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Comprehensive
PROJECT WORK IN BUSINESS STUDIES CLASS XII
As per latest guidelines issued by CBSE By
AUVM1BOEFZ MA &DP
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CONTENTS
(vii)
Preface
Acknowledgement (viii) Bonafide Certificate (ix) PROJECT WORK
1–135
1. Principles of Management 1–16
2. Scientific Management 17–30
3. Elements of Business Environment 31–47
4. Anti-plastic Campaign 48–56
5. Stock Exchange 57–76
6. Changing Role of Women in India 77–95
7. Marketing Management: Shampoo 96–118
8. Marketing Management: Washing Powder/Detergent 119–135
(v)
Preface It has been long since CBSE has introduced Project Work in the curriculum of Class XIth and XIIth for Business Studies. Project Work provides knowledge to the students regarding the practical application of the theoretical concepts they learn. By complementing the theoretical knowledge of the students with practical application of the concepts, project work helps the students in better understanding of the subject. Students learn how various theoretical concepts are applied in real life situations. This book contains several projects that help the students in better understanding of the practical application of various technical topics like: Fayol’s Principles of Management, Taylor’s Scientific Management, Elements of Business Environment, Marketing etc. The book aims at empowering the learners to explore how the concepts of Business Studies are applied to the real life scenarios. The sample projects given in the book help the students in preparing the full fledged project work for presentation before the examiner. As the Project Work of Business Studies for Class XIIth, carries 20 marks, this book will help the students in scoring well and also will help them to develop a practical approach towards the subject. It is hoped that this edition will prove of immense help to the students of Class XII in the preparation of Project Work in Business Studies. All suggestions for further enrichment and improvement would be greatly appreciated. —Author
( vii )
Acknowledgement This is to convey my sincere thanks and gratitude to Mr./Ms.
.........................................................................................
who has provided valuable suggestions and guidance for the fruitful culmination of this project work. He/She has extended all possible help and guidance to enable me to understand and remember important details of the project work that could not have been possible otherwise. I have completed the project successfully only because of his / her timely help, cooperation, motivation and direction.
Signature .................................................................................................. Name of student ..................................................................................... Class .............................................. Section ............................................ Name of the School ............................................................................... Date of submission of the project .....................................................
(viii)
Bonafide Certificate It is to certify that Mr./Ms. ........................................................ of class ............... section ............... of ...................................... school, has successfully completed his/her project work on ............................... under my supervision. He/she remained disciplined and has taken proper care and shown utmost sincerity in the completion of this project. I certify that his/her project work is upto my expectation and inline with the guidelines issued the CENTRAL BOARD OF SECONDARY EDUCATION, NEW DELHI. I wish him/her all the best in his/her future endeavours.
Signature ......................................................................................... Name of the teacher Mr./Ms. .................................................... Department ..................................................................................... Name of the School ...................................................................... Date of signing the project .........................................................
(ix)
INDEX S. No.
AIM
DATE
SIGN.
Project
I
Principles of Management
Introduction Management has now been recognised as a separate discipline, because it is a systematised body of knowledge, studied in specialised institutions and practised in the real life situations of the business. The application of management principles shows concrete and constructive results in the matter of production, sales and profits. Principles are fundamental truth that explain the relationship between two or more sets or variables under given situations. Principles are based upon scientific study, inquiry and analysis. Principles establish relationship between causes and their effects. Principles of management are broad and general guideline for managerial decision making and behaviour of employees towards organisation. They are statements of general truth providing guide to thought or action. All management theories and concepts are based on certain principles. These essentials are the basic foundations on which it can be evaluated if the manager has been efficient or not. Principles of management are a set of guidelines that assist managers to conduct the management properly and effectively. They are set of guidelines that assist managers in making management decisions. Principles of management are the underlying factors that affect how effective management can be. The principles of management includes a list of things that must be put into practice in order to bring about an effective management result. These are the guidelines to be followed by every organisation. No manager can be effective if he does not follow the principles of management. Therefore, managers in all organisations whether big or small, business or non-business, all must follow the principles of management. According to Koontz and O’donnell ‘Management principles are fundamental truth of general validity’. In the words of Herbert G. Hicks, ‘Principles of management are the guiding rules of laws for managerial action’. The management principles are not as exact as the principles of Physical Sciences, because management is a Social Science and thus a victim of the weaknesses of Social Sciences. It deals with the human beings, whose behaviours are always unpredictable, because they have got individually different socioeconomic status, needs and perceptions. Secondly, it deals with the complex problems about which too little is known, though a lot of principles have been derived out of experiments, observation and enquiry. These principles are being satisfactorily applied but we cannot say that we have attained the perfection stage. Invention and improvement of theories in every discipline is a continuous process. The existing management principles are satisfactorily effective in understanding the complex management problems. These principles are applied in the real situations of managing business enterprises and achieving handsome results.
How Principles of Management are Derived?
In order to derive principles, following steps are taken: 1. Choice of the problem or opportunity: The researchers in Management Science identify the area, where general principles of business management are lacking or need modification. 2. Observation and study of the problem: Researchers observe the problem carefully in different situations and form different angles. They have to study deeply the problem, its causes, magnitude, consequences and the solutions.
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PROJECT WORK IN BUSINESS STUDIES—XII
3. Making hypothesis: On the basis of observation and the data collection, a hypothesis is formed, under assumed situations. What is expected to happen? For example, there will be more output, as wages are paid according to piece rate system.
4. Conclusion and forecasting: The next step will be to reach the logical conclusion and predict the specific happenings under assumed situations.
5. Testing the principle: The principle formed must be scientifically tested and verified. Before generalisation of the principle, testing under different situations is a must.
Characteristics/Nature of Management Principles Management principles are the fundamental truth, which express the relationship between two sets of variables under given situations. These principles help the management in understanding and solving complex problems of management. Nature of management principles stands for special features or characteristics of management principles. Important features of these principles are as under:
1. Universal application. Management principles are applied in every situation, where the objectives are attained through group efforts. All social, economic, political, cultural or even religious organisations apply management principles for the successful operations of their activities. Every organisation must make the best possible use of its available resources by the application of management principles i.e., planning, organising, staffing, directing and controlling effectively and achieve the desired result. 2. General guidelines. Management principles are concerned mostly with human behaviour, which cannot be tested under controlled conditions i.e., a laboratory. Human behaviour is always unpredictable, so management principles are not as exact as the principles of physical science. This is why, management principles are merely statements. 3. Flexibility. Management principles are dynamic guidelines and not static rules. Management helps the business in multiplying its profit at minimum cost. The business situations and its socioeconomic environment is always changing, so the management principles are dynamic enough to suit the size, nature, needs and situations of the business. Improvement and modification of management principles is a continuing process, so the principles are always flexible. 4. Mainly behavioural. Management is really, how to get work done by workers? Human element is an essential factor of production. It activates and extracts work from other factors also. Every worker is individually, different from other workers as regards his ability, knowledge, skill, socioeconomic status, attitudes and ideologies. Management is concerned with the integration of individual efforts and how to channelise them towards achieving the desired results. This is why, management is said to be a team work and group activity. Management principles thus aim at influencing individual efforts and directing them to the maximisation of profit with the minimum wastage and the best possible utilisation of available resources. 5. Cause and effect relationship. Management principles also form cause and effect relationship. It indicates the consequences of its principles. For instance, if wages are paid on the basis of piecerate system the quantity of work will be more but the quality will suffer. If the principle of unity of command is adopted, the confusion, duplication and overlapping will be avoided. In the same way, other principles also indicate the relationship between principles, their consequences and results. 6. Contingent. Management principles are contingent or dependent upon the prevailing situation at a particular point of time in an organisation. The application of management principles depend on the nature, size and type of organisation and has to be changed as per organisation requirements.
Need/Significance/Importance of Management Principles Management principles are very important for the successful management of organisation in its real situations. These principles are guidelines to the management. They highlight the areas, where management
PRINCIPLES OF MANAGEMENT
3
should pay immediate attention. These principles simplify the process of management, increase the all round efficiency of the management and help in the achievement of the desired objective of the business. The significance of management principles is summarised herewith:
1. Providing managers with useful insights into reality. The management principles generate sound understanding of the complex problems of business enterprises. They develop scientific approach for the solution of problem. The management will adopt ‘Trial and Error’ method for managing the enterprise and incur wastage of resource, if they do not understand management principles.
2. Optimum utilisation of resources and effective administration. The understanding of the management principles provides guidelines to the managers for handling effectively the complex problems. It facilitates managers in performing their duties smoothly. The efficiency of the management is increased and the manager adopts systematic and scientific approach towards the solution of the problems. 3. Scientific decision. The management principles should provide such kind of decisions which must be based on facts, thoughtful and justificable in terms of the intended purposes. The principles of management develop scientific approach for the solutions of problem. 4. Directing the areas of training. The management principles identify the present and prospective areas of management, wherein managers should be specially trained. Business situations are themselves complex and they change considerably with the changes in socio-politico-economic situations. Management principles identify these areas and impart requisite training to business executives. 5. Meeting the needs of changing environment. Management principles are guidelines which require necessary modifications with the changing situations. In order to make management meaningful and of practical utility, researchers examine these principles, justify their utility and suggest modifications, if necessary. 6. Achieving social objectives. Management develops spirit of co-operation and co-ordination among workers and employees. It also helps in the optimum utilisation of the social resources. It eliminates unnecessary wastage of resources. These days, principles of management are directed at maximising profit without loss of social values. The management must supply requisite commodities at fair price, not indulge in adulteration and make payment of fair wages to workers. The modern management has to fulfil its social obligations also.
Henri Fayol Henri Fayol (29 July 1841–19 November 1925) was a French mining engineer, mining executive, author and director of mines who developed general theory of business administration that is often called Fayolism. He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. Like his contemporary, he is widely acknowledged as a founder of modern management method. Henri Fayol provided one of the most influential modern management concepts of his time. He is founder of the 14 principles of management and the five functions of management. Henri Fayol commenced his career as an engineer at the mining company Compagnie de Commentry Fourchambeau Decazeville in Commentry at the age of 19. In 1888, he became the Managing Director of this mining company that employed over 1000 people. He was very successful in this position for over 30 years (until 1918). Around 1900 the mining company was one of the largest producers of iron and steel in France. At that time this industry was considered to be vital for France. In addition to being managing director of the mining company, he was also one of the founders of the principles of modern management. His research work was in competition with that of another great theoretician namely Frederick Taylor. In 1916, he published his work experience in the book Administration Industrielle et Generale (General and
4
PROJECT WORK IN BUSINESS STUDIES—XII
Industrial Management). Fayol’s work became more generally known with the 1949 publicaton of ‘General and Industrial administration’, the English translation of the 1916 article ‘Administration Industrielle et generale’. In this work Fayol presented his theory of management, known as Fayolism. Before that Fayol had written several articles on mining engineering, starting in the 1870s and some preliminary papers on administration. Fayol’s work was one of the first comprehensive statements of a general theory of management. He proposed that there were five primary functions of management and fourteen principles of management.
Contribution of Henri Fayol to Management Thought Henri Fayol is rightly considered as the father of modern theory of management. His fourteen principles of management are very popular among management students and learners. By 1930 Henri Fayol came to be recognised as the founder of modern management theory. His analysis of management process acted as the foundation of the whole management theory and the present super-structure of management has been built on it. He developed fourteen principles of management out of his practical experience. These principles are universal in character and are applicable to all types of organisations. Each principle suggested by him has specific meaning and significance. According to Fayol, managers in all organisations need to follow these principles while managing the affairs of their business units. The management principles suggested by him are universally accepted by modern authorities or management and are treated as valid even to this day. This is because these principles are logical and practical in nature and moreover are result oriented. These basic principles are useful for effective management of business activities. They are related to the basic components of management process like planning, organising, staffing, leading, coordinating and controlling. The principles of management suggested by him are useful for each and every type of organisation. Due to his contribution to management theory and principles, he is rightly treated as the father of modern management thought. His ideas on management have been summed up as the Administrative Management theory, which later evolved into the management process school. Fayol was the first one to attempt a systematic analysis of the overall management process. Fayol’s contribution to management can be discussed under the following four heads: 1. Division of Industrial Activities: Fayol observed the organisational functioning from manager’s point of view. He found that all activities of the industrial enterprise could be divided into six groups. (a) Technical (relating to production)
(b) Commercial (buying, selling and exchange) (c) Financial (search for capital and its optimum utilisation)
(d) Security (protection of property and persons) (e) Accounting (preparation of various accounts, statements, returns etc.)
(f) Managerial (planning, organisation, command, co-ordination and control) 2. Qualities of an Effective Manager: Henri Fayol was the first person to recognise the different qualities for manager.
These qualities are: (i) Physical (vigour, health and address).
(ii) Mental (ability to understand and learn, judgement, mental vigour and adaptability). (iii) Moral (firmness, energy, willingness to accept responsibility, initiative, loyalty, dignity and tact).
(iv) Educational (Equipped with matters related to general functioning). (v) Technical (peculiarity associated with functions to be performed)
(vi) Experience (gained from the work)
PRINCIPLES OF MANAGEMENT
5
3. Functions of Management: According to Fayol, following are the functions of management:
(i) Planning: Deciding in advance what to do. It involves thought and decision relating to a future course of action.
(ii) Organising: Providing everything that is useful to a business enterprise for its operation i.e., men, materials, machines and money etc.
(iii) Commanding: Maintaining activity among personnel. Leading the personnel in a better way.
(iv) Co-ordinating: The channelisation of group efforts in the direction of achieving the desired objective of the enterprise. In other words binding together by unifying and harmonising all the activities in the organisation.
(v) Controlling: Ensuring that everything is being carried out according to the plan which has been adopted, the orders which have been given and the principles which have been laid down.
4. Principles of Management: Henri Fayol evolved 14 principles that can be applied in all management situations irrespective of the types of organisation. He made a distinction between management principles and management elements. According to him principles of management are fundamental truth that establish cause and effect relationships. The general principles of management given by Fayol is considered as his most significant contribution to management.
Fayol’s General Principles of Management Henri Fayol views management to be more technical at lower level and more administrative at higher level. In order to illustrate his general theory of management, Fayol suggests the following 14 principles:
1. Division of work. Henri Fayol has stressed on specialisation of jobs. It requires that every job and its parts should be identified as separate work and entrusted to the most suited person. The quality and quantity of production will improve, if every job is assigned to the right person. According to Henri Fayol under the division of work, The worker always on the same post, the manager always concerned with the same matters, acquire an ability, sureness and accuracy which increases their output.
2. Parity of authority and responsibility. Authority and responsibility are co-existing. If authority is granted to a person, he should also be made responsible. In the same way, if anybody is made responsible for any job, he should also have the concerned authority. An efficient manager makes the best possible use of his authority and does not escape from the responsibility.
3. Discipline. According to Fayol discipline means sincerity about the work and enterprise, carrying out orders and instructions of superiors and to have faith in the policies and programmes of the business enterprise. Fayol does not advocate warning, fines, suspension and dismissals of workers for maintaining discipline. These punishments should be rarely awarded. A well disciplined working force is essential for improving the quality and quantity of production.
4. Unity of command. According to Fayol every employee should receive orders and instructions from one boss and he should be responsible and accountable to him only. The violation of this principle will have the following consequences:
Adverse effect of violation of the principle of unity of command
(i) There will be confusion and indiscipline.
(ii) Duplication of work. (iii) Over-lapping of orders and instructions.
(iv) Disobeying the orders of superiors and divided loyalty. (v) Escaping responsibility.
(vi) Disrespect to the work and officers.
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