The marketing head of Navya Ltd. wants to spend most of the advertising budget in his home town. Sales data show that other cities would bring the company far more customers. The CEO turns down his plan and spends the budget where the company gains most. Which principle of management does the CEO follow?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Subordination of individual interest to general interest
Option (1) Unity of direction — Incorrect. Unity of direction means each group of activities with the same objective has one head and one plan. Here the issue is not the number of plans. It is a manager's personal wish set against the company's gain.
Option (2) Centralisation and decentralisation — Incorrect. This principle is about how far decision-making authority is kept at the top or spread among more people. The CEO does not change who holds authority. He only turns down a plan that serves one person.
Option (3) Subordination of individual interest to general interest — Correct. Under this principle the interests of the organisation take priority over the interests of any one employee. The marketing head wants the money spent in his home town, which is a personal wish. The CEO spends it where the company gains most, so the general interest wins.
Option (4) Discipline — Incorrect. Discipline is obedience to organisational rules and the employment agreement. The marketing head breaks no rule by proposing a plan, and the CEO punishes no one. So the case is not about discipline.
NCERT (2026-27 Edition): “(vi) Subordination of Individual Interest to 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. …” “(vi) Subordination of Individual Interest to General Interest: … A manager can ensure this by her/his exemplary behaviour. For example, she/he should not fall into temptation of misusing her/his powers for individual/ family benefit at the cost of larger general interest of the workers/ company. This will raise her/his stature in the eyes of the workers and at the same time ensure same behaviour by them.” |