A company makes both scooters and tractors. It sets up two separate divisions, each with its own head, its own plan and its own resources, so that the two product lines do not overlap. Which principle does this follow?

Centralisation and decentralisation

The statement that principles of management are "derived from the experience and collective wisdom of managers and tested through observation" describes which feature of their nature?

Formed by practice and experimentation

Universal applicability to all organisations

Contingent on the prevailing situation

Formed by practice and experimentation

After years of disputes over wages, the management and the union of a steel plant agree to stop arguing over how to divide the profit and instead work together to increase it — a complete change of attitude on both sides. Which principle of Taylor does this illustrate?

Development of each person to greatest efficiency

Principles of Management — Fayol’s Fourteen and Taylor’s Scientific Management

A principle of management is a broad, general guideline for decision-making and behaviour — not a rigid rule like a law of physics, but a statement of cause and effect that experienced managers have found to hold, and which a manager adapts to the situation in front of them. Two pioneers supply nearly all the principles this unit examines. Henri Fayol, a French mining engineer who rose to run a large mining company, looked at management from the top and wrote fourteen principles of general administration. Frederick Winslow Taylor, an American engineer who worked his way up the shop floor of a steel works, looked at it from the bottom and asked how each worker’s job could be done in the one best way — which he called scientific management. CUET tests both through short cases, so learn each principle with the situation it governs.

What Kind of Thing a Principle Is

Universal applicability — meant for all kinds of organisations, business and non-business, small and large.
General guidelines — they guide action but do not give readymade solutions, because real situations are complex.
Formed by practice and experimentation — distilled from the experience and collective wisdom of managers.
Flexible — a manager can modify them to suit the situation.
Mainly behavioural — they aim to influence human behaviour, so they are less exact than the principles of pure science.
Cause-and-effect relationships — they say what is likely to follow if a principle is applied.
Contingent — whether a principle should be applied depends on the prevailing situation.

Their significance is what they let a manager do: gain useful insight into real situations, make optimum use of resources and administer effectively, take scientific rather than impulsive decisions, respond to a changing environment, fulfil social responsibility, and train, educate and research — since a principle is the starting point for teaching management at all.

Taylor: Scientific Management

Taylor’s four principles are each written as "this, not that". Science, not rule of thumb — find the one best way to do each job by investigation instead of trial and error. Harmony, not discord — management and workers should see each other as necessary partners; Taylor called the change of attitude this needs a mental revolution, with both sides concentrating on increasing the surplus rather than fighting over how to divide it. Cooperation, not individualism — an extension of harmony: management should welcome workers’ suggestions and share the gains, and workers should not strike or make unreasonable demands. Development of each and every person to his or her greatest efficiency and prosperity — scientific selection of workers, and training them for the job they are best suited to.

The techniques of scientific management
Technique	What it does
Functional foremanship	Replaces one foreman with eight specialists: under the planning in-charge — instruction card clerk, route clerk, time and cost clerk, disciplinarian; under the production in-charge — speed boss, gang boss, repair boss, inspector. A worker takes orders from all eight, which violates Fayol’s unity of command.
Standardisation and simplification of work	Standardisation sets standards for every activity — process, materials, machines, working conditions. Simplification eliminates unnecessary varieties, sizes and dimensions of a product.
Method study	Finds the one best way of doing the job — from procuring raw material to delivering the product.
Motion study	Studies the movements of a worker or machine to eliminate unnecessary motions.
Time study	Sets the standard time for a well-defined job, which fixes the fair day’s work and the number of workers needed.
Fatigue study	Determines the amount and frequency of rest intervals needed to restore a worker’s energy.
Differential piece wage system	Two piece rates: a higher rate per unit for workers who reach the standard output, a lower rate for those below it.

📖 Working the differential piece wage

Suppose the standard output is 20 units a day, the rate is ₹30 a unit for those who reach it and ₹25 a unit for those who fall short. A worker making 21 units earns 21 × 30 = ₹630; one making 19 units earns 19 × 25 = ₹475. Two units of output separate them, but ₹155 of pay does — that gap is the point, since the scheme is designed to reward the efficient worker sharply and push the inefficient one to train up.

Fayol: Fourteen Principles of General Management

Fayol’s principles, with the situation each one governs
Principle	What it says
Division of work	Divide work into small tasks so each person specialises.
Authority and responsibility	Authority must be matched with an equal responsibility.
Discipline	Obedience to rules and agreements; needs good superiors at all levels, clear and fair agreements, and judicious penalties.
Unity of command	Each employee receives orders from one superior only.
Unity of direction	Each group of activities with the same objective has one head and one plan.
Subordination of individual interest to general interest	The organisation’s interest comes before any individual’s or group’s.
Remuneration of employees	Pay should be fair and give at least a reasonable standard of living.
Centralisation and decentralisation	Strike a balance between concentrating and dispersing decision-making authority.
Scalar chain	The formal line of authority from top to bottom, which communication should follow. A gang plank lets two employees at the same level in different chains communicate directly in an emergency.
Order	A place for everything and everyone, and everything and everyone in its place.
Equity	Kindliness and justice; no discrimination on grounds of caste, gender, religion, nationality.
Stability of tenure of personnel	Once selected and trained, employees should be kept in their posts for a reasonable time; high turnover is wasteful.
Initiative	Employees should be encouraged to develop and carry out their own plans for improvement.
Esprit de corps	Team spirit and unity; a manager should say "we" rather than "I".

⚠️ Command is about a PERSON, direction is about a PLAN

If a case shows one employee getting conflicting orders from two bosses, the principle violated is unity of command. If it shows two departments with the same objective working to two different plans — say, two teams promoting the same product with separate budgets and separate heads — the principle violated is unity of direction. Command prevents dual subordination; direction prevents overlapping and wasteful effort.

⚠️ Order is not discipline

Order is about placement — a worker who cannot find the tool she needs because nothing is kept in a fixed place is the classic violation. Discipline is about obedience to rules and agreements, and Fayol puts the burden on management too: a manager who breaks the agreed bonus terms, or who arrives late while fining workers for lateness, is violating discipline.

Fayol and Taylor Side by Side

The comparison CUET draws on
Basis	Fayol	Taylor
Perspective	Top-level management	Shop floor — supervisors and workers
Unity of command	Staunch supporter	Did not follow it — functional foremanship gives a worker eight bosses
Applicability	Universal	Specialised situations
Basis of formation	Personal experience	Observation and experimentation
Focus	Improving overall administration	Increasing productivity
Personality	Practitioner	Scientist
Expression	General theory of administration	Scientific management

Key takeaways

Principles of management are universal, general guidelines formed by practice, flexible, mainly behavioural, cause-and-effect, and contingent on the situation.
Taylor’s four principles: science not rule of thumb; harmony not discord (the mental revolution); cooperation not individualism; development of every person to greatest efficiency and prosperity.
Functional foremanship has eight specialists — four under planning (instruction card, route, time and cost clerks, disciplinarian) and four under production (speed, gang, repair bosses, inspector) — and violates unity of command.
Unity of command: one employee, one boss. Unity of direction: one objective, one head, one plan. Gang plank is the emergency exception to the scalar chain.
Order is a place for everything and everyone; discipline is obedience to rules and agreements, binding on managers as much as workers.

Practice questions (8)

Attempt each one before opening the answer. Every explanation names the tempting wrong option as well as the right one, because that is where marks are lost.

A sales executive receives instructions from both the regional manager and the product manager, and the two instructions conflict. Which principle of Fayol is being violated?
1. Unity of direction
2. Unity of command
3. Scalar chain
4. Division of work
Show answer
Answer: B — Unity of command
One employee taking orders from two superiors is dual subordination, which unity of command forbids. Unity of direction is the usual wrong pick, but it concerns one plan and one head for a group of activities with a common objective, not the number of bosses one person has. The scalar chain is the line of authority for communication, and division of work is about specialisation; neither is what the conflict shows.
A company makes both scooters and tractors. It sets up two separate divisions, each with its own head, its own plan and its own resources, so that the two product lines do not overlap. Which principle does this follow?
1. Unity of command
2. Centralisation and decentralisation
3. Order
4. Unity of direction
Show answer
Answer: D — Unity of direction
One head and one plan for each group of activities sharing an objective is exactly unity of direction, and its purpose is to prevent overlapping effort. Unity of command is about each employee having a single boss, which the case does not mention. The divisions do decentralise some decisions, but the case stresses one head and one plan per product line, which is the defining feature of unity of direction. Order concerns the placement of people and materials.
A machine breaks down in the production department and the supervisor there contacts the supervisor of the maintenance department, who is at the same level, directly — instead of routing the request up to the general manager and down again. This direct contact is called:
1. Gang plank
2. Grapevine
3. Esprit de corps
4. Unity of direction
Show answer
Answer: A — Gang plank
Fayol allows a gang plank so that two employees at the same level in different chains can communicate directly when following the full scalar chain would cause delay — an emergency like a breakdown is the standard case. Grapevine is informal, unofficial communication, whereas this is a sanctioned official shortcut, which is the distinction to hold on to. Esprit de corps is team spirit, and unity of direction is about one plan per objective.
Under Taylor’s functional foremanship, which of these specialists works under the PRODUCTION in-charge rather than the planning in-charge?
1. Route clerk
2. Instruction card clerk
3. Speed boss
4. Disciplinarian
Show answer
Answer: C — Speed boss
The production in-charge has the speed boss, gang boss, repair boss and inspector — the people who act on the shop floor. The route clerk, instruction card clerk and disciplinarian, together with the time and cost clerk, sit under the planning in-charge. The disciplinarian is the one most often misplaced, because enforcing rules sounds like a shop-floor job, but Taylor put it on the planning side.
Under a differential piece wage system the standard output is 10 units a day. Workers reaching the standard are paid ₹50 per unit and those below it ₹40 per unit. Worker P produces 11 units and worker Q produces 9 units. By how much do their daily wages differ?
1. ₹190
2. ₹100
3. ₹90
4. ₹110
Show answer
Answer: A — ₹190
P reaches the standard, so earns 11 × 50 = ₹550; Q falls short, so earns 9 × 40 = ₹360; the difference is ₹190. ₹100 is what you get by paying both workers ₹50 a unit — it misses that the rate itself drops below the standard. ₹90 and ₹110 each compare one worker’s output at the two rates (9 × 50 against 9 × 40, and 11 × 50 against 11 × 40), which answers a different question. The size of the gap for a two-unit difference is the whole point of Taylor’s scheme.
The statement that principles of management are "derived from the experience and collective wisdom of managers and tested through observation" describes which feature of their nature?
1. Universal applicability to all organisations
2. Mainly behavioural in nature
3. Contingent on the prevailing situation
4. Formed by practice and experimentation
Show answer
Answer: D — Formed by practice and experimentation
Where the principles come from — managers’ experience, tested by observation — is the feature called "formed by practice and experimentation". Universal applicability is about where they can be used, behavioural is about their aim of influencing people, and contingent is about their application depending on the situation; each is a real feature, but none describes the source.
After years of disputes over wages, the management and the union of a steel plant agree to stop arguing over how to divide the profit and instead work together to increase it — a complete change of attitude on both sides. Which principle of Taylor does this illustrate?
1. Science, not rule of thumb
2. Harmony, not discord
3. Development of each person to greatest efficiency
4. Standardisation of work
Show answer
Answer: B — Harmony, not discord
A complete change of attitude so that both sides try to enlarge the surplus rather than fight over it is Taylor’s "mental revolution", and it is the heart of harmony, not discord. Cooperation, not individualism, extends this idea but is not offered here. Science, not rule of thumb, is about the method of work, development of each person is about selection and training, and standardisation is a technique rather than one of the four principles.
A factory manager fines workers for arriving late but often arrives late himself, and last year he did not pay the bonus that had been agreed with the workers. Which principle of Fayol is he chiefly violating?
1. Order
2. Remuneration of employees
3. Discipline
4. Stability of tenure
Show answer
Answer: C — Discipline
Fayol’s discipline is obedience to rules and agreements, and he says it needs good superiors at every level and clear, fair agreements — a manager who breaks the punctuality rule he enforces and dishonours an agreed bonus violates it on both counts. Remuneration is tempting because of the bonus, but that principle is about pay being fair in amount; here the fault is breaking an agreement. Order concerns placement of people and things, and stability of tenure concerns keeping employees in post.