Question

Principles of management emphasise logical and rational decision-

making rather than on the basis of bias and prejudice. The given
statement highlights that the knowledge of principles of management
leads to______.
Solution
(a) Scientific decisions
(b)Providing managers with useful insight into the reality
(c) Meeting changing environmental requirements
(d) All of the above
Answer (b) Scientific decisions
Explanation: Knowledge of the principles of management empowers
administrators to gain proficiency with the cause and effect
relationship between factors working in the association. They can
foster an objective and scientific approach towards critical thinking
and decision-making.
1. Which of the following is true about Principles of Management?

a. The principles of management are in a continuous process of evolution.

b. The principles of management have evolved.

c. The principles of management have not evolved.

d. None of the above

2. Which of the following best describes the Principles of Management?

a. They help managers take decisions while performing managerial functions.

b. They denote a cause-and-effect relationship.

c. They are guidelines for further action in management functions.

d. All the above

3. The main reason why Principles of Management do not provide readymade

solutions for all management problems is that ________.

a. They act as general guidelines for business-related issues.

b. The real business issues are complex.

c. The real business issues are very dynamic.

d. All the above

4. One good thing about the Principles of Management is that it helps

understand the relationship between human and material resources in
achieving organisational goals. Which feature of the Principles of Management
is described in the above statement?

a. Behavioural

b. Cause and effect relationships

c. Use of resources and effective administration

d. None of the above

5. The Principles of Management emphasise logical decision making and

avoiding bias or prejudice at all costs. The above statement points out that
knowledge of these principles helps in _______.

a. Scientific decision making

b. Providing managers with a valuable information

c. Meet the changing requirements of a business environment.

d. All the above

6. Which Principle of Scientific Management says that employees must be
rewarded when they make suggestions that lead to cost savings within the
company?

a. Cooperation not individualism

b. Harmony not discord

c. Science, not a rule of thumb

d. All the above

7. Which of the following is true about managers within an organisation?

a. Management skills apply to managers at top levels in an organisation.

b. Management skills apply to managers at all levels in an organisation.

c. Management skills apply to managers at middle levels in an organisation.

d. Management skills apply to managers at executive levels in an organisation.

8. Which of the following is the main reason for the existence of an

organisation?

a. The vision of an organisation

b. The mission of an organisation

c. The objectives of an organisation

d. The Chief Executive Officer (CEO) of an organization

9. Which of the following is a crucial aspect of strategic planning?

a. It is a broad concept that consists of business and corporate strategy.

b. It is an overall concept that consists of strategy formulation and implementation.

c. It is a broad concept that consists of environmental and internal analysis.

d. It is a general concept that consists of business inputs and outputs.

10. Within a workplace, a worker describes how his co-workers leave business
documents on the reception desk and personal belongings within the
conference room when their manager is absent. How would this affect the
functioning of a company?

a. The company would not be able to complete its tasks efficiently.

b. The company would not be able to complete its tasks effectively.

c. Both a and b are correct

d. Both a and b are in

11.Which of the following describes the principle of harmony, not discord?

a.The management should properly investigate any task

b.The management should engage in scientific enquiry

c.The management should focus on observation and analysis

d.The management should share the gains or profits of a company with their workers
1.Which of the following is true about Principles of Management? a.The principles of management are
in a continuous process of evolution b.The principles of management have evolved c.The principles of
management have not evolved d.None of the above Answer: a 2.Which of the following best describes
the Principles of Management? a.They help managers take decisions while performing managerial
functions b.They denote a cause and effect relationship c.They are guidelines for further action in
management functions d.All of the above Answer: d 3.The main reason why Principles of Management
do not provide readymade solutions for all management problems is that ________. a.They act as
general guidelines for business-related issues b.The real business issues are pretty complex c.The real
business issues are very dynamic d.All of the above Answer: d 4.One good thing about the Principles of
Management is that it helps understand the relationship between human and material resources in
achieving organisational goals. Which feature of the Principles of Management is described in the above
statement? a.Behavioural b.Cause and effect relationships c.Use of resources and effective
administration d.None of the above Answer: a

5.The Principles of Management emphasise logical decision making and avoiding bias or prejudice at all
costs. The above statement points out that knowledge of these principles help in _______. a.Scientific
decision making b.Providing managers with a valuable information c.Meet the changing requirements of
a business environment d.All of the above Answer: a 6.Which Principle of Scientific Management says
that employees must be rewarded when they make suggestions that lead to cost savings within the
company?

a.Cooperation not individualism b.Harmony not discord c.Science, not a rule of thumb d.All of the above
Answer: a 7.Which of the following is true about managers within an organisation? a.Management skills
apply to managers at top levels in an organisation b.Management skills apply to managers at all levels in
an organisation c.Management skills apply to managers at middle levels in an organisation
d.Management skills apply to managers at executive levels in an organisation Answer: b

8.Which of the following is the main reason for the existence of an organisation? a.The vision of an
organisation b.The mission of an organisation c.The objectives of an organisation d.The Chief Executive
Officer (CEO) of an organisation Answer: b 9.Which of the following is a crucial aspect of strategic
planning? a.It is a broad concept that consists of business and corporate strategy b.It is an overall
concept that consists of strategy formulation and implementation c.It is a broad concept that consists of
environmental and internal analysis d.It is a general concept that consists of business inputs and outputs
Answer: b 10.Within a workplace, a worker describes how his coworkers leave business documents on
the reception desk and personal belongings within the conference room when their manager is absent.
How would this affect the functioning of a company? a.The company would not be able to complete its
tasks efficiently b.The company would not be able to complete its tasks effectively c.Both a and b are
correct d.Both a and b are incorrect Answer: c 11.Which of the following describes the principle of
harmony, not discord? a.The management should properly investigate any task b.The management
should engage in scientific enquiry c.The management should focus on observation and analysis d.The
management should share the gains or profits of a company with their workers
Previous Year Short & Long Questions With Answers - Principles of Management | Business
Studies (BST) Class 12 – Commerce

Short Answer Type Questions Q. 1. Explain how principles of Management:(i) Help in optimum
utilisation of resources and effective administration;(ii) Help the managers in meeting changing
environment requirements.Ans. (i) Principles of management help in optimum utilisation of
resources by equipping managers to foresee the cause and effect relationships thereby
reducing the wastages associated with trial and error approach.Principles of management help
in effective administration by limiting the boundaries of managerial discretion so that decisions
are free from personal prejudices.(ii) Principles of management help the managers in meeting
requirements of changing environment because they can be modified according to the changes
taking place in the environment.Q. 2. Explain how Principles of Management:(i) Provide useful
insights into reality, and(ii) Help in thoughtful decision making.Ans. (i) Principles of management
provide useful insights into reality by enabling the managers to learn from the past mistakes and
conserve time by solving recurring problems quickly.(ii) Principles of management help in
thoughtful decision making because the decisions based on principles are not biased and based
on the objective assessment of the situation.Q. 3. What is meant by the statement, “Principles of
Management are Flexible”?Ans. Management Principles are not as rigid as those of natural
science viz. Physics and Chemistry. Principles of Management are not applied blindly in an
identical manner to all situations. Management principles are not absolute and should be utilised
in the light of changing and special conditions. Management principles do not provide any hard
and fast rules and they have to be modified as per changes in the business environment.Q. 4.
Explain any four points regarding significance of principles of management.ORExplain any four
points of importance of Principles of Management.ORState any four points which highlight the
importance of Principles of Management.Ans. Importance of Principles of Management:(i)
Providing managers with useful insights into reality: The principles of management provide the
managers with useful insights into the real world situations. Adherence to these principles will
add to their knowledge, ability and understanding of managerial situations and circumstances. It
will also enable managers to learn from the past mistakes and conserve time by solving
recurring problems quickly. As such management principles increase managerial efficiency.(ii)
Optimum utilisation of resources and effective administration: Both human and material
resources, 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.(iii) Scientific decisions: Decisions must be
based on facts, thoughtful and justifiable in terms of the intended purposes. They must be
timely, realistic and subjected to measurement and evaluation. Management principles help in
thoughtful decision-making. They emphasize logic rather than blind faith. Management
decisions are taken on the basis of principles which 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.
Management principles are flexible to adapt to a dynamic business environment.(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.(vi)
Providing basis for Management training,education and research: Principles of management are
at the core of management theory. As such these are used as a basis for management training,
education and research. These principles provide basic groundwork for the development of
management as a discipline. These principles enable refinement of management practices as
well by facilitating the development of new management techniques which have developed due
to further research on these principles.Q. 5. Explain “Unity of Direction” and “Order” as
principles of general management.Ans. (i) Order: Fayol advocated that people and materials
must be in suitable places at appropriate time for maximum efficiency i.e. there should be a
place for everything and everyone in an organisation and that things or person should be found
at the allotted place. This will lead to increase in productivity and efficiency. For example, Raw
material should be available at the place prescribed for it.(ii) Unity of direction: According to their
principle,each unit of the organisation should work towards a common objective. Each unit
should have single head and plan. It helps in eliminating the overlapping of work.Q. 6. Explain
briefly ‘Espirit de Corps’ and ‘Order’ as general principles of management.Ans. Esprit de
Corps(i) It states that management should promote a team spirit of unity and harmony among
employees to realise organisational objectives. The manager should replace ‘I’ with ‘We’ to
foster team spirit.(ii) This will give rise to a spirit of mutual trust and belongingness among team
members. It will also minimise the need for using penalties. Order(i) It states that there should
be a place for everything and everyone in an organisation and that thing or person should be
found at the allotted place.(ii) People and materials must be in suitable places at appropriate
time for maximum efficiency.Q. 7. Explain ‘unity of command’ and ‘equity’ as principles of
general management.Ans. Unity of command: According to this principle, one subordinate
should receive orders from one superior only at a given point of time. The principle is necessary
to avoid confusion and conflict.Equity: The principle of equity implies of sense of fairness and
justice to all workers working in an organisation. Observance of equity alone would make
workers loyal and devoted to the organisation. Equity does not mean equal salary to a peon and
supervisor. But equity means application of same disciplinary rules, leave rules, etc. irrespective
of their grade, positions and gender, language, religion or nationality, etc.Q. 8. Name and
explain the principle of management according to which a manager should replace ‘I’ with ‘We’
in all his conversation with workers. Ans. Esprit de Corps given by Henry Fayol: According to
this principle, management should promote team spirit of unity and harmony among its
employees. This will give rise to a spirit of mutual unity and harmony among the employees.
This will give rise to a spirit of mutual trust and will create a sense of belongingness towards the
organisation.Q. 9. Prashant Toys Pvt. Ltd. manufactures and sells toys of different types. Two
founders of the company, Prashant and Nishant, jointly look after the overall management of the
company. Since there is no clear-cut demarcation of authority between the two, often
contradictory orders are passed to production and marketing people. Sometimes, this situation
becomes embarrassing to production and marketing manager.(i) Which principles of
Management are being violated in this case?(ii) State two steps that the company should take to
overcome the problem.Ans. (i) Principle of Authority and Responsibility and principle of Unity of
Command are being violated here.(ii) Following steps can be taken to overcome the problem:(a)
The promoters should define their areas of authority clearly based on functions performed by
them.(b) The promoters should issue orders in their specific areas only to avoid confusions.Q.
10. Explain the following principles of “Scientific Management”.(i) Science, not a rule of thumb(ii)
Co-operation, not individualism(iii) Harmony, not discord.ORExplain ‘Harmony, not discord’ as a
principle of scientific management.ORExplain ‘Science, not a rule of thumb’ as a principle of
management.ORExplain ‘Co-operation not individualism’ as a principle of scientific
management.Ans. (i) Science, not a rule of thumb: Taylor believed that there was only one best
method to maximise efficiency. This method can be developed through scientific study and
analysis of each element of a job and should substitute ‘Rule of Thumb‘. This standard method
then should be followed throughout the organisation.(ii) Co-operation, not individualism: There
should be complete co-operation between the labour and management instead of individualism;
competition should be replaced by co-operation. Both should realise that they need each other.
(iii) Harmony, not discord: According to Taylor, there should not be any conflict between the
managers and the workers. He emphasised that there should be complete harmony between
the managers and the workers. Both should realise that each one is important to achieve the
objectives of the organisation.Q. 11. Enumerate any two techniques of Scientific
Management.Ans. Techniques of Scientific Management:(i) Functional Foremanship: The
technique is to improve the performance of supervisor in the factory set up. Taylor suggested
functional foremanship through eight persons. Functional Foremanship is an extension of
principle of division of work and specialization at the shop floor.(ii) Motion Study: It refers to the
study of movements like lifting, putting objects, sitting & changing positions etc. Which are
undertaken while doing a typical job. Unnecessary movements are eliminated so that it takes
less time to complete the job efficiently.(iii) Standardisation and Simplification of Work: It is the
process of setting standards for every business activity. These standards are benchmarks which
must be adhered during production process. The standards should be set for every business
activity i.e., standardisation of process, raw material, time, product etc. Simplification aims at
eliminating superfluous varieties, sizes and dimension.(iv) Method Study: The objective of
method study is to find one best way of doing the work(v) Time Study: It 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(vi) Fatigue Study: This study seeks to determine the amount
and frequency of rest intervals in completion of a task(vii) Differential Piece Wage System:
According to this, there are different rate of wage payment, higher rate for the efficient members
who performed above standard and lower rate for those who perform below standards.Q. 12.
Explain the technique of scientific management that is the extension of ‘Principle of Division of
Work and Specialisation’.ORExplain the technique of scientific management which separates
the planning and execution work.Ans. The technique of Functional Foremanship.(i) Functional
Foremanship is a technique which aims to improve the quality of supervision at the shop floor by
putting a worker under eight specialist foremen.(ii) In this technique, planning is separated from
execution.Under Planning Department:(a) Route Clerk: This foreman lays down the sequence of
operations, in which the work is to be carried out by each class of machines and men.(b)
Instruction Card Clerk: This foreman has to lay down the instructions and guidelines which
workers need to follow in order to do their job.(c) Time and Cost Clerk: This foreman records the
time taken by a worker in completing a job. He also keeps a record of cost of the work done.(d)
Disciplinarian: He is responsible for discipline and systematic performance of the job. Under
Production Department :(a) Gang Boss: He is responsible to keep machines, materials, tools,
etc. ready for operation by the concerned workers.(b) Speed Boss: He has to ensure that the
work is accomplished at the right time and according to the specified speed.(c) Repair Boss: He
is responsible for keeping up of machines and equipment in an efficient and working order.(d)
Inspector: He is responsible for the quality of work and brings a spirit of quality consciousness in
the minds of the workers.Q. 13. ‘Chennai Leather Ltd.’ is the manufacturer of leather products. It
is producing on large scale and its organisational structure is functional. In the production
department various foremen have been employed. Each foreman has been made responsible
for production planning, implementation and control. This has led to a situation of confusion ad
uncertainty. Suggest a technique of scientific management to Chennai Leather Ltd. which may
help it to effectively organise planning and its execution.Ans. Technique of scientific
management which may help Chennai Leather Ltd. to effectively organise planning and its
execution is Functional Foremanship.(i) Functional foremanship is a technique which aims to
improve the quality of supervision at shop floor.(ii) Taylor identified a list of qualities of a good
foreman or a supervisor. Since all the qualities could not be found in a single person, Taylor
proposed eight specialists.(iii) In this technique, planning is separated from execution. Taylor
suggested four foremen for planning and four foremen for execution.(iv) It is an extension of the
principle of division of work and specialisation.(v) The four foremen for planning were route
clerk,instruction card clerk, time and cost clerk and disciplinarian. The four foremen for planning
would draft instructions for the workers, specify the route of production, prepare time a and cost
sheet and ensure discipline respectively.(vi) The four foremen for execution were gang
boss,speed boss, repair boss and inspector. The four foremen for execution were responsible
for timely and accurate completion of the job, keeping machines and tools ready for operation
by the workers, ensuring proper working conditions of machines and tools and checking the
quality of work.

Long Answer Type Questions Q. 1. Why principles of management are needed? Explain by
giving any five reasons [Outside Delhi Comptt. Set I 2010]OR"Principles of Management, now a
days have become an integral part for all types of successful business organisations". In light of
this statement, present your comments regarding the reasons why management principles are
needed?Ans. Following are the main five reasons which highlight the importance of
management principles:(i) Improves understanding: The knowledge of principles improves the
understanding of the managers about the ways and means of managing an organisation.(ii)
Direction for training of managers: The principles are helpful in identifying the areas of
management in which existing and future managers should be trained.(iii) Optimum
utilization: Management principles aim at optimum utilization of human and physical resources
for the attainment of organisational goals.(iv) Meeting changing environment
requirement: Management principles help the managers to meet changing requirements of the
environment.(v) Fulfilling social responsibility and research: Management principles are used as
a basis for management training education and research.Q. 2. Explain any four characteristics
of 'Principles of Management.' [Delhi Set I, II, III 2016]ORDescribe the nature of Principles of
Management with the help of any four points. [Outside Delhi Set I, II, III
2016]Ans. Characteristics of principles of management:(i) Universal applicability.(ii) General
guidelines.(iii) Formed by practice and experimentation.(iv) Flexible.(v) Mainly behavioural.(vi)
Cause and effect relationship.(vii) Contingent.Detailed Answer: Characteristics/Nature of
Principles of Management:(i) Universal applicability: The principles of management are intended
to apply to all types of organisations, business as well as non-business, small as well as large,
public sector as well as private sector, manufacturing as well as the services sectors. However,
the extent of their applicability would vary with the nature of the organisation, business activity,
scale of operations, etc.(ii) General guidelines: The principles are guidelines to action but do not
provide ready made and to the point solutions to all managerial problems. This is so because
real business situations are very complex and dynamic and are a result of many factors.
However, the importance of principles cannot be underestimated because even a small
guideline helps to solve a given problem.(iii) Formed by practice and experimentation: The
principles of management are formed by experience and collective wisdom of managers as well
as experimentation. For example, It is a matter of common experience that discipline is
indispensable for accomplishing any purpose. This principle is mentioned in the management
theory. On the other hand, in order to remedy the problem of fatigue of workers in the factory,
an experiment may be conducted to see the effect of improvement of physical conditions to
reduce the stress.(iv) 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 when the
situation so demands. They give the manager enough discretion to do so.(v) Mainly
behavioural: Management principles aim at influencing behaviour of human beings. Therefore,
principles of management are mainly behavioural in nature. It is not that these principles do not
pertain to things and phenomenon at all; it is just a matter of emphasis. Moreover, principles
enable a better understanding of the relationship between human and material resources in
accomplishing organisational purposes.(vi) Cause and effect relationships: The principles of
management are intended to establish relationship between cause and effect so that they can
be used in similar situations in a large number of cases. As such, they tell us if a particular
principle was applied in a particular situation, what would be its likely effect. The principles of
management are less than perfect since they mainly apply to human behaviour. In real life,
situations are not identical. Therefore, accurate cause and effect relationships may be difficult to
establish.(vii) Contingent: The application of principles of management is contingent or
dependent upon the prevailing situation at a particular point of time. The application of principles
has to be changed as per requirements.Q. 3. Explain Fayol’s principles of ‘equity’ and ‘order’
with examples. [Delhi Set II, Outside Delhi Set I 2011]Ans. Equity: Fayol advocated that there
should be no discrimination against anyone on account of sex, religion, language, caste, belief,
nationality, etc. and emphasised kindness and justice in the behaviour of the managers towards
the workers to ensure loyalty and devotion. For example, Now-a-days, in multinational
corporations, equal opportunities are available to everyone.Order: Fayol advocated that people
and resources must be in suitable places at appropriate time for maximum efficiency i.e., there
should be a place for everything and everyone in an organisation and that thing or person
should be found in the allotted place. This will lead to increased productivity and efficiency. For
example, Raw material should be available at the place prescribed for it.Q. 4. Explain the
following principles of Fayol with the help of one example of each:(i) Initiative(ii) Espirit de
Corps. [Delhi Comptt. Set III 2011]Ans. (i) Initiative: Fayol wanted that subordinates should be
given an opportunity to take some initiatives in making and executing the plans. Employees get
satisfaction when they are allowed to take initiatives. Initiatives on their part can be a great
source of organisational strength. For example, Before setting up the plan, the manager must
welcome the suggestions and ideas of its employees to allow their maximum participation. But
once the plan is made, every employee must follow and implement it.(ii) Espirit de
Corps: According to this principle, the management should take responsible steps to develop a
sense of belongingness and feeling of team spirit among employees. In order to achieve the
best possible results, individual and group efforts need to be effectively integrated and
coordinated. Management must infuse the team spirit in the workers. It develops atmosphere of
mutual trust and understanding among employees and minimises the need of penalties for
default. A manager should replace ‘I’ with ‘We’ in his conversations to promote spirit of team
work. For example, If a department has to achieve a target, then according to this principle, it is
the duty of each member of the department to ensure that target is achieved on time, even if
any member is unable to fulfill his/her individual target. It means that employees should not
concentrate only on achieving their individual targets but on achieving group targets.Q. 5.
Explain the following principles of management given by Fayol:(i) Unity of Command(ii) Order. U
[SQP 2015]Ans. (i) Unity of Command: There should be one and only one boss for every
individual employee. If an employee gets orders from two supervisors at the same time, the
principle is violated. Consequences of violation : Authority is undermined, discipline is in
jeopardy, order gets disturbed and stability is threatened.(ii) Order: People and materials must
be in suitable places at appropriate time for maximum efficiency. A place for everything
(everyone) and everything (everyone) in its (her/his) place i.e., orderliness. Benefits of the
principle : No hindrance in the activities of business, increased productivity and
efficiency.Detailed Answer: Unity of Command: According to the principle of unity of command,
an individual employee should receive orders from only one superior at a time and that
employee should be answerable only to that superior. If there are many superiors giving orders
to the same employee, he will not be able to decide as to which order is to be given priority. He
thus finds himself in a confused situation. Such a situation adversely affects the efficiency of the
subordinates. On the other hand, when there are many superiors, every superior would like his
orders to be given priority. This ego problem creates a possibility of clash. Consequently, their
own efficiency is likely to be affected.Order: According to the principle of order, a right person
should be placed at the right job and a right thing should be placed at the right place. According
to Fayol, every enterprise should have two different orders-Material Order for Physical
Resources and Social Order for Human Resources. Keeping the physical resources in order
means that ‘a proper place for everything and everything in its right place’. Similarly, keeping the
human resources in order means ‘a place for everyone and everyone in his appointed place’.
Maintaining these two orders properly will ensure that everybody knows his workplace, what he
is to do and from where he would get his required material. Consequently, all the available
resources in the organisation will be utilised properly.

FAQs on Previous Year Short & Long Questions With Answers - Principles of Management -
Business Studies (BST) Class 12 - Commerce

1. What are the principles of management?

Ans. The principles of management are fundamental guidelines that govern the functions and
activities of managers in an organization. They include principles such as division of work, unity
of command, scalar chain, and unity of direction, among others.

2. How do the principles of management help in improving organizational efficiency?

Ans. The principles of management provide a framework for managers to effectively plan,
organize, lead, and control their teams and resources. By adhering to these principles,
managers can enhance coordination, communication, productivity, and overall efficiency within
the organization.

3. Can you explain the principle of unity of command?

Ans. The principle of unity of command states that each employee should receive orders from
only one superior. This ensures clarity in communication, avoids confusion, and helps maintain
discipline within the organization. It also helps in establishing accountability and a clear chain of
command.

4. How does the principle of division of work contribute to organizational effectiveness?

Ans. The principle of division of work suggests that tasks should be divided and assigned to
different individuals based on their specialization and expertise. This leads to specialization,
increased efficiency, and improved productivity as employees can focus on their assigned tasks
and develop expertise in their respective areas.

5. What is the significance of the principle of unity of direction?

Ans. The principle of unity of direction emphasizes the importance of having a single plan and a
unified direction for all activities that are related to achieving a common goal. It ensures that all
efforts are aligned and coordinated towards a shared objective, minimizing conflicts and
maximizing organizational effectiveness.
Principles of Management Class 12
Business Studies MCQs Pdf
1. Which of the following statements is true with reference to principles of
management?
(a) The principles of management have evolved.
(b) The principles of management are yet to be evolved.
(c) The principles of management are in the continuous process of evolution.
(d) None of the above.

Answer/Explanation

Answer: c
Explanation:
(c) Principles of Management are said to be evolutionary in nature as these
principles have evolved over a long period of time with continuous practice
and experimentation.

2. By profession, FW Taylor was a

(a) Mechanical engineer
(b) Mining engineer
(c) Psychologist
(d) Human resource officer

Answer

Answer: a

3. The principles of pure science is considered to be _________ in nature.

(a) Flexible
(b) Rigid
(c) Creative
(d) None of the above
Answer/Explanation

Answer: c
Explanation:
(c) Because they are applied in an absolute or in a static manner.

4. Which of the following statements best defines the techniques of

management?
(a) It is a set of guidelines to take decisions and actions.
(b) It is a procedure which involves a series of steps to be taken.
(c) They are general rules for behaviour of individuals.
(d) None of the above.

Answer

Answer: b

5. The principles of management have been developed on the basis of

(a) Observation
(b) Experimentation
(c) Personal experiences of the manager
(d) All of the above

Answer

Answer: d

6. Which of the following statements is/are true with reference to principles

of management?
(a) The principles are guidelines to action.
(b) The principles denote a cause and effect relationship.
(c) Principles help the manager to take decisions while performing various
management functions.
(d) All of the above.

Answer

Answer: d
7. The principles of management are intended to be applied to all types and
sizes of organisations. This statement reflects that the principles of
management are
(a) General guidelines
(b) Flexible
(c) Universally applicable
(d) Mainly behavioural

Answer

Answer: c

8. The principles of management do not provide readymade straight jacket

solutions to all management problems because
(a) The real business situations are complex.
(b) The real business situations are dynamic.
(c) The principles act as general guidelines.
(d) All of the above.

Answer

Answer: d

9. Principles of management can be modified by the manager when the

situation demands. This statement implies that the principles of
management are
(a) Rigid
(b) Contingent
(c) Flexible
(d) Universally applicable

Answer

Answer: c

10. The principles of management enhance the understanding of relationship

between human and material resources for the achievement of
organisational goals. Identify the feature of the principles of management
being described in the given statement.
(a) Cause and effect relationships
(b) Optimum utilisation of resources and effective administration
(c) Formed by practice and experimentation
(d) Mainly behavioural

Answer

Answer: d

11. The application of the principles of management has to be changed as

per the requirements of the prevailing situation at a particular point of time.
Which feature of the principles of management is being described in the
given statement?
(a) Contingent
(b) Mainly behavioural
(c) Cause and effect relationship
(d) General guidelines

Answer

Answer: a

12. Principles of management emphasize on logical and rational decision

making rather than on the basis of bias and prejudice. The given statement
highlights that the knowledge of principles of management leads to
(a) Providing managers with useful insight into reality
(b) Scientific decisions
(c) Meeting changing environmental requirements
(d) All of the above

Answer/Explanation

Answer: b
Explanation:
(b) Principles of management are not based on rule of thumb/hit-and-trial
method, but on a scientific approach.

13. ‘Rule of thumb’ refers to

(a) Use of personal judgement in handling management issues
(b) Adopting a hit-and-trial approach to resolve management problems
(c) Both of the above
(d) None of the above

Answer

Answer: c

14. According to Taylor, “even a small production activity like loading figures
of iron into boxes can be scientifically planned and managed. This can result
in tremendous savings of human energy as well as wastage of time and
materials.” Identify the related principle of scientific management.
(a) Harmony, not discord
(b) Science, not rule of thumb
(c) Development of each and every person to get his/her greatest efficiency
and prosperity
(d) None of the above

Answer/Explanation

Answer: b
Explanation:
(b) Taylor believes that there was only one method to maximize efficiency
which can be developed to study and analysis.

15. According to this principle of scientific management, “Scientific

management has for its foundation the firm conviction that true interest of
the management and workers are one and the same; the prosperity for the
employer cannot exist for a long time unless it is accompanied by prosperity
for the employees and vice versa.”
(a) Science, not rule of thumb
(b) Co-operation, not individualism
(c) Harmony, not discord
(d) All of the above

Answer

Answer: c

16. According to this principle of scientific management, the employees

should be rewarded for their suggestions which results in substantial
reduction in the cost.
(a) Science, not rule of thumb
(b) Co-operation, not individualism
(c) Harmony, not discord
(d) All of the above

Answer

Answer: b

17. According to Taylor, “each specialist is to be assigned work according to

his/her qualities, the employees who possess technical mastery should be
involved in planning work whereas those with energy and good health may
be assigned execution work.” Name the related principle of scientific
management.
(a) Functional foremanship
(b) Science, not rule of thumb
(c) Development of each and every person to his or her greatest efficiency
and prosperity
(d) None of the above

Answer

Answer: c

18. Considering the fact that it is difficult to find one single person with all
the needed qualities, Taylor suggested appointment of a specialist through
this technique of scientific management. Identify the technique.
(a) Standardisation and simplification of work
(b) Method study
(c) Functional foremanship
(d) Motion study

Answer/Explanation

Answer: c
Explanation:
(c) Through the technique of functional foremanship, Taylor suggested
appointment eight specialists to monitor various aspects of a job.
19. The concept of Work Study techniques includes
(a) Time study
(b) Motion study
(c) Fatigue study
(d) All of the above

Answer/Explanation

Answer: d
Explanation:
(d) The concept of work study includes time study, motion study, fatigue
study and method study.

20. The objective of this technique of scientific management is to reduce a

given line or a product to fixed type sizes and characteristics. Name the
technique.
(a) Method study
(b) Differential piece wage system
(c) Standardisation and simplification of work
(d) Functional foremanship

Answer/Explanation

Answer: c
Explanation:
(c) Through the technique of simplification, Taylor suggested elimination of
unnecessary diversity of products.

21. This technique of scientific management helps in development of the

concept of assembly line which is widely used in automobile companies
these days as well. Identify the technique.
(a) Motion study
(b) Standardisation and simplification of work
(c) Method study
(d) lime study

Answer/Explanation

Answer: c
Explanation:
(c) The concept of assembly line is used extensively in automobile industries
like Toyota, Ford etc. these days as well.
22. Which of the following is an objective of time study?
(a) To determine the number of workers to be employed
(b) To formulate suitable incentive schemes
(c) To calculate the labour costs
(d) All of the above

Answer

Answer: d

23. This technique of scientific management aims to determine the amount

and frequency of rest intervals that should be provided to the employees
during working hours.
(a) Time study
(b) Method study
(c) Motion study
(d) None of the above

Answer/Explanation

Answer: d
Explanation:
(d) The correct answer is fatigue study.

24. The technique of differential piece rate system was developed by Taylor
in order to
(a) Discriminate between efficient and inefficient workers
(b) Reward the efficient worker
(c) Motivate the inefficient workers to perform better
(d) All of the above

Answer/Explanation

Answer: d
Explanation:
(d) Through the technique of differential piece rate wage system, Taylor
advocated . that efficient workers should be paid at a higher rate as
compared to inefficient workers.
25. The application of this principle of management leads to higher
production and better work for the same effort. Identify the related principle
of general management.
(a) Discipline
(b) Equity
(c) Division of work
(d) Order

Answer/Explanation

Answer: c
Explanation:
(c) The application of principle of division of work enables an employee to
gain proficiency in work by doing it repetitively over a period of time.

26. According to this principle of general management, “an organisation

should safeguard against abuse of managerial power, but at the same time a
manager should have the necessary authority to carry out his responsibility.”
Name the principle of management being described in the given statement.
(a) Discipline
(b) Authority and responsibility
(c) Unity of command
(d) Unity of direction

Answer/Explanation

Answer: b
Explanation:
(b) Through the principle of authority and responsibility, Taylor advocated
that there should always be a balance between the authority granted and
the • responsibility entrusted to an employee.

27. Name the principle of management suggested by Henri Fayol, which

advocates that, “there should be good superiors at all levels, clear and fair
agreement and judicious application of penalties.”
(a) Authority and responsibility
(b) Esprit De Corps
(c) Order
(d) None of the above

Answer/Explanation
Answer: d
Explanation:
(d) The correct answer is Discipline.

28. According to Henri Fayol, if this principle of general management is

violated, “authority is undermined, discipline is in jeopardy, order disturbed
and stability threatened.” Identify the principle.
(a) Authority and responsibility
(b) Discipline
(c) Unity of command
(d) Equity

Answer/Explanation

Answer: b
Explanation:
(b) According to Fayol, there should be one and only one boss for every
individual employee and dual subordination should be avoided.

29. Through this principle of management, Henri Fayol guides the managers
to exhibit exemplary behaviour and advises that they should not fall into
temptation of misusing their powers for personal benefit at the cost of
general interest of the organisation. Which principle of management is being
described in the above statement?
(a) Remuneration of employees
(b) Centralisation and decentralisation
(c) Subordination of individual interest to general interest
(d) Equity

Answer/Explanation

Answer: c
Explanation:
(c) Through this principle, Fayol advocates that the interest of the
organisation should supersede individual interest of an employee under all
kinds of situations.

30. Which principle of general management advocates that, “Employee

turnover should be minimised to maintain organisational efficiency.”?
(a) Stability of personnel
(b) Remuneration of employees
(c) Equity
(d) Esprit De Corps

Answer/Explanation

Answer: a
Explanation:
(a) According to Fayol, due care should be taken while carrying out the
recruitment and selection process and the new recruits should be placed at a
particular position for a sufficient tenure.
MCQs on Principles of Management

Which of the following is true about Principles of Management?

The principles of management are in a continuous process of evolution

The principles of management have evolved

The principles of management have not evolved

None of the above

Answer: a

Which of the following best describes the Principles of Management?

They help managers take decisions while performing managerial functions

They denote a cause and effect relationship

They are guidelines for further action in management functions

All of the above

Answer: d

The main reason why Principles of Management do not provide readymade

solutions for all management problems is that ________.

They act as general guidelines for business-related issues

The real business issues are pretty complex

The real business issues are very dynamic

All of the above

Answer: d

One good thing about the Principles of Management is that it helps

understand the relationship between human and material resources in
achieving organisational goals.

Which feature of the Principles of Management is described in the above

statement?

Behavioural Cause and effect relationships

Use of resources and effective administration

None of the above

Answer: a

The Principles of Management emphasise logical decision making and

avoiding bias or prejudice at all costs. The above statement points out that
knowledge of these principles help in _______. Scientific decision making

Providing managers with a valuable information

Meet the changing requirements of a business environment

All of the above

Answer: a
Which Principle of Scientific Management says that employees must be
rewarded when they make suggestions that lead to cost savings within the
company?

Cooperation not individualism

Harmony not discord

Science, not a rule of thumb

All of the above

Answer: a

Which of the following is true about managers within an organisation?

Management skills apply to managers at top levels in an organisation

Management skills apply to managers at all levels in an organisation

Management skills apply to managers at middle levels in an organisation

Management skills apply to managers at executive levels in an organisation

Answer: b

Which of the following is the main reason for the existence of an

organisation?

The vision of an organisation

The mission of an organisation

The objectives of an organisation

The Chief Executive Officer (CEO) of an organisation

Answer: b

Which of the following is a crucial aspect of strategic planning?

It is a broad concept that consists of business and corporate strategy

It is an overall concept that consists of strategy formulation and

implementation

It is a broad concept that consists of environmental and internal analysis

It is a general concept that consists of business inputs and outputs

Answer: b

Within a workplace, a worker describes how his coworkers leave business

documents on the reception desk and personal belongings within the
conference room when their manager is absent. How would this affect the
functioning of a company?

The company would not be able to complete its tasks efficiently

The company would not be able to complete its tasks effectively

Both a and b are correct

Both a and b are incorrect

Answer: c
Which of the following describes the principle of harmony, not discord?

The management should properly investigate any task

The management should engage in scientific enquiry

The management should focus on observation and analysis

The management should share the gains or profits of a company with their
workers

Answer: d

Which of the following describes the main objective behind functional

foremanship?

To separate the top-level management of a company from its Chief

Executive Officer (CEO)

To separate the planning functions from the executive functions

To provide zero free time to workers in a company

To not divide or delegate the work within an organisation

Answer: b

Which of the following is the main motive behind carrying out a fatigue
study?

It helps to calculate the standard output for employees within a task

It helps to calculate the expected time taken for employees to complete their
tasks