Important Short Questions and Answers: Principles of Management

1. Define Management.

According to KOONTZ & WEIHRICH, “Management is the process of designing and maintaining of an environment in which individuals working together in groups efficiently accomplish selected aims”. “Management is the art of getting things through and with people in formally organized groups”.

Ex: Human Resource Management, Financial Management.

2. Is Management - an art or science?

Managing as practice is an art; the organized knowledge underlying the practice is a science. Managing has the following features that make it an art.

• Creative

• Individual approach

• Application and dedication

• Initiative and

• Intelligence.

3. What are the essential skills of Managers?

The major skills required or expected out of managers are:-

ü Technical skills – Pertaining to knowledge and proficiency in activities involving methods and procedures;

ü Human skills – Ability to work effectively with other persons and to build up cooperative group relations to accomplish organizational objectives;

ü Conceptual skills – Ability to recognize significant elements in a situation; and to understand the relationship among those elements; and

ü Design skills – Ability to solve problems in ways that will benefit the enterprise.

4. Define Scientific Management.

Scientific management involves specific method of determination of facts through observation. The concept of scientific management was introduced by Frederick Winslow Taylor in the USA in the beginning of 20th century. It was further carried on by Frank and

Lillian Gilbreth, Henry Gantt, etc. It was concerned essentially with improving the operational efficiency at the shop floor level. “Scientific Management is concerned with

knowing exactly what you want men to do and then see in that they do it best and cheapest way”.

5. List the principles of Scientific Management.

Scientific management was introduced by F.W Taylor who is known as the Father of Scientific Management. He adopted scientific methods to increase the productivity and greater efficiency in production.

The principles of Scientific Management are:-

Separation of planning and working

Functional foremanship

Job analyzers

Time study

Motion study

Fatigue study

Standardization

Scientific selection of training

Financial incentives and

Economy and mental revolution

6. List the contributions of Fayol towards Management.

Henry Fayol is a French industrialist whose contributions are termed as operational

management or administrative management. He followed ‘The Classical Approach’ to the

evolution of management thought. His contributions are given as follows:-

ü Grouping of activities of an industrial organization into six groups, namely- Technical, commercial, financial, security, accounting and managerial;

ü Identified six types of qualities of a manager are- Physical, mental, moral, educational, technical and experience;

ü Fourteen principles of Management namely- Division of Work, Authority and responsibility and so on; and

ü Five elements/functions of management- Planning, organizing, commanding, coordinating and controlling.

7. Functions of management

ü Planning

ü Organizing

ü Staffing

ü Leading or Direction or Coordination

ü Controlling

8. Management level and functions.

ü Top-level management

ü Middle level management

ü Lower level management

Top level management functions

1. To formulate goals and policies

2. To formulate budgets

3. To appoint top executives

Middle level management functions.

1. To train motives &develop supervisory level

2. To monitor and control the operations performance

Low level management

1. To train &develop workers

2. To assign job

3. To give orders and instructions

4. To report the information about the workers

9. What are the roles played by a Manager?

Interpersonal roles

ü Figurehead role

ü The leader role

ü The liaison role

Informational roles

ü  The recipient role

ü  The disseminator role

ü  The spokesperson role

10 Define ‘Sole proprietorship’

A Business unit that is owned and controlled by a single individual is known as sole trading or sole proprietorship concern. He uses his own savings for running the business. The sole trader makes all purchases and sells on his own and maintains all the accounts. He alone enjoys all the profits and bears all the losses.

Ex: A Fancy store.

11. What do you mean by a ‘Partnership firm’?

A partnership is an association of two or more persons to carry on business and to share its profit and losses. The relation of a partnership arises from contract. The maximum number of partners is limited to 10 in the case of banking business and 20 in the case of other business.

Ex: Chand & Co.

12. What do you understand by the term ‘Joint Stock Company’?

“By a Company we mean an association of many persons who contribute money or money’s worth to a common stock and employs it in some trade or business and also shares the profit and loss as the case may be arising there from”.

There are two types of Joint stock companies:-

*  Private Limited company – Ex: M/s Key Media Pvt. Ltd.

*  Public Limited company – Ex: M/s Pearl credits Ltd.

13. Who is (i) an active partner (ii) a sleeping partner?

Active partner: Any partner who is authorized by others to manage the business is known as active partner.

Sleeping partner: Any partner who does not express his intention to participate in the business can be called as a sleeping partner. He will be just an investor who has a right to share profits.

14. What is a Co-operative Enterprise?

A Co-operative enterprise is a voluntary association of persons for mutual benefit and its aims are accomplished through self-help and collective effort. It may be described as a protective device used by the relatively less strong sections of society to safeguard their economic interests in the face of exploitation by producers and sellers working solely for maximizing profits.

Ex: AAVIN Milk Federation Cooperative Society.

15. What is a Private limited company?

A Private limited company is a company which has a minimum paid up capital as may be prescribed. It can be incorporated with just two persons. It can have a maximum of 50 members. It cannot go in for a public issue. It restricts the transfer of its shares. It is particularly suitable for industrial ventures which can get many concessions in respect of income tax.

Ex: M/s Key Media Pvt. Ltd.

16. What is a Public limited company?

A Public limited company should have a minimum of 7 members and the maximum limit is unlimited. It can issue shares to the Public. The financial statement should be sent to all the members and to the Registrar of Companies. The shares of a public limited company

can be transferred by the members to the others without any restriction by the company. Such transfers are made through organized markets called ‘stock markets’ or ‘stock exchanges’.

Ex: M/s Pearl credits Ltd.

17. What is a Public sector Enterprise?

Public enterprise or State enterprise is an undertaking owned and controlled by the local or state or central government. They are financed and managed by the government. They are started with a service motive.

Ex: NLC Ltd.

18. What is a Public Corporation?

A Public corporation is an autonomous body corporate created by a special statute of a state or central government. A public corporation is a separate legal entity created for a specific purpose.

Ex: LIC.