Principles of Management: Taylor's and Fayol's Principles (ISC Class 12 Commerce)

What Principles of Management is about

Weightage: Principles of Management is part of the unit Management, which carries 33 of the 80 theory marks, shared with 9 other chapters. Questions on it can appear in any section of the paper.Source: CISCE ISC Commerce syllabus, examination year 2027, distribution of marks

Key concepts

Nature and need of principles of management

Nature

• Universal applicability: apply to all kinds of organisations (business and non-business), though to varying degrees.
• General guidelines: they guide action but do not give ready-made solutions.
• Formed by practice and experimentation: developed from experience and research.
• Flexible: can be modified to suit the situation.
• Mainly behavioural: they influence human behaviour.
• Cause-and-effect relationship: they tell what is likely to happen if applied.
• Contingent: their application depends on the situation.

They are not as accurate as the principles of natural science because they deal with human behaviour, which is unpredictable.

Need

• Provide managers with useful insights into reality.
• Optimum use of resources and effective administration.
• Scientific decisions based on logic rather than whim.
• Help meet a changing environment.
• Help fulfil social responsibility.
• Basis for management training, education and research.

Worked example

Why are principles of management not as accurate as the principles of science? [1 mark]

Try it first, then show the solutionSolution

1. They deal with people.

Answer: They deal with human behaviour, which is complex and changes, so results cannot be predicted exactly.

Taylor's five principles of scientific management

F. W. Taylor (the father of scientific management) aimed to raise productivity by applying scientific methods to work.

1. Science, not rule of thumb: every task should be studied scientifically (time, motion and method studies) to find the one best way, instead of relying on guesswork and tradition.
2. Harmony, not discord: management and workers should work in harmony, with a mental revolution: both should see that they gain from higher productivity instead of fighting over sharing profits.
3. Cooperation, not individualism: managers and workers should cooperate; management should welcome workers' suggestions and workers should not go on strike unnecessarily.
4. Maximum output in place of restricted output: aim at the highest possible production to benefit owners, workers and consumers.
5. Development of each person to his greatest efficiency and prosperity: scientific selection and training of workers so that they reach their best efficiency and earn more.

(Taylor also proposed techniques such as functional foremanship, standardisation, time and motion studies and the differential piece-wage system.)

Worked example

True or false: "Science, not rule of thumb" is one of Fayol's principles of management. [1 mark]

Try it first, then show the solutionSolution

1. It is a principle of scientific management.

Answer: False: it was given by F. W. Taylor.

Fayol's fourteen principles (1)

Henri Fayol (the father of modern general management) gave fourteen principles based on his experience as a top manager.

No.	Principle	Meaning in brief
1	Division of work	Work is divided into small tasks and each is assigned to a person according to competence, so specialisation raises efficiency
2	Authority and responsibility	Authority (right to command) must match responsibility (obligation to perform)
3	Discipline	Obedience to rules and agreements by all, with fair rules and penalties
4	Unity of command	Each employee receives orders from one superior only
5	Unity of direction	One head and one plan for a group of activities with the same objective
6	Subordination of individual interest to general interest	The interest of the organisation comes before the interest of any individual or group
7	Remuneration of employees	Fair pay that satisfies both employees and the firm
8	Centralisation and decentralisation	A proper balance between concentrating and dispersing authority
9	Scalar chain	A formal line of authority from top to bottom; "gang plank" for quick communication at the same level
10	Order	A place for everything and everything in its place (material order); a place for everyone and everyone in his place (social order)
11	Equity	Kindliness and justice in dealing with employees; no bias
12	Stability of tenure of personnel	Employees should not be moved or removed frequently
13	Initiative	Employees should be encouraged to think out and carry out plans
14	Esprit de corps	Team spirit and unity among employees ("union is strength")

Worked example

Suppose a bakery stops having every worker do everything and instead assigns mixing, baking and packing to different people according to their skills, and daily output rises. Name and briefly explain the Fayol principle applied. [2 marks]

Try it first, then show the solutionSolution

1. Principle: division of work.
2. The whole work is divided into small tasks, each assigned to a person according to his competence; repetition builds specialisation, raising efficiency and output.

Answer: Division of work.

Fayol's principles (2): key pairs and illustrations

Unity of command vs unity of direction: unity of command concerns people (one boss for each employee); unity of direction concerns the organisation (one plan and one head for each group of activities with the same objective). Violation of the first causes confusion of orders; of the second, duplication and waste.

Order: two aspects: material order (a place for everything and everything in its place: tools, files, stock) and social order (a place for everyone and everyone in his place: right person in the right position). Both must be explained.

Equity: fair and kind treatment of all employees without discrimination on grounds of caste, gender, religion and so on. It is not "equality" (identical treatment).

Subordination of individual interest to general interest: when an employee pursues personal goals at the cost of organisational objectives, this principle is violated; the organisation's interest must come first.

Scalar chain and gang plank: communication follows the chain of authority; in an emergency, two employees at the same level can communicate directly through a gang plank, keeping their superiors informed.

Esprit de corps: managers should build team spirit, using "we" instead of "I".

Worked example

Suppose a regional sales head pushes a product that earns him the highest personal commission, although the company wants to clear old stock first. Which Fayol principle is violated? Explain it. [2 marks]

Try it first, then show the solutionSolution

1. Subordination of individual interest to general interest.
2. The interest of the organisation must come before the personal interest of any individual or group; managers should reconcile the two where possible.

Answer: Subordination of individual interest to general interest.

Relevance today; Taylor vs Fayol

Relevance of the principles in today's business

• Division of work and specialisation underpin modern manufacturing and services.
• Unity of command and scalar chain still define reporting lines, though matrix and flat structures adapt them.
• Equity, remuneration, stability of tenure, initiative and esprit de corps match modern HR practices (fair pay, retention, employee engagement, teamwork).
• Taylor's science, not rule of thumb lives on in process improvement, quality management and data-driven decisions; harmony and cooperation in participative management.
• But principles are applied flexibly: digital firms use decentralised, cross-functional teams, so some principles are modified.

Basis	Taylor	Fayol
Background	Mechanical engineer	Mining engineer and top executive
Focus	Shop-floor (operative) level	Top management and the whole organisation
Concern	Productivity and efficiency of workers	General administration
Approach	Scientific observation and experiment	Personal experience
Known as	Father of scientific management	Father of general (modern) management
Command	Functional foremanship (many supervisors)	Unity of command (one boss)
Applicability	Specialised situations	Universal

Worked example

Distinguish between Taylor and Fayol on the bases of focus and approach. [2 marks]

Try it first, then show the solutionSolution

1. Focus: Taylor concentrated on the shop-floor (operative) level; Fayol on top management and the whole organisation.
2. Approach: Taylor used scientific observation and experiment; Fayol drew on personal experience.

Answer: Shop floor vs top management; experiment vs experience.

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

• Fayol's Fourteen Principles and Taylor Compared
• Nature, Need and Taylor's Scientific Management

Principles of Management: key facts

Taylor's five

Science not rule of thumb; harmony not discord; cooperation not individualism; maximum output; development of each person

Fayol's fourteen

• •Division of work
• •authority-responsibility
• •discipline
• •unity of command
• •unity of direction
• •subordination
• •remuneration
• •centralisation
• •scalar chain
• •order
• •equity
• •stability
• •initiative
• •esprit de corps

Command vs direction

Command = one boss per person; direction = one plan and one head per objective

Order

Material (things) + social (people)

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.

• Taylor's "SHCMD"

  Science, Harmony, Cooperation, Maximum output, Development.

  Use it when: Taylor's five principles.

• Fayol "DADU-USR-COSES-I-E"

  Division, Authority, Discipline, Unity of command; Unity of direction, Subordination, Remuneration; Centralisation, Order, Scalar chain, Equity, Stability; Initiative, Esprit de corps.

  Use it when: Fayol's fourteen.

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 C style)

Read the situation, then answer every part. In the board paper this is a 8-mark question split into 1 + 2 + 2 + 3 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: Half of the principle of order

  CISCE examiners' comments, 2024: candidates explained order by copying the question, covered only material or only social order, described social order as merely the right person in the right job, and used "equal" or "equality" for equity.

  ✓Do this: Order = material order + social order; write "equity" and explain fairness without discrimination.

  Usually costs: 1-2 marks.

• ✗Mistake: "Specialisation" for division of work

  CISCE examiners' comments, 2025: candidates named the principle "specialisation", repeated the question, and left out that work is divided and allocated by competence.

  ✓Do this: Name: division of work; explain: divide into tasks, assign by competence, specialisation follows.

  Usually costs: 1 mark.

• ✗Mistake: Wrong wording for subordination of interest

  CISCE examiners' comments, 2025: candidates could not identify the principle or altered its wording, and gave vague explanations.

  ✓Do this: Learn the exact name: subordination of individual interest to general interest.

  Usually costs: 1-2 marks.

• ✗Mistake: Taylor's principle credited to Fayol

  CISCE examiners' comments, 2025: candidates did not realise that a principle in a true/false item was given by Taylor, not Fayol.

  ✓Do this: Taylor: science, harmony, cooperation, maximum output, development. Fayol: the fourteen.

  Usually costs: 1 mark.

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

   Which is Taylor's principle?
   (a) Unity of command
   (b) Esprit de corps
   (c) Harmony, not discord
   (d) Scalar chain

   Hint

   Scientific management.

   Answer

   (c)

2. Q2 · 1 mark · Very short answerHarder board level

   What is the gang plank?

   Hint

   Scalar chain.

   Answer

   A direct line of communication between employees at the same level, allowed in emergencies with superiors informed.

3. Q3 · 1 mark · Very short answerBoard level

   Give the meaning of esprit de corps.

   Hint

   Team.

   Answer

   Team spirit and unity among employees.

4. Q4 · 1 mark · Very short answerHarder board level

   Distinguish unity of command from unity of direction in one line.

   Hint

   People vs plans.

   Answer

   Unity of command: one boss per employee; unity of direction: one head and one plan per group of activities with the same objective.

5. Q5 · 3 marks · Short answerBoard level

   State three features of the nature of principles of management.

   Hint

   Universal, flexible.

   Answer

   Universal applicability; flexibility; formed by practice and experimentation (also general guidelines, behavioural, cause-effect, contingent).

6. Q6 · 4 marks · Short answerHarder board level

   Explain four reasons why principles of management are needed.

   Hint

   Insights, resources.

   Answer

   Useful insights into reality; optimum use of resources; scientific decisions; meeting a changing environment (also social responsibility, training and research).

7. Q7 · 4 marks · Short answerHarder board level

   Compare Taylor and Fayol on four bases.

   Hint

   Focus, approach.

   Answer

   Background: mechanical vs mining engineer. Focus: shop floor vs top management. Approach: experiment vs experience. Command: functional foremanship vs unity of command.

8. Q8 · 5 marks · Short answerHOTS / competency

   Suppose a company introduces eight specialist supervisors for each group of workers, as Taylor suggested. Which Fayol principle does this conflict with, and how might a modern firm reconcile them?

   Hint

   Functional foremanship.

   Answer

   Functional foremanship conflicts with Fayol's unity of command. A modern firm can let specialists advise (staff role) while one line supervisor gives orders, or use clearly defined matrix reporting so workers know whose orders prevail.

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.Father of scientific management?Show answer

   F. W. Taylor.

2. 2.Number of Fayol's principles?Show answer

   Fourteen.

3. 3.One boss for one employee?Show answer

   Unity of command.

4. 4.Two aspects of order?Show answer

   Material and social order.

Quick revision checklist

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

• ☐Principles: universal, flexible, behavioural, contingent guidelines.
• ☐Taylor: science, harmony, cooperation, maximum output, development.
• ☐Fayol: fourteen principles from division of work to esprit de corps.
• ☐Order: material and social; equity, not equality.
• ☐Taylor: shop floor, experiments; Fayol: top management, experience.

Principles of Management: frequently asked questions