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Chapter 2 - Prinisiples of Management PDF
Chapter 2 - Prinisiples of Management PDF
COM PAGE 1
PRINCIPLES OF MANAGEMENT
Any fundamental statement of truth that establishes a cause and effect relationship between
two or more variables is called principle. Principles are a guide to thought and action.
Principles of management are not rigid prescriptions which have to be followed by the
managers. They are broad and general guidelines for decision- making and behaviour of
managers.
• Values are something which are acceptable or desirable. Values are formed through
common practises.
• Management principles are basic truths or guidelines for behaviour. Management
principles are formed after research in work situations.
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THEEXTRACL ASS.COM PAGE 2
1. Universal Applicability:
3. General guidelines:
The management principles are general guidelines and does not ensure any
readymade solution to all the problems. Because the environment in which a
business runs is very complex and dynamic.
4. Flexible:
The principles of management are not rigid prescriptions, which have to be
followed absolutely. They are flexible and can be modified by the manager when
the situation demands.
6. Behavioural:
Management principles aim at influencing behaviour of human beings. Therefore,
principles of management are mainly behavioural in nature.
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THEEXTRACL ASS.COM PAGE 3
4. Scientific/thoughtful decisions:
Management principles are based on the objective assessment of the situation.
They emphasise on logic rather than blind faith, this help management to take
unbiased decisions.
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THEEXTRACL ASS.COM PAGE 4
• Professional courses such as MBA, BBA also teach these principles as a part
of their curriculum at the beginner’s level.
HENRI FAYOL
Lifetime – 1841 to 1925
Education – Graduated from mining academy at St. Entinne in 1880
The 14 principles of management are given by Henri Fayol, he developed the principles
based on his own experience.
These principles were discussed in detail in his book which was published in 1917 as
‘Administration Industrielle et Generale.’ It was published in English as General and
Industrial Management’ in 1949 and is widely considered a foundational work in classical
management theory. He is also known as ‘Father of General Management’ for his contribution.
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THEEXTRACL ASS.COM PAGE 5
1. Division of work:
According to Fayol, “The intent of division of work is to produce more and better work for
the same effort. Specialisation is the most efficient way to use human effort”
What he wanted to say by this statement is that, work should be divided into small tasks
and a trained employee who is competent is required to perform each job. This will result in
increased efficiency and effective output. Thus, in a company we have various separate
departments like finance, human resource, marketing etc.
This principle can be applied to both technical as well as managerial work.
A manager must have the right to punish his subordinate for wilfully not obeying orders but
only after sufficient opportunities has been given to a subordinate for presenting his case.
3. Discipline:
According to Fayol, discipline requires good superiors at all levels, clear and fair agreements
and judicious application of penalties.
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THEEXTRACL ASS.COM PAGE 6
• It implies respect for agreements (rules and regulations) designed to secure obedience.
4. Unity of command:
According to Fayol there should be one and only one boss for every individual employee.
He felt that if this principle is violated “authority is undermined, discipline is in jeopardy,
order disturbed and stability threatened”. The principle states that in a formal organisation
each participants should receive orders from one and be responsible to only one superior.
• If an employee gets orders from two superiors at the same time the principle of unity
of command is violated.
• Dual subordination should be avoided.
5. Unity of direction:
• All the units of an organisation should be moving towards the same objectives
through coordinated efforts.
• Each group of activities having the same objectives must have one head and one
plan.
FOR EXAMPLE- Honda produces cars as well a motorcycles therefore to avoid any
confusion it has two separate divisions for both of them . Each divisions have a separate
incharge, plans and resources.
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THEEXTRACL ASS.COM PAGE 7
7.Remuneration of employees:
Remuneration should be just and equitable i.e. overall compensation or pay should be fair
to both employees and the organisation. The employees should be paid fair wages so
that they can at least afford a reasonable standard of living.
A fair compensation will ensure good relations between workers and management.
9. Scalar chain:
The formal lines of authority from highest to lowest ranks are known as scalar chain.
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THEEXTRACL ASS.COM PAGE 8
If E has to communicate with ‘O’ who is at the same level of authority then he has to
traverse the route E-D-C-B-A-L-M-N-O. This is due to the principle of scalar chain
being followed in this situation.
According to Fayol, this chain should not be violated in the normal course of formal
communication. However in the case of emergency then E can directly contact O
through ‘Gang bang
Gang
plank
10.Order:
If everything will be at fixed place, then there will be no hindrance in the action of
business. This will lead to increased efficiency and productivity.
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THEEXTRACL ASS.COM PAGE 9
11.Equity:
This principle emphasises kindliness and justice in the behaviour of managers towards
workers. There should be no discrimination on account of sex, religion, language,
belief, nationality, caste, etc. This will ensure loyalty and devotion. There will be cordial
relations between managers and workers. For example now-a-days in MNC’S we find
people from different background working under same roof in a discrimination free
environment.
12.Stability of personnel:
They should be given reasonable time to show results. Recruitment, selection and
training cost will be high if there’s insecurity among employees.
13.Initiative:
According to Fayol workers should be encouraged to develop and carry out their plans
for improvements. Initiative means taking the first step with self-motivating.
14.Espirit De Corps:
According to Fayol, management should promote a team spirit of unity and harmony
among employees. Management should promote team work especially in large
organisation because otherwise objective would be difficult to realise.
A manager should replace ‘I’ with ‘We’ in all his conversations with workers to foster
team spirit
I with We
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THEEXTRACL ASS.COM PAGE 10
F. W . T A Y L O R
“Scientific management means knowing exactly what you want men to do and seeing that
they do it in the best and the cheapest way.” – F.W. Taylor
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THEEXTRACL ASS.COM P A G E 11
1. Science not rule of thumb: According to Taylor there is only one best method to
maximise efficiency. This method can be developed through study and analysis. The
method so developed should substitute ‘rule of thumb’ throughout the organisation.
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THEEXTRACL ASS.COM PA G E 12
3.Cooperation, not individualism:
This principle is an extension of principle of ‘harmony and discord’.
There should be complete cooperation between the management and the workers
instead of individualism.
Management should not close its ears to any constructive suggestions made by
employees infact it should reward them for their suggestions if it results in substantial
reduction in costs.
Workers should be part of the management and if any important decisions are taken
they should be taken into confidence.
Workers should also avoid going on strikes and making unreasonable demands.
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THEEXTRACL ASS.COM PAG E 13
1.Functional Foremanship-
Under the factory manager there was a planning incharge and a production incharge.
iii. Time and cost clerk: Prepare time and cost sheet
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THEEXTRACL ASS.COM PAG E 14
iv. Disciplinarian worked: Ensure discipline.
Under production incharge there are four personnel namely:
vi. Gang boss: Keeping machines and tools etc. ready for operation by workers
III. Method study: there are various methods of doing a particular job, the objective of
method study is to find out one best way of doing the job. Right from the procurement
of raw materials till the final product is delivered to the customer every activity is a
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THEEXTRACL ASS.COM PAG E 15
part of method study. The objective of the whole exercise is to maximise the quality
and satisfaction of the customer.
IV. Motion study: it refers to the study of movements like sitting, lifting, putting objects
and changing positions which are undertaken while doing a typical job.
Unnecessary movements should be eliminated so that it takes less time to complete the
job efficiently.
On close examination of body movements Taylor found that there are three types of
motions as follows:
V. Time study: time study determines the standard time taken to perform a well-defined
job. Time measuring devices are used for each element of task. The standard time is set
after taking several readings. The objective of time study is to determine the number of
workers to be employed; frame incentive schemes and determine labour cost.
FOR EXAMPLE- A worker takes 1 hour to type 20 pages assuming that the Jon is of 8
hours shift deducting one hour for rest and lunch. It is determined that in 7 hours a worker
will type 140 pages i.e 20 pages in an hour of work. Now this will be the standard
according to which task is to be performed and wages are decided accordingly.
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THEEXTRACL ASS.COM PAG E 16
VI.Fatigue study: A person is bound to feel tired physically and mentally if he/she does
not rest while working. The rest intervals will help the worker to regain stamina and
work with the same capacity which will result in increased productivity.
There can be many causes for fatigue like long working hours, doing unsuitable work, bad
working conditions etc. such hindrances should be removed for better performance. Fatigue
study seeks to determine the amount and frequency of rest intervals in completing a task.
Worker A Worker B
Actual output - 220 units 180 units
Total wages - 220 x 5 = 1100 180 x 4 = 720
Difference in units produce = 40
Difference in wages = Rs.380
According to Taylor, this loss will be the strongest motivating factor for worker B to
complete work according to standards in future.
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THEEXTRACL ASS.COM PA G E 17
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