable nor popular.
Sanchit was keen to find out the reason. He appointed Sandhya an MBA from a reputed college, as a manager to
find out the cause for the same. Sandhya took feedback from the clients and found out that though they loved the
special unique aroma of coffee but were not happy with the long waiting time being taken to process the order. She
analyzed and found out that there were many unnecessary obstructions in between which could be eliminated. She
fixed a standard time for processing the order. She also realized that there were some flavors whose demand whose
demand was not enough. So, she also decided to stop the sale of such flavors. As a result, within a short period
Sandhya was able to attract the customers. Identify the identify the technique of scientific management used by
Sandhya to solve the problem.
a) Motion study
b) Time study
c) Simplification of work
d) All of these
Q 21. ‘Good Health Care’ ensures that no doctor provides less favourable treatment to patients on account of gender,
religion, occupation, language, caste, belief or nationality. They do their utmost to ensure that all patients are
treated as fairly as possible.
Identify the principle of management being followed by ‘Good Health Care’.
a) Stability of personnel
b) Initiative
c) Order
d) Equity
Q 22. ‘Heyday Productions’ is a big factory having 3000 workers. Management of this factory
wants that workers should not go on strikes for their unreasonable demands. There should be
almost equal division of work and responsibility between workers and management and both of
them have to realize that they need each other. To replace the competition by cooperation,
management must give importance to those constructive suggestions made by employees which
should result in reduction of cost. Identify the Taylor’s principle of management applied by
‘Heyday Productions’:
a) Initiative
b) Cooperation, not individualism
c) Development of each and every person to his/her greatest efficiency and prosperity
d) Subordination of individual interest to general interest
Q 23. Taylor proposed eight specialists from whom each worker will to take orders from as a part
of the technique of functional foremanship specified by him. Those with technical, mastery,
intelligence and grit may be given ________________ work. Those with energy and good health may
be assigned ___________ work.
a) Planning, Execution
b) Execution, Planning
c) Production, Planning
d) Implementation, Production
Case Study. Read the following text and answer question no. 37-40 on the basis of the same:
Karan Nath took over 'D North Motor Company' from his ailing father three months ago. In the
past the company was not performing well. Karan was determined to improve the company's
performance. He observed that the methods of production as well as selection of employees in the
company were not scientific.
He believed that there was only one best method to maximize efficiency. He also felt that once the
method is developed, the workers of the company should be trained to learn that 'best method'.
He asked the Production Manager to develop the best method and carry out the necessary
training. The Production Manager developed this method using several parameters right from
deciding the sequence of operations, place for men, machines and raw materials till the delivery of
the product to the customers. This method was implemented throughout the organisation. It
helped in increasing the output, improving the quality and reducing the cost and wastage.
Q 24. "He believed that there was only one best method to maximize efficiency." Identify the
principle of scientific management followed by the Production Manager.
a) Science, not rule of thumb
b) Development of each and every person to his greatest efficiency and prosperity
c) Harmony, Not Discord
d) Cooperation, not Individualism
Q 25. "He also felt that once the method is developed, the workers of the company should be
trained to learn that best method." Identify the principle of scientific management followed by the
Production Manager.
a) Science, not rule of thumb
b) Development of each and every person to his greatest efficiency and prosperity
c) Harmony, Not Discord
d) Cooperation, not Individualism.
Q 26. “The Production Manager developed this method using several parameters right from
deciding the sequence of operations, place for men, machines and raw materials till the delivery of
the product to the customers.” Identify the principle/ technique of scientific management as given
by Taylor discussed above.
a) Harmony, Not Discord
b) Development of each and every person to his or her greatest efficiency and prosperity
c) Method study
d) Science, not rule of thumb
Q 27. Which of the following is not a principle of scientific management, as given by Taylor?
a) Harmony, Not Discord
b) Development of each and every person to his or her greatest efficiency and prosperity
c) Functional foremanship
d) Science, not rule of thumb
Q 28. Read the following statements – Assertion (A) and Reason (R):
Assertion (A): Prosperity for the employer cannot exist for a long time unless it is accompanied by
prosperity for the employees and vice versa.
Reason (R): Taylor emphasized that there should be complete harmony between the management
and workers. Both should realize that each one is important.
Select the correct alternative:
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 the correct explanation of
Assertion (A)
c) Assertion (A) is true and Reason (R) is false
d) Assertion (A) is false and Reason (R) is true
Q 29. Read the following statements – Assertion (A) and Reason (R):
Assertion (A): Employee turnover should be maximized to maintain organizational efficiency.
Reason (R): Employees should have stability of tenure. They should be given reasonable time to
show results.
Select the correct alternative:
a) Both Assertion (A) and Reason (R) are true
b) Both Assertion (A) and Reason (R) are false
c) Assertion (A) is true and Reason (R) is false
d) Assertion (A) is false and Reason (R) is true
Q 36. According to the technique of Scientific management “Differential Piece Wage System”. How much
more will a worker making 60 units earn as compared to a worker making 49 units? If the standard
output per day is 50 units and those who make standard output or more than standard get ₹ 75 per
unit and those below get ₹ 65 per unit.
a) ₹ 4500
b) ₹ 3185
c) ₹ 1315
d) ₹ 3250
Q 37. Mr. Prakash Chopra, General Manager of M/s Kwality Enterprises (Leather bags manufacturing
company) retains complete authority over all the activities of the business. No decision-making power is
given to the subordinates. As a result, Mr. Prakash is always engaged in day-to-day operational
activities and is unable to concentrate on core issues of the company. Identify the management principle
violated by Mr. Prakash Chopra.
a) Authority and responsibility
b) Initiative
c) Equity
d) Centralization and decentralization
Q 38. The sales manager assigned a target of selling 40 RO Water Purifiers in a month to a group of 10
sales executives. They mutually decided to sell 4 purifiers each. However, after selling 1 purifier, Kshitij
(one of the sales executive) met with an accident. The other sales executives did not pay any attention
to the remaining target of Kshitij and concentrated on their individual sales target. At the end of the
month, only 37 purifiers could be sold. Identify the principle of management violated in the given case?
a) Esprit De Corps
b) Centralization and decentralization
c) Initiative
d) Division of work
Q 39. A production manager at top level in a reputed corporate, Mr. Rathore holds the responsibility for
ordering raw material for the firm. While deciding on the supplier for the financial year 2018-19, he
gave the order to his cousin at a higher price per unit instead of the firm’s usual supplier who has willing
to lower the rates for the order. Which principle of management was violated by Mr. Rathore?
a) Subordination of individual interest to general interest
b) Centralization and decentralization
c) Discipline
d) Initiative
Q 40. Principles of management equip the managers to foresee the cause and effect relationship of
their decisions and actions. As such the wastages associated with a trial - and - error approach can be
overcome. Principles of management also limit the boundary of managerial discretion so that their
decisions may be free from personal prejudices and biases. For example, in deciding the annual budgets
for different departments, rather than personal preferences, managerial discretion is bounded by the
principles of contribution to organizational objectives. Identify the administration principle of
management highlighted above.
a) Subordination of individual interest to general interest.
b) Science, not rule of thumb
c) Stability of personnel
d) Discipline
Answers
1. (d) 21. (d)
2. (a) 22. (b)
3. (c) 23. (a)
4. (d) 24. (a)
5. (c) 25. (b)
6. (c) 26. (c)
7. (a) 27. (c)
8. (c) 28. (a)
9. (c) 29. (d)
10. (b) 30. (a)
11. (a) 31. (a)
12. (b) 32. (c)
13. (a) 33. (b)
14. (a) 34. (d)
15. (d) 35. (a)
16. (d) 36. (c)
17. (a) 37. (d)
18. (a) 38. (a)
19. (a) 39. (a)
20. (d) 40. (a)
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