12th commerce chapter 1 study material pdf download 2021 - 2022

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D.Chithambararaj

PGT Commerce

CHAPTER 1: PRINCIPLES OF MANAGEMENT

I .VERY SHORT ANSWER QUESTIONS:

1. What is Management?

 Management is goal oriented and it is an art of getting things done with and through others.

 The practice of management helps to achieve the organizational mission and determines the future of

the business enterprises.

2. List out the management tools.

 Tools of management have been developed such as, accounting, business law, psychology, statistics,

econometrics, data processing, etc.

 These branches of management profession have enhanced the practical utility of the science of

management.

3. Who is a manager?

 According to P. Drucker, the manager has to balance and integrate three major jobs of a business

enterprise as mentioned below

(i) Managing a business;

(ii) Managing manager; and

 (iii) Managing workers and work.

 A manager is a dynamic and life-giving element in every business.

4. State the meaning of Authority.

 Authority means the right of a superior to give the order to his subordinates

5. What do you mean by Span of management?

 The Span of Management refers to the number of subordinates who can be managed efficiently by a

superior.

II. SHORT ANSWER QUESTIONS:

1. Define the term management.

“Management is a multipurpose organ that manages a business and manages manager, and manages

worker and work.” — Peter F. Drucker

“To manage is to forecast, to plan, to organise, to command, to co-ordinate and to control.” —Henry

Fayol.

2. Is management an Art or Science?

Management is neither a science nor an art, but a combination of both requiring people holding

managerial positions to apply the scientific management principles and displaying popular managerial

skills to accomplish the organizational goals as efficiently and as quickly as possible so as to be

competitive in the globalised environment of business.

3. Differentiate management from Administration.

BASIS FOR COMPARISON MANAGEMENT ADMINISTRATION

Meaning An organized way of managing

people and things of a business

organization is called the

Management

The process of administering an

organization by a group of

people is known as the

Administration.

Authority Middle and Lower Level Top Level

 Role Executive Decisive

Concerned with Policy Implementation Policy Formulation

4. What are the principles of Taylor?

Principles of scientific management propounded by Taylor are

1. Science, Not Rule of Thumb

2. Harmony, Not Discord

3. Mental Revolution

4. Cooperation, Not Individualism

5. Development of each and every person to his or her greatest efficiency and prosperity.

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D.Chithambararaj

PGT Commerce

5. What determines the span of management?

The Span of Management refers to the number of subordinates who can be managed efficiently by a

superior.

The Span of Management has two implications:

1. Influences the complexities of the individual manager‘s job

2. Determine the shape or configuration of the Organization

III. Long answer questions:

1. Write about the contribution of Drucker to management.

 Drucker stresses three jobs of management:

(i) Managing a business;

(ii) Managing manager; and

(iii) Managing workers and work.

 Even if one is omitted, It would not have management anymore and it also would not have a business

enterprise or an industrial society.

 According to P. Drucker, the manager has to balance and integrate three major jobs of a business enterprise

as mentioned above. Hence, a manager is a dynamic and life giving element in every business. Without efficient

management it cannot be secure the best allocation and utilisation of human, material and financial resources.

2. Explain the management process in detail.

1. Management is Co-Ordination:

The manager of an enterprise must effectively coordinate all activities and resources of the

organisation, namely, men, machines, materials and money the four M‘s of management.

2. Management is a Process:

The manager achieves proper coordination of resources by means of the managerial functions of

planning, organising, staffing, directing (or leading and motivating) and controlling.

3. Management is a Purposive Process:

It is directed toward the achievement of predetermined goals or objectives. Without an objective, we

have no destination to reach or a path to follow to arrive at our destination, i.e., a goal, both

management and organisation must be purposive or goal-oriented.

4. Management is a Social Process:

It is the art of getting things done through other people.

5. Management is a Cyclical Process:

It represents planning-action-control-replanning cycle, i.e., an ongoing process to attain the planned

goals.

3. Describe the principles of scientific management.

Mr.Frederick Winslow Taylor (F.W.Taylor) brought about a scientific approach.

1. Science, Not Rule of Thumb:

 Rule of Thumb means decisions taken by manager as per their personal judgments.

 According to Taylor, even a small production activity like loading iron sheets into box cars can be

scientifically planned.

 This principle is concerned with selecting the best way of performing a job through the

application of scientific analysis and not by intuition or hit and trial methods.

2. Harmony, Not Discord:

 Taylor emphasized that there should be complete harmony between the workers and the

management

 Both the management and the workers should realize the importance of each other.

 Management should always be ready to share the gains of the company with the workers and the

latter should provide their full cooperation and hard work for achieving organizational goals.

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D.Chithambararaj

PGT Commerce

3. Mental Revolution:

 Management as well as the workers should aim to increase the profits of the organisation.

 workers should put in their best efforts so that the company makes profit and on the other hand

management should share part of profits with the workers.

 Thus, mental revolution requires a complete change in the outlook of both management and

workers.

4. Cooperation, Not Individualism:

 Cooperation, mutual confidence, sense of goodwill should prevail among both, managers as well

as workers.

 Workers should be considered as part of management and should be allowed to take part in

decision making process of the management.

 workers should also resist from going on strike or making unnecessary demands from

management.

5. Development of each and every person to his or her greatest efficiency and prosperity:

 Efficiency of any organisation also depends on the skills and capabilities of its employees to a

great extent.

 To attain the efficiency, steps should be taken right from the process of selection of employees.

 The work assigned to each employee should suit his/her physical, mental and intellectual

capabilities.

 This ultimately helps to attain efficiency and prosperity for both organisation and the

employees.

4. Explain the principles of modern management.

The Father of Modern Management is Mr.Henry Fayol, and according to him there are 14 major

principles of management.

1. Division of Work: According to this principle the whole work is divided into small tasks. It leads to

specialization which increases the efficiency of labour.

2. Authority and Responsibility: Authority means the right of a superior to give the order to his

subordinates whereas responsibility means obligation for performance.

3. Discipline: It is obedience, proper conduct in relation to others, respect of authority, etc. It is essential

for the smooth functioning of all organizations.

4. Unity of Command: This principle states that each subordinate should receive orders and be

accountable to one and only one superior. If an employee receives orders from more than one

superior, it is likely to create confusion and conflict.

5. Unity of Direction: All related activities should be put under one group, there should be one plan of

action for them, and they should be under the control of one manager.

6. Subordination of Individual Interest to Mutual Interest: The management must put aside personal

considerations and put company objectives firstly. Therefore the interests of goals of the organization

must prevail over the personal interests of individuals.

7. Remuneration: Workers must be paid sufficiently as this is a chief motivation of employees and

therefore greatly influences productivity.

8. The Degree of Centralization: Centralization implies the concentration of decision making authority at

the top management, it depends on company size.

9. Line of Authority/Scalar Chain: The principle suggests that there should be a clear line of authority

from top to bottom linking all managers at all levels.

10. Order: Social order ensures the fluid operation of a company through authoritative procedure.

Material order ensures safety and efficiency in the workplace. Order should be acceptable and under

the rules of the company.

11. Equity: Employees must be treated kindly. Managers should be fair and impartial when dealing with

employees, giving equal attention towards all employees.

12. Stability of Tenure of Personnel: Stability of tenure of personnel is a principle stating that in order for

an organization to run smoothly, personnel (especially managerial personnel) must not frequently

enter and exit the organization.

13. Initiative: Using the initiative of employees can add strength and new ideas to an organization.

Initiative on the part of employees is a source of strength for organization because it provides new

and better ideas.

14. Esprit de Corps/Team Spirit: This refers to the need of managers to ensure and develop morale in the

workplace; individually and communally. Team spirit helps develop an atmosphere of mutual trust

and understanding. Team spirit helps to finish the task on time.

5. Discuss the implications of span of management

The Span of Management has two implications:

1. Influences the complexities of the individual manager‘s job

2. Determine the shape or configuration of the Organization

 There is a wide and a narrow span of management.

Wide Span of Management:

 there will be less hierarchical levels, and thus, the organizational structure would be flatter

 It will be very difficult for a superior to manage a large number of subordinates at a time and also may

not listen to all efficiently.

 Number of managers gets reduced in the hierarchy, and thus, the expense in terms of remuneration is

saved.

 The subordinates feel relaxed and develop their independent spirits in a free work environment, where

the strict supervision is absent.

Narrow span of Management:

 The hierarchical levels increases, hence the organizational structure would be tall and more challenges.

 Less number of subordinates under one superior, requires more managers to be employed in the

organization.

 It would be very expensive in terms of the salaries to be paid to each senior.

 Communication suffers drastically.

 Lack of coordination and control because the operating staff is far away from the top management.

 Cross communication gets facilitated, i.e., operative staff communicating with the top management. Also,

the chance of promotion increases with the availability of several job positions.