Join Your Exam WhatsApp group to get regular news, updates & study materials HOW TO JOIN

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

CBSE Class 12 Commerce Business Studies Principles Of Management : The Central Board of Secondary Education or CBSE is a prestigious board of education and it provides affiliation to public and private schools. Apart from this, all Jawahar Navodaya Vidyalayas and kendriya vidyalayas are affiliated to this board. To impart quality education to its learners, CBSE took the required steps and also provides a healthy and holistic school education, which gives students adequate space to develop physically and mentally.

The board conducts research and based on that, it evaluates its syllabus and educational pattern. CBSE provides standard education to all and also promotes a state-of-the art environment that makes students vivacious and competent in all aspects. CBSE Syllabus is well-structured as several proficient subject experts are associated with this board. The syllabus of CBSE Maths, CBSE Science along with other syllabus are amended from time to time to make students up-to-date with current information so that they can meet all educational demands confidently.

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

CBSE Class 12 Commerce Business Studies Principles Of Management : In earlier chapters you have studied how the insurance sector is developing in Indian economy and in the present scenario insurance sector is one of the promising sectors to provide employment opportunity. Once you have opted your career in insurance sector and select any form of organization to do the insurance business, as discussed in the previous chapter and to run any organization one should have the knowledge of principles of management.

Download here CBSE Commerce Class 12 Business Studies Principles Of Management in PDF Format 

In the following paragraphs the principles of management is being explained. Before discussing the principles of management it is to explain that all industrial or business activities can be classified as follows:

1. Technical activities consisting of production or manufacture

2. Commercial activities consisting of buying, selling and exchange

3. Financial activities concerning search for optimum use of capital

4. Security activities concerning protection of property and persons

5. Accounting activities concerning with maintenance of accounts including statistics

6. Managerial activities consisting of planning, organizing, commanding, co-ordaining and controlling

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

CBSE Class 12 Commerce Business Studies Principles Of Management : Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining company in France. He eventually became the director, at a time when the mining company employed more than 1,000 people. Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Essentially, these explained how managers should organize and interact with staff. In 1916, two years before he stepped down as director, he published his “14 Principles of Management” in the book “Administration Industrialize at Générale.” Fayol also created a list of the six primary functions of management, which go hand in hand with the Principles.

Fayol’s “14 Principles” was one of the earliest theories of management to be created, and remains one of the most comprehensive. He’s considered to be among the most influential contributors to the modern concept of management, even though people don’t refer to “The 14 Principles” often today. The theory falls under the Administrative Management school of thought (as opposed to the Scientific Management school, led by Fredrick Taylor).

Fayol’s 14 Principles of Management

Fayol’s principles are listed below:

  1. Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
  2. Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
  3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
  4. Unity of Command – Employees should have only one direct supervisor.
  5. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
  6. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
  7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
  8. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
  9. Scalar Chain – Employees should be aware of where they stand in the organization’s hierarchy, or chain of command.
  10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
  11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
  12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
  13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
  14. Esprit de Corps – Organizations should strive to promote team spirit and unity.

Fayol’s Six Functions of Management

Fayol’s six primary functions of management, which go hand in hand with the Principles, are as follows:

  1. Forecasting.
  2. Planning.
  3. Organizing.
  4. Commanding.
  5. Coordinating.
  6. Controlling.

Key Points

Henri Fayol’s “14 Principles of Management” have been a significant influence on modern management theory. His practical list of principles helped early 20th century managers learn how to organize and interact with their employees in a productive way.

Although the 14 Principles aren’t widely used today, they can still offer guidance for today’s managers. Many of the principles are now considered to be common sense, but at the time they were revolutionary concepts for organizational management.

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

CBSE Class 12 Commerce Business Studies Principles Of Management : Although industrial or business organizations differ from one another in nature, size or complexities of operation yet all these six activities are common in all enterprises. The first five activities are quite well known therefore we are discussing only the sixth i.e managerial activities. We will explain these principles applicable in any insurance company.

OBJECTIVES

At the end of this lesson you will be able

1 To know the principles of management

2 How to apply these principles in insurance organization

MANAGERIAL ACTIVITIES /PRINCIPLES OF MANAGEMENT

The management activities are known as principles of management which are as follows:

1. Forecasting and Planning,

2. Organizing,

3. Commanding,

4. Co-ordaining and

5. Controlling

A) Forecasting and Planning Planning means looking ahead or to foresee.

To foresee means, “both to assess the future and make provision for it. To plan means to foresee and provide means for future. The process of planning includes:

1. The identification of organizational goals. The aim of any insurance company is to insure life or property of the human being. The goal is to insure maximum number of person or the property so that the risk can be spread on number of persons.

2. The line of action to be followed. Once aim is set to insurer human being or property then the next step is how to insure human beings or property. The action will be to create a Marketing Department for a company.

3. The various stages through which the action would pass: To sell the insurance product only marketing department at one place i.e head office cannot achieve the results therefore various offices at different location to be set up to sell the insurance products.

4. The method to be used to achieve the desired goals: The next issue comes how to sell the insurance products. Weather it should be through Agents or Corporate Agent or Broker. Accordingly the action of the insurance company will start to recruit the manpower.

B) Organizing To organize means building up the dual structure, material and human of the organization.

To organize means to provide the organization with everything useful to its functioning raw material, tools, capital and personnel. An insurance company may not require the raw material but it requires other material i.e. tool (computers), capital and personnel. A sound organization should have the following to achieve the good relationship between material and human.

  • A single competent and energetic guiding authority: There should be a single person to be overall in-charge of the organization who will report to the Board of directors. Like Chief Executing Officer (CEO) or Managing Director is appointed in all organization whether it is insurance or other type of organization. Irrespective of the size of the organization.
  •  Efficient selection of personnel: Any organization is run by the human beings therefore it is always endeavor of the CEO /Managing Director to recruit the manpower weather technical or finance or marketing the person should be intelligent and efficient. It saves the cost because the efficient people understand the working of the organization and take the decisions quickly. In an insurance industry the trained manpower is required because the insurance polices ate technical in nature and requires lot of skill to make the understand to the customer
  •  Clear definition of duties at all levels: The duties of each employee should be defined to get the better results form the employees. If duties are not defined then the employees will be confused what to do or not to do. In an insurance company the target should be given to the marketing personnel to insure so many lives or property and being a marketing function, it should not be assigned to Finance Deptt. Moreover there will be many employees in the department the target should be given to the Head of the Deptt and then he will assign the targets to his juniors at different locations
  • Initiative and responsibility: The management should ensure that employees take initiative to complete the job assigned to them. The employees should be held responsible for not doing the things. In an insurance company the marketing team should be very strong to sell the insurance products. The team should take initiative to meet the number of persons to get the insurance business. The team should not wait for the instruction of their superiors to meet the customers.
  •  Minimum paper work: In the computer era the paper work can be reduced and the employees of the organization should maximum use the computers to save paper work. In insurance the marketing team should send the daily performance report through email which will reduce the paper work.
  •  Reward & efficiency: The good performers should be awarded cash or non cash award which boost the moral and efficiency of the employees.
  •  Unit of command: Every employee should report to one superior not to more than otherwise the performance and controlling of the employees will be very difficult.
  •  Clear and precise decision making: Any decision taken by any employee should not be ambiguous i.e double meaning because it creates confusion.
  •  Proper control
  • Disincentives for faults and error: for any fault of any employee or non performer should be penalized otherwise it will affect the working of the performers.
  •  Supremacy of general interest in relation to individual etc: Any individual interest should not be clash with the organization interest. The organization interest should be protected.

CBSE Class 12 Commerce Business Studies Principles Of Management Complete Notes

Cakart.in provides India’s top Class 12 Commerce  faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get Class 12 Commerce  Video classes from www.cakart.in  to do a great preparation for primary Student.

Watch Class 12 Commerce  sample video lectures Visit cakart.in
Watch Class 12 Commerce  sample lecture books  Here
Watch Class 12 Commerce   free downloads  

Leave a comment

Your email address will not be published. Required fields are marked *