case study about principles of management

CBSE Class 12 Case Studies In Business Studies – Principles of Management

PRINCIPLES OF MANAGEMENT Principles of Management: Definition The principles of management serve as broad and general guidelines for the managerial decision making and action.

Types of Principles of Management

• Fayol’s Principles of General Management
• Taylor’s Principles of Scientific Management.

Significance of Principles of Management

• They help to provide managers with useful insights into reality and increase their efficiency in dealing with recurring problems.
• They ensure optimum utilisation of resources as due to the presence of cause and effect relationship the outcome of the decisions and actions can be predicted. Moreover, it leads to effective administration as the principles tend to restrict the personal prejudices and biases.
• They facilitate scientific decision making as they emphasise on logical thinking rather than blind faith.
• They help to meet the changing requirements of the environment to the best advantage ofa organisation.
• They help in fulfilling social responsibility of an organisation.
• They facilitate the process of management training, education and research as they are at the core of management theory.

Features of Principles of Management

• Universal Applicability: The principles of management are deemed to apply to all types and sizes of organizations.
• General Guidelines: The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems as the real business situations are very complex and dynamic and are a result of many factors.
• Formed by practice and experimentation: The principles of management are formulated by the management experts through observation and tested through repeated experimentation.
• Flexible: The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can be modified by the manager in the light of given situation so as to achieve the desired goals.
• Mainly Behavioural: The principles of management aim at influencing behaviour of human beings in a desired manner.
• Cause and effect relationships: The principles of management seek to establish relationship between cause and effect so that they can be used in similar situations in a large number of cases.
• Contingent: The application of principles of management is contingent or dependent upon the prevailing situation at a particular point of time.

FAYOL’S PRINCIPLES OF MANAGEMENT

• Division of work: The whole organisation work, both managerial and technical, should be divided into smaller jobs and the task involved in doing each such job should be determined. It leads to specialization, speed, efficiency and accuracy of work.
• Discipline: It refers to the obedience to organizational rules and the employment agreement. It is necessary for the systematic working of the organisation. It requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
• Authority and Responsibility: There should always be a balance between the authority given and responsibility entrusted to an employee. This is because if authority is more than responsibility, the employees are likely to misuse it whereas if authority is less than responsibility, he/she will be unable to do the desired work.
• Unity of command: There should be one and only one boss for every individual employee from whom he should receive orders and be responsible to. Dual subordination should be avoided.
• Unity of Direction: All the units of an organisation should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan.
• Subordination of Individual Interest to General Interest: In all the situations, the interests of an organisation should take priority over the interests of any one individual employee .
• Remuneration of employees: The overall pay and compensation should be fair to both employees and the organization. The employees should be paid fair wages, which should give them at least a reasonable standard of living. At the same time it should be within the paying capacity of the company i.e. remuneration should be just and equitable.
• Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralization. Large organizations have more decentralization than small organizations.
• Scalar Chain: The formal lines of authority along which the communication flows from highest to lowest ranks are known as scalar chain. Gang Plank is a shorter route that has been provided so that communication is not delayed during emergencies. However, the superior has to be informed later on.
• Order: The people and materials must be in suitable places at appropriate time for maximum efficiency i.e. ‘a place for everything (everyone) and everything in its place/
• Equity: It emphasizes kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise caste, creed.
• Stability of Personnel: The employee turnover should be minimized to maintain organizational efficiency. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation.
• Initiative: Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Espirit De Corps: The management should promote a team spirit of unity and harmony among employees. A manager should replace T with ‘We’ in all his conversations with workers.

Difference between Unity of Comman and Unity fo Direction

SCIENTIFIC MANAGEMENT Scientific Management: Definition Scientific Management means knowing exactly what you want your employees to do and seeing that they do it in the best and cheapest way. Fredrick Winslow Taylor is known as the ‘Father of Scientific Management’.

Techniques of Scientific Management

• Time Study is the technique to determine the standard time taken bya worker of average skill and knowledge to complete a standard task.
• Fatigue study seeks to determine the amount and frequency of rest intervals required in completing a task.
• Method study seeks to find out one best way of doing the job.
• Motion study refers to the study of movements of limbs which are undertaken while doing a typical job.This helps to eliminate unnecessary movements so that it takes less time to complete the job efficiently.
• Standardisation refers to the process of setting standards for every business activity Simplification aims at eliminating superfluous varieties, sizes and dimensions of products.
• Instruction Card Clerk: He assigns work to all the employees.
• Route Clerk: He decides how work will progress regarding total productions. So that production is on time.
• Time and Cost Clerk: He determines what will be the total cost and how much time each job take.
• Disciplinarian: He sees that there is discipline at work place.
• Speed boss: He ensures that the work is moving at a suitable pace.
• Gang Boss: He ensures sufficient availability of raw material, tools etc.
• Repair Boss: He sees that whenever some repair is involved in any work, the work is done properly.
• Inspector: He sees that whether the quality of output is good or not.
• Differential piece wage system was introduced to reward efficient workers by paying them at a higher rate than those who performed below standard.

PRINCIPLES OF SCIENTIFIC MANAGEMENT

• Taylor believed that there was only one best method to maximise efficiency which can be developed through study and analysis and should substitute ‘Rule of Thumb’ or hit and trial method throughout the organisation.
• The scientific method involved investigation of traditional methods through work-study unifying the best practices and developing a standard method, which would be followed throughout the organisation.
• In the present context, the use of internet has brought about tremendous improvements in internal efficiencies and customer satisfaction.
• Taylor emphasised that there should be complete harmony between the management and workers instead ofa kind of class-conflict, the managers versus workers.
• To achieve this state, Taylor called for complete mental revolution on the part of both management and workers.
• The prosperity for the employer cannot exist fora long time unless it is accompanied by prosperity for the employees and vice versa.
• He advocated paternalistic style of management should be in practice.
• This principle is an extension of principle of ‘Harmony Not Discord’
• There should be complete cooperation between the labour and the management instead of individualism.
• Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management.
• Also, management should reward workers for their suggestions which results in substantial reduction in costs.
• At the same time workers should desist from going on strike and making unreasonable demands on the management
• Taylor was of the view that the concern for efficiency could be built in right from the process of employee selection.
• Each person should be scientifically selected and the work assigned should suit her/his physical, mental and intellectual capabilities.
• To increase efficiency, they should be given the required training.
• Efficient employees would produce more and earn more. This will ensure their greatest efficiency and prosperity for both company and workers.

Difference between Fayol’s and Taylor’s Approach to Management

Latest CBSE Questions

Question 1. Explain ‘unity of command’ and ‘equity’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Unity of command: According to Fayol, there should be one and only one boss for every individual employee. Dual subordination should be avoided. Fayol felt that if this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.
• Equity: According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.” This principle emphasizes on kindliness and justice in the behaviour of managers towards workers. The managers should not discriminate against anyone on account of gender, religion, language, caste, belief or nationality etc.

Question 2. Sanchit, after completing his entrepreneurship course from Sweden returned to India and started a coffee shop ‘AromaCoffeeCan’ in a famous mall in New Delhi. The speciality of the coffee ship was the special aroma of coffee and a wide variety of flavours 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 causes 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 analysed 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 realised that there were some flavours whose demand was not enough. So, she also decided to stop the sale of such flavours. As a result with in a short period Sandhya was able to attract the customers. Identify and explain any two techniques of scientific management used by Sandhya to solve the problem. (CBSE, Delhi 2017) Answer: The two techniques of scientific management used by Sandhya to solve the problem are: (any two)

• Time study: It seeks to determines the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed , frame suitable incentive schemes and determine labour costs. By using time measuring devices for each element of task the standard time is fixed for the whole of the task by taking several readings.
• Simplification (Standardisation and Simplification): Simplification aims at eliminating superfluous diversity of products in terms of varieties, sizes and dimensions. It not only helps to reduce inventories but also save cost of labour, machines and tools. Thus it helps to increase turnover by ensuring optimum utilisation of resources.
• Motions which are required
• Motions which are unnecessary
• Motions which are incidental. Thus, motion study helps to eliminate unnecessary movements of a work and enables him to complete the given task efficiently.

Question 3. Explain briefly ‘discipline’ and ‘scalar chain’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Discipline: Discipline refers to the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties. .

Question 4. Explain ‘order’ and ‘initiative’ as principles of general management. (CBSE, Delhi 2017) Answer:

• Order: According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.” The principle of order states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. A sense of orderliness will lead to increased productivity and efficiency in the organization.

Question 5. Explain briefly ‘Unity of Direction’ and ‘Order’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Unity of direction: According to Fayol, each group of activities having same objective must have one head and one plan. It prevents overlapping of activities. For example if a company is manufacturing handmade carpets as well as machine made carpets there is likely to be a lot of overlapping of activities. Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources.

Question 6. Explain briefly ‘Initiative’ and ‘Esprit de Corps’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Initiative: Initiative means taking the first step with self-motivation. The workers should’ be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Espirit de corps: According to Fayol, ‘Management should promote a team spirit of unity and harmony among employees.” A manager should replace T with ‘We’ in all his conversations with workers to promote teamwork. This approach is will give rise to a spirit of mutual trust and belongingness among team members. It will also reduce the need for using penalties.

Question 7. Explain briefly ‘Remuneration of Employees’ and ‘Scalar Chain’ as principles of general mangement. (CBSE, OD 2017) Answer:

• Remuneration of employees: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management.

Question 8. What did Taylor want to communicate through mental revolution? (CBSE, Sample Paper, 2017) Answer: Through the concept of mental revolution Taylor emphasized that there should be complete transformation in the outlook of the management and workers towards each other. Managers should share surplus with workers and the workers should work with full devotion instead of indulging in any form of class conflicts.

Question 9. Briefly explain work study techniques that help in developing standards to be followed throughout the organization. Answer: The various work study techniques that help in developing standards to be followed throughout the organization are described below:

• Time study: It seeks to determine the standard time taken to perform a well-defined job. The objective of time study is to determine the number of workers to be employed, frame suitable incentive schemes and determine labour costs. By using time measuring devices for each element of task, the standard time is fixed for the whole of the task by taking several readings.
• Method study: The objective of method study is to find out one best way of doing the job among the various methods available of doing the job. This can be done by taking into consideration several related parameters.
• Fatigue study: It seeks to determine the amount and frequency of rest intervals that should be provided to the workers for completing a task. This technique helps in increasing productivity as the rest intervals will help a person to regain stamina and work again with the same capacity.

Question 10. Nutan Tiffin Box service was started in Mumbai by the 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 the 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’. Owing to their tremendous popularity amongst the happy and satisfied customers and members, the Dabbawalas were invited as guest lecturer by top business schools. The Dabbawalas operate in a group of 25-30 people alongwith a group leader. Each group teams up with other groups in order to deliver the tiffins 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 leaves without permission; wearing white caps and carrying ID cards during business hours. Recently, on the suggestion of a few self-motivated fellow men, the dabbawalas thought out and executed a plan of providing food left in tiffins by customers to slum children. They have instructed their customers to place red sticker if food is left in the tiffin, to be fed to poor children later.

• State any one principle of management given by Fayol and one characteristic of management mentioned in the above case.
• Give any two values which the Dabbawalas want to communicated to society. (CBSE, Sample Paper 2016)
• The relevant principle of management given by Fayol is: Stability of Personnel: The employee turnover should be minimized to maintain organizational efficiency. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation. (The other correct answers are principle of Discipline / Initiative / Espirit de corps) The characteristic of management mentioned in the above case is: Management is goal oriented as it seeks to integrate the efforts of different individuals towards the accomplishment of both organizational and individual goals. (The other correct answers are management is intangible/ group activity/dynamic)
• Concern for poor/ Humanity
• Responsibility

Question 11. ‘Aapka Vidyalaya’ believes in the holistic development of students and encourages team building through a mix of curricular, co-curricular and sports activities. On its Founder’s 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 the members supported each other. With mutual trust and a sense of belonging, the programme was systematically planned and executed. Kartik, one of the prefects, realised that the group had unknowingly applied one of the principles of management while planning and executing the programme. He was so inspired by the success of this 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.
• State any two features of management highlighted in the above paragraph.
• Identify any two values which ‘Aapka Vidyalaya’ communicated to society. (CBSE, Delhi 2015)
• The principle of management applied for the success of the programme is Espirit De Corps.
• Management is goal oriented as it seeks to integrate the efforts of different individuals towards the accomplishment of both organizational and individual goals.
• Management is pervasive as it is applicable to all types of organizations, (economic, social, political) all sizes of organizations (small, medium, large) and at all levels of management (top, middle and lower).
• Sustainable development.

Question 12. Telco Ltd. manufactures files and folders from old clothes to discourage the use of plastic files and folders. For this, they employ people from nearby villages where very less job opportunities are available. An employee, Harish, designed a plan for cost reduction but it was not welcomed by the production manager. Another employee gave some suggestions for improvements in design, but it also was not appreciated by the production manager.

• State the principle of management that is violated in the above paragraph.
• Identify any two values that the company wants to communicate to the society. (CBSE, OD 2014)
• The principle of management that has been violated in the above case is Initiative. Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization.
• Concern for environment
• Providing job opportunities

Question 13. Pawan is working as a Production Manager in CFL Ltd. which manufactures CFL bulbs. There is no class-conflict between the management and workers. The working conditions are very good. The company is earning huge profits. As a policy, the management shares the profits earned with the workers because they believe in the prosperity of the employees.

• State the principle of management described in the above paragraph.
• Identify any two values which the company wants to communicate to society. (CBSE, OD 2014)
• The principle of management described in the above paragraph is ‘Harmony, not Discord’. Taylor emphasised that there should be complete harmony between the management and workers instead of a kind of class-conflict, the manager versus workers. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. The prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa. He advocated paternalistic style of management should be in practice.

Question 14. Voltech India Ltd. is manufacturing LED bulbs to save electricity. However, it is running under heavy losses. To revive from the losses, the management shifts the unit to a backward area where labour is available at a low cost. The management also asks the workers to work overtime without any additional payments and promises to increase the wages of the workers after achieving its mission. Within a short period, the company starts earning profits because both the management and workers honour their commitments.

• Identify any two values that the company wants to communicate to the society. (CBSE, Delhi 2014)
• The principle of management described in the above paragraph is ‘Discipline’. Discipline- It refers to the obedience to organizational rules and the employment agreement. It is necessary for the systematic working of the organization. It requires good superiors at all levels, clear and fair agreements and judicious application of penalties.
• Sustainable development

Question 15. ABC Ltd. is engaged in producing electricity from domestic garbage. There is almost equal division of work and responsibilities between workers and the management. The management even takes workers into confidence before taking important decisions. All the workers are satisfied as the behaviour of the management is very good.

• Identify any two values which the company wants to communicate to society. (CBSE, Delhi 2014)
• The principle of management described in the above paragraph is ‘Cooperation, Not Individualism’. This principle is an extension of principle of ‘Harmony, Not Discord’. There should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management. Also, management should reward workers for their suggestions which results in substantial reduction in costs. At the same time, workers should desist from going on strike and making unreasonable demands on the management
• Participation

Question 16. The principles of Taylor and Fayol are mutually complementary. One believed that management should share the gains with the workers while the other suggested that employees’ compensation should depend on the earning capacity of the company and should give them a reasonable standard of living. Identify and explain the principles of Favol and Taylor referred to in the above paragraph. (CBSE, Delhi 2014) Answer: The principles of Fayol and Toylor referred to in the above paragraph are ‘Remuneration of employees’ and ‘Harmony, Not Discord’. Remuneration of Employes: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time, it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management. Harmony, Not Discord: Taylor emphasised that there should be complete harmony between the management and workers instead of a kind of class-conflict, the managers versus workers. To achieve this state, Taylor called for complete mental revolution on the part of both management and workers. The prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa. He advocated paternalistic style of management should be in practice

Question 17. The principles of Taylor and Fayol are mutually complementary. One believed that management should not close its ears to constructive suggestions made by the employees while the other suggested that a good company should have an employee suggestion system whereby suggestions which result in substantial time or cost reduction should be rewarded. Identify and explain the principles of Taylor and Fayol referred to in the above paragraph. (CBSE, Delhi 2014) Answer: The principles of Fayol and Taylor referred to in the above paragraph respectively are ‘Initiative’ and ‘Cooperation and Not Individualism’. Initiative: Initiative means taking the first step with self-motivation. The workers should be encouraged to develop and carry out their plans for improvement. Suggestion system should be adopted in the organization. Cooperation and Not Individualism: This principle is an extension of principle of ‘Harmony, Not Discord’.There should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation and there should be an almost equal division of work and responsibility between workers and management. Also, management should reward workers for their suggestions which result in substantial reduction in costs. At the same time, workers should desist from going on strike and making unreasonable demands on the management.

Question 18. Nikita and Salman completed their MBA and started working in a multinational company at the same level. Both of them worked hard and were happy with their employer. Salman had the habit of back-biting and wrong reporting about his colleagues to impress his boss. All the employees in the organisation knew about it. At the time of performance appraisal, the performance of Nikita was judged to be better than Salman. Even then their boss, Mohammed Sharif, decided to promote Salman stating that being a female, Nikita would not be able to handle the complications of a higher post.

• Identify and explain the principle of management which was not followed by this, multinational company.
• Identify the values which are being ignored quoting the lines from the above paragraph. (CBSE, OD 2013)
• The multinational company didn’t follow the Principle of Equity. It emphasizes kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise.
• Honesty: “Wrong reporting about his colleagues to impress his boss.”
• Justice: “At the time of performance appraisal, the performance of Nikita was judged better than Salman. Even then their boss, Mohammad Sharif, decided to promote Salman.”

Question 19. Hina and Harish are typists in a company having the same educational qualifications. Hina gets Rs.3,000 per month and Harish gets Rs.4,000 per month as salaries for the same working hours. Which principle of management is being violated in this case? Name and explain the principle. (CBSE, Delhi 2006) Answer: The principle of Equity has been violated in this case. It emphasises kindliness and justice in the behaviour of managers towards workers. No discrimination should be made by them on the basis of caste, creed, gender or otherwise.

Additional Questions

Question 1. Radhika opens a jewellry showroom in Jaipur after completing a course in jewellry designing. She has employed eleven persons in her showroom. For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialised job. The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority. In the earlier days of starting of the business, five of her employees were asked to put in extra hours of work. In return she had promised to give them a special incentive within a year. Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment. However, when it comes to settling the conflicts among her employees, she tends to be more biased towards her female employees. In context of the above case:

• Identify and explain the various principles of management that are being applied by Radhika by quoting lines from the paragraph.
• Identify and explain the principle of management which is being violated by Radhika by quoting lines from the paragraph.
• State any one effect of the violation of the principle of management by Radhika as identified in part(b) of the question.
• Principle of Division of Work: According to Fayol, “The intent of division of work is to produce more and better work for the same effort. Specialisation is the most efficient way to use human effort.” He advocates that the principle of division of work is applicable to all kinds of work both technical as well as managerial. “For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialised job.”
• Principle of Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.” “The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority.”
• Principle of Discipline: Discipline refers to the obedience to organisational rules and employment agreement which are necessary for the working of the organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties. “Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment.”
• The principle of management which is being violated by Radhika is Equity. According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.” This principle emphasizes on kindliness and justice in the behaviour of managers towards workers. The managers should not discriminate against anyone on account of gender, religion, language, caste, belief or nationality etc. “However, when it comes to settling the conflicts among her employees, she tends to be more biased towards her female employees.”
• One effect of the violation of the Principle of Equity is that it may lead to job dissatisfaction among the male workers.

Question 2. Rajveer works as a plant superintendent in a carpet making factory. In order to complete the export orders on time, the production manager asks him to make the workers work over time whereas the finance manager is strictly against this practice because it will increase the cost of production. Moreover, Rajveer feels that since the company is manufacturing handmade carpets as well as machine made carpets there is a lot of overlapping of activities. Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources. In context of the above case:

• Identify and explain the principle of management which is being violated.
• Also identify the principle of management that Rajveer feels should be implemented in the factory.
• Give any two differences between the principle of management as identified in part (a) and part (b) respectively.

Answer: The principle of management which is being violated is stated below:

• Unity of command: There should be one and only one boss for every individual employee. Dual subordination should be avoided. Fayol felt that if this principle is violated, “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”.
• Unity of direction: All the units of an organization should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan. This will lead to unity of action and coordination.

Question 3. Neeraj is selected for the post of software developer in an IT Company. On the first day of his joining Mehul, his project manager tells Neeraj that during the course of his work he will come across many such opportunities which may tempt him to misuse his powers for individual or family’s benefit at the cost of larger general interest of the company. In such situations, he should rather exhibit exemplary behaviour as it will raise his stature in the eyes of the company. Also, for interacting with anyone in the company on official matters, he should adopt the formal chain of authority and communication. In context of the above case:

• Identify and explain the various principles of management that Mehul is advising Neeraj to follow while doing his job.
• List any two values that Mehul wants to communicate to Neeraj.
• Subordination of Individual Interest to General Interest: Through this principle, Fayol advocates that in all circumstances, the interests of an organisation should take priority over the interests of any one individual employee. This is essential because larger interests of the other employees and the stakeholders i.e., owners, shareholders, creditors, debtors, financers, tax authorities, customers and the society at large cannot be sacrificed for the interest of any one person. For example, Mehul tells Neeraj that he might get tempted to misuse his powers for his or his family’s benefit and so he must display exemplary behaviour to raise his stature in the eyes of the company.
• Self restraint

Question 4. Davinder is a class twelfth commerce student in a reputed school in Punjab. Satinder is his elder brother who is doing his Masters in Hospital Administration from Delhi after completing his B.Sc course. During vacations when Satinder comes home, Davinder shows him the business studies project that he is preparing on the topic ‘Principles of Management’. Satinder tells him that these principles are also a part of MBA course curriculum at the beginner’s level as they form the core of management in practice. But he finds these principles different from those of pure science. In context of the above case:

• Outline the concept of principles of management.
• Why does Satinder find the principles of management different from those of pure science?
• Why do the principles of management form the core of management in practice? Explain by giving any two points highlighting the importance of principles of management.
• The principles of management serve as a broad and general guideline for the managerial decision making and action.
• Satinder finds the principles of management different from those of pure science because the management principles are not as rigid as principles of pure science. This is due to the fact that they deal with the human behaviour and thus, need to be applied creatively in the light of given situation.
• Providing managers with useful insights into reality: The principles of management provide the managers with useful insights into real world situations and help them to enrich their knowledge, ability and understanding of the diverse managerial situations and circumstances. It also enables the managers to learn from past mistakes and conserve time by solving recurring problems quickly.
• Optimum utilisation of resources and effective administration: The knowledge of management principles enables the managers to foresee the cause and effect relationships of their decisions and actions. As a result, it leads to optimum utilisation of scarce resources by avoiding wastage associated with a trial-and-error approach. Principles of management limit the boundary of managerial discretion so that their decisions may be free from personal prejudices and biases. This facilitates effective administration within the organisation.

Question 5. Gurpreet is running a retail mart in Varanasi to provide various types of products of daily use under one roof to the buyers. The employee turnover in his business is very high and he is perpetually on a look out for new staff. The fact of the matter is that he lacks managerial skills and assigns work to his employees on adhoc basis without letting them settle down in a specific work. This approach of his creates a sense of insecurity among the employees and they tend to leave the job very quickly. However, he is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living. In context of the above case:

• Identify and explain the principle of management which Gurpreet is unable to apply and is perpetually on a look out for new staff.
• “He is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.” Name and explain the relevant principle of management will has been brought into effect by Gurpreet.
• Stability of Personnel: Stability of personnel is principle of management which Gurpreet is unable to apply and is perpetually on a look out for new staff. According to Fayol, “Employee turnover should be minimised to maintain organisational efficiency”. Personnel should be selected and appointed after due and rigorous procedure. After placement, they should be kept at their post for a minimum fixed tenure so that they get time to show results. Any adhocism in this regard will create instability/insecurity among employees. They would tend to leave the organisation.
• Remuneration of Employees: According to Fayol, the overall pay and compensation should be fair and equitable to both employees and the organisation. The employees should be paid fair wages so that they are able to maintain at least a reasonable standard of living. At the same time, it should be within the paying capacity of the company. This will ensure pleasant working atmosphere and good relations between workers and management.

Question 6. After finishing her BBA degree course, Tanya gets a job of Assistant Manager in a retail company through the reference of her cousin Taruna who works in the same company as a Senior Manager. Taruna decides to guide Tanya through her experience by making her aware of the important facts about management in practice. She tells her that neither the principles of management provide any readymade, straitjacket solutions to all managerial problems nor they are not rigid prescriptions, which have to be followed absolutely. In context of the above case :

• Identify the two features of principles of management mentioned in the above paragraph by quoting lines from the paragraph.
• Why do the principles of management not provide readymade, straitjacket solutions to all managerial problems?
• General guidelines: The principles of management are guidelines to action. Since the real business situations are very complex and dynamic and are a result of many factors, these principles do not provide readymade, straitjacket solutions to all managerial problems. But the importance of principles cannot be underestimated because even a small guideline may help to solve a given problem.
• Flexibile: The principles of management are not rigid prescriptions which have to be followed absolutely. They are flexible and can be modified by the manager when the situation so demands. They give the manager enough discretion to decide which principle should be used under what circumstances as individual principles are like different tools serving different purposes.
• As the real business situations are very complex and dynamic and are a result of many factors, the principles of management not provide readymade, straitjacket solutions to all managerial problems.

Question 7. Raj and Simran are both qualified eye surgeons and good friends. After obtaining a certificate of practice, they decide to persue a career of their own choice. Raj starts an eye care centre in the city whereas Simran joins a government hospital in a small village. They meet after a long time in a party. Raj invites Simran to visit his eye care centre and she accepts his invitation. She observes at his clinic that there is a fixed place for everything and everyone and it is present there so that there is no hinderance in the activities pf the clinic. Also, Raj always tends to replace T with ‘We’ in all his conversations with the staff members. Later on Raj shares with her that he always deals with lazy staff sternly to send the message that everyone is equal in his eyes. In context of the above case:

• Identify and explain the various principles of management that Raj is applying for the successful management of his eye care centre.
• List any two values that Simran wants to communicate to the society by taking up a job in a village.
• Espirit De Corps: According to Fayol, “Management should promote a team spirit of unity and harmony among employees.” A manager should replace T with ‘We’ in all his conversations with workers to promote teamwork. This approach will give rise to a spirit of mutual trust and belongingness among team members. It will also reduce the need for using penalties.
• Concern for poor

Question 8. Hritik is desirous of setting up a small factory to manufacture different kinds of eco-friendly packaging materials. He proposes to adopt a logical approach to his business rather than hit and trial method as he knows that this can result in tremendous saving of human energy as well as wastage of time and materials. He plans to adopt paternalistic style of management in practice in order to avoid any kind of class-conflict that may emerge between him and the workers. Moreover, he plans to seek the opinion of his workers before taking any important decisions and also offers incentives to them for providing valuable suggestions for the business. In context of the above case:

• Identify and explain the various principle of scientific management that Hritik plans to apply in his business.
• List any two values that he wants to communicate to the society by offering eco¬friendly packaging material.
• Science, not Rule of Thumb: Taylor believed that there was only one best method to maximise efficiency and it could be developed through scientific study and analysis. This is because if the managers rely on personal judgment in attending to the work related problems, it may suffer from the limitation of a trial and error approach. Therefore, it is important for them to know what works and why does it work. For this, they should adopt scientific method to substitute the ‘Rule of Thumb or hit and trial method’ throughout the organisation.
• Harmony, Not Discord: In the paternalistic style of management, the employer takes care of the needs of employees like a father. Taylor said that any kind of class conflicts between the workers and the managers were not good; rather they must realise that each one is important. Therefore, he emphasised that there should be complete harmony between the management and workers. To achieve this, Taylor called for complete mental revolution on the part of both management and workers by transforming their thinking. The management should share the gains of the company, if any, with the workers and at the same time, workers should work hard.
• Cooperation, Not Individualism: Through this principle, Taylor suggests that there should be complete cooperation between the workers and the management instead of individualism. This principle is an extension of principle of ‘Harmony, Not Discord’. Both should realise the importance of each other. In order to replace the feeling of competition with cooperation, the management should not close its ears to any constructive suggestions made by the employees. Rather, the workers should be rewarded for any of their valuable suggestions which results in substantial saving in costs. Also, the workers should be taken into confidence by the management whenever any important decisions are to be taken.
• Sense of responsibility

Question 9. ‘Study Buddy Pvt. Ltd.’ is company dealing in stationery items. In order to establish standards of excellence and quality in materials and in the performance of men and machines, the company adheres to benchmarks during production. Moreover, its products are available in limited varieties, sizes and dimensions thereby eliminating superfluous diversity of products. Identify the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’ Answer: Standardisation and Simplification of Work is the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’ Standardisation implies devising new varieties instead of the existing ones. It refers to the process of setting standards for every business activity; it can be standardisation of process, raw material, time, product, machinery, methods or working conditions. These standards are the benchmarks which must be adhered to during production. It helps to reduce a given line or product to fixed types, sizes and characteristics, establish interchange ability of manufactured parts and products, determine standards of excellence and quality in materials and of performance of men and machines. Simplification aims at eliminating superfluous diversity of products in terms of varieties, sizes and dimensions. It not only helps to reduce inventories but also to save cost of labour, machines and tools. Thus it helps to increase turnover by ensuring ‘optimum utilisation of resources. Most large companies like Samsung, Toyota and Microsoft etc. have successfully implemented standardisation and simplification.

Question 10. Anshul owns a small scale factory where utility items are prepared from waste material like paper mache items, paper and cloth bags, decorative material etc. Over the past few weeks, he was observing that the productivity of one of his very efficient worker, Ramdas, is going down. So he decides to probe into the matter and confronts Ramdas one day. On being asked, Ramdas shares with Anshul that he has deliberately slowed down in his work as many of the less efficient workers often pull his leg saying that there is no need for him to be more efficient when everybody is being paid at the same rate. Taking a lesson from this insight, Anshul decides to implement an incentive bonus plan so as differentiate between efficient and inefficient workers. In context of the above case:

• Name and explain the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers.
• State any two values that Anshul wants to communicate to the society by setting up a special type of business.

Answer: Differential Piece Wage System is the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers. Differential Piece Wage System is a performance based wage system which was introduced by Taylor so as to distinguish between the workers who were able to achieve the standard or performed above standard from those who performed below standard. For example, it is determined that standard output per worker per day is 10 units and those who made standard or more than standard will get Rs. 40 per unit and those below will get Rs. 30 per unit. Now an efficient worker making 11 units will get 11 x 40 = Rs. 440 per day whereas a worker who makes 9 units will get 9 x 30 = Rs. 270 per day. According to Taylor, the difference of Rs. 170 should be enough for the inefficient worker to be motivated to perform better.

Question 11. Swaraj is running an office furniture showroom. Most of his clients are businessmen and they prefer to buy goods on credit. Keeping this in mind, he has given the power to the sales manager, Mr. Bhardwaj, to offer a credit period of only 20 days, while negotiating a deal with a buyer. On a specific day, Mr. Bhardwaj finds that if he can offer a credit period of 30 days as an exception to a prospective buyer, he is likely to finalise a highly profitable deal for the business. So Mr. Bhardwaj requests Swaraj to grant him additional authority for offering a credit period of 30 days in the interest of the business. But Swaraj refuses to extend his authority and as a result, the deal is not finalized. In context of the above case:

• Can Mr. Bhardwaj be held responsible for loss of the deal? Why or why not ? Give a suitable reason in support of your answer.
• Also, explain the related principle.
• No, Mr. Bhardwaj cannot be held responsible for loss of the deal in the above case as he was not given the necessary authority to carry out his responsibility. There is an imbalance in authority and responsibility.
• The name of the related principle is Authority and Responsibility. Authority is the right to give orders and obtain obedience by the virtue of one’s position in the organization. Responsibility is the obligation of a person to carry out the assigned task to the best of one’s abilities and skills. There are two types of authorities, namely the official authority, which is the authority to command, and personal authority, which is the authority of the individual manager. Authority is both formal and informal. According to Fayol, there should be balance between the authority given and responsibility entrusted to an employee so that he is able to carry out the assigned task. Any kind of imbalance in authority and responsibility is not good for the organisation. If the authority granted to an employee is less than what is required, he will ineffective in doing his work. On the other hand, if the authority delegated to an employee is more than what is required, he may tend to misuse it.

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Case Studies - Principles of Management | Business Studies (BST) Class 12 - Commerce PDF Download

Q. 1. In your school, you observe that books are kept in office, chalks in the library and office records in the staff room.

• Which principle of management is violated here and why?
• How will that affect the achievement of school objectives?
• As a manager, what steps will you take to rectify the shortcomings?           (3 marks)
• Disparate storage of resources violates "Unity of Direction" principle.
• Breeds inefficiency: Staff waste time searching for materials, reducing productivity.
• Increases mismanagement risk: Resources may be misplaced or lost, disrupting school operations.
• Creates coordination challenges: Departments struggle to implement cohesive strategies.
• Solutions: Centralize resource management; designate storage areas; implement inventory control.
• Train staff on proper resource handling.
• Foster collaboration among departments.
• Benefits: Enhances efficiency, minimizes mismanagement risks, promotes unified direction towards achieving school objectives.

Q. 2. The production manager of an automobile company asked the foreman to achieve a target production of 200 scooters per day.  But he did not give him the authority of requisition tools and materials from the stores department.  Can the production manger blame the foreman if he is not able to achieve the desired target?  Explain briefly the principle relating to the situation.               (3 marks)

Ans.  No, the production manager cannot blame the foreman because he did not give him the authority to requisition tools and materials form the stores department.  Since he has no authority, he could not fulfill his responsibility.

In this case the principle of ‘Authority and Responsibility’ is violated.  Fayol suggested tht there must be a balance between authority and responsibility.  Authority and responsibility must go hand in hand.  Responsibility without adequate authority will make the subordinate ineffective, I.e., he will not be able to perform his duties properly.  At the same time giving authority without fixing responsibility may lead to misuse of of authority.

Q. 3. S oniya Ltd. was engaged in the business of manufacturing auto components.  Lately, its business was expanding due to increased demand for cars.  The competition was also increasing.  In order to keep its market share intact, the company directed its workforce to work overtime.  But this resulted in many problems.

Due to increased pressure of work the efficiency of workers declined.  Sometimes, the subordinates had to work for more than one superiors.  The workers were becoming indisciplined.  The spirit of teamwork, which had characterized the company previously, had begun to wane.

Identify any three principles of management (as given by Henry Fayol) which were begin violated, quoting the lines from the above case.             (3 marks)

Ans.  Three principles of management by Henry Fayol that were being violated in the case of Soniya Ltd.:

Unity of Command : "Sometimes, the subordinates had to work for more than one superiors."

• This violates the principle of unity of command, which states that an employee should receive orders from only one superior to avoid confusion and conflicting instructions.

Division of Work : "Due to increased pressure of work the efficiency of workers declined."

• The increased workload and pressure on workers suggest a lack of effective division of work, leading to decreased efficiency and productivity.

Esprit de Corps (Spirit of Teamwork) : "The spirit of teamwork, which had characterized the company previously, had begun to wane."

• This indicates a decline in the spirit of teamwork among employees, which violates the principle of esprit de corps. This principle emphasizes the importance of fostering harmony and unity among workers to achieve common objectives.

Q. 4. The production manager of Harsh Ltd. instructs a salesman to go slow in selling the product, where the marketing manager is insisting on fast selling to achieve the target.  Which principle of management is being violated in this case?                           (1 mark)

Ans.  Unity of command

Q. 5. Kanika and Priyanka are typists in a company having same educational qualifications.  Kanika is getting Rs. 16000 per month and Priyanka Rs. 10000 per month as salary for the same working hours.  Which principle of management is violated in this case.  (1 mark)

Ans.  Principle of equity

Q. 6. Rishabh, a manager, very often speaks to people at all levels, passing on instructions regarding his department and also the other departments.  Which principle of management is being overlooked?                    (1 mark)

Ans.  Principle of Scalar Chain.

Q. 7. The management and workers have entered into an agreement that workers will do overtime to cover up looses of the company.  In return, the manager will increase the wages.  But management later refused to increase the wages.  Name the principle violated in this situation.             (1 mark)

Ans.  Principle of discipline

Q. 8. In Simran Ltd., an employee has the objective of maximizing his salary, but the organizational objective is to maximize output at competitive cost.  There was some dispute on this for a while.  Eventually, the organization’s interest was given priority over employees’ interest.  Name the principle related to this situation.                                       (1 marks)

Ans.  Principle of subordination of individual interest to general interest.

Q. 9. Radhika opens a jewelry showroom in Jaipur after completing a course in jewelry designing.  She has employed eleven persons in her showroom.  For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialized job.  The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to given any further discount rests with Radhika as the final authority.  In the earlier days of starting of the business, five of her employees were asked to put in extra hours of work.  In return she had promised to give them a special incentive within a year.  Therefore, after six months when the business was doing well, she awarded a cash bonus to each of these employees to honour her commitment.  However, when it comes to setting the conflicts among her employees, she tends to b e more biased towards her female employees.

In context of the above case:

• Identify and explain the various principles of management that are being applied by Radhika by quoting lines from the paragraph.
• Identify and explain the principle of management which is being violated by Radhika by quoting lines from the paragraph.
• State any one effect of the violation of the principle of management by Radhika as identified in part (b) of the question.
• The various principles of management that are being applied by Radhika are listed below:
• Principle of Division of work:

“For greater productivity, she divides the work into small tasks and each employee is trained to perform his/her specialized job.”

• Principle of Centralization and Decentralization:

“The sales persons are allowed to close a deal with a buyer by giving a maximum of 10% discount, whereas the decision to give any further discount rests with Radhika as the final authority.”

• Principle of Discipline:

“Therefore, after six months when the business was doing well, she awarded a each bonus to each of these employees to honour her commitment.”

• The principle of management which is being violated by Radhika is Equity.

“However, when it comes to setting the conflicts among her employees, she tends to be more biased towards her female employees.”

• One effect of the violation of the Principle of Equity is that it may lead to job dissatisfaction among the male workers.

Q. 10. Neeraj is selected for the post of software developer in an IT Company.  On the first day of his joining Mehul, his project manager tells Neeraj that during the course of his work he will come across many such opportunities which may temp him to misuse his powers for individual or family’s benefit at the cost of larger general interest of the company.  In such situations, he should rather exhibit exemplary behavior as it will raise his stature in the eyes of the company.  Also, for interacting with anyone in the company on official matters, he should adopt the formal chain of authority and communication.

• Identify and explain the various principles of management that Mehul is advising Neeraj to follow while doing his job.
• List any two values that Mehul wants to communicate to Neraj.
• Subordination of Individual Interest to General Interest:
• Scalar Chain:
• Self restraint

Q. 11. Davinder is a class twelfth commerce student in a reputed school in Punjab.  Satinder is his elder brother who is doing his Masters in Hospital administration from Delhi after completing his B. Sc course.  During vacations when Satinder comes home, Davinder shows him the business studies project that he is preparing on the topic ‘Principles of Management’.  Satinder tells him that these principles are also a part of MBA course curriculum at the beginner’s level as they form the core of management in practice.  But he finds these principle different from those of pure science.

• Outline the concept of principles of management.
• Why does Satinder find the principle of management different from those of pure science?
• Why do the principles of management form the core of management in practice?

Explain by giving any two points highlighting the importance of principles of management.

• The principles of management serve as a broad and general guideline for the managerial decision making and action.
• Satinder finds the principles of management different from those of pure science because the management principles are not as rigit as principles of pure science.  This is due to the fact that they deal with the human behavior and thus, need to be applied creatively in the light of given situation.
• The importance of principles of management is described below:
• Providing managers with useful insights into reality:
• Optimum utilization of resources and effective administration:

Q. 12. 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’ mydabbawals.com’.  owing to their tremendous popularity amongst the happy and satisfied customers and members, the dabbawalas were invited as guest lecturers by top business schools.  The Dabbawals operate in a group of 25-30 people along with a group pleader.  Each group teams up with other 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 & carrying ID cards during business hours.

Recently on the suggestion of a few self motivated fellow men, the dabbawalas thought out and executed a plan of providing food left in tiffins by customers to slum children.  They have instructed their customers to place red sticker if food is left in the tiffin, to be fed to poor children later.

• State any one principle of management given by Fayol & one characteristic of management mentioned in the above case.
• Given any two values which the Dabbawalas want to communicate to the society.

Ans.   One principle of management given by Fayol that can be observed in the case of Mumbai dabbawalas is "Unity of Command." This principle states that an employee should receive orders from only one superior to avoid confusion and conflict. In the case of dabbawalas, each group operates under the leadership of a group leader (group pleader), ensuring clear direction and accountability within the group.

One characteristic of management mentioned in the above case is "Adaptability." Despite facing various challenges such as bad weather, political unrest, and social disturbances, the dabbawalas continue to provide uninterrupted service by adapting their strategies and operations to overcome these obstacles.

Two values that the Dabbawalas want to communicate to society are:

1. Social Responsibility : By implementing a plan to feed slum children with leftover food from customers' tiffins, the dabbawalas demonstrate their commitment to addressing social issues and contributing to the welfare of the less fortunate in society.

2. Reliability : The dabbawalas' consistent and efficient delivery service, even in adverse conditions, reflects their value of reliability. They strive to provide prompt and dependable service to their customers, earning their trust and satisfaction.

Q. 13. ‘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 aspect of the function.  They all decided to use recycled paper for decoration.  There was a spirit of unit 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 to 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.
• State any two features of management highlighted in the above para.
• Identify any two values which ‘Aapka Vidyalaya’ communicated to the society.

Ans.  The principle of management applied for the success of the program is "Unity of Purpose" or "Unity of Objective." This principle emphasizes the importance of aligning individual and group efforts towards the achievement of common goals.

Two features of management highlighted in the paragraph are:

Teamwork : The committee of prefects demonstrates effective teamwork by collaborating to plan and execute the function. There is a spirit of unity and harmony among the members, and they support each other to achieve their goals.

Systematic Planning and Execution : The program is systematically planned and executed by the committee of prefects. They use recycled paper for decoration, indicating a thoughtful and environmentally conscious approach to organizing the event.

Two values communicated to society by 'Aapka Vidyalaya' are:

Environmental Responsibility : By choosing to use recycled paper for decoration, 'Aapka Vidyalaya' demonstrates its commitment to environmental sustainability and responsibility. This value promotes awareness and action towards protecting the environment.

Holistic Development : 'Aapka Vidyalaya' emphasizes holistic development by encouraging a mix of curricular, co-curricular, and sports activities. This value reflects a commitment to nurturing students' overall growth and well-being, beyond academic achievements alone.

Q. 14. Nikita and Salman completed the 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 and explain the principle of management which was not followed by this multinational company.
• Identify the values which are being ignored quoting the liens the above para.               (5 marks)

Ans.  The principle of management that was not followed by this multinational company is "Impartiality" or "Fairness." This principle emphasizes that decisions and actions should be fair and unbiased, without favoritism or discrimination.

In this scenario, the boss, Mohammed Sharif, decided to promote Salman over Nikita despite Nikita's better performance. The reason cited for promoting Salman, based on gender stereotypes, indicates a lack of impartiality and fairness in the decision-making process. By allowing Salman's negative behavior to influence the promotion decision and discriminating against Nikita based on her gender, the company fails to uphold the principle of impartiality.

The values being ignored in this scenario are:

Fairness and Equality : The company's decision to promote Salman over Nikita based on gender stereotypes disregards the principles of fairness and equality. Nikita's better performance should have been the sole criterion for promotion, irrespective of her gender.

Integrity and Ethical Conduct : Salman's habit of backbiting and wrong reporting about his colleagues indicates a lack of integrity and ethical conduct. By promoting him despite his negative behavior, the company sends a message that unethical conduct is tolerated and even rewarded, undermining the values of integrity and ethical behavior in the workplace.

Q. 15.  Sigma Ltd. is a large company manufacturing electric motors.  The company has several departments – Production, Marketing, Finance and HR. Mr. Shashank, CEO of the company set the target sale of 10 crore in a month.  To increase the sales, the marketing manager, Mr. Ishaan insists on offering 10% discount to customers.  But the finance manager, Mr. Mohak does not approve such discount as it would mean loss of revenue.  Because of dual subordination, the sales manager, Mr. Anshik could not achieve the sales target.

• Which concept of management Sigman Ltd. is lacking?  State it.
• Which principle of management has been overlooked by this company?   State it.
• Which principle of management has been overlooked by this company?  State it.           (6 marks)
• The company is lacking ‘ Coordination ’.

It is the process by which the activities of different departments are synchronized to ensure unity of action.

    2. Concept: Unity of Command

In Sigma Ltd., the absence of "Unity of Command" leads to dual subordination for the sales manager, Mr. Anshik.

Mr. Anshik faces conflicting directives from the marketing manager, Mr. Ishaan, who advocates for offering discounts to boost sales, and the finance manager, Mr. Mohak, who opposes the idea due to potential revenue loss.

This dual subordination hampers Mr. Anshik's ability to effectively achieve the sales target set by the CEO, Mr. Shashank, as he receives contradictory instructions from multiple superiors.

   3. Principle: Unity of Direction

In addition to lacking "Unity of Command," Sigma Ltd. also overlooks the principle of "Unity of Direction."

This principle emphasizes the importance of aligning all activities within the organization towards a common goal or objective.

While the CEO has set a sales target of 10 crore in a month, the conflicting opinions between the marketing manager and the finance manager regarding offering discounts create disunity in direction.

The marketing manager's proposal to offer discounts to increase sales conflicts with the finance manager's concern about potential revenue loss, resulting in a lack of alignment in efforts towards achieving the sales target.

This lack of unity in direction hampers the company's ability to effectively coordinate its actions and resources towards the common goal of achieving the sales target.

Q. 16. ABC Ltd. is engaged in producing electricity from domestic garbage.  There is almost equal division of work and responsibility between workers and management.  The management even takes workers into confidence before taking important decisions.

All the workers are satisfied as the behavior of the management is very good.

• State the principle of management described in the above para.
• Identify any two values which the company wants to communicate to the society.             (3 marks)
• The principle of Taylor described in the above para is Cooperation, Not Individualism.

Values communicated to society by ABC Ltd.:

Employee Empowerment : ABC Ltd. values and promotes employee empowerment by involving workers in decision-making processes and sharing responsibilities equally between workers and management. This communicates a commitment to fostering a sense of ownership and involvement among employees, empowering them to contribute meaningfully to the company's success.

Good Governance and Transparency : The company emphasizes good governance and transparency by taking workers into confidence before making important decisions. This demonstrates a commitment to open communication, trust, and fairness in organizational practices, thereby promoting transparency and accountability in its operations.

Q. 17. Voltech India Ltd. is manufacturing LED bulbs to save electricity and running under heavy losses.

To revive from the losses, the management thought of shifting the unit to a backward area where labour is available at a low cost.  The management also asked the workers to work overtime without any additional payment and promised to increased to wages of the workers after achieving its mission.  Within a short period the company started earning profits because both the management and the workers honoured their commitments.

• Identify any two values that the company wants to communicate to the society.           (3 marks)
• The principle of management described in the above para is Discipline.

Discipline is the obedience to organizational rules and employment agreement which are necessary for the working of the organization.

    2. Values communicated to society by Voltech India Ltd.:

Fairness and Social Responsibility : The company demonstrates a commitment to fairness and social responsibility by promising to increase wages for workers after achieving its mission. Despite asking workers to work overtime without additional payment initially, the company fulfills its commitment to reward their efforts once profitability is restored. This communicates a sense of fairness and social responsibility towards its employees, ensuring they are fairly compensated for their contributions.

Ethical Conduct and Integrity : Voltech India Ltd. upholds ethical conduct and integrity by honoring its commitments to both management and workers. The decision to shift the unit to a backward area where labor is available at a low cost may raise questions about ethical labor practices. However, by promising to increase wages after achieving profitability and delivering on that promise, the company demonstrates integrity and ethical conduct, ensuring transparency and trust in its dealings with both management and workers.

Q. 18. Kushal Ltd. is a leading automobile company in which the various departments are setting up their own objectives without paying any interest to the organizational objectives.

• Which aspect of management the company is lacking?  What will be its impact on the organization?
• Identify the principle of management which has been overlooked by this organization.
• State any two values neglected by the people of this organization.   (5 marks)

Ans.   Aspect of Management Lacking: Coordination

Impact on the Organization: The lack of coordination among departments in setting their own objectives without aligning them with organizational objectives can lead to inefficiency, duplication of efforts, conflicts, and ultimately hinder the achievement of overall organizational goals. Departments may pursue their own agendas, resulting in disjointed efforts, wasted resources, and decreased overall performance of the organization.

Principle of Management Overlooked: Unity of Direction

Values Neglected by the People of the Organization:

Teamwork and Collaboration : The departments' focus on setting their own objectives without considering organizational goals neglects the value of teamwork and collaboration. Instead of working together towards common objectives, departments may operate in silos, hindering synergy and cooperation within the organization.

Organizational Vision and Mission : By disregarding organizational objectives in favor of departmental goals, the people of Kushal Ltd. neglect the value of aligning individual and departmental efforts with the organization's vision and mission. This lack of alignment can lead to a loss of focus on the overarching purpose and direction of the organization, resulting in fragmented efforts and diminished organizational effectiveness.

Q. 19. Telco Ltd. is manufacturing files and folders from old clothes to discourage use of plastic fields and folders.  For this, they employ people from nearby villages where very less job opportunities are available.  An employee, Harish, designed a plan for cost reduction but it was not welcomed by the production manager.  Another employee gave some suggestion for improvement in design, but it was also not appreciated by the production manager.

• Identify any two values that the company wants to communicate to the society. (3 marks)
• Initiative.  It means eagerness to initiate action without being asked to do so.
• Values which the company wants to communicate to the society are:
• Sensitivity towards the environment
• Creation of job opportunities
• Development of backward regions.

Q. 20. Khandelwal Ltd., a tyre manufacturing concern has been established for more than ten years.  Having made good profits in the past, company wanted to expand further and hence did not declare bonus for the previous year.  The workers got agitated and trade union declared strike and demanded bonus and other facilities.  The management decided not to give into their demands.

• Which principle of scientific management is overlooked in the given case?
• State any two values overlooked/ignored by the management in the above case.
• Harmony, not Discord
• Values overlooked are:
• Mutual understanding
• Peace and stability
• Law and Order
• Sense of belongingness  (any two)

Q. 21. Hritik is desirous of setting up a small factory to manufacture different kinds of eco-friendly packaging materials.  He proposes to adopt to logical approach to his business rather than hit and trial method as he knows that this can result in tremendous saving of human energy as well as wastage of time and materials.  He plans to adopt paternalistic style of management in practice in order to avoid any kind of class-conflict that may emerge between him and the workers.  Moreover, he plans to seek the opinion of his workers before taking any important decisions and also offers incentives to them for providing valuable suggestions for the business.

• Identify and explain the various principle of scientific management that Hritik plans to apply in his business.
• List any two values that he wants to communicate to the society by offering eco-friendly packaging material.
• The various principle of scientific management that Hritik plans to apply in his business are described below:
• Science, not Rule of Thumb:
• Harmony, Not Discord:
• Cooperation, Not Individualism:
• The two values that Harit wants to communicate to the society by offering eco-friendly packaging material are:
• Concern for environment
• Sense of responsibility

Q. 22. Gaurika has been appointed as the chief organizer of a weeklong cultural event.  Being a staunch follower of scientific management, she decides to execute her work by putting into practice the various techniques of scientific management.  On the basis of several observations, she is able to determine that the standard time taken by the security officer at the gat to check the credentials of each visitor is 30 seconds.  So she decides to employ two persons on this job for every function along with the other necessary support staff.  She considers the fact that every day, the functions will take place in three shifts of four hours each, therefore it is important to give breaks to the support staff even in a single shift to take her/his lunch etc.  moreover, on introspection, she determines that the best way to distribute refreshment boxes to the visitors will be to hand it over to them at the exit gate as it would help to save time and eliminate any kind of confusion.

In the context of the above case:

• Identify and explain the various techniques of work study which have been put into practice by Gaurika.
• List any two values that Gaurika wants to communicate to the society.
• The various techniques of work study which have been put into practice by Gaurika are outlined below:
• Time Study:
• Fatigue Study:
• Method Study:
• The two values that Gaurika wants to communicate to the society are:
• Optimum utilization of resources
• Concern for employees

Q. 23. ‘Study Buddy Pvt.’ Is company dealing in stationery items. In order to establish standards of excellence and quality in materials and in the performance of men and machines, the company adheres to benchmarks during production.  Moreover, its products are available in limited varieties, sizes and dimensions thereby eliminating superfluous diversity of products.

Identify the technique of scientific management which has been adopted by ‘Study Buddy Pvt. Ltd.’

Ans.   Technique of scientific management: Standardization

• Establishing benchmarks during production.
• Limiting varieties, sizes, and dimensions of products.
• Consistency in materials and performance.
• Quality control and excellence in production.
• Efficiency in operations.
• Enhanced quality and customer satisfaction.

Q. 24. Tina and Anshu completed their MBA and started working in a multinational company at the same level.  Both are working hard.  Anshu has the habit of backbiting and wrong reporting about his colleagues to impress the boss.  All the employees in the organization know about it.  At the time of performance appraisal also Tina’s performance was rated better than Anshu.  Even then their boss decided to promote Anshu stating that being a female, Tina will not be able to handle the complications of higher post.

• Identify and explain the principle of management that was not followed by this company.
• Identify the values being ignore.
• Company is violating the “Principle of Equity.”
• The values ignored are

                  1.   Gender equality

                  2. eward for performance

                  3. Good human behavior.

Q. 25. In one of his principles, Taylor suggested that job performance should be based on scientific enquiry and not on will/wish or personal intuition of manager?

• Name that principle.
• What values can be followed by using this principle?
• Principle of “Science not rule of thumb.”
• If manager is using this technique he can follow the value of objectivity it as when decisions are taken scientifically he cannot be biased.

Q. 26. The production department of Alpha Ltd. was not performing well on detailed analysis, it was observed that the workers of that department were overburdened.  They were forced to work for longer hours without any break.  So the management planned to replace the production manager.  They appointed Mr. Hari as the new Production Manager.  He observed the average worker and note down their times.  He noted down the time they worked and the time they required to be fresh to join back the work.  Based on this observation, he set the break intervals for workers. He gave small breaks to workers to recharge their energy.

• Name and explain the technique of scientific management used by Mr. Hari.
• State the value which Mr. Hari wants to communicate to the society by allowing rest intervals to workers.
• Fatigue study.
• Value of humanity/sympathy/respect towards employees.

Q. 27. In the staff meeting the principal of the school raised objection that teachers start the teacher after 5 to 10 minutes in third floor classes.  He warned them as students are complaining about this.  The teachers explained the principal that when we climb steps from ground to third floor.  We get some tiredness and need 5 to 10 minutes rest before starting the lecture.  The principal planned to install a lift in school so that teachers do not waste their energy on wasteful activity of climbing steps.

• State the techniques of scientific management used by principal.
• State any other technique of scientific management.
• “Technique of motion study.”
• Other two techniques:
• Functional foremanship
• Time study.

Q. 28. In a factory the toolbox was kept under the table of every worker, whenever worker needs tools he had to bend tape out tool from tool box and keep it back after use.  The newly appointed supervisor observed it and suggested to keep a stool near every worker’s chain where toolbox can he placed so that workers do not waste their energy in bending again and again.

• Which technique of scientific management is used by New Supervisor.
• State the objective of motion study.
• Motion study.
• The objective of motion study is to eliminate unproductive movements of workers.

Q. 29. Mr. Mukesh used to manufacture shoes by employing labour who were easily available.  When his son after completing his MBA joined the business, he analysed that if we use capital intensive method by using a machine it will reduce the cost and the quality of shoes will also improve.

• Which technique of Scientific management is used by his son.
• What is the objective of that technique.
• Method Study
• Finding the best way of doing thing.

Q. 30. Mr. Kapoor, Finance manager of ABC Ltd. applied for leave to attend a family function in Amritsar.  The director of the company  requested him to cancel his leave as there is an important meeting schedule on that date.  Mr. Kapoor immediately agreed and cancelled his trip as he thought attending meeting is more important for company’s benefit.

• Which principle of Fayol is applied by Mr. Kapoor?
• Explain that principle.
• Principle of subordination of individual interest to general interest.
• According to this principle, the interest of organization must supersede the interest of individuals or employees.  In the organization all the employees are working with some objective and there is always an objective of organization.

Q. 31. The manager of ABC Ltd. asked his workers to work overtime to increase the production and earn more but he did not paid extra wages to workers for extra time worked.  The workers started feeling dissatisfied and stop contributing maximum.

• Which principle of Fayol is violated in the above case.
• Explain that principles.
• Principle of Remuneration.
• According to this principle, the interest of organization must supersede the interest of individuals or employees.

Q. 32. Mr. Rajiv is the owner of ‘Laxmi Dairy.’  He is producing various milk products.  He always tests various ways of producing different products and chooses the best and most economical way of production.  He is also very particular about fixing a place for everything and he makes sure that all the employees are given a fixed place so that there is no wastage of time and delay in production.

• Which technique of scientific management is applied by Mr. Rajiv?
• Which principle of Henry Fayol is followed by him?
• Principle of order

Q. 33. Mr. Rajiv the senior manager of Unique enterprise considered himself very wise and used to take all the decisions himself without consulting the employees, he never used to help any one nor he used to take help of anyone.  The employees of unique enterprise were not working efficiently and company’s profit margin started declining to tackle the problem, the company appointed a new manager from IIM Bangalore.  The new manager after joining made a policy that all the decisions will be taken after consulting employees in the meeting.  All employees must give some suggestions and best suggestions will be rewarded with financial and nonfinancial incentives.  This policy had a very positive effects on company.

• State the principle of Hencry Fayol used by new manager.
• State the technique of scientific management related to above case.
• Principle of initiative.
• “Cooperation not individualism.”

Q. 34. In a school principal makes sure that every instruction, order or information given by him must be passed to vice-principal then Head of the department and then to teachers and students must be informed by respective teachers only.  He never allows teachers to directly communicate with him.

• Stat the Principle of Henry Fayol followed by the school principal.
• In case of emergency which concept of Scalar Chain can be used by teacher to pass urgent message directly to principal.
• Scalar Chain.
• Gang-plank.

Q. 35. Pawan is working as a Production Manager in CFL Ltd. which manufactures CFL bulbs.  There is no class-conflict between the management and workers.  The working conditions are very good.  The company is earning huge profits.  As a policy, the management shares the profits earned with the workers because they believe in the prosperity of the employees.

• State the principle of management described in the above paragraph.
• Identify any two values which the company wants to communicate to society.
• The principle of management described in the above paragraph is ‘Harmony, not discord’.
• The two values that the company wants to communicate to the society are:

Q. 36. The principles of Taylor and Fayol are mutually complementary.  On believed that management should share the gains with the workers while the other suggested that employees’ compensation should depend on the earning capacity of the company and should give them a reasonable standard of living.

Identify and explain the principles of Fayol and Taylor referred to in the above paragraph.

The principles of Fayol and Taylor referred to in the above paragraph are ‘Remuneration of employees’ and ‘Harmony, Not Discord’.

• Remuneration of Employees:
• Harmony, not Discord:

Q. 37. The principles of Taylor and Fayol are mutually complementary.  One believed that management should not close its ears to constructive suggestions made by the employees while the other suggested that a good company should have an employee suggestion system whereby suggestions which result in substantial time or cost reduction should be rewarded.

Identify and explain the principles of Taylor and Fayol referred to in the above paragraph.

Ans.  The principles of Fayol and Taylor referred to in the above paragraph respectively are ‘Initiative’ and ‘Cooperation and Not Individualism’.

• Initiative:
• Cooperation and Not Individualism:

Q. 38. Hina and Harish are typists in a company having the same educational qualifications.  Hina gets Rs. 3,000 per month and Harish gets Rs. 4,000 per month as salaries for the same working hours.  Which principle of management is being violated in this case?  Name and explain the principle.

Ans.  The principle of Equity has been violated in this case.  It emphasizes kindliness and justice in the behavior of managers towards workers.  No discrimination should be made by them on the basis of caste, creed, gender or otherwise.

Q. 39. Rajveer works as a plant superintendent in a carpet making factory.  In order to complete the export orders on time, the production manager asks him to make the workers work over time whereas the finance manager is strictly against this practice because it will increase the cost of production.  Moreover, Rajveer feels that since the company is manufacturing handmade carpets as well as machine made carpets there is a lot of overlapping of activities.  Therefore, there should be two separate divisions for both of them wherein each division should have its own in charge, plans and execution resources.

• Identify and explain the principle of management which is being violated.
• Also identify the principle of management that Rajveer feels should be implemented in the factory.
• Give any two differences between the principle of management as identified in part (a) and part (b) respectively.

The principle of management which is being violated in stated below:

• Unity of command:
• Unity of direction:
• The difference between the principle of Unity of Command and Unity of Direction is given below:

Q. 40. Gurpreet is running a retail mart in Varansi to provide various types of products of daily use under one roof to the buyers.  The employee turnover in his business is very high and he is perpetually on a look out for new staff.  The fact of the matter is that he lacks managerial skills and assigns work to his employees on adhoc basis without letting them settle down in a specific work.  This approach of his creates a sense of insecurity among the employees and they tend to leave the job very quickly.  However, he is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.

• Identify and explain the principle of management which Gurpreet is unable to apply and is perpetually ona look out for new staff.
• “He is a very god fearing person and offers fair wages to his employees so they can afford a reasonable standard of living.”  Name and explain the relevant principle of management will have been brought into effect by Gurpreet.
• Stability of Personnel;

Also Check at EduRev:   Chapter Notes - Principles Of Management   Learn Principles of the Scientific Management: Overview  

Q. 41. After finishing her BBA degree course, Tanya gets a job of Assistant Manager in a retail company through the reference of her cousin Taruna who works in the same company as a Senior Manager.  Taruna decides to guide Tanya through her experience by making her aware of the important facts about management in practice.  She tells her that neither the principles of management provide any readymade, straitjacket solutions to all managerial problems nor they are not rigid prescriptions, which have to be followed absolutely.

• Identify the two features of principles of management mentioned in the above paragraph by quoting lines from the paragraph.
• Why do the principles of management not provide readymade, straitjacket solutions to all managerial problems?
• The two features of principles of management mentioned in the above paragraph are as follows:
• General guidelines:
• As the real business situations are very complex and dynamic and are a result of many factors, the principles of management not provide readymade, straitjacket solutions to all managerial problems.

Q. 42. Raj and Simran are both qualified eye surgeons and good friends.  After obtaining a certificate of practice, they decide to persue a career of their own choice.  Raj starts an eye care centre in the city whereas Simran joins a government hospital in a small village.  They meet after a long time in a party.  Raj invites Simran to visit his eye care centre and she accepts his invitation.  She observes at his clinic that there is a fixed place for everything and everyone and it is present there so that there is no hinderance in the activities of the clinic.  Also, Raj always tends to replace ‘I’ will ‘We’ in all his conversations with the staff members.  Later on Raj shares with her that he always deals with lazy staff sternly to send the message that everyone is equal in his eyes.

• Identify and explain the various principles of management that Raj is applying for the successful management of his eye care centre.
• List any two values that Simran wants to communicate to the society by taking up a job in a village.
• Spirit de Corps:
• Concern for poor

Q. 43. Anshul owns a small scale factory where utility items are prepared from waste material like paper mache items, paper and cloth bags, decorative material etc.  over the past few weeks, he was observing that the productivity of one of his very efficient worker, Ramdas, is going down.  So he decides to probe into the matter and confronts Ramdas one day.  On being asked, Ramdas shares with Anshul that he has deliberately slowed down in his work as many of the less efficient workers often pull his leg saying that there is no need for him to be more efficient when everybody is being paid at the same rate.  Taking a lesson from this insight, Anshul decides to implement an incentive bonus plan so as differentiate between efficient and inefficient workers.

• Name and explain the incentive bonus plan that Anshul may implement so as differentiate between efficient and inefficient workers.
• State any two values that Anshul wants to communicate to the society by setting up a special type of business.

Differential Piece wage System is the incentive bonus plan that Ashul may implement so as differentiate between efficient and inefficient workers.

Q. 44. Swaraj is running an office furniture showroom.  Most of his clients are businessmen and they prefer to buy goods on credit.  Keeping this in mind, he has given the power to the sales manager, Mr. Bhardwaj, to offer a credit period of only 20 days, while negotiating a deal with a buyer.  On a specific day, Mr. Bhardwaj finds that if he can offer a credit period of 30 days as an exception to a prospective buyer, he is likely to finalize a highly profitable deal for the business.  So Mr. Bhardwaj requests Swaraj to grant him additional authority for offering a credit period of 30 days in the interest of the business.  But swaraj refuses to extend his authority and as a result, the deal is not finalized.

• Can Mr. Bhardwaj be held responsible for loss of the deal?  Why or why not?  Give a suitable reason in support of your answer.
• Also, explain the related principle.
• No, Mr. Bhardwaj cannot be held responsible for loss of the deal in the above case as he was not given the necessary authority to carry out his responsibility.  There is an imbalance in authority and responsibility.
• The name of the related principle is Authority and Responsibility.

Get an overview of Business Finance through this  video. Find NCERT Solutions of Financial Management  here .  

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Critical Thinking Case

Interface inc.’s strategy for sustainability.

Watch Interface CEO Ray Anderson present his vision for Interface, Inc.:

https://www.youtube.com/watch?v=NskixbVn0BE

Interface, Inc. is the world’s largest manufacturer of carpet tile. Headquartered in Atlanta, Georgia, the global company manufactures the kind of carpet that millions of commercial buildings of all types have on their floors. Carpet manufacturing is a historically dirty business. Not only is commercial carpet a petroleum-based product, the manufacturing process is water-intensive, and carpet squares are installed using toxic glue. Because this carpet is aimed at the commercial market (think schools, libraries, malls, office buildings), it usually does not have a long life span. Malls and schools regularly remove and replace carpet after just a few years because of fading and wear from daily foot traffic. This puts millions of square feet of old carpet into landfills annually.

In 1994, Ray Anderson, the founder of Interface, was put on the spot when he was asked what his company was doing to be sustainable. He realized that the answer to the question was, unfortunately, “not much.” Anderson realized that in order to improve the company’s sustainability performance, Interface was going to have to radically reimagine every part of their business.

Unlike what many CEOs in his position might have done, Anderson decided to do just that. He gave Interface a new vision, which he called Mission Zero. The objective was to reduce Interface’s environmental impact to zero by the year 2020. To accomplish this vision, the company looked at every aspect of its operations and developed what it called the “Seven Fronts of Sustainability”:

Front #1—Eliminate Waste: Eliminate all forms of waste in every area of the business. Front #2—Benign Emissions: Eliminate toxic substances from products, vehicles, and facilities. Front #3—Renewable Energy: Operate facilities with 100% renewable energy. Front #4—Closing the Loop: Redesign processes and products to close the technical loop using recycled and biobased materials. Front #5—Efficient Transportation: Transport people and products efficiently to eliminate waste and emissions. Front #6—Sensitizing Stakeholders: Create a culture that uses sustainability principles to improve the lives and livelihoods of all of our stakeholders. Front #7—Redesign Commerce: Create a new business model that demonstrates and supports the value of sustainability-based commerce.

To achieve the seven sustainability goals, Interface needed to redesign their operations from start to finish and even reconsider what constituted the start and finish for their products. Anderson empowered employees and invested in research to develop new ways to design, manufacture, and install carpet tiles. Interface also reimagined how its clients would use and dispose of carpet tiles.

Changing the strategy of a successful company is always risky, but Anderson felt he had to take the risk. Developing action plans for such a radical change meant that every step of the business had to be rethought, and Interface is on the way to achieving Ray Anderson’s vision. “Since January 2014, Interface's plants in Holland and Northern Ireland have been using around 90% less carbon and 95% less water than in 1996, with no waste going to landfill. Its plant in Scherpenzeel, Netherlands, has hit two of its zero targets.”

How has Interface made these changes? In addition to changing the way they thought about their product’s life cycle, Interface has implemented performance measures to track its progress and it has incentivized employees to be part of the company’s successful redesign. Connecting company actions to real cost savings was a key part of Ray Anderson’s vision. “Over time, programs that linked bonuses for employees at all company levels to reductions in waste started to put meat on the bones of Ray's ‘business case for sustainability.’” Interface’s costs have dropped as they have learned to use fewer resources to manufacture their products, and the cost savings have improved profitability even as Interface continues to invest in Mission Zero.

• What reaction do you think employees had when Ray Anderson announced he wanted to change the company’s mission?
• How would you turn the Seven Fronts of Sustainability into SMART goals?
• How is tying rewards to improved sustainability performance a form of strategic control?

Sources: Interface Inc. company website: http://www.interfaceglobal.com/Company.aspx and sustainability site: http://www.interfaceglobal.com/Sustainability.aspx ; Thorpe, Lorna (2014). “Interface is a carpet-tile revolutionary.” The Guardian Sustainable Business. https://www.theguardian.com/sustainable-business/sustainability-case-studies-interface-carpet-tile-revolutionary; Davis, Mikhail (2014). “Radical Industrialists: 20 years later, Interface looks back on Ray Anderson's legacy.” Greenbiz.com. https://www.greenbiz.com/blog/2014/09/03/20-years-later-interface-looks-back-ray-andersons-legacy.

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• Publisher/website: OpenStax
• Book title: Principles of Management
• Publication date: Mar 20, 2019
• Location: Houston, Texas
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Principles of Management

(10 reviews)

Contributing Authors

Copyright Year: 2019

ISBN 13: 9780998625775

Publisher: OpenStax

Language: English

Formats Available

Conditions of use.

Learn more about reviews.

Reviewed by Samira Fallah, Assistant Professor, University of Mary Washington on 8/12/24

This textbook effectively covers the essential topics commonly taught in principles of management courses, along with some current topics such as social responsibility, diversity, and innovation. However, there are areas where the coverage could... read more

Comprehensiveness rating: 4 see less

This textbook effectively covers the essential topics commonly taught in principles of management courses, along with some current topics such as social responsibility, diversity, and innovation. However, there are areas where the coverage could be improved. A notable example is the topic of “strategic management.” Currently, this topic spans two chapters (Chapters 8 and 9), with additional content in Chapter 4, which could have been consolidated into the existing chapters. As an instructor teaching both strategic management and principles of management, I believe that many of the strategic management concepts covered in these chapters, such as strategic groups, the BCG matrix, and the VRIO model, would be better suited for discussion in the strategic management capstone course. Business majors typically explore these concepts in greater depth in their strategic management capstone courses, and including them in the principles of management course may not enhance student learning. This is because the time and depth required for these topics cannot be adequately addressed within the constraints of the principles course. Additionally, covering these concepts in the principles course might lead to redundancy and potentially diminish the perceived value of the strategic management capstone course.

Content Accuracy rating: 5

I have not noticed any inaccuracies in the content of this textbook.

Relevance/Longevity rating: 5

Although the textbook was published in 2019, its content remains relevant today. However, to reflect the changes in the business landscape since its publication in 2019, future revisions could greatly enhance the textbook’s practicality by incorporating more contemporary subjects such as crisis management, managing remote and hybrid work, and the application of artificial intelligence in management.

Clarity rating: 5

The book is written in clear, accessible language and benefits from numerous examples throughout, making it easier for students to understand and engage with the material.

Consistency rating: 5

I believe the content of the book is consistently presented throughout.

Modularity rating: 5

In my view, the book does a good job of dividing chapter topics into meaningful subheadings overall.

Organization/Structure/Flow rating: 3

In my view, the major weakness of this textbook is the organization of content into chapters, which sometimes leads to redundancies. For example, Chapter 4 and Chapter 8 both cover aspects of the external environment, resulting in overlapping information. Similarly, Chapter 4 and Chapter 10 present similar content on organizational structure. To improve the textbook, future revisions could benefit from consolidating these overlapping topics into more streamlined chapters.

Interface rating: 4

The book could be enhanced by incorporating more graphical elements, such as images and color, to make the content more engaging. Currently, the book is more text-heavy, which may lead to student disengagement. Additionally, the quality of graphs and pictures in the PDF version is not optimal, and improving these visuals could significantly enhance the reader's experience.

Grammatical Errors rating: 5

I have not noticed many grammatical issues in the text thus far.

Cultural Relevance rating: 5

The textbook does not seem to include any insensitive or offensive language.

Looking forward to using this textbook this semester!

Reviewed by Melissa Polen, Instructor, Rogue Community College on 11/9/23

I thought this book offered a great overview of management. There was a good chapter on the history of management and how practices have evolved. I found this very interesting and helps students see patterns of management from years ago. read more

I thought this book offered a great overview of management. There was a good chapter on the history of management and how practices have evolved. I found this very interesting and helps students see patterns of management from years ago.

Content Accuracy rating: 4

I have not come across any errors in my review although there is an updated errata list.

Relevance/Longevity rating: 4

I found the content to be fairly up-to-date. I appreciated the different managerial decision exercises at the end of the chapter.

I found the textbook fairly easy to understand.

From what I reviewed, the text was consistent throughout.

The sections through the textbook are set perfectly so that it provides the reader with breaks to digest what was just read.

Organization/Structure/Flow rating: 4

I found this textbook organized although I was surprised by the layout of some of the chapters. Nothing that would impact using this textbook though.

Interface rating: 5

I have used many modalities of this book and all have been easy to use. I have not experienced any interface issues.

I have not noticed any grammatical errors in my review.

I found the textbook to be culturally appropriate.

I am looking forward to using this book!

Reviewed by BAnn Dittmar, Instructor, Clarke University on 12/14/22

This text covers all of the relevant and appropriate management topics that other Principles of Management texts cover. read more

Comprehensiveness rating: 5 see less

This text covers all of the relevant and appropriate management topics that other Principles of Management texts cover.

It appears to be accurate and detailed, as well as error-free and unbiased.

The book is relevant and has long-standing content, yet incorporates some more current content as well. The PowePoints include video links and they appear to have be within the last 5 years. I'm not sure how often they update this content, but it was all still relevant. The TEDTalks are long-standing and could be used for many years to come.

This book is clear and concise and has appropriate terminology for a principles of management text. The vocabulary is very similar to other texts I have used for this course, and there is a nice resource at the end of the chapter providing definitions for various terms.

Consistency rating: 4

The book's style, content and framework are consistent from chapter to chapter. This makes for predictability and ease of readability. I would like to see more imagery and adding in some more color for interest for the student's as research proves that those two aspects improve engagement with the material.

The text has manageably sized chapters and the text is split up with subheadings, which assists with being able to take in chunks of material at a time.

Organization/Structure/Flow rating: 5

The chapters build on each other and they are organized well. I like the resources that are available to professors and students in each chapter, as well as the Instructor and Student manuals.

I appreciated seeing that there are multiple modes of access options for students- an online option, an app (which I think is GREAT!), and they can access a PDF, or they can order a copy of a printed book. This is wonderful to provide these options, as not all students prefer the same interface. The online interface is easy to navigate as well.

As expected in a text, it was free of grammar errors.

Cultural Relevance rating: 4

I always like to see imagery with a variety of cultures and races, and since this book doesn't have a ton of imagery, I think this could be added and it's an opportunity to be intentional and inclusive.

I really liked the excellent resources provided. The PowerPoints had videos embedded, with discussion questions that follow, which is so helpful and time-saving, plus it makes a lecture interactive and more engaging. It includes review questions and a test bank. I just wish there was an easy way to get the tools that I use with my current textbook provider, which includes things like video case studies with questions, practice questions that are scored immediately and provide feedback on learning to the student. The discussion questions and tests appeared to me that they would be more paper-based and labor intensive than the online graded alternative that I currently use. Overall, if that isn't something that a professor is looking for, this text looks like a great option!

Reviewed by Martha Lovett, Lecturer II, University of Texas Rio Grande Valley on 12/17/21

This book is very detailed and covers most of the essentials in every principle of the management discipline. I specially noted the detailed vocabulary and conceptualized content. read more

This book is very detailed and covers most of the essentials in every principle of the management discipline. I specially noted the detailed vocabulary and conceptualized content.

This book's accuracy is very high, although when it comes to contemporary issues most publications are challenged.

This book's relevance is good but it could be challenging to introduce updates. It has a lot of content and it is a bit packed with so many objectives that will be a lot of work to introduce updates.

This book is well written and adequately defined. Probably its best feature is the vocabularies section at the end of every chapter.

The consistency of this book is very good. Although the objectives are more than effectiveness principles recommend.

Modularity rating: 4

The content in the chapters have plenty of subheadings. Although once again the objectives are too many to maintain the balance among reading and organization.

Organization in this text is very well designed and definitely an asset in this book.

Interface rating: 3

Interface is goo enough. I have seen better online interface books. But his one is good enough for a free material.

I couldn't find one error in this regard.

I definitely did not see any cultural mishap. The text maintains a consistent objectivity.

My only observation is that the pictures and charts are not the best I have seen, and also they could be located better in the layout for accessibility purposes.

Reviewed by Leslie Jackson, Associate Professor, Drake University on 12/11/21

The OpenStax version of Principles of Management addresses a range of areas that managers in a variety of settings and industry are likely to face. While it is focused on business, the information in this text are appropriate to healthcare... read more

The OpenStax version of Principles of Management addresses a range of areas that managers in a variety of settings and industry are likely to face. While it is focused on business, the information in this text are appropriate to healthcare managers and people new to management.

From my quick read of the text, it appears to be unbiased and error-free.

The book has a 2019 publication date so the content is recent enough to be relevant. It should be relatively easy to update the information as needed.

Clarity rating: 4

It was easier for me to read the downloaded version of the book rather than online. I was able to follow and understand the content with very little difficulty.

The text appears to be consistent in its formatting, framework and use of terminology.

Each chapter is organized in subsections that could lend themselves to dividing into smaller reading sections or topics within a course.

The book's organization is easy to follow.

The online version of the book was harder for me to follow and I had more difficulty navigating it. The downloaded version was much easier for me to use and navigate.

I did not find any grammatical errors.

The book includes chapters devoted to international management and diversity within organizations. Examples, pictures, and scenarios used in other chapters also reflected a range of races, ethnicities and backgrounds.

I am new to using open educational resources and am exploring what is out there for the kinds of courses I teach. Thank you for making this publication available.

Reviewed by Lori Duus, Instructor, Midlands Technical College on 4/29/21

The text is comprehensive, all relevant subjects are covered thoroughly. There is no specific index or glossary, however the entire text is searchable in the e-book and definitions are provided. read more

The text is comprehensive, all relevant subjects are covered thoroughly. There is no specific index or glossary, however the entire text is searchable in the e-book and definitions are provided.

There were no inconsistencies found within the text. All information seemed to be accurate.

The examples in the text are relevant, however, some have become outdated and require revision. Due to the recent rapid changes in virtual environments and work settings a meaningful amount of content should be updated. Updates should be easy to implement.

The text incorporates most commonly used terms and jargon which it fully defines in accessible language. It also incorporates jargon and terms progressively so that students build a working “language” in the field of management.

The text uses consistent terminology and is framed throughout by learning objectives.

I believe the text is very divisible by learning objective, each of which is thoroughly covered. The objectives could be re-organized and assigned independently to meet the needs of a typical MGT 101 course without any disruption.

Although the topics are very clear and logical, the order in which they are presented is somewhat jumbled in my opinion. To use this text I would need to re-arrange the chapters in a more progressive pattern.

The text is very easy to navigate, all images are clear and include proper descriptions.

To my knowledge, the text has no grammatical errors.

The text is culturally inclusive; examples of diverse populations are represented throughout.

Reviewed by Norman Thomas, Professor, California State University, Dominguez Hills on 7/18/20

The Principles of Management text is very comprehensive compared to the McGraw Hill textbook Management: Leading and Collaborating in a Competitive World 12 ed. As I compare the chapters it has all the topics that I teach in my Principles of... read more

The Principles of Management text is very comprehensive compared to the McGraw Hill textbook Management: Leading and Collaborating in a Competitive World 12 ed. As I compare the chapters it has all the topics that I teach in my Principles of Management class (MGT: Management Theory) and its Table of Contents mirrors my existing textbook very well. 1. Managing and Performing (same) 2. Managerial Decision-Making (maps to Chapter 3) 3. The History of Management 4. External and Internal Organizational Environments and Corporate Culture (maps to Chapter 2) 5. Ethics, Corporate Responsibility, and Sustainability (same) 6. International Management (same) 7. Entrepreneurship (same) 8. Strategic Analysis: Understanding a Firm's Competitive Environment 9. The Strategic Management Process: Achieving and Sustaining Competitive Advantage 10. Organizational Structure and Change (maps to Chapters 8 & 18) 11. Human Resource Management (maps to Chapter 10) 12. Diversity in Organizations (maps to Chapter 11) 13. Leadership (maps to Chapter 12) 14. Work Motivation for Performance (maps to Chapter 13) 15. Managing Teams (maps to Chapter 14) 16. Managerial Communication (maps to Chapter 15) 17. Organizational Planning and Controlling (maps to Chapter 16 but I don’t use this one) 18. Management of Technology and Innovation (maps to Chapter 17 but I don’t use this one) I like that the OpenStax textbook has Chapter 3 on the History of Management as I do cover this topic and have used other resources as a supplement to my current textbook.

The OpenStax Management textbook reading level is a good fit for my students and the examples are modern and relatable to my students who live in a large U.S. city. The PDF and iOS application versions are colorful and easy to read with inviting graphics, tables and illustrations. I find the textbook a great substitute for the publisher versions I have used or reviewed. My department also uses the Cengage textbook by Daft and I have considered books by Pearson, Wiley and Sage.

I found zero issues with the accuracy of the book with respect to the management concepts or discussion of organizations and leaders outside the typical lionization of the largest companies and most famous founders. This text has a modern approach and due to the ethical discussions in each chapter does a nice job of helping students to critically examine today's examplar companies (like Uber) who also have had several management problems. I would single out the coverage of Uber in this text as it raises points that I have brought up in my lectures as a counterpoint to coverage in other older editions of books.

The book's corporate examples are very relevant in terms of industry and sector coverage and the timeliness of the cases presented. Attempts are made to include multiple geographies and diversity in the examples of managers and leaders. It has a very fresh feel to it as I sampled each chapter and the boxed features are particularly relevant and useful teaching tools.

The language is very clean, clear, and precise. The prose is lucid and accessible. The jargon is defined and summarized at the end of the chapter as this language is key management language the student is expected to master in the course. The multiple examples and illustrations provide the needed context.

I see no issues with consistency. The book defines key terms and uses them throughout the book. This helps with its clarity. This is rarely an issue I encounter outside very specialized courses that cover newer material with few textbooks available.

The modularity is on-par with the best textbooks. Both a detailed and a short table of contents are included and I find these essential when designing my course, particularly when adapting to asynchronous online classes. This textbook is VERY modular and would be easy to adapt to my summer and accelerated versions of my course.

The chapters are very logical and clear. The level of coverage is longer than very short textbooks and is not missing any key concepts that I cover in a 15-week course. My current textbook has greater coverage, but nothing essential is lost in this version and I am finding by editions 12-15 the larger textbooks are getting a bit bloated to ensure they have everything any instructor might want which can lead to longer reading time for my students. I like these three in-text examples of how to apply each chapter's concepts very much: Ethics in Practice Managing Change Managerial Leadership There are others that are useful around sustainability and entrepreneurship but I would not use all of them.

These sections are very helpful for my students when reviewing what they learned: Concept Check Key Terms Summary of Learning Objectives Chapter Review Questions Finally, I like having three choices of cases and exercises that I might use in-class or as homework. Management Skills Application Exercises Managerial Decision Exercises Critical Thinking Case

Very easy to navigate. The information is organized very well in each chapter. However, students may be losing their ability to read as I did so attention should be paid to supporting software such as video and interactive elements that gamify key concepts and their application. As an example Exhibit 2.6 has a very easy to follow ethical decision tree. The lines are a bit faint but the overall impact is very clear. Shading might help with tables, but this might also hamper screen readers so I understand there is a balance to consider when using colors.

I found no grammatical errors. This is a great final product. The writing is clear and concise.

The first photo is very white. This sets the tone for the book and might send a signal to my students who are mostly students of color. I understand the orchestra metaphor, but the next version could seek out a more diverse group of performers. The second photo is of Howard Shultz, CEO of a company I respect, but again a message may be coming through. By chapter 2 there is a photo in Asian country and more diversity so the book appears to have made an effort and the company and leader examples overall are diverse and include multiple cultures. The graphics of people are more diverse than the photos.

The one area of concern would be the lack of adaptive online teaching support tools such as LearnSmart/Smartbook and the interactive exercises. These tools greatly increase my student engagement and my 10 years of classroom observation and research shows that my busy, working students typically read less than 25% of a textbook if I don’t require weekly reading with graded quizzes and assignments based on the material from the textbook. The performance on my cumulative, closed-book proctored final exam questions based on the textbook has increased from a class average of 69-71% to about 80% by using the adaptive learning and interactive tools on a weekly basis. As a result, it will be hard to eliminate those tools from my course. If my student behaviors shift and I could expect them to read each week I could easily adopt this textbook. Alternatively, if OpenStax created similar software tools then I could also make the change.

Reviewed by Ashli Ree, Professor, Middlesex Community College on 5/30/20

At first, eighteen chapters may appear overwhelming to cover in one semester. After reviewing the chapters and topics though, this would provide an opportunity to cover different chapters as needed. I have read other management textbooks in a... read more

At first, eighteen chapters may appear overwhelming to cover in one semester. After reviewing the chapters and topics though, this would provide an opportunity to cover different chapters as needed. I have read other management textbooks in a very linear format, starting with history and covering the four management functions in order. This textbook allows more flexibility in teaching and learning.

The content is accurate and error-free. I was delighted to see a chapter on entrepreneurship with focus on small businesses. It is true that larger organizations have more teams to manage, but I do have many students with interests in starting a small business or start working at a small to mid-size company.

This textbook has both timeless content (e.g., history of management) and more recent topics (e.g., corporate social responsibility). In addition to having many well-known companies as examples, it was great seeing Malden Mills captured in servant leadership section because many of my students are from Lawrence, MA or have been there from living in New England. The content often becomes more meaningful for students when they can connect with it.

The content is easy to follow and accessible for students. I have used a different OER textbook for Intro to Business courses and the format is similar.

After a chapter or two, it will be fairly clear for students to understand how the chapters are set up.

The clear format of this textbook makes it easy for me to assign sections and for students to find the sections. Sometimes, in other textbooks, there are images or text boxes in the corner of a page and I have seen students missing them. This is much more straight forward, top to bottom, and left to right.

I find the chapters and topics non-linear, but definitely not random. The order appears logical and purposeful to keep students engaged.

As my students often use different devices, I also tested this textbook using different devices. There were no navigation problems.

I did not notice any grammatical errors.

More in "International Management" and "Diversity in Organizations" chapters, the textbook covers many current issues affecting both individuals and organizations. Students often come having different knowledge on various topics. The learning content having historical facts, examples of different interpretations, and even topics that go beyond the surface level, will hopefully lead to students developing diverse thinking.

The learning outcomes I have often seen in other textbooks are statements so students often read them and accept them as is. I appreciated the learning outcomes written as questions. I believe this will lead to students exploring for answers and different options as they read the textbook.

Reviewed by Steve Custer, Associate Professor, Oakland City University on 3/28/20

The Principles of Management text is very comprehensive in that it covers a wide ranging amount of material. Actually, I was quite impressed with the depth provided to each content area. The terms and assorted exercises at the end of each... read more

The Principles of Management text is very comprehensive in that it covers a wide ranging amount of material. Actually, I was quite impressed with the depth provided to each content area. The terms and assorted exercises at the end of each chapter provide an excellent review of topics.

Upon inspection, no errors were observed by this reviewer.

Many current real-world examples of management are supplied throughout the text to accentuate the subject matter. Particularly, illustrations covered organizations such as Amazon, McDonald's, Hasbro, and Uber.

The text was presented in a logical fashion and was very easy to read and comprehend.

The text consistently covered all aspects of management and was careful to include ethical considerations in every chapter.

The content was well assembled and could be referenced in many different class formats, which this reviewer found extremely beneficial. Also, the tables, pictures, and examples further enhanced the credibility of the content.

The subject matter was well organized and chapter topics can be easily retrieved from the table of contents in either an online version or a PDF.

No interface issues were experienced by this reviewer on multiple occasions on a variety of devices- tablet, laptop, or desktop.

This reviewer did not observe any grammatical issues.

This reviewer did not notice any offensive or insensitive material.

Overall, this reviewer found this text to be packed with great information about management issues. Along that line, it seemed that the text could function as the main text in a management course or as a supplementary resource as well. Moreover, the chapter content identified its course learning outcomes at the outset and circled back around to drive home key issues in corresponding chapter summaries. In light of the importance of assessment in today's educational climate, this feature was particularly noteworthy.

Reviewed by Regina Schinker, Director of Instructional Development , Trine University on 6/1/19

True to the nature of OER, I was searching for material on managerial decision-making and I primarily focused on Chapters 1 - 3 of this textbook (with special attention to Chapter 2). Chapter 2 is quite comprehensive on the topic of managerial... read more

True to the nature of OER, I was searching for material on managerial decision-making and I primarily focused on Chapters 1 - 3 of this textbook (with special attention to Chapter 2). Chapter 2 is quite comprehensive on the topic of managerial decision-making and meets my needs as a course developer and instructor. It appears the entire textbook addresses a vast number of management topics thoroughly. I look forward to returning to this textbook in the future as I develop additional courses.

The content is accurate and unbiased.

Much of the content is foundational and timeless. The real-world stories taken from business and industry incorporated into the chapters are powerful; linking concepts to reality. Necessary updates to the real-world examples should be relatively easy to implement. As a course developer that intends to use this textbook for a variety of courses, I am hopeful that the examples in the textbook will be continuously updated to remain as valid illustrations of concepts in practice.

The textbook's writing style is understandable, durable, and straightforward. The content flows easily and should be agreeable to a wide audience.

Consistency is a strength of this textbook. The structure of the chapters is arranged nicely around the learning outcomes (formatted as questions at the beginning of each chapter). This framework is consistent throughout the entire textbook. The alignment of the learning outcomes to the subsequent text is clear as the reader progresses through the chapter(s).

The chapters are configured nicely with sections of foundational content, business and industry examples (stories), Concept Checks, exhibits, tables, and end-of-chapter reviews and activities. The modularity of the text brings a nice variety to the reading.

Again, the organization of the chapters has created relevant and applicable content.

Navigation was effortless and I did not encounter any display errors.

The content of this book is inclusive of a variety of races, ethnicities, and backgrounds.

This textbook is rich in content. I am looking forward to returning to the textbook as I create future courses on management. I appreciate the effort the authors put into this textbook's formatting and relevancy. This is a rich tool for all management instructors.

Table of Contents

• 1. Managing and Performing
• 2. Managerial Decision-Making
• 3. The History of Management
• 4. External and Internal Organizational Environments and Corporate Culture
• 5. Ethics, Corporate Responsibility, and Sustainability
• 6. International Management
• 7. Entrepreneurship
• 8. Strategic Analysis: Understanding a Firm's Competitive Environment
• 9. The Strategic Management Process: Achieving and Sustaining Competitive Advantage
• 10. Organizational Structure and Change
• 11. Human Resource Management
• 12. Diversity in Organizations
• 13. Leadership
• 14. Work Motivation for Performance
• 15. Managing Teams
• 16. Managerial Communication
• 17. Organizational Planning and Controlling
• 18. Management of Technology and Innovation

Ancillary Material

About the book.

Principles of Management is designed to meet the scope and sequence requirements of the introductory course on management. This is a traditional approach to management using the leading, planning, organizing, and controlling approach. Management is a broad business discipline, and the Principles of Management course covers many management areas such as human resource management and strategic management, as well behavioral areas such as motivation. No one individual can be an expert in all areas of management, so an additional benefit of this text is that specialists in a variety of areas have authored individual chapters.

About the Contributors

David S. Bright , Wright State University Anastasia H. Cortes , Virginia Tech University Eva Hartmann , University of Richmond K. Praveen Parboteeah , University of Wisconsin-Whitewater Jon L. Pierce , University of Minnesota-Duluth Monique Reece Amit Shah , Frostburg State University Siri Terjesen , American University Joseph Weiss , Bentley University Margaret A. White , Oklahoma State University Donald G. Gardner , University of Colorado-Colorado Springs Jason Lambert , Texas Woman’s University Laura M. Leduc , James Madison University Joy Leopold , Webster University Jeffrey Muldoon , Emporia State University James S. O’Rourke , University of Notre Dame

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Business Management Case Study: A Complete Breakdown

Gain a comprehensive understanding of the "Business Management Case Study" as we break down the concept from start to finish. Discover the incredible journeys of companies like Apple Inc., Tesla and Netflix as they navigate innovation, global expansion, and transformation. This detailed analysis will provide insights into the dynamic world of business management.

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• PMP® Certification Training Course
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• Business Management Training Course

Case studies play a pivotal role in understanding real-world challenges, strategies, and outcomes in the ever-evolving field of Business Management. This blog dives into the intricacies of a compelling Business Management Case Study, dissecting its components to extract valuable insights for aspiring managers, entrepreneurs, and students alike. Learn the study behind some of the most significant Business Management Case Studies & how an online business degree can help you learn more in this article. 

Table of Contents

1) What is Business Management? 

2) Case Studies in Business Management 

    a) Apple Inc. Innovation 

    b) Tesla’s EV revolution 

    c) Amazon retailer to e-commerce giant 

    d) McDonald’s global expansion 

    e) Netflix’s transformation 

3) Conclusion 

What is Business Management?  

Business Management refers to the set of activities, strategies, and practices employed to oversee and coordinate an organisation's operations, resources, and personnel to achieve specific goals and objectives. It encompasses a wide range of responsibilities to ensure an organisation's efficient and effective functioning across various functional areas. 

Try our Business Case Training Course today and start your career!  

Case Studies in Business Management  

Here are some of the notable case studies in the field of Business Management that have garnered attention due to their complexity, innovative strategies, and significant impact on their respective industries:  

Apple Inc. innovation  

a) Background: Apple Inc. is a global technology giant noted for its innovative products and design-driven approach. In the early 2000s, Apple faced intense competition and declining market share. The company needed to reinvent itself to remain relevant and competitive. 

b) Problem statement: Apple's challenge was revitalising its product line and regaining market leadership while navigating a rapidly changing technological world. 

c) Analysis of the situation: The Case Study dives into Apple's design thinking and customer-centric innovation to develop products that seamlessly blend form and function. The company's focus on user experience, ecosystem integration, and attention to detail set it apart from its competitors. 

d) Proposed solutions: Apple's strategy involved launching breakthrough products like the iPod, iPhone, and iPad that redefined their respective markets. The company also invested heavily in creating a robust ecosystem through iTunes and the App Store. 

e) Chosen strategy: Apple's commitment to user-centred design and innovation became the cornerstone of its success. The strategy encompassed cutting-edge technology, minimalist design, and exceptional user experience. 

f) Implementation process: Apple's implementation involved rigorous research and development, collaboration among various teams, and meticulous attention to detail. The company also established a loyal customer base through iconic product launches and marketing campaigns. 

g) Results and outcomes: Apple's strategy paid off immensely, leading to a resurgence in its market share, revenue, and brand value. The company's products became cultural touchstones, and its ecosystem approach set new standards for the technology industry. 

Tesla’s EV revolution  

a) Background: Tesla, led by Elon Musk, aimed to disrupt the traditional automotive industry by introducing electric vehicles (EVs) that combined sustainability, performance, and cutting-edge technology. 

b) Problem statement: Tesla faced challenges related to the production, scalability, and market acceptance of electric vehicles in an industry dominated by internal combustion engine vehicles. 

c) Analysis of the situation: This Case Study examines Tesla's unique approach, which combines innovation in electric powertrains, battery technology, and software. The company also adopted a direct-to-consumer sales model, bypassing traditional dealership networks. 

d) Proposed solutions: Tesla's solutions included building a network of Supercharger stations, developing advanced autonomous driving technology, and leveraging over-the-air software updates to improve vehicle performance and features. 

e) Chosen strategy: Tesla focused on high-quality engineering, creating a luxury brand image for EVs, and promoting a community of passionate supporters. The company also bet on long-term sustainability and energy innovation beyond just manufacturing cars. 

f) Implementation process: Tesla faced production challenges, supply chain issues, and scepticism from traditional automakers. The company's determination to continuously refine its vehicles and technology resulted in incremental improvements and increased consumer interest. 

g) Results and outcomes: Tesla's innovative approach catapulted it into the forefront of the EV market. The Model S, Model 3, Model X, and Model Y gained popularity for their performance, range, and technology. Tesla's market capitalisation surged, and the company played a significant part in changing the perception of electric vehicles. 

Amazon retailer to e-commerce giant  

a) Background: Amazon started as an online bookstore in the 1990s and quickly expanded its offerings to become the world's largest online retailer. However, its journey was riddled with challenges and risks. 

b) Problem statement: Amazon faced difficulties in achieving profitability due to its aggressive expansion, heavy investments, and price competition. The company needed to find a way to sustain its growth and solidify its position in the e-commerce market. 

c) Analysis of the situation: This Case Study explores Amazon's unique business model, which prioritises customer satisfaction, convenience, and diversification. The company continuously experimented with new ideas, services, and technologies. 

d) Proposed solutions: Amazon's solutions included the introduction of Amazon Prime, the Kindle e-reader, and the development of its third-party seller marketplace. These initiatives aimed to enhance customer loyalty, expand product offerings, and increase revenue streams. 

e) Chosen strategy: Amazon's strategy revolved around long-term thinking, customer obsession, and a willingness to invest heavily in innovation and infrastructure, even at the expense of short-term profits. 

f) Implementation process: Amazon's implementation involved building a vast network of fulfilment centres, investing in advanced technology for logistics and supply chain management, and expanding its services beyond e-commerce into cloud computing (Amazon Web Services) and entertainment (Amazon Prime Video). 

g) Results and outcomes: Amazon's strategy paid off as it transformed from an online bookstore to an e-commerce behemoth. The company not only achieved profitability but also diversified into various sectors, making Jeff Bezos the richest person in the world for a time. 

McDonald’s global expansion  

a) Background: McDonald's is one of the world's largest and most recognisable fast-food chains. The Case Study focuses on the company's global expansion strategy and challenges in adapting to diverse cultural preferences and market conditions. 

b) Problem statement: McDonald's challenge was maintaining its brand identity while tailoring its menu offerings and marketing strategies to suit different countries' preferences and cultural norms. 

c) Analysis: The Case Study analyses McDonald's localisation efforts, menu adaptations, and marketing campaigns in different countries. It explores how the company balances standardisation with customisation to appeal to local tastes. 

d) Solutions and outcomes: McDonald's successfully combines global branding with localized strategies, resulting in sustained growth and customer loyalty in various markets. The Case Study demonstrates the importance of understanding cultural nuances in international business. 

Netflix’s evolution  

a) Background: Netflix started as a DVD rental-by-mail service and became a leading global streaming platform. The Case Study explores Netflix's strategic evolution, content production, and influence on the entertainment industry. 

b) Problem statement: Netflix's challenge was transitioning from a traditional DVD rental business to a digital streaming service while competing with established cable networks and other streaming platforms. 

c) Analysis: The Case Study analyses Netflix's shift to online streaming, its investment in original content production, and its use of data analytics to personalise user experiences and content recommendations. 

d) Solutions and outcomes: Netflix's strategic pivot and focus on content quality and user experience contributed to its dominance in the streaming market. The Case Study illustrates how embracing digital disruption and customer-centric strategies can drive success.  

Conclusion  

These case studies offer valuable insights into different facets of Business Management, including innovation, strategic decision-making, customer-centric approaches, and market disruption. Analysing these cases provides aspiring managers and entrepreneurs with real-world examples of how effective strategies, risk-taking, and adaptability can lead to remarkable success in the dynamic business world. 

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Top 40 Most Popular Case Studies of 2021

Two cases about Hertz claimed top spots in 2021's Top 40 Most Popular Case Studies

Two cases on the uses of debt and equity at Hertz claimed top spots in the CRDT’s (Case Research and Development Team) 2021 top 40 review of cases.

Hertz (A) took the top spot. The case details the financial structure of the rental car company through the end of 2019. Hertz (B), which ranked third in CRDT’s list, describes the company’s struggles during the early part of the COVID pandemic and its eventual need to enter Chapter 11 bankruptcy. 

The success of the Hertz cases was unprecedented for the top 40 list. Usually, cases take a number of years to gain popularity, but the Hertz cases claimed top spots in their first year of release. Hertz (A) also became the first ‘cooked’ case to top the annual review, as all of the other winners had been web-based ‘raw’ cases.

Besides introducing students to the complicated financing required to maintain an enormous fleet of cars, the Hertz cases also expanded the diversity of case protagonists. Kathyrn Marinello was the CEO of Hertz during this period and the CFO, Jamere Jackson is black.

Sandwiched between the two Hertz cases, Coffee 2016, a perennial best seller, finished second. “Glory, Glory, Man United!” a case about an English football team’s IPO made a surprise move to number four.  Cases on search fund boards, the future of malls,  Norway’s Sovereign Wealth fund, Prodigy Finance, the Mayo Clinic, and Cadbury rounded out the top ten.

Other year-end data for 2021 showed:

• Online “raw” case usage remained steady as compared to 2020 with over 35K users from 170 countries and all 50 U.S. states interacting with 196 cases.
• Fifty four percent of raw case users came from outside the U.S..
• The Yale School of Management (SOM) case study directory pages received over 160K page views from 177 countries with approximately a third originating in India followed by the U.S. and the Philippines.
• Twenty-six of the cases in the list are raw cases.
• A third of the cases feature a woman protagonist.
• Orders for Yale SOM case studies increased by almost 50% compared to 2020.
• The top 40 cases were supervised by 19 different Yale SOM faculty members, several supervising multiple cases.

CRDT compiled the Top 40 list by combining data from its case store, Google Analytics, and other measures of interest and adoption.

All of this year’s Top 40 cases are available for purchase from the Yale Management Media store .

And the Top 40 cases studies of 2021 are:

1.   Hertz Global Holdings (A): Uses of Debt and Equity

2.   Coffee 2016

3.   Hertz Global Holdings (B): Uses of Debt and Equity 2020

4.   Glory, Glory Man United!

5.   Search Fund Company Boards: How CEOs Can Build Boards to Help Them Thrive

6.   The Future of Malls: Was Decline Inevitable?

7.   Strategy for Norway's Pension Fund Global

8.   Prodigy Finance

9.   Design at Mayo

10. Cadbury

11. City Hospital Emergency Room

13. Volkswagen

14. Marina Bay Sands

15. Shake Shack IPO

16. Mastercard

17. Netflix

18. Ant Financial

19. AXA: Creating the New CR Metrics

20. IBM Corporate Service Corps

21. Business Leadership in South Africa's 1994 Reforms

22. Alternative Meat Industry

23. Children's Premier

24. Khalil Tawil and Umi (A)

25. Palm Oil 2016

26. Teach For All: Designing a Global Network

27. What's Next? Search Fund Entrepreneurs Reflect on Life After Exit

28. Searching for a Search Fund Structure: A Student Takes a Tour of Various Options

30. Project Sammaan

31. Commonfund ESG

32. Polaroid

33. Connecticut Green Bank 2018: After the Raid

34. FieldFresh Foods

35. The Alibaba Group

36. 360 State Street: Real Options

37. Herman Miller

38. AgBiome

39. Nathan Cummings Foundation

40. Toyota 2010

7 Case Studies on Effective Management Accountability

The examination of seven case studies on effective management accountability reveals key strategies employed by various organizations. Company X showcases a structured accountability framework focusing on clear roles and performance metrics. Organization Y emphasizes inclusivity, fostering ownership at every level. Firm Z aligns employee goals with strategic objectives, enhancing operational efficiency. Business A and Enterprise B demonstrate the importance of ethical leadership and transparent evaluation processes. Finally, Corporation C and Startup D highlight the cultural alignment necessary for sustainable accountability. Collectively, these cases offer valuable insights into fostering a culture of accountability that drives performance and innovation. Further exploration reveals even deeper strategies.

Table of Contents

Case Study 1: Company X

In evaluating the effectiveness of management accountability, Company X serves as a compelling case study. The organization has implemented robust management strategies that prioritize accountability at all levels, fostering a culture of transparency and responsibility. This strategic approach has enabled Company X to enhance operational efficiency and drive performance improvements.

Central to Company X's success is its well-defined accountability framework, which delineates roles, responsibilities, and expectations across the organization. This framework not only provides clear guidelines for individual performance but also promotes collective ownership of outcomes. By integrating key performance indicators (KPIs) into its accountability strategies, Company X effectively aligns employee objectives with broader organizational goals, facilitating a cohesive pursuit of excellence.

Furthermore, Company X emphasizes continuous feedback and regular performance reviews within its accountability framework. This iterative process allows management to identify areas for improvement and recognize high performers, thereby reinforcing positive behaviors and encouraging a proactive approach to problem-solving. The establishment of open communication channels further supports this dynamic, enabling employees to voice concerns and contribute ideas, which enhances engagement and accountability.

Case Study 2: Organization Y

Organization Y provides an insightful example of how effective management accountability can be operationalized in a diverse environment. By embedding accountability frameworks within its robust organizational culture, Organization Y fosters an environment where employees at all levels are encouraged to take ownership of their roles and responsibilities. This approach not only enhances individual performance but also contributes to a cohesive organizational mission.

At the core of Organization Y's success is its commitment to transparency and communication. Clear lines of accountability are established through well-defined roles and responsibilities, ensuring that all team members understand their contributions to overarching goals. Regular performance reviews and feedback mechanisms are integral to this process, allowing for real-time adjustments and fostering a culture of continuous improvement.

Moreover, Organization Y emphasizes inclusivity in its accountability frameworks. By recognizing the diverse backgrounds and perspectives of its workforce, the organization tailors its strategies to engage all employees effectively. This inclusiveness not only boosts morale but also drives innovation, as diverse teams are empowered to share unique insights and solutions.

Case Study 3: Firm Z

Through a strategic focus on accountability, Firm Z has established a robust framework that enhances performance and drives results across its operations. This framework is underpinned by innovative management strategies that prioritize transparency, responsibility, and continuous improvement. By embedding accountability into the organizational culture, Firm Z has created an environment where employees are empowered to take ownership of their roles and outcomes.

The accountability frameworks implemented by Firm Z include clear performance metrics and regular feedback loops, which facilitate ongoing evaluation and adjustment of individual and team objectives. This systematic approach not only aligns employee goals with the overall strategic vision but also fosters a sense of shared responsibility for achieving organizational success. Management regularly reviews these frameworks to ensure they remain relevant and effective in addressing both current challenges and future ambitions.

Furthermore, Firm Z employs a comprehensive training program aimed at enhancing managerial skills related to accountability. This initiative equips leaders with the tools necessary to cultivate a high-performance team dynamic, ensuring that accountability is not merely a top-down directive but a collective commitment across all levels of the organization.

The results of these management strategies are evident in improved operational efficiency and higher employee engagement, which translate into increased profitability. By leveraging accountability as a core principle, Firm Z not only enhances its competitive edge but also establishes a sustainable model for long-term success, demonstrating the critical role that effective management accountability plays in achieving strategic objectives.

Case Study 4: Business A

In analyzing Business A, we observe a robust framework for leadership accountability that directly influences organizational performance. The integration of performance metrics has been strategically employed to enhance transparency and drive results. This case exemplifies the critical role that accountability practices play in achieving strategic objectives and fostering a culture of continuous improvement.

Leadership Accountability Practices

Effective leadership accountability practices are critical for fostering a culture of responsibility within any business. In Business A, a robust accountability framework has been established, emphasizing ethical leadership as a central tenet. Leadership styles adopted by executives encourage open communication and effective decision-making processes, which enhance team dynamics and ensure that all team members understand their roles in achieving organizational goals.

Furthermore, the distribution of responsibilities is clearly delineated, allowing leaders to hold team members accountable while also promoting ownership of tasks. This clarity supports performance feedback mechanisms that are constructive and timely, reinforcing desired behaviors and outcomes. Trust-building strategies are evident, as leaders consistently model accountability, cultivating an environment where employees feel empowered to voice concerns and contribute ideas.

The organizational culture at Business A reflects these practices, demonstrating a commitment to transparency and inclusivity. Such an environment not only enhances communication effectiveness but also aligns individual contributions with the broader objectives of the business. Ultimately, these leadership accountability practices serve as a foundation for sustained success, driving both individual and organizational performance in a collaborative setting.

Performance Metrics Utilization

While establishing a strong accountability framework is essential, the utilization of performance metrics serves as a pivotal tool for measuring and enhancing organizational effectiveness in Business A. This organization effectively integrates performance tracking with strategic objectives, ensuring metric alignment across departments. By implementing data-driven decisions, Business A empowers its leadership to engage stakeholders meaningfully, fostering a culture of transparency and accountability.

Goal setting is systematically linked to performance metrics, allowing for precise evaluation during performance reviews. The organization utilizes feedback loops to facilitate continuous improvement, ensuring that insights from performance evaluations inform future strategies. This iterative process enhances not only individual accountability but also collective performance, aligning efforts with overarching business goals.

Additionally, Business A emphasizes stakeholder engagement through regular communication of performance metrics, creating a shared understanding of progress and areas needing attention. This proactive approach reinforces accountability frameworks, facilitating a culture where employees are motivated to meet and exceed expectations. Ultimately, the strategic application of performance metrics in Business A serves as a cornerstone for effective management accountability, driving both operational excellence and long-term success.

Case Study 5: Enterprise B

In examining Enterprise B, it becomes evident that leadership commitment to accountability is pivotal in driving organizational success. The establishment of transparent performance metrics further enhances this commitment, fostering a culture of responsibility and trust. This case study highlights how these elements collectively contribute to effective management accountability.

Leadership Commitment to Accountability

A strong commitment to accountability from leadership is crucial for fostering a culture of transparency and responsibility within an organization. In Enterprise B, leadership styles emphasize ethical leadership, which serves as a cornerstone for establishing robust accountability frameworks. This alignment between leadership values and organizational culture promotes trust building and encourages employee engagement.

The company's decision-making processes are strategically designed to incorporate performance feedback mechanisms, ensuring that employees are held accountable for their actions while also being supported in their development. Through effective goal setting, leaders articulate clear expectations, which further reinforces accountability at all levels.

Moreover, communication strategies play a pivotal role in this commitment, as they facilitate open dialogues about responsibilities and outcomes. By prioritizing transparent communication, leadership can effectively bridge gaps between individual contributions and organizational objectives, thereby enhancing cultural alignment.

Ultimately, the commitment to accountability demonstrated by Enterprise B's leadership fosters an environment where employees feel empowered to take ownership of their roles, leading to higher engagement and overall organizational performance. This case study exemplifies how strategic leadership approaches can instill a culture of accountability that drives success.

Transparent Performance Metrics

The effectiveness of accountability measures in Enterprise B is significantly enhanced by the implementation of transparent performance metrics. These metrics serve as critical components of the organization's accountability frameworks, facilitating rigorous performance evaluation and fostering a robust performance culture. By ensuring data transparency, Enterprise B empowers employees to understand how their contributions align with organizational goals, thereby enhancing metric alignment across teams.

Transparent performance metrics also play a pivotal role in driving employee engagement. When employees have access to clear performance indicators, they are more likely to feel a sense of ownership over their work. This engagement is further supported by established feedback loops, which create opportunities for ongoing dialogue about performance and improvement.

Moreover, the commitment to transparency fosters organizational trust. Employees are more inclined to participate and advocate for accountability when they perceive that metrics are fair and reflective of actual performance. This trust enhances collaboration and encourages a culture of continuous improvement. Ultimately, the strategic implementation of transparent performance metrics not only strengthens accountability but also positions Enterprise B as a leader in cultivating an engaged workforce dedicated to achieving shared objectives.

Case Study 6: Corporation C

Corporation C serves as a compelling case study in effective management accountability, showcasing how strategic oversight can drive organizational success. The company has implemented robust corporate governance structures that emphasize transparency and ethical leadership, forming the backbone of its accountability frameworks. This approach not only fosters trust among stakeholders but also enhances performance evaluation processes, ensuring that all levels of management are aligned with the organization's strategic objectives.

A critical aspect of Corporation C's success lies in its comprehensive risk management strategies. By proactively identifying potential risks and integrating them into decision-making processes, the organization mitigates adverse impacts while capitalizing on opportunities. This forward-thinking approach has proven crucial in navigating the complexities of the modern business landscape.

Furthermore, Corporation C prioritizes stakeholder engagement, recognizing that effective communication and collaboration are fundamental for fostering a culture of accountability. Regular feedback mechanisms and open dialogue with stakeholders facilitate alignment between corporate goals and societal expectations, reinforcing the company's commitment to ethical practices.

The alignment of cultural values with organizational objectives has also been a cornerstone of Corporation C's strategic initiatives. By cultivating an environment that encourages integrity and accountability, the company not only boosts employee morale but also enhances overall performance. This cultural alignment ensures that all employees are invested in the success of the organization, leading to improved decision-making and a cohesive approach to achieving corporate goals.

Case Study 7: Startup D

In the dynamic landscape of entrepreneurship, Startup D exemplifies how agile management accountability can be a catalyst for rapid growth and innovation. By leveraging effective management strategies and robust accountability frameworks, the company has successfully navigated the intricacies of startup culture while addressing common growth challenges.

• Focus on employee engagement and accountability
• Streamlined resource allocation for scalability
• Enhanced investor relations through transparent performance reviews

Startup D has cultivated a strong team dynamic, ensuring that every employee understands their role in the larger vision. This clarity fosters a culture where accountability is not merely a top-down directive but a shared responsibility. As the organization expands, it confronts scalability issues that necessitate adaptive management strategies. The implementation of regular performance reviews not only aids in identifying areas for improvement but also reinforces a sense of belonging among team members.

Moreover, the startup's proactive approach to investor relations has strengthened its financial footing. By maintaining open lines of communication and showcasing accountability in its operations, Startup D has attracted significant investment, positioning itself for sustainable growth.

Ultimately, the success of Startup D highlights the importance of integrating accountability frameworks into the fabric of the organization. This not only enhances employee engagement but also ensures optimal resource allocation, setting the stage for future innovations and market leadership. By embracing these principles, Startup D stands as a model for other emerging enterprises aiming to thrive in a competitive environment.

Frequently Asked Questions

What are the key principles of effective management accountability.

Effective management accountability hinges on transparency standards and clearly defined leadership roles. These principles foster trust, enhance decision-making, and ensure that organizational objectives are met through responsible governance and performance evaluation.

How Can Small Businesses Implement Accountability Measures?

Small businesses can implement accountability measures by establishing clear accountability frameworks that align with organizational goals, fostering employee engagement through transparent communication, and regularly assessing performance to enhance responsibility and ownership among team members.

What Are Common Challenges in Establishing Management Accountability?

Establishing management accountability often encounters challenges such as communication barriers, unclear performance expectations, varied leadership styles, insufficient employee engagement, inadequate feedback loops, poor resource allocation, limited training programs, and lack of organizational transparency.

How Does Culture Impact Management Accountability in Organizations?

Culture significantly influences management accountability by shaping organizational values and expectations. Strong leadership influence is crucial in fostering an environment where accountability is prioritized, aligning managerial behavior with the organization's mission and ethical standards.

What Metrics Can Assess the Effectiveness of Accountability Practices?

To assess the effectiveness of accountability practices, organizations should employ performance indicators within comprehensive accountability frameworks. Metrics such as goal achievement rates, compliance levels, and stakeholder satisfaction provide critical insights into accountability performance and overall organizational effectiveness.

UNLOCK YOUR COPY

Relevance of classical management concepts in the contemporary era – a case study of Fayol’s principles

IIMT Journal of Management

ISSN : 2976-7261

Article publication date: 7 May 2024

Issue publication date: 16 July 2024

• Supplementary Material

This hypothetical case study aims to revisit the classical model given by Henri Fayol whereby he put forward a set of 14 principles to guide managers in decision-making across organizations. The case study showcases the dilemma in which the top manager of an automobile company finds himself when some of the very basic principles – on which the whole discipline of management is founded – are ignored. It will also serve as an aid for faculty members in B-Schools to teach students the significance of basic management principles postulated many years back which stand relevant even in contemporary times.

Design/methodology/approach

This case study is based on a hypothetical scenario in the corporate world. Different incidents in a fictitious automobile manufacturing firm are presented and the corresponding principles given by Henri Fayol are inferred.

This case study highlights that decision-making gets complicated if fundamental principles of management are not complied with. The decision taken during each and every situation which has been discussed in this case study is contrary to the correct course of action as propounded by Fayol. Modern-day managers must acknowledge the relevance and importance of these principles for achieving success in business.

Originality/value

This case study underscores that even in this volatile business environment where most of the management practices are technology-driven, we cannot disregard the most elementary rules of management. The managers working at different levels in the organizational hierarchy may be guided to make the right decisions in situations similar to the ones described.

• Organizational effectiveness
• Administrative management
• Classical school of management
• Henri Fayol
• Management principles

Sharma, A.K. , Goyal, A. and Sharma, A. (2024), "Relevance of classical management concepts in the contemporary era – a case study of Fayol’s principles", IIMT Journal of Management , Vol. 1 No. 1, pp. 112-120. https://doi.org/10.1108/IIMTJM-10-2023-0026

Emerald Publishing Limited

Copyright © 2024, Ashish Kumar Sharma, Ankita Goyal and Anjali Sharma

Published in IIMT Journal of Management . Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Henri Fayol who is regarded as “The Father of Modern Management Theory” might be turning in his grave when he realizes that the 14 principles which he propounded way back in 1916 have been relegated to just one of the topics of study in management text-books all across the globe. His idea was to provide a set of ideologies which could guide managers in decision-making across different organizations – big or small – but the current trend of managers taking decisions on the basis of “gut feeling” without giving consideration to his 14 tenets is bound to sadden him. This hypothetical case highlights the story of one such manager. It showcases the dilemma in which a top manager of an automobile company finds himself when some of the very basic principles – on which the whole discipline of management is founded – are ignored.

Mr. Ravi Mehta, General Manager, Maxima Motors, was looking out of the glass window of his plush chamber located on the 13th floor of Anshul Heights – the tallest skyscraper along the posh Marine Drive area of Mumbai and contemplating – What went wrong?

A great start

After graduating with a BTech degree in Mechanical Engineering from the prestigious IIT Delhi, Ravi went on to pursue an MBA degree in Marketing from the United States. He was always fond of cars since his childhood and fancied joining the automobile industry. Getting selected by Maxima Motors was a “dream come true” for Ravi and his happiness knew no bounds when he stepped into the Mumbai office of the company. According to him, the “Sales Executive” designation was good enough for him to showcase his selling skills which he had learnt so well in the MBA classroom.

At Maxima Motors, Ravi had been a workaholic and had spent 5 years in this company putting in time and effort and played an important role in catapulting the firm to great heights (Maxima reported a 15% rise in sales in the very first year of Ravi’s joining and accolades were showered on him for this spectacular achievement). He was awarded “Salesman of the Year” trophy for five straight years. Ravi used to spend a lot of time with his client dealers, even dining out with them and their families apart from engaging in official meetings. He also used to invite all of them to celebrate his birthday. No surprise that he became a household name even in their homes. His peers tried to copy his sales skills but couldn’t succeed. Ravi was the cynosure of all eyes and achieved successive promotions in quick time – from Sales Executive to Senior Sales Executive in two years and then to General Manager (Marketing) after three more years.

Trouble begins

No specialization.

Till now, Ravi had been subordinate to his “bosses” and obeyed their instructions to achieve the sales targets which were conveyed to him during meetings. But ever since he became a Manager, he has found it difficult to make decisions on his own. Ravi was leading a sales team of 20 comprising both male and female personnel. Mr. Shantanu Ghosh – the Senior Sales Executive – was the most experienced of them all who had spent about 10 years at Maxima Motors. During the first team meeting, Ravi laid out his expectations from each member. Every member was asked to contribute to the ad campaign for the soon-to-be-launched X1 Electric SUV Model. The team members were tasked with collecting information about the competitive moves and sales. Further, they were required to even scan the international car market to explore the “best practices” followed the world over by the big players like Tesla, Toyota, Ford and Nissan, to name a few. Most of the team members were very excited about the “new” responsibilities, but Mr. Shantanu had his reservations, and he raised his point, “I believe as most of the Sales Team members are freshers and new to the job, all of them shouldn't be burdened with so many responsibilities at the outset and should be given time to settle down.” Ravi argued that in the present era of cut-throat competition, every employee must be ready to work to his or her fullest potential right from the first day of entry into the organization and should never make excuses for not working.

Reluctance to delegate

Things were going well for the first few months and Ravi was confident about positive financial results. Mr. Shyam Agarwal – a newly joined Sales Executive – was tasked with the responsibility of exploring new client dealers who could promote and sell the new X1 model in South Mumbai. Shyam was really excited about his first assignment and was successful in convincing Mr. Prem Nautyal of Karseva – a new player in the car dealership market – to sell X1. As a follow-up, Shyam completed all the formalities for the agreement and happily called Ravi on the phone to convey details about the deal but was shocked when Ravi asked him to fix a meeting between himself and Mr. Prem to finalize the deal. Shyam was further disappointed to find that this meeting had no role for Shyam and Ravi took all the credit for the deal. After a few days, when Ravi reached his office and opened his mailbox, he found the resignation mail from Shyam.

Breaking rules

The office timing for employees at Maxima Motors was the ubiquitous 9 to 5. And the same was applicable to all employees working in the Marketing Department. But Ms. Shreya Pandit – the Accounts Executive – was not the one to follow the rules. She was regularly irregular in reporting for work. Moreover, she had failed to meet deadlines for most of her assignments on more than one occasion. Once Maxima nearly lost an important client as the monthly transaction report, which the client required urgently to settle some tax issues, was not submitted by Shreya on time. Although a few of Shreya's colleagues did complain about her behavior to Ravi, but he ignored all of them. Later it was found out that Shreya was a distant relative of Ravi. As was expected, some other fresh recruits of the department took “late reporting” as a norm and they too started coming late for work.

Power-accountability mismatch

Aakash Mathur and Sunil Agarwal were the two best performers in Ravi's sales team. Both were consistently achieving 80–90% of their monthly sales targets. One day, while both of them were having lunch at the canteen, Aakash felt all was not well with Sunil and asked, “Are you okay?” Sunil responded with a wry smile, “I am fine.” After continuous prodding by Aakash, Sunil shared one of his recent experiences. He said, “Last month, apart from routine work, Ravi had assigned me the additional task of designing the new print advertisement for Model X1 after the latest addition of airbags for passenger safety in the car. He also asked me to approach external advertising agencies for any help which I may require. I confidently embarked on the assignment. On the very next day, Ravi called me and shared addresses of three ad agencies – Kriti, Vigyapanam and Ad-join. I visited all three (one on each day) and held detailed discussions with their design managers about our ad requirements. After the third day, I was completely convinced that Kriti would be the best for us as it had designed successful ads for our competitors in the past which had also grabbed a lot of eyeballs in the automobile industry. Also, Kriti was offering us the best deal for negotiating with The Times of India Mumbai edition (Rs. 10 lakhs for a full front page ad) on our behalf while Vigyapanam and Ad-join's quotes for the same were Rs. 12 lakhs and Rs. 13 lakhs, respectively. When I apprised Ravi of my meetings, he said, “I think we must hire Ad-join as they are comparatively new in the ad business and might have fresh ideas to launch the new car. Customers are getting bored with similar car ads and desire to see something new which may create excitement and ultimately lead them to buy X1.” Further, Ravi asked me to submit all my travel bills and advised me to travel by bus instead of cab in future. Before I started work on this assignment, I was sanctioned an advance of Rs. 1,000 by the Accounts Department to meet travel expenses and was told that I was free to choose my mode of travel provided the expenses do not cross Rs. 1,000.” After listening to Sunil's story, Aakash sighed and said, “Life is tough.” Both Aakash and Sunil left Maxima after 6 months and are now together once again at Maxima's competitor – Uva Motors.

Too many cooks!!!

The employees at the Marketing Department at Maxima have been facing a dilemma for quite some time now. Mr. Sujoy Mitra had joined Maxima Motors as the Managing Director. Right from the first week, he started calling Marketing Executives for short meetings at his office. Initially, everyone took it as an introductory tete-a-tete but when these meetings became a regular feature, frustration started creeping in. On more than one occasion, Ravi Mehta – the Marketing Manager – had assigned the executives the task of preparing monthly sales reports, but they couldn't work on it as Mr. Mitra sent an urgent notice for a meeting. Work at the Marketing Department was being hampered and the young executives were confused – Who is the Boss???

When all the employees of Maxima were busy putting in their full effort and energy and working day in and day out for a successful launch of the new X1, Mr. Sujoy Mitra set two of Ravi’s sales team members – Kavya Sinha and Priti Singh – on a new project concerned with exploring the location for a new branch office. After initial reluctance, the two ladies had no option but to comply with the official orders. Earlier, Kavya and Priti were very excited to be a part of “Project X1,” but the excitement was shattered once the news broke about their inclusion in the new branch-related project. Ravi was devastated as he had planned to put both Kavya and Priti on the forefront of his negotiation team to handle queries related to X1 and had trained them hard for the same.

Being selfish

The experienced Mr. Shantanu Ghosh was categorically told by Ravi to look into the nitty-gritty of “Project X1” to plug any loopholes whatsoever in the promotional campaign which was to be launched in the next few days. A crucial meeting was scheduled where Mr. Shantanu was to give a presentation on the prospective promotional campaign in order to explain the plan to the top management team. On the morning of the meeting, Ravi received a phone call from Mr. Shantanu who informed him about the arrival of a few guests at home and therefore he couldn't come to the office for the meeting as he had to make arrangements for the guests. Instantly, Ravi lost his temper and asked Shantanu to immediately report to him at the office or else submit his resignation. Within an hour, Mr. Shantanu was at the office in Ravi’s chamber. The two didn’t have a single word about the guests or the resignation. Luckily the clock struck 10 o’clock; it was time for the meeting and the two straightaway barged out of the chamber toward the conference hall where the meeting was scheduled. Mr. Shantanu initiated the presentation and carried on describing all the details about the promotion on different media including digital marketing of Model X1. Ravi could gauge from Shantanu’s presentation that although the detailed plan was being presented by Shantanu, but the spark was missing which obviously was the result of the unpleasant telephonic conversation in the morning. The presentation ended with Shantanu successfully answering all queries from the management team and moving out of the conference hall without saying anything to Ravi who could easily sense the grudge against him in Shantanu’s heart clearly visible on his face while departing.

Unfair treatment

About three months back, Ms. Aastha Jain joined Maxima Motors as a Junior Sales Executive. She was a St. Stephen’s, Delhi pass out and belonged to that present-age ambitious generation whose members possess a lot of enthusiasm and energy to perform and grow in their chosen career. She proved her mettle in the very first month of joining when she was praised for her work in the month-end sales meeting. She was very happy the day the first salary was credited into her account and was planning to go out with her friends for a party after office hours. During the tea break, a conversation broke out between Aastha and Nancy, her colleague, who had also joined Maxima at the same time as Aastha. During this conversation, Aastha came to know about Nancy’s salary which was much higher than hers. Nancy was just a Class XII pass out and that too from Open School whereas Aastha was a graduate. Both had the same work experience and logically, Aastha’s salary should have been higher or at least the same as Nancy’s since both were working as a Junior Sales Executive. After the tea break, Aastha was sad as she had expected fair treatment from a renowned firm like Maxima Motors. In the next few days, her morale and productivity had taken a hit which turned her into one of the low performers at Maxima. Aastha could easily sense the Damocles' sword hanging over her head.

It’s all messed up!!!

A few months back, Mr. Gaurav Tripathi along with Ms. Tanya Sairam and Mr. Vamsi Krishna received offer letters from Maxima for the position of Sales Executive in the Marketing Department. All three readily accepted the offer and reported for work after a week. After the induction programme and a detailed meeting with Ravi, they were ready to begin their “Maxima journey” which each one of them felt would be a big stepping stone in their professional career. Soon they got the first “feel” of the office culture at Maxima Motors. Of late, the work culture at the Marketing Department of Maxima Motors was anything but disciplinary. Late reporting for work had become the norm. When the “freshers” who had just joined Maxima observed their seniors not being punctual, they perceived it as “normal” and jumped on the bandwagon. There was no biometric attendance system installed anywhere at the workplace and everybody seemed to take undue advantage of the lacuna. A “casual” approach was prevalent all over and the seriousness which is associated with the launch of a new product (Model X1 in this case) was nowhere to be seen. Files were piling up at each office desk; meetings were getting postponed without assigning any reason due to which crucial decisions were getting delayed.

A short ride…

Over the years, Maxima Motors has earned goodwill for itself in the automobile industry. This has been made possible by offering “value-for-money” cars. In its ambit, Maxima has a vehicle for every customer – the very basic hatchback model S1 for the middle-class to the high-end luxury SUV A1 for the high-income group. This positive image has helped Maxima Motors to attract some of the most talented candidates for all positions whenever the company has advertised for vacancies. Keeping this in mind, Darshan Tiwari and Prerna Tyagi joined Maxima Motors to catapult their career. Post-joining, they were invited to the informal get-together party at the nearby five-star hotel. During interaction with their experienced colleagues, they found out that the average tenure for most of the employees at Maxima was only one-and-a-half years. The causes for the same ranged from dissatisfaction with the chaotic work culture, centralized decision-making, inequitable remuneration, etc. Both Darshan and Prerna were saddened as one-and-a-half years were too short a duration to establish oneself in the corporate world, and they felt that they too might face similar situations in future. Consequently, they soon got themselves registered on different job portals.

The missing plank

Two months ago, Ramesh – the automobile engineer working on Model X1 – reported to Kishanlal Dahiya, the Production Manager, about a slight roaring sound in the engine of the car which needed to be fixed urgently. A few missing nuts and bolts could easily and quickly rectify the fault. Mr. Dahiya went to Mr. Kapil Kohli, General Manager (Production), but he was on leave for the next one week. After a week, when Mr. Kapil was apprised of the problem, he sent a mail to Mr. Purab Ratan, the Purchase Manager, to buy nuts and bolts of a specific size. This time, Purab was on leave for the next fifteen days, and the whole purchase process came to a halt. The production timeline of Model X1 was hampered as a result. There was no chance that the delivery of the new car could meet the expected deadlines after the launch. This further affected the credibility of the Marketing Department as the “Marketing and Sales Guys” are the face of any organization for the customers, and if the sales staff is not able to fulfill their expectations, it may result in a loss of sales in the near future.

Dousing the fire

Ritu Bajaj was the youngest member of the Marketing Department at Maxima Motors. Her enthusiasm and uncanny knack for making friends easily made her the “go-to” person whenever any employee was under stress. They felt relieved after sharing their problems with her. During her short stay at Maxima Motors, Ritu could easily gauge the high level of stress prevailing in the office. She decided to play her part in resolving the issue and approached Ravi with the proposal to organize regular picnics and group visits to movie shows. Ravi outrightly rejected the idea on the ground that this would distract the employees and asked Ritu to concentrate on her official assignments instead. Ritu was not amused and categorically shared her views on social media about the “dull” life at Maxima Motors where employees are treated like robots. The next day she was fired and Maxima lost a gem of an employee.

Working in silos

There are a large number of group projects within any big organization, and sometimes, employees from different departments need to collectively put in their efforts day in and day out. Coordination and cooperation are the two basic “mantras” for the success of any group project. Ravi’s problem was that since he had been internally promoted at Maxima Motors, he was not taken seriously by his much older peers who were at the helm in the other departments, namely, Production, HR and Finance. After his promotion to the current position of General Manager (Marketing), whenever Ravi tried to share his views during organizational meetings, he was rebuffed by them. For Ravi, the word “Teamwork” is utopian.

Maxima Motors had invested a lot of energy, effort and money into building goodwill in the automobile market, especially in the premium car segment. This was a big achievement for a company which was established just a decade back. With a market share of more than 50% in each of the last three years, Maxima was seriously planning to launch a range of premium electric cars in the coming years and the X1 SUV Model was destined to be the first in this series. This was in line with the Indian government’s aim to end the sale of petrol and diesel cars by 2030 and Maxima’s thrust toward a sustainable future. During one of the Board meetings, the top management made its intentions about the new “sustainable” project absolutely clear to all the internal stakeholders. This was the reason Ravi had taken up the launch of X1 as his topmost priority. He was ready to take up this challenge and wanted to demonstrate his prowess as a frontrunner in automobile marketing. However, the events in the last few months were detrimental to the seamless launch of the new car.

Prof. Satyajit Malik had been the favorite Management Teacher for Ravi during his MBA days. It was Prof. Malik, with his insightful teaching style, that the world of management captivated Ravi’s attention. He was one of the top scorers and was fully confident of securing a successful career in the contemporary business world.

After a few months at Maxima, Ravi started experiencing real-life challenges in business. Now, he was sure that the practical business scenario was very different from the concepts and theories learnt in the classroom. Until he was working as a subordinate in the organization that did not cause any major complications; but the unsavory incidents after his promotion as a manager tested his managerial skills. He started making decisions on his own sidelining the management basics that he had studied earlier. This proved to be a turning point in his professional journey. After climbing up the organizational hierarchy to the position of General Manager (Marketing), the series of events which unfolded at Maxima Motors was a testimony of how wrong decisions could be detrimental to the harmonious work culture in the organization. Ravi wondered whether adhering to the 14 principles of management which were proposed by Henri Fayol many years back and taught to him by Prof. Satyajit Malik during his MBA could have helped him in making the right decisions at Maxima Motors.

Future uncertain

Gazing out of the glass window of his office for the last 15 min went on like a flashback in Ravi’s mind. The recent times have been very challenging for Ravi. All this mental stress has taken a toll on his health. He called a mental health specialist on the phone and fixed an appointment for the evening. Before meeting the doctor, he made up his mind to call and seek guidance from Prof. Malik – his Management Teacher. Also, he was carrying his resignation letter with him in his briefcase which took him three hours to write with a heavy heart.

Amongst the many schools of management thought, the classical school is the oldest, and it emphasizes enhancing the workers’ efficiency along with organizational growth. The management principles, based on detailed observations, emerged from the studies undertaken by various management thinkers who played a prominent role in the development of this school. Administrative management theory is one of the most significant outcomes of the research studies done under the classical school, which focuses on the major roles and functions of managers in organizations ( Bhat and Kumar, 2016 ).

An organization is described as a group of people working together to achieve a common goal, and the probability of success for an organization reduces considerably when these personnel do not follow some of the very basic principles on which the whole field of management is founded. The set of these management principles serves as an effective two-pronged technique which aims at enhancing cooperation and coordination amongst members of the most important resources of an organization, i.e. human resources, and at the same time, it also aids in the economic growth of the organization. Years ago, Henri Fayol, a French industrialist and management practitioner, documented the necessity to acknowledge some rules for administrative learning ( Koontz and Weihrich, 2017 ). He identified certain guidelines which can be adopted by all types of organizations, big or small, private or public, for the smooth functioning of managerial activities ( Robbins and Coulter, 2017 ). These guidelines are flexible in nature and can be modified as per the specific requirements of an organization. Managers have incorporated these guidelines known as “Fayol's 14 Principles of Management” as a strategic tool in both routine and strategic decision-making under various challenging situations. Both managers and management gurus have time and again underscored the significance of these principles ( Tripathi and Reddy, 2017 ). The importance of these 14 principles of management cannot be ignored even in case of the present-era startup businesses. Due to the diverse culture and style, some of the principles have to be adapted as per the requirements of these new-age startup organizations ( Godwin et al ., 2017 ). Fayol's principles aid managers in seamlessly executing their work and giving direction towards achieving organizational goals in a systematic manner. Fayol also believed that such principles need to be followed on a regular basis in the organization ( Stoner et al. , 2007 ). Complications arise in any successful organization when basic principles of management are not adhered to. The same happened in the case of Maxima Motors where certain wrong decisions and not following Fayol's principles derailed the progress of the organization and led to several unsavory incidents. These principles can be deduced from the various incidents described in the case, and important lessons can be learnt for effective administration.

Without principles one is in darkness and chaos; interest, experience and proportion are still very handicapped, even with the best principles. The principle is the lighthouse fixing the bearings but it can only serve those who already know the way into port. – ( Fayol, 1949 , p. 42)

The characters

Sujoy Mitra – Managing D irector

Ravi Mehta – General M anager (Marketing)

Kapil Kohli – General M anager (Production)

Kishanlal Dahiya – Production M anager

Prem Nautyal – Car D ealer (Karseva)

Shantanu Ghosh – Senior S ales E xecutive

Shyam Agarwal – Sales E xecutive

Aakash Mathur – Sales Executive

Sunil Agarwal – Sales Executive

Kavya Sinha – Sales Executive

Priti Singh – Sales Executive

Gaurav Tripathi – Sales Executive

Tanya Sairam – Sales Executive

Vamsi Krishna – Sales Executive

Tanmay Anand – Sales Executive

Darshan Tiwari – Sales Executive

Prerna Tyagi – Sales Executive

Aastha Jain – Junior S ales E xecutive

Ritu Bajaj – Junior S ales E xecutive

Shreya Pandit – Accounts Executive

Nancy Trivedi – Junior Accounts E xecutive

Prof. Satyajit Malik – Ravi ' s M anagement T eacher at B-School

The supplementary material for this article can be found online.

Bhat , A. and Kumar , A. ( 2016 ), Principles of Management , 2nd ed. , Oxford University Press , New Delhi .

Fayol , H. ( 1949 ), General and Industrial Management , 1st ed. , (C. Storrs, Trans.) , Sir Isaac Pitman & Sons , London .

Godwin , A. , Handsome , O.E. , Ayomide , W.A. , Enobong , A.E. and Johnson , F.O. ( 2017 ), “ Application of the Henri Fayol principles of management in startup organizations ”, IOSR Journal of Business and Management , Vol.  19 No.  10 , pp.  78 - 85 , available at: https://www.iosrjournals.org/iosr-jbm/papers/Vol19-issue10/Version-4/K1910047885.pdf ( accessed 15 January 2024 )

Koontz , H. and Weihrich , H. ( 2017 ), Essentials of Management: an International, Innovation, and Leadership Perspective , 10th ed. , McGraw Hill Education (India) Pvt. , Chennai .

Robbins , S.P. and Coulter , M. ( 2017 ), Management , 13th ed. , Pearson India Education Pvt. , Noida .

Stoner , J.A. , Freeman , R.E. and Gilbert , D.R. Jr ( 2007 ), Management , 6th ed. , Pearson Education , New Delhi .

Tripathi , P.C. and Reddy , P.N. ( 2017 ), Principles of Management , 6th ed. , McGraw Hill Education (India) Pvt. , Chennai .

Acknowledgements

Erratum: It has come to the attention of the publisher that the article “Sharma, A.K., Goyal, A. and Sharma, A. (2024), “Relevance of classical management concepts in the contemporary era – a case study of Fayol’s principles”, IIMT Journal of Management , Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IIMTJM-10-2023-0026 , was missing a supplementary file. This error was introduced during the production process. The supplementary file has now been added. The publisher sincerely apologises for this error and for any confusion caused.

Corresponding author

Supplementary materials.

IIMTJM-10-2023-0026_suppl1.docx (48 KB)

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Case Studies- Principles of Management

CASE STUDIES- PRINCIPLES OF MANAGEMENT

This case study is hand picked original case study. It is created keeping in mind CBSE 10+2 CBSE Students. Many students get benifit out of it. You will find these in form of simple questions and answers.

Q1: Anshul a commerce student visited a hospital . He observed that in hospital to treat different type of disease there is a separate department and each department is lead by dean of that respective department who is expert in that particular field having knowledge , training and experience of that particular area only. He could relate it to one of the principle of management. Identify and explain.

Q2; Harshita , a sales manager has to negotiate a deal with a buyer. She finds that if she can offer credit period of 60 days she is likely to clinch the deal which is supposed to fetch the company a net margin of Rs. !,00,000 . Now the company gives power to the manager to offer a credit period of 40 days due to which she could not get the deal. Identify the principle of management violated above.

Q3; In Ashu limited Management and labour union entered into an agreement whereby workers have agreed to put in extra hours without any additional payment to revive the company out of loss. In return the management has promised to increase wages of the workers when this mission is accomplished But afterwards management refused to fulfill its commitment. Identify the principle of management violated by the management of Ashu Ltd. .

Q4; Akshit a sales person is asked to clinch a deal with a buyer and is allowed to give 10% discount by marketing manager. But finance department tells him not to offer more than 5% discount. Due to which Akshit is confused. Which principle of management is violated?  Identify.

Q5; Stuti Industries is engaged in manufacturing Cars and Motorbikes. It has two separate departments for both the products. Each department has its own Incharge , plans and execution resources which leads to focused efforts of all the employees. Identify the principle of management followed by Stuti Industries.

Q6;  Udhay is working as Plant superintendent in Tanish Industries. But he is given a salary of a clerk as his compensation.  Which act as a demotivator for udhay and he does not feel like working whole heartedly for the company. Identify the principle of management violated in Tanish Limited.

Q7; Amita and Shamita are working as  typist in Ashiana Ltd. . But Amita is paid salary of Rs. 4,000 pm and Shamita is apid salary of Rs. 5,000 pm. After knowing this Amita got discouraged and started thinking of shifting the job. Which principle of Fayol is violated in above case?

Q8; Rajeev joined Anamika Ltd. As training manager . After joining he observed that employees are lacking the feeling of belongingness with the organization. To encourage the feeling of beloningingness and self motivation he decided to apply one of the principle of fayol and started employee suggestion system whereby employees are encouraged to give suggestion and whereby suggestions which result in substantial cost/ time reductions will be rewarded. Identify the principle.

Q9; In Tanya Ltd, there is discord among all the employees due which objectives are not realized and there  is no coordination among employees . there is no mutual trust and belongingness among employees . So managers have to apply penalities on employees which further increases the inefficiency. What do you is wrong with above organization . Give your answer in respect to Principle of Fayol.

Q10; In Ayesha Ltd. Losses are pouring in. So for their rescue Vishal CEO of the company decided to  hire  Aryan the cost control expert at higher salary . Maximum of the directors opposed the decision of hiring  Aryan in company’s crisis period when company is already going into losses. After taking charge of the Job Aryan advised the company to eliminate superfluous varities , sizes and dimensions . because these are the reason for undue high cost Expenditures . Which concept of principle of management is applied above.

Q11; In Model Motor Company For designing a car the assembly line production is entailed which decided the sequence od operations, place for men, machines and raw material etc. This exercise helped in minimizing the cost of production and maximize the quality of products. Identify the concept in relation to scientific management in the above case which is the reason for minimizing cost.

Q12;  On the basis of several observations it is determined that one worker can make one cardboard in 2o minutes. So in one hour he will make 3 boxes. Assuming that a worker has to put in 8 hours of work in a shift and deducting    one hour for rest and lunch, it is determined that in 7 hours a worker makes 21 boxes @ 3 boxes per hour. Now this is the standard  task workers have to do . Wages are decided accordingly. The base of above technique is one of the technique of F.W. Taylor. Identify that technique.

Q13; It si determined that standard output per worker per day is 10 units and those who made standard or mopre than standard will get Rs. 50 per unit and those below will get Rs. 40 per unit. Now an efficient worker making 11 units will get Rs. 11x 50= Rs. 550 per day whereas a worker who produces 9 units will get 9×40= Rs. 360 per day. This example is concerned with one of the technique of scientific management whose objective  is to encourage the inefficient workers to work harder. KIdentify the gtechnique.

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