Principles of Management Class 12: Fayol, Taylor, Cases and Board Answers

What Principles of Management is about

Weightage: This chapter shares 16 of the 80 theory marks with Nature and Significance of Management and Business Environment.Source: CBSE Business Studies (054) syllabus 2026-27, course structure (marks are printed once per group of units)

In real board papers: asked in 2 of the 2 board papers we hold (2026 to 2026), on average 7.5 marks per paper. See the questions

Key concepts

Nature of principles of management

NCERT section Nature of Principles of Management

1. Universal applicability: meant for all kinds of organisations (business and non-business, small and large, public and private, manufacturing and services), though the extent varies.
2. General guidelines: they guide action but give no ready-made solutions, because real situations are complex.
3. Formed by practice and experimentation: from the experience and collective wisdom of managers and from experiments.
4. Flexible: not rigid rules; managers modify them to suit the situation.
5. Mainly behavioural: they aim to influence the behaviour of people.
6. Cause and effect relationships: they say what is likely to happen if a principle is applied.
7. Contingent: their use depends on the prevailing situation at a given time.

Worked example

Suppose a school, a hospital and a software company all divide their work into small specialised tasks, though to different degrees. Which feature of the nature of principles of management is shown? (1 mark)

Try it first, then show the solutionSolution

1. Principles apply to all kinds of organisations, though the extent varies with size and nature of work.

Answer: Universal applicability.

Significance of principles of management

NCERT section Significance of the Principles of Management

1. Providing managers with useful insights into reality: they add to knowledge, so managers handle situations better and avoid repeating mistakes.
2. Optimum utilisation of resources and effective administration: resources (human and material) are limited; principles help use them to get maximum benefit at minimum cost, and help make administration impersonal (e.g. no personal bias in decisions).
3. Scientific decisions: decisions based on facts, justifiable and free from bias.
4. Meeting changing environment requirements: principles are flexible, e.g. division of work extends to specialisation and diversification.
5. Fulfilling social responsibility: e.g. equity and fair remuneration; principles are interpreted to meet social goals.
6. Management training, education and research: principles are the base of management education and of new techniques built from them.

Worked example

Suppose the CEO of a hotel chain takes all promotion decisions on objective criteria such as performance scores, not on personal liking, so no decision can be questioned. State the significance of principles of management shown and explain it. (3 marks)

Try it first, then show the solutionSolution

1. Significance: principles help in taking scientific decisions. (1)
2. Explanation: decisions are based on facts, are thoughtful and can be justified. (1)
3. Link: promotions on objective performance scores are free from personal bias and can be justified. (1)

Answer: Scientific decisions (also linked to effective, impersonal administration).

Taylor's principles of scientific management

NCERT section Taylor's Scientific Management

F.W. Taylor, the father of scientific management, saw management as knowing exactly what work is wanted from people and making sure it is done in the cheapest, best way.

1. Science, not rule of thumb: replace trial-and-error, intuition-based methods with methods developed through scientific study. Taylor's experiments with shovels are the classic example.
2. Harmony, not discord: management and workers should not see each other as rivals; both need a mental revolution, a complete change of attitude so that they share gains (management shares gains, workers work hard). Taylor wanted a paternalistic style.
3. Cooperation, not individualism: an extension of harmony; management should welcome workers' suggestions (and reward them) and workers should not strike; management and workers share work and responsibility almost equally.
4. Development of each and every person to their greatest efficiency and prosperity: scientific selection of workers, assigning work suited to their abilities, and training them in the best method.

Worked example

Suppose the owner of a bakery shares part of the extra profit from a new oven with the workers, and the workers in turn give up strikes and work wholeheartedly. Which principle of scientific management is followed, and what change in thinking does it need? (3 marks)

Try it first, then show the solutionSolution

1. Principle: harmony, not discord. (1)
2. It needs a mental revolution: management and workers change their attitude towards each other. (1)
3. Link: owner shares gains and workers stop striking and work hard, so the relationship is of harmony, not conflict. (1)

Answer: Harmony, not discord, through a mental revolution.

Techniques of scientific management

NCERT section Techniques of Scientific Management

1. Functional foremanship: separates planning from execution. Under the factory manager, a planning in-charge has the instruction card clerk, route clerk, time and cost clerk and disciplinarian; a production in-charge has the speed boss, gang boss, repair boss and inspector. Each worker gets orders from eight specialist bosses. It extends division of work and specialisation to the shop floor (but violates unity of command).
2. Standardisation and simplification of work: standardisation sets benchmarks for every activity (process, raw material, time, product, machinery, methods, working conditions); simplification removes unnecessary diversity of products (varieties, sizes, dimensions), saving labour, machines and tools and reducing inventory.
3. Method study: finds the one best way of doing a job, from procuring raw material to delivery, to minimise cost and maximise quality.
4. Motion study: studies movements (lifting, putting objects, sitting, changing positions) to eliminate unnecessary motions; motions are productive, incidental or unproductive.
5. Time study: fixes the standard time for a well-defined job, used to decide the number of workers, frame incentive schemes and fix labour costs.
6. Fatigue study: decides the amount and frequency of rest intervals so workers regain stamina.
7. Differential piece wage system: a higher rate per unit for workers who reach the standard output and a lower rate for those below it. NCERT's example: standard 10 units a day, Rs 50 per unit at or above standard and Rs 40 below. A worker making 11 units earns Rs 550; one making 9 units earns Rs 360. The difference of Rs 190 motivates the slower worker.

Worked example

Suppose a factory sets a standard of 20 units per day, pays Rs 30 per unit to workers who reach it and Rs 25 per unit to those below it. Worker P makes 22 units and Q makes 18. Calculate their wages, name the technique and state its purpose. (3 marks)

Try it first, then show the solutionSolution

1. P reaches the standard: 22 × 30 = Rs 660. Q is below: 18 × 25 = Rs 450. (1)
2. Technique: differential piece wage system. (1)
3. Purpose: the gap of Rs 210 for only 4 units more motivates below-standard workers to improve; it rewards efficient workers. (1)

Answer: P earns Rs 660, Q earns Rs 450; differential piece wage system, to motivate efficiency.

Fayol's 14 principles of general management (1 to 7)

NCERT section Principles of General Management

Henri Fayol, the father of general management, gave principles for the whole organisation.
1. Division of work: work is divided into small tasks; each is done by a trained specialist, giving efficiency.
2. Authority and responsibility: authority (right to give orders and get them obeyed) must be balanced with responsibility (obligation to complete the task); a manager should have the authority needed for the responsibility given.
3. Discipline: obedience to organisational rules and the employment agreement; needs good superiors at all levels, clear and fair agreements and judicious use of penalties.
4. Unity of command: each employee should receive orders from one superior only; dual subordination causes confusion and conflict.
5. Unity of direction: all units with the same objective should run under one head and one plan; it ensures unity of action.
6. Subordination of individual interest to general interest: the organisation's interest must come before any individual's or group's interest.
7. Remuneration of employees: fair and just pay to give at least a reasonable standard of living, within the employer's paying capacity.

Worked example

Suppose a salesman in a firm gets instructions from both the sales manager and the production manager, and the two orders conflict. Which principle is violated, and what is the likely result? (3 marks)

Try it first, then show the solutionSolution

1. Principle violated: unity of command. (1)
2. Meaning: an employee should receive orders from one superior only. (1)
3. Result: confusion for the employee, undermined authority of superiors, conflict and lower efficiency. (1)

Answer: Unity of command is violated; it leads to confusion, conflict and poor discipline.

Fayol's 14 principles (8 to 14)

NCERT section Principles of General Management

8. Centralisation and decentralisation: concentration of decision-making authority is centralisation; its dispersal among more than one person is decentralisation. A firm needs a balance of the two, depending on its size and situation.
9. Scalar chain: the formal line of authority from the highest to the lowest rank; communication should normally follow it. In an emergency, a gang plank lets employees at the same level (e.g. E and O in Fayol's chain) communicate directly with their superiors' knowledge.
10. Order: 'a place for everything (everyone) and everything (everyone) in its place'; people and materials in their fixed place.
11. Equity: kindliness and justice in behaviour towards workers; no discrimination on the basis of caste, sex, religion or nationality.
12. Stability of tenure of personnel: employees should be selected and appointed after due process and kept in their posts for a minimum fixed period; frequent turnover is costly.
13. Initiative: workers should be encouraged to develop and carry out their plans for improvement, e.g. through a suggestion system; initiative means taking the first step with self-motivation.
14. Esprit de corps: management should promote team spirit, unity and harmony; a manager should replace 'I' with 'We'.

Worked example

Suppose a store manager insists that every product has a fixed shelf and every employee a fixed desk, so time is not wasted searching. Name the principle and give one benefit.

Try it first, then show the solutionSolution

1. Principle: order: a place for everything and everyone, and everything and everyone in its place. (1)
2. Benefit: no time is wasted searching for people or things, so productivity rises and work runs smoothly. (1)

Answer: Order; it saves time and raises productivity.

Fayol versus Taylor

NCERT section Fayol versus Taylor: A Comparison

Basis	Henri Fayol	F.W. Taylor
Perspective	Top-level management	Shop floor (supervisory) level
Unity of command	Staunch supporter	Did not feel it important (functional foremanship gives eight bosses)
Applicability	Universal	Specialised situations
Basis of formation	Personal experience	Observation and experimentation
Focus	Improving overall administration	Increasing productivity
Personality	Practitioner	Scientist
Expression	General theory of administration	Scientific management

The two are complementary: both stress the human element and want better efficiency; Taylor worked up from the shop floor and Fayol down from the top.

Worked example

Distinguish between Fayol and Taylor on the basis of (a) perspective and (b) unity of command.

Try it first, then show the solutionSolution

1. (a) Fayol: top-level management; Taylor: shop floor level of a factory. (1)
2. (b) Fayol: staunch supporter of unity of command; Taylor: did not feel it important, as under functional foremanship a worker gets orders from eight specialists. (1)

Answer: Perspective: top vs shop floor; unity of command: supported by Fayol, not by Taylor.

Principles of Management in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Topics in this chapter

• Nature and Significance of Principles of Management
• Fayol's 14 Principles of Management
• Taylor's Techniques of Scientific Management

Principles of Management: key facts

Nature of principles (7)

Universal, General guidelines, Formed by practice and experimentation, Flexible, Behavioural, Cause and effect, Contingent

Mnemonic below: 'UG Fixes FBCC'.

Taylor's four principles

Science not rule of thumb; Harmony not discord; Cooperation not individualism; Development of each and every person

Harmony needs a mental revolution.

Taylor's techniques

Functional foremanship; Standardisation and simplification; Method study; Motion study; Time study; Fatigue study; Differential piece wage

Foremanship: 4 planning + 4 production specialists.

Differential piece wage

Wage = units × higher rate (at or above standard); units × lower rate (below standard)

NCERT example: 11 × 50 = 550; 9 × 40 = 360; gap 190.

Fayol's 14 principles

• •Division of work
• •Authority-responsibility
• •Discipline
• •Unity of command
• •Unity of direction
• •Subordination
• •Remuneration
• •Centralisation-decentralisation
• •Scalar chain
• •Order
• •Equity
• •Stability of personnel
• •Initiative
• •Esprit de corps

Unity of command = one boss per employee; unity of direction = one head, one plan per objective.

Gang plank

Direct contact between employees at the same level in an emergency, with superiors informed

An exception to the scalar chain.

How the board asks Principles of Management

The question patterns to expect, and the method that works for each.

Tricks to remember Principles of Management

Short memory aids. Say each one aloud once, then use it on a question the same day.

• Nature of principles: 'UG Fixes FBCC'

  Universal, General guidelines, Formed by practice, Flexible, Behavioural, Cause and effect, Contingent.

  Use it when: Listing the seven features.

• Taylor's principles: 'SHCD'

  Science, Harmony, Cooperation, Development: 'Some Happy Cows Dance'.

  Use it when: Four principles of scientific management.

• Functional foremanship: 'I Route Time Discipline' and 'Speed Gang Repair Inspect'

  Planning side: Instruction card clerk, Route clerk, Time and cost clerk, Disciplinerian. Production side: Speed boss, Gang boss, Repair boss, Inspector.

  Use it when: Naming all eight specialists.

• Command vs direction

  Unity of command = one boss per person. Unity of direction = one head and one plan per group of activities with the same objective.

  Use it when: The common distinction question.

• Fayol's 14 in pairs

  Work (division), Power (authority-responsibility), Rules (discipline), Boss (unity of command), Plan (unity of direction), Self vs group (subordination), Pay (remuneration), Power spread (centralisation), Chain (scalar), Place (order), Fairness (equity), Stay (stability), Ideas (initiative), Team (esprit de corps).

  Use it when: Recalling all 14 in NCERT order.

Principles of Management: board-level solved questions

Ordered from board level to HOTS. Cover the solution, write your own, then compare step by step.

Case-study practice (Section E style)

Read the situation, then answer every part. In the board paper this is a 4-mark question split into 1 + 1 + 2 marks.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Where students lose marks in Principles of Management

The slips examiners see most often, and what to write instead.

• ✗Mistake: Confusing unity of command with unity of direction

  Both start with 'unity'.

  Wrong working

  Two departments making the same product have two heads: unity of command is violated.

  Right working

  Two heads and two plans for the same objective violate unity of direction.

  ✓Do this: Command is about one superior per employee; direction is about one head and one plan per objective.

  Usually costs: The full identification mark and the explanation that depends on it.

• ✗Mistake: Mixing Taylor's principles with his techniques

  Both lists are taught together.

  ✓Do this: Principles: science, harmony, cooperation, development. Techniques: foremanship, standardisation, method, motion, time, fatigue studies, differential wages.

  Usually costs: 1-2 marks.

• ✗Mistake: Writing only six of the eight functional foremen

  Students forget the clerks.

  ✓Do this: Write four under planning in-charge and four under production in-charge, with one line on each.

  Usually costs: Up to 1 mark in a 4-mark answer.

• ✗Mistake: Confusing method study with motion study

  Both improve how work is done.

  Wrong working

  Method study removes unnecessary movements of the worker.

  Right working

  Motion study removes unnecessary movements; method study finds the one best way of doing the whole job.

  ✓Do this: Method = whole process (best way); motion = body movements; time = standard time; fatigue = rest intervals.

  Usually costs: The identification mark.

• ✗Mistake: Explaining order as 'orders from superiors'

  The word 'order' suggests commands.

  ✓Do this: Fayol's order means a place for everything and everyone, and everything and everyone in its place.

  Usually costs: 1 mark in an MCQ or the principle mark in a case.

• ✗Mistake: Leaving out the case link

  Students write textbook explanations only.

  ✓Do this: End each point with 'as seen in the case when...'.

  Usually costs: Usually half the marks for each point in an application question.

NCERT exercise guide: Principles of Management

What each exercise in the NCERT chapter tests, how to approach it, and a question of the same kind solved step by step. Questions here are written in our own words.

Principles of Management: previous year questions

• Asked in 2 of the 2 board papers we hold (2026 to 2026), on average 7.5 marks per paper; 6 questions in all, counting OR alternatives. In 4 of 4 sample papers.

Counted from the real papers on our previous year papers page, not estimated. Average marks are over every board paper we hold, with an OR pair counted once. Chapter tags are ours.

Solved board questions from Principles of Management

Real questions from recent papers. Try each one first, then open our step-by-step solution with marks per step.

Every Principles of Management question, by year

Practice questions on Principles of Management

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

1. Q1 · 1 mark · MCQBoard level

   Who said that a manager should replace 'I' with 'We' in all conversations?
   (a) Taylor (b) Fayol (c) Gilbreth (d) Drucker

   Hint

   Esprit de corps.

   Answer

   (b) Fayol

2. Q2 · 1 mark · Assertion-reasonHarder board level

   Assertion (A): Functional foremanship violates the principle of unity of command.
   Reason (R): Under functional foremanship a worker receives instructions from eight specialists.
   (a) Both A and R are true and R is the correct explanation of A.
   (b) Both A and R are true but R is not the correct explanation of A.
   (c) A is true but R is false.
   (d) A is false but R is true.

   Hint

   Count the bosses.

   Answer

   (a)

3. Q3 · 1 mark · Very short answerBoard level

   Which technique of scientific management fixes the standard time for a well-defined job?

   Hint

   Stopwatch.

   Answer

   Time study.

4. Q4 · 3 marks · Case-basedHarder board level

   Suppose a manager of a car showroom allows the sales and service executives to talk directly to each other to solve an urgent customer complaint, informing their superiors. Name the concept and the principle it is an exception to. (3 marks)

   Hint

   Fayol's chain.

   Answer

   Gang plank (1). It is an exception to the scalar chain, the formal line of authority from top to bottom through which communication normally flows (1). It allows employees at the same level to communicate directly in an emergency so that time is saved, while their superiors are kept informed (1).

5. Q5 · 4 marks · Short answerBoard level

   Explain the significance of principles of management with respect to (a) optimum utilisation of resources and effective administration (b) meeting changing environment requirements. (4 marks)

   Hint

   Cost-benefit; flexibility.

   Answer

   (a) Resources are limited; principles help managers use them with maximum benefit at minimum cost through coordination, and make administration impersonal by limiting personal bias (2). (b) Principles are flexible and can be modified to suit changes; for example, division of work has grown into specialisation and diversification (2).

6. Q6 · 4 marks · Case-basedHarder board level

   Suppose 'Leela Biscuits' makes 48 shapes of biscuit, many of which hardly sell, and every line uses a different kind of flour and packing. Which technique of scientific management should it use? Explain two benefits. (4 marks)

   Hint

   Fewer varieties, fixed standards.

   Answer

   Standardisation and simplification of work (1). Simplification removes unnecessary varieties of shapes, saving machines, tools and inventory (1.5); standardisation fixes standards for flour, packing and methods, giving uniform quality and lower cost (1.5).

7. Q7 · 3 marks · Short answerHarder board level

   Distinguish between unity of command and unity of direction on three bases. (3 marks)

   Hint

   Meaning, aim, implication.

   Answer

   Meaning: one superior per employee vs one head and one plan for a group of activities with the same objective. Aim: prevent dual subordination vs prevent overlapping of activities. Implication: affects an individual employee vs affects the entire organisation or department.

8. Q8 · 6 marks · Case-basedHOTS / competency

   Suppose 'Sundar Mills' ignores workers' suggestions, pays them poorly, and workers often strike. A new manager wants to apply Taylor's principles. Explain three principles he should follow and how each would help. (6 marks)

   Hint

   Harmony, cooperation, development.

   Answer

   Harmony, not discord: through a mental revolution management shares gains with workers and workers stop striking (2). Cooperation, not individualism: management welcomes and rewards workers' suggestions, and both share responsibility, so workers feel involved (2). Development of each and every person: scientific selection and training of workers raises their efficiency and wages, giving prosperity to both the mill and the workers (2).

9. Q9 · 3 marks · Case-basedHarder board level

   Suppose a supermarket chain encourages cashiers to suggest ways to reduce queues and rewards good ideas. Identify the principle of Fayol and one principle of Taylor that the chain follows, and state one benefit to the chain. (3 marks)

   Hint

   Taking the first step; suggestions.

   Answer

   Fayol: initiative (workers are encouraged to develop and carry out improvement plans) (1). Taylor: cooperation, not individualism (management welcomes and rewards workers' suggestions) (1). Benefit: cashiers feel valued and involved, so they keep offering practical ideas that cut queues and raise efficiency (1).

10. Q10 · 4 marks · Short answerHOTS / competency

    'Principles of management are flexible and not rigid.' Explain with a suitable example, and state how this differs from principles of pure science. (4 marks)

    Hint

    Situation-based use.

    Answer

    Management principles are not rigid prescriptions; a manager can modify them when the situation demands (1). Example: the balance between centralisation and decentralisation is changed according to the size of the firm and the nature of its work (1). Principles of pure science give the same result everywhere, while management principles deal with human behaviour and depend on circumstances (1), so they are applied with judgement rather than mechanically (1).

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1. 1.Who is called the father of scientific management, and who the father of general management?Show answer

   F.W. Taylor; Henri Fayol.

2. 2.What is a mental revolution?Show answer

   A complete change in the attitude of management and workers towards each other, from conflict to cooperation and sharing of gains.

3. 3.Name the four specialists under the planning in-charge.Show answer

   Instruction card clerk, route clerk, time and cost clerk, disciplinarian.

4. 4.Name the four specialists under the production in-charge.Show answer

   Speed boss, gang boss, repair boss, inspector.

5. 5.What does fatigue study decide?Show answer

   The amount and frequency of rest intervals in completing a task.

6. 6.In NCERT's differential piece wage example, what do workers making 11 and 9 units earn?Show answer

   Rs 550 (11 × 50) and Rs 360 (9 × 40).

7. 7.State Fayol's principle of order.Show answer

   A place for everything and everyone, and everything and everyone in its place.

8. 8.What is a gang plank?Show answer

   Direct communication between employees at the same level in an emergency, departing from the scalar chain.

9. 9.Seven features of the nature of principles?Show answer

   Universal, general guidelines, formed by practice and experimentation, flexible, mainly behavioural, cause and effect, contingent.

10. 10.What does simplification aim at?Show answer

    Eliminating unnecessary diversity of products (varieties, sizes, dimensions).

11. 11.Which Fayol principle asks for no discrimination on caste, sex or religion?Show answer

    Equity.

12. 12.Taylor and unity of command?Show answer

    Taylor did not consider it important; functional foremanship violates it.

Quick revision checklist

The night before the exam: can you do each of these without looking?

• ☐Can you distinguish principles from techniques and values?
• ☐Can you write the seven points of the nature of principles?
• ☐Can you explain the six points of significance?
• ☐Can you state and explain Taylor's four principles and mental revolution?
• ☐Can you name all eight functional foremen and their jobs?
• ☐Can you calculate wages under the differential piece wage system?
• ☐Can you list and explain Fayol's 14 principles with an example of violation?
• ☐Can you compare Fayol and Taylor on six bases?

Principles of Management: frequently asked questions