Business Studies

Principles of Management

Easy

After completing her Bachelor's in Fashion Designing from a well known college in London, Aahana opened a boutique in a posh market in Delhi. She divided the work into smaller units and each employee was well-trained to perform his/her work efficiently. The sales persons are allowed to close a deal with the buyers by giving a maximum of 5% discount. Whereas the decision to give any further discount rests with Aahana as the final authority.

In the earlier period of her business venture, employees were asked to put in extra hours of work. In return, she had promised to give them a special incentive within a year. Therefore, when the business was doing well, she honored her commitment by giving a bonus to her employees. She also instructed employees that communication from top to bottom should follow the official lines of command.

However, she tends to be more biased towards her female employees when it comes to resolving conflicts among employees.

"The sales persons are allowed to give a maximum of 5% discount, whereas the decision to give an extra discount rests with Aahana".

Identify the Principle of Management highlighted here.

Initiative

Authority and Responsibility

Unity of Command

Unity of Direction

✅ Correct Option: 2

Option 1 -> Initiative refers to the freedom given to employees to conceive and execute plans on their own, which is not demonstrated in this scenario.

Option 2 -> Authority and Responsibility principle involves delegation of authority at different levels, where salespeople have limited authority (5% discount) while higher authority rests with Aahana for additional discounts.

Option 3 -> Unity of Command means each employee should receive orders from only one superior, which is not the focus of this scenario.

Option 4 -> Unity of Direction means one head and one plan for activities with the same objective, which is not illustrated here.

Hence, Option 2: Authority and Responsibility -> The scenario clearly demonstrates delegation of authority where salespeople have defined limits (5% discount authority) and decisions requiring extra authority are reserved for higher management (Aahana). This shows proper distribution of authority at different organizational levels, which is the essence of the Authority and Responsibility principle -> correct

Question 42

"She instructed employees that communication from top to bottom should follow the official lines of command". Identify the Principle of Management here.

Question 43

"She divided the work in smaller units and each employee is well trained to perform his/her work efficiently".

Which Principle of Management is followed here?

Question 44

"She tends to be biased towards female employees when it comes to resolving conflicts among employees." Which principle is being violated here?

Question 45

"When the business was doing well, she honored her commitment by giving a bonus to her employee". Identify the Principle of Management here.

"The sales persons are allowed to give a maximum of 5% discount, whereas the decision to give an extra discount rests with Aahana". Identify the Principle of Management highlighted here.

Solution

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CUET Business Studies Past Year Questions (Topic-Wise)

"The sales persons are allowed to give a maximum of 5% discount, whereas the decision to give an extra discount rests with Aahana".

Identify the Principle of Management highlighted here.