Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Principles of Management

Question:

From the following principles of management which combination has been given by the 'Father of General Management'.

(A) Cooperation not Individualism

(B) Authority and Responsibility

(C) Subordination of individual interest to general interest

(D) Science not rule of thumb

(E) Discipline

Choose the correct answer from the options given below. 

Options:

(A), (B) and (E) Only

(B), (C) and (D) Only

(A) and (D) Only

(B), (C) and (E) Only

Correct Answer:

(B), (C) and (E) Only

Explanation:

The correct answer is option (4) : (B), (C) and (E) Only

Henri Fayol is the 'Father of General Management'. Henri Fayol gives 14 principles. Among them 3 (B,C,E) are mentioned here.

(B) Authority and Responsibility: According to Fayol, "Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. The two types of authority are 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. Managers require authority commensurate with their responsibility. There should be a balance between authority and responsibility. An organisation should build safeguards against the abuse of managerial power. At the same time, a manager should have necessary authority to carry out his responsibility.

(C) Subordination of individual interest to the general interest: The interests of an organisation should take priority over the interests of any one individual employee according to Fayol. Every worker has some individual interest for working in a company. The company has got its own objectives. For example, the company would want to get maximum output from its employees at a competitive cost (salary). On the other hand, an employee may want to get maximum salary while working the least. In another situation an individual employee may demand some concession, which is not admissible to any other employee like working for less time. In all the situations the interests of the group/company will supersede the interest of any one individual. This is so because larger interests of the workers and stakeholders are more important than the interest of any one person. For example, interests of various stakeholders, i.e., owners, shareholders, creditors, debtors, financers, tax authorities, customers and the society at large cannot be sacrificed for one individual or a small group of individuals who want to exert pressure on the company. A manager can ensure this by her/his exemplary behaviour.

(E) Discipline: Discipline is 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. Suppose management and labour union have 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. Here discipline when applied would mean that the workers and management both honour their commitments without any prejudice towards one another.

A & D are principles of scientific management given by F.W Taylor.

(A) Cooperation, Not Individualism: There should be complete cooperation between the labour and the management instead of individualism. This principle is an extension of principle of ‘Harmony not discord’. Competition should be replaced by cooperation. Both should realise that they need each other. For this, management should not close its ears to any constructive suggestions made by the employees. They should be rewarded for their suggestions which results in substantial reduction in costs. They should be part of management and, if any important decisions are taken, workers should be taken into confidence. At the same time workers should desist from going on strike and making unreasonable demands on the management.

(D) Science not Rule of Thumb: Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. The method so developed should substitute ‘Rule of Thumb’ throughout the organisation. 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. There is no higher recruitment costs.