CBSE Important Questions Class 12 Business Studies Chapter 2 Principles of Management

Principles of management are broad guidelines that help managers make decisions and guide workplace behaviour. Students use these principles to identify managerial errors, improve coordination and explain business case studies.

Business Studies Chapter 2 becomes scoring when students can identify the principle behind a case. CBSE Important Questions Class 12 Business Studies Chapter 2 help students revise “Principles of Management” for the 2026 exam pattern. The NCERT chapter covers the meaning, nature and significance of management principles, Taylor’s Scientific Management and Fayol’s 14 principles. It also includes applied examples such as Toyota, Biocon, Lijjat Papad, Taylor’s experiments and Bhasin Limited.

Key Takeaways

• Management Principles: They are broad and general guidelines for managerial decision-making.
• Taylor’s Focus: Scientific Management improves shop-floor efficiency through work study and standardisation.
• Fayol’s Focus: Fayol’s principles improve overall administration through authority, discipline and coordination.
• CBSE 2026 Focus: Case-based questions often test violated principles and corrective actions.

CBSE Important Questions Class 12 Business Studies Chapter 2 Structure 2026

CBSE Important Questions Class 12 Business Studies Chapter 2: CBSE 2026 Exam Focus

Principles of Management connects theory with practical managerial decisions. CBSE often frames questions around violated principles, employee behaviour and production problems.

The uploaded NCERT chapter places Taylor and Fayol under classical management theory and treats their contributions as complementary.

1. What are principles of management?

Principles of management are broad guidelines for managerial decision-making and behaviour. They help managers choose suitable actions in work situations.

They are not rigid formulas like pure science.

For example, a manager may use merit or seniority while deciding promotion.

2. Why are management principles different from scientific principles?

Management principles are flexible because they deal with human behaviour. Scientific principles usually give more exact results.

Human behaviour changes across situations, organisations and cultures.

Managers apply management principles creatively according to the situation.

3. Why are principles of management important for CBSE 2026?

Principles of management are important because they form the base for application-based questions. Students must identify the principle shown in a case.

They must also explain the impact of following or violating it.

Fayol’s principles and Taylor’s techniques are high-value topics.

4. What is the main difference between principles, techniques and values?

Principles guide decisions, techniques explain procedures and values show desirable behaviour. Principles are broad managerial guidelines.

Techniques give steps to complete work.

Values have moral meaning and guide social behaviour.

5. Why are Toyota’s guiding principles relevant to this chapter?

Toyota’s guiding principles show how businesses use principles to guide conduct and long-term vision. They include legal compliance, respect for culture and quality products.

They also support innovation and social contribution.

NCERT uses Toyota to introduce the role of principles in management.

Class 12 Business Studies Chapter 2 Important Questions with Answers for NCERT Exercise

NCERT exercise questions give the strongest base for school and CBSE 2026 preparation. Students should revise them before moving to extra case studies.

Class 12 Business Studies Chapter 2 important questions with answers must cover very short, short and long-answer formats.

6. What makes principles of management flexible?

Principles of management are flexible because managers can modify them according to situations. They are not rigid rules.

The degree of centralisation or decentralisation changes with business size and need.

A small business may centralise more decisions than a large company.

7. What is the main objective of time study?

The main objective of time study is to determine the standard time for a well-defined job. It helps decide labour requirements.

It also helps frame incentive schemes and labour costs.

Taylor used it as a scientific management technique.

8. Which principle extends “Harmony, Not Discord”?

Cooperation, Not Individualism extends the principle of Harmony, Not Discord. Taylor wanted labour and management to work together.

He opposed unnecessary conflict between workers and management.

Both sides should cooperate for higher output and shared prosperity.

9. State any two causes of fatigue at work.

Two causes of fatigue are long working hours and unsuitable work. Bad working conditions also create fatigue.

Uncordial relations with the boss can reduce performance.

Fatigue study helps decide rest intervals.

10. Which principle is followed when new employees get one year to prove themselves?

Stability of Personnel is followed when employees get time to prove themselves. Fayol supported reasonable tenure for employees.

Frequent turnover increases recruitment and training cost.

Stable employees improve organisational efficiency.

11. Which technique distinguishes efficient and inefficient workers?

Differential Piece Wage System distinguishes efficient and inefficient workers. Taylor used different wage rates for different performance levels.

Efficient workers earn higher wages.

Inefficient workers receive lower wages and feel motivated to improve.

12. How is Unity of Command useful to management?

Unity of Command prevents confusion by ensuring one employee receives orders from one superior. It avoids dual subordination.

It improves discipline and responsibility.

For example, one salesperson should not receive conflicting discount instructions.

13. What is Scientific Management?

Scientific Management means knowing exactly what workers should do and ensuring it happens in the best and cheapest way. Taylor developed this approach.

It replaces rule of thumb with scientific study.

It uses standard methods, trained workers and scientific selection.

14. Which principle is violated if resources have no fixed place?

Order is violated when physical and human resources do not have the right place. Fayol said everything and everyone should have a suitable place.

Violation causes delay, confusion and inefficiency.

Order improves productivity and smooth work.

15. Which principle did Mr Rathore violate by giving orders to his cousin at a higher price?

Mr Rathore violated Subordination of Individual Interest to General Interest. He favoured personal relations over company interest.

The firm lost the benefit of a lower price.

Following this principle protects fairness, cost control and organisational goals.

Principles of Management Class 12 Important Questions for Core Concepts

The core theory of this chapter explains why principles guide managers. It also explains why principles need judgement.

Principles of Management Class 12 important questions usually test nature and significance before Taylor and Fayol.

16. What is the nature of principles of management?

Principles of management are universal, flexible, behavioural and contingent. They act as general guidelines.

They show cause-and-effect relationships in managerial situations.

They develop through practice, experience and experimentation.

17. Why are management principles universally applicable?

Management principles are universally applicable because they apply to different organisations. They work in business and non-business organisations.

They apply to small, large, public and private organisations.

Their extent of application changes by situation.

18. Why are management principles called general guidelines?

Management principles are general guidelines because they do not give ready-made solutions. Business situations remain complex and dynamic.

A manager uses principles with judgement.

For example, conflict between departments needs overall goal focus.

19. How are management principles formed?

Management principles form through practice, experience and experimentation. Managers observe repeated workplace situations.

They test methods and develop workable guidelines.

Taylor’s techniques came from such observation and experimentation.

20. Why are management principles mainly behavioural?

Management principles are mainly behavioural because they influence human behaviour at work. Managers deal with employees, groups and specialists.

These principles help align human effort with material resources.

Discipline and equity directly affect employee behaviour.

21. Why are management principles contingent?

Management principles are contingent because their application depends on the situation. The same principle may need different treatment.

Fair remuneration depends on contribution, capacity and wage rates.

Managers must judge the context before applying a principle.

22. What is the significance of management principles?

Management principles improve managerial efficiency, resource use and decision-making. They also help managers adapt to change.

They support training, research and social responsibility.

NCERT lists these points under the significance of principles.

23. How do principles help in scientific decision-making?

Principles help managers make decisions based on facts and logic. They reduce bias and blind faith.

They support objective assessment of situations.

This improves the quality of business decisions.

24. How do principles help in optimum utilisation of resources?

Principles help managers use human and material resources with minimum waste. They reduce trial-and-error decisions.

They also guide proper authority and responsibility.

Optimum use means maximum benefit at minimum cost.

25. How do principles help in meeting changing environment requirements?

Principles help managers adapt to changing business conditions. Their flexibility allows new interpretations.

Specialisation now extends to outsourcing and core competency decisions.

Businesses use principles in modern forms like BPO and KPO.

Taylor Scientific Management Questions for Class 12 Business Studies

Taylor focused on improving industrial efficiency at the shop-floor level. His ideas replaced guesswork with observation and scientific analysis.

Taylor Scientific Management questions often ask principles, techniques and practical applications.

26. Who was F. W. Taylor?

1. W. Taylor was an American mechanical engineer known as the father of Scientific Management. He studied factory work scientifically.

He improved productivity through time study, motion study and standardisation.

NCERT links Taylor with the classical management theory.

27. What is “Science, Not Rule of Thumb”?

Science, Not Rule of Thumb means managers should replace guesswork with scientific methods. Taylor believed one best method exists for every task.

This method comes from study and analysis.

It improves efficiency, quality and cost control.

28. What is “Harmony, Not Discord”?

Harmony, Not Discord means management and workers should avoid conflict. Both sides depend on each other.

Taylor wanted complete mental revolution in attitudes.

Management should share gains, and workers should cooperate.

29. What is “Cooperation, Not Individualism”?

Cooperation, Not Individualism means labour and management should work together instead of competing. Management should welcome worker suggestions.

Workers should avoid unreasonable demands.

Open communication improves trust and output.

30. What is development of each person to greatest efficiency and prosperity?

This principle means workers should get scientific selection, training and suitable work. Taylor linked efficiency with worker development.

Employees should receive tasks matching their abilities.

Efficient workers produce more and earn more.

31. What is functional foremanship?

Functional foremanship means dividing supervision among eight specialist foremen. Taylor separated planning and execution.

Planning includes instruction card clerk, route clerk, time and cost clerk and disciplinarian.

Production includes speed boss, gang boss, repair boss and inspector.

32. What is standardisation of work?

Standardisation means setting benchmarks for processes, materials, time, products and methods. It creates uniformity.

It improves quality and performance.

It also supports control and comparison.

33. What is simplification of work?

Simplification means eliminating unnecessary varieties, sizes and dimensions. It reduces diversity in products.

It saves labour, machines and tools.

It also reduces inventory and improves turnover.

34. What is method study?

Method study finds the one best way to do a job. It studies every activity from raw material to finished product.

It aims to minimise cost and maximise customer satisfaction.

Assembly line production uses this idea.

35. What is motion study?

Motion study analyses body movements during work. It removes unnecessary movements.

It reduces time and increases efficiency.

Taylor and Gilbreth reduced bricklaying motions from 18 to 5.

36. What is fatigue study?

Fatigue study determines the amount and frequency of rest intervals. It helps workers regain stamina.

It improves productivity by reducing tiredness.

Heavy manual work needs more frequent rest pauses.

37. What is differential piece wage system?

Differential Piece Wage System pays different rates to efficient and inefficient workers. It rewards workers who meet or exceed standards.

It gives lower wages to workers below standard.

Taylor used it to motivate higher productivity.

Fayol 14 Principles of Management Questions with Answers

Fayol studied administration from the manager’s point of view. His principles guide planning, authority, discipline and teamwork.

Fayol 14 principles of management questions require examples because CBSE often gives principle-identification cases.

38. Who was Henri Fayol?

Henri Fayol was a French mining engineer and management theorist. He developed 14 principles of management.

He is known as the father of General Management.

His work focused on overall administration.

39. What is Division of Work?

Division of Work means dividing work into small specialised tasks. It improves efficiency and skill.

Specialised employees perform tasks faster and better.

A company may divide work into finance, marketing and production.

40. What is Authority and Responsibility?

Authority is the right to give orders, and responsibility is the duty to complete work. Both must remain balanced.

A manager needs enough authority to fulfil responsibility.

Imbalance reduces effectiveness.

41. What is Discipline in Fayol’s principles?

Discipline means obedience to organisational rules and employment agreements. It needs clear rules and fair penalties.

Both managers and workers must honour commitments.

Discipline supports smooth functioning.

42. What is Unity of Command?

Unity of Command means one employee should receive orders from only one superior. It avoids confusion.

It also protects discipline and responsibility.

Dual orders can create conflict.

43. What is Unity of Direction?

Unity of Direction means activities with the same objective must have one head and one plan. It prevents overlapping.

It creates coordination in departments.

A car and motorcycle division should have separate plans.

44. What is Subordination of Individual Interest to General Interest?

This principle means organisational interest should come before individual interest. Managers should not misuse power for personal benefit.

Employees must support the larger goal.

It protects stakeholders and company objectives.

45. What is Remuneration of Employees?

Remuneration of Employees means pay should be fair to workers and the organisation. Wages should support a reasonable standard of living.

They must also remain within company capacity.

Fair pay creates good relations.

46. What is Scalar Chain and Gang Plank?

Scalar Chain is the formal line of authority from top to bottom. Gang Plank allows direct communication in emergencies.

Fayol suggested Gang Plank to avoid delay.

It keeps communication fast during urgent situations.

47. What is Equity in management?

Equity means managers should treat employees with fairness and kindness. It prevents discrimination.

It supports loyalty and devotion.

Employees should not face bias based on gender, religion or nationality.

48. What is Esprit De Corps?

Esprit De Corps means promoting team spirit and unity among employees. Managers should use “we” instead of “I”.

It builds belongingness and trust.

It reduces the need for penalties.

Class 12 BST Chapter 2 Case Study Questions with Answers

Case-study questions need fast concept identification. Read the action first, then name the principle or technique.

Class 12 BST Chapter 2 case study questions often test violations of Fayol’s principles and Taylor’s techniques.

49. A company has two bosses giving different instructions to one employee. Which principle is violated?

Unity of Command is violated. One employee should receive orders from only one superior.

Two bosses create confusion and reduce accountability.

The company should clarify reporting relationships.

50. A department keeps raw material anywhere and workers waste time finding it. Which principle is violated?

Order is violated. People and materials must have suitable places.

Lack of order creates delay and confusion.

The company should assign fixed locations for all resources.

51. A manager favours his relative over a cheaper supplier. Which principle is violated?

Subordination of Individual Interest to General Interest is violated. The manager placed personal relations above company interest.

This increases cost and harms organisational goals.

The company should follow objective supplier selection.

52. Workers receive no rest during heavy manual labour. Which Taylor technique is ignored?

Fatigue Study is ignored. Rest intervals help workers regain energy.

Without rest, productivity and quality decline.

The firm should study workload and set suitable breaks.

53. A factory wants one best method for production. Which technique should it use?

Method Study should be used. It identifies the best way to perform a task.

It studies process, sequence, materials and layout.

The goal is lower cost and better quality.

54. A firm pays higher wages to workers above standard output. Which technique is used?

Differential Piece Wage System is used. It rewards efficient workers with a higher rate.

It gives inefficient workers a lower rate.

Taylor used it to motivate performance.

55. Bhasin Limited made workers report to more than one superior. Which Fayol principle was violated?

Unity of Command was violated. Workers became confused because they received orders from multiple superiors.

The company should create one reporting boss for each worker.

This protects discipline and accountability.

56. Bhasin Limited made one division work on many products, causing overlap. Which principle was violated?

Unity of Direction was violated. Activities with the same objective need one head and one plan.

Overlapping work creates wastage.

The company should create clear product-wise plans.

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