Consider the following statements about the significance of principles of management in optimum utilisation of resources and effective administration:
(A) Optimum use means that resources give maximum benefit with minimum time.
(B) Principles help managers foresee the cause and effect of their decisions, so trial-and-error wastage can be overcome.
(C) Effective administration needs impersonalisation of managerial conduct, so that power is used with due discretion.
(D) Principles of management limit the boundary of managerial discretion, so that decisions are free from delays.
(E) In deciding departmental budgets, managerial discretion is bounded by the principle of contribution to organisational objectives.
How many of the above statements are correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
(A) Optimum use means that resources give maximum benefit with minimum time. — Incorrect. Optimum use is about the cost of using resources: they should give maximum benefit with minimum cost.
(B) Principles help managers foresee the cause and effect of their decisions, so trial-and-error wastage can be overcome. — Correct. Principles let managers foresee the cause and effect of their decisions. So the wastage of a trial-and-error approach can be avoided.
(C) Effective administration needs impersonalisation of managerial conduct, so that power is used with due discretion. — Correct. Effective administration needs managers to act impersonally, without personal likes and dislikes. Then managerial power is used with due discretion.
(D) Principles of management limit the boundary of managerial discretion, so that decisions are free from delays. — Incorrect. Principles limit the boundary of managerial discretion so that decisions are free from personal prejudices and biases. The purpose is fairness in decisions; speed is not the point here.
(E) In deciding departmental budgets, managerial discretion is bounded by the principle of contribution to organisational objectives. — Correct. When annual budgets for departments are decided, personal preference does not decide the amount. Each department’s contribution to organisational objectives sets the limit.
NCERT (2026-27 Edition): “(ii) Optimum utilisation of resources and effective administration: Resources both human and material available with the company are limited. They have to be put to optimum use. By optimum use we mean that the resources should be put to use in such a manner that they should give maximum benefit with minimum cost. Principles equip the managers to foresee the cause and effect relationships of their decisions and actions. As such the wastages associated with a trial-and-error approach can be overcome. Effective administration necessitates impersonalisation of managerial conduct so that managerial power is used with due discretion. Principles of management limit the boundary of managerial discretion so that their decisions may be free from personal prejudices and biases. For example, in deciding the annual budgets for different departments, rather than personal preferences, managerial discretion is bounded by the principle of contribution to organisational objectives.” |