Consider the following statements about the significance of principles of management:
(A) In fulfilling social responsibility, the principle of equity today covers value to the customer and care for the environment besides wages.
(B) In modern times, the principle of division of work has been extended to the entire business, with companies taking up more non-core businesses.
(C) Management decisions taken on the basis of principles are based on the objective assessment of the situation.
(D) Principles of management are at the core of management theory, so they are used as a basis for the recruitment and promotion of managers.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (C) only
(A) In fulfilling social responsibility, the principle of equity today covers value to the customer and care for the environment besides wages. — Correct. The meaning of equity has grown with time. It no longer means fair wages alone; value to the customer, care for the environment and dealings with business associates also come under it. In this way principles help a business meet its social responsibility.
(B) In modern times, the principle of division of work has been extended to the entire business, with companies taking up more non-core businesses. — Incorrect. Division of work and specialisation has indeed been extended to the whole business, but it works the other way: companies specialise in their core competency and divest non-core businesses. Some even hand non-core work, such as advertising, to outside agencies.
(C) Management decisions taken on the basis of principles are based on the objective assessment of the situation. — Correct. Decisions based on principles rest on facts and follow logic rather than blind faith. They are free from bias and are based on the objective assessment of the situation.
(D) Principles of management are at the core of management theory, so they are used as a basis for the recruitment and promotion of managers. — Incorrect. Because they are at the core of management theory, the principles are used as a basis for management training, education and research. Courses such as MBA and BBA teach them, and management aptitude tests rest on them.
NCERT (2026-27 Edition): “(iii) Scientific decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. They must be timely, realistic and subject to measurement and evaluation. Management principles help in thoughtful decision-making. They emphasise logic rather than blind faith. Management decisions taken on the basis of principles are free from bias and prejudice. They are based on the objective assessment of the situation.” “(iv) Meeting changing environment requirements: Although the principles are in the nature of general guidelines but they are modified and as such help managers to meet changing requirements of the environment. You have already studied that management principles are flexible to adapt to dynamic business environment. For example, management principles emphasise division of work and specialisation. In modern times this principle has been extended to the entire business whereby companies are specialising in their core competency and divesting non-core businesses. …” “(v) Fulfilling social responsibility: The increased awareness of the public, forces businesses especially limited companies to fulfill their social responsibilities. Management theory and management principles have also evolved in response to these demands. Moreover, the interpretation of the principles also assumes newer and contemporary meanings with the change in time. So, if one were to talk of ‘equity’ today, it does not apply to wages alone. Value to the customer, care for the environment, dealings with business associates would all come under the purview of this principle. …” |