50 Principles and Functions of Managemem

Remuneration of Reasonable pay reward. Performance based reward.

Personnel
8. Centralisation Power in hands of top level. Powers distributed evenly at eve
level.
9. Scalar chain and short cut
Smooth flow of information by Flatter
passing through every level. communication.
10. Order Orderly arrangement of men Orderly arrangement of men and
and material for control. material for coordination.
11. Equity Kindness and just treatment of Developing sense of ownership.
employee.
employee training and
12. Stability of tenure Train employees to encourage On going
them to remain. development.
13. Initiative Managers are encouraged to give Workers are encouraged to give
new ideas. new ideas.
high morale of
14. Espirit de Corps Maintaining high morale of Maintaining
managers. employees.

2.5 Scientific Management Developed by F.W. Taylor

2.5.1 Background and History of F.W.Taylor
& W. Taylor was born in 1856 in USA)In ID he joined Midval Steel Company as
a Mechanical Engineer. Using his engineering background Taylor set out scientific
studies and techniques. e was primarily concerned about the efficiency of workers and
optimum utilization of resources. Taylor's principles and techniques were based on the
observations he conducted in factories where methods of production lack planning and
working methods were haphazard.
2.5.2 Contributions of Taylor
C.W. Taylor became famous as a father of scientific manageme . His main contributions
which made him so popular were:
(i) Taylor published books and research papers explaining his scientific view on
industrial organisation and management.
(ii) His major contribution was publishing of "Shop Management", "Piece Rate
System" and "Principles of Scientific Management".
(iii) He emphasised on adoption of scientificmethods to the problems of management.
2.5.3 Meaning of Scientific Management
cientific management can be defined as "Application of science for each and every
e ement of management" In general language it means apply scientific
tools, methods
and trained personnel in order to increase the output. Scientific
management insists on
 Principles of Management
51

replacement of role of thunib by that nu•an• i«ion• in the organisation •hould

not be taken on the basis of willsand wishesof matiagev but iqion•must be based on
scientific studies conducted by using Vientific tools.
According to F.W. "Scientific Menagement mean€ knovt'ingevac/ly mho/ want men
to do and seemg that they do in best and the Cheapestvro.y.
Definitions of Scientific Management
• "Scientific management means knowing exactly what you want men to do and seeing that they do
it in the best and cheapest way". —F.W.Taylor
• is the art and science of preparing, organising and directing human effort applied to control the
forces and utilise the materials of nature for the benefits of man"
—Association of Mechanical Engineers, U.S.A.
• attistheoperationalstudyofwork, theanalysis ofwork into its simplest element and the systematic
improvement of the workers' performance of each element". —Peter F. Drucker

2.5.4 Scientific Principles of Management

Tavlor formulated four principles of scientific management which are explained below:
(i) Science, not rule of thumb.vAccordingto this principle [hylor insists•thateach
job performed in •the organisation should be based on scientificenquiry. and
not cy€intuition, efperience and hit and miss methods. leesays thatthere must
be thinking before doing which is not in case of rule of thumb. Rule of thumb
means dictatorship of manager whereas scientificdecisionsare based on cause
and effect and scientificmeasurement of methods and waysof produ tion
aylor insisted on introduction of scientificinquiry into the of
management practice Taylor believed that there ISonly one best method to
maximise efficiency is method can be developed through work study and
analysis. The method so developed should be substitute of Rule of Thumb.
For example, in rule of thumb the standard time required to do a particular job
is decided by the managers on the basis of his past experience. aylor insists that
standar•ætårnéfor a job should be set up scientifically b! performing time study
in die organisation and then•the day's target should be fixed
(ii) Harmony, not discord. rding to this principle those who work together in
an organisation must rk in harmony that is with mutual give and take and
proper understanding. Generally in every organisatiön theie two groups
of people—workersgr oup and managernent group and both the groups work
as rivals of each other as Workersalways feel {hat they ave underpaid and are
overburdened with' the work and jnanagernejit alwayA feely.that workers are
good for nothing. Jn this principlö"låylor insists that tliejc•is need both the
grc;ups to change their attitudes each other. le on mentalrevolution

Class:
ill
52
of attitude
Chich means complete chan e
rhey must
and outlook for each other.
other and
developpositivethinking for eac
discord as
work with harmony and avoid
direction only
their objectives are in one
For example, the main objective of workers is to
earn more and the objectiveof management is
to maximiseproduction; instead of discord
for each other's objective workers can earn
more by producing more which will help in
Management
maximising the production also Sharing of Gains Between
and
Management should share the gains of WorkersLeadingToCompleteHarmony
the company with workers at the same of
time workers must contribute to their best level. 'aylor feels that prosperity
organisationdepends upon prosperity of employer a ell as employees.
harmony
(iii) Cooperation, not individualism. -his principle is the extension of th
not discord. According to this principle work must be carried on in co-operation
wm-üfi¯othev, with mutual confidence and understanding for each other.
Corkers and managers must wor.kin co-operation. The
managemenb ntust take workers in confidence before
setting up the standard task för them because when
standards or targets are set up 'in consul(ation of workers,
then they will try their best to achieve it.
To • have cooperation management should welcome good suggestions of
employees and tfiey should be rewarded for their suggestion. At the same time
workers should not go on strike and make unreasonable deman s. There must
be open communication system there must be Paternalistic style of management
as in case ofJapanese companies.
For exam le, Chile assigningjob to workers if management asks them about
t elr Interest and then work is assignedaccording to their interest, definitely
the workers will perform it mare efficiently
Japanese companies this principle is pra@tisedas here managers treat
workers as part of their familyand workers also do not show their agitation by
going on 'trike father they tie a blackribbon t€show thew-dissatisfactionand
gain managers Managers must work almost side by side with the
workers, helping and encou aging them.
(iv) Development of workers to their greatest efficiency and prosperity. Industrial
efficiency depends upon the efficiencyof workers. Worker's
efficiency depends
upon proper training and their selection aylor insisted
due care should be
Principles of Management 53

taken while selecting the employees and after selecting they must be givenjob
according to their qualification. Employees must be sent for tråihi@from time
to time to update their knowledge This will ensure greatest efficiencyand
prosperity for both company and w rkers.
2.5.5 Scientific Techniques of Taylor
Along with scientific principles Taylor developed some scientific techniques by
conducting various experiments at his work place.
 exist.

TALYLOR'S SCIENTIFIC MANAGEMENT :

I Positive side : Scientific management principles are credited with increasing I
worker productivity and efficiency
Negativeside .€Productivity gain was made only at the cost of deskilling in
many areas of work. It can result in a loss of motivation on the I
part of employees.

2.5.6 TECHNIQUES OF TAYLOR'S SCIENTIFIC MANAGEMENT

Techniques of scientific management are as follows :
1. Functional foremanship : For supervision of workers, Taylor has evolved
functional foremanship technique which is defined as follows :
Functional foremanship is a technique which involves supervision of each
workerby eight supervisors.
In functional foremanship, planning aspect of a work is separated from its
actual doing aspect.Gere are eight supervisors supervising the work of each
worker, four supervisors supervising planning aspect and four supervisors
supervising doing aspect.)
MAIN FUNCTIONS OF THE EIGHT PERSONS DIRECTING WORKER :
Route Clerk : Determining the routes through which raw materials will I
pass.
Instruction Card-Clerk : Providing instructions about how workers I
should perform their jobs.
I (iii) Time and Cost Clerk : Setting timetable for performing different I
operations of a job and specifyingmaterial and labour costs of each I
operation.
I (iv) Disciplinarian : Maintaining proper discipline in the workshop and I
offering immediate solutions to clashes and taking disciplinary actions I
against erring workers.
Speed Boss : Maintaining the planned speed of production.
I (zn) Inspector : Maintainingproduct quality according to standard I
prescribed.
I (vii) Maintenance Foreman : Maintenance of machines, tools, etc
 42 HIGHER SECONDARY BUSINESS STUDIES

viii) Gang Boss : Arranging machines, tools, materials, etc. required

performing

Functionalforemanship uses high level of specialization at workshop level

Because of this specialization, a work is completed within specified time,
and quality.
2. tandardisation and simplification of work : Standardisation and
simplification of work is defined as follows :
tandardization and simplification of work refers to setting standards
every organizational activity to maximize outputs and making work as simple
as possible by eliminatingunnecessarydiversity of products.
Standardisation of work involves standardization of work methods and
processes, raw materials time, machinery and workin conditi ns. Thi
exercise res ts m new ways of working in place of existing ways of working.
OBJECTIVES OF STANDARDIZATIONAND SIMPLIFICATION OF WORK :

(i) Eliminating unnecessary diversity of products resulting in cost savings.I

I (ii) Establishing inter-changeability manufactured parts and products. I
I (iii) Establishingstandards of performanceof men and machines so as to
determine a fair day's work.
I (iv) Establishingstandards of excellenceand quality of materials.
3. Method study : ethod study involves analyzing various activities with a
view to find out the best possible way of doing a work.)A method involves the
manner in which a par •cularactivityof a work is performed.A work may
have several activities e basic objectiveof method study is to find out 'one
best way of doing a work'.
4. MÖtion study : otion study involves analyzing various movements involved
in performing an activity so as to minimize the movement simplifies the
job to be performed, fixing the best method of doing it and thereby reducing
the time and cost per unit of production.
Motion refers to movementof human body and its parts in performingan
activity, for example, lifting of a tool from the floor. The basic objectivesof
motion study is eliminating unnecessary movements, reducing frequency Of
movements and reducing degree of movements so that a work is performed
with the least possible efforts.
5. Time study : ime study involves analyzing the time taken by various
movements req ed to perform a work
e basic objective oi time study is to find out standard time taken for
completing a work. Based on this standard¯time,output standard for each
worker i resc • é' . Motion study and time stådy differ from each other. This
difference hås been 'presented.
 PRINCIPLES OF MANAGEMENT 43
DIFFERENCEBETWEENMOTION STUDY AND TIME STUDY :

Basis Motion Stud Time Stud

1. Meaning Analyses various Analyses the time taken by
movements involved in various movements required
performing an activity. to perform a work.
2. Purpose To minimize movements of To determine standard time
human body so that a work for a work so that a fair day's
is performedwith the least work for each worker is
possible efforts. prescribed.
3. Tools It is conductedwith the help It is conducted with the help
of a movie camera connected of stopwatch.
with a micro chronometer
(a type of clock).

6. Fatigue study : atigue study is the analysis of time by which workers tend to
feel fatigue and need some rest.
uring working hours, workers feel fatigue after performing a definite amount
of work. If they continue to work after fatigue, their efficiencywill go do
Therefore, they need some rest on the results of fatigue study, frequen
of rests and time duration of each rest are prescribed with the aim that workers
do not'feel undue fåtigue and their effiåency remains uniform throughou) the
prescribed working hours. So the basic objective of fåtigue study is to reduce
fatigue at work and maintain the operational efficiency of the workers.
7. Different piece-rate system or getting maximum productivity from workers,
Taylor has emphasized dif erential piece-rate system for paying wages to
work&s. Differential piece-rate system is a system of wage payment in which
a wprker who achieVesor exceedsproduction target gets wage at higher rate
per piece while a worker who does not achieve this target get' wage at lower
rate per piece.
Thus, in this system, wage difference between target achievers and
non-achieverstends to be quite significant.However,this system is quite
motivating.For examplé, suppose that in a factory,production target is
20 units an wage rate for target achieversis 15 per unit and for non-
achievers is 13.
If A produces 22 units, he will get 330 ; B produces 20 units, he will get 300 ;
C produces 18 units, he will get 234.Thus, A will get 41% more wage than
C while his productivity is only 22%higher than e. This is quite motivating to
produce more.
44 HIGHER SECONDARY BUSINESS STUDIES

OF
2.6 COMPARISON BETWEEN FAYOL'S AND TAYLOR'S PRINCIPLES
MANAGEMENT
Fayol's principles of management and Taylor's principles of scientificmanagement
are mutually complementary. Both of them evolved their principles thruogh
practical experiences and realised the importance of management in industrial
progress.
However, a comparison of the two great management scientists is given below •
Basis Henri Fayol's F.W. Taylor's
Principles of Management Principles of Management

1. Philosophy Fayol's approach towards his Taylor described his

management principles is as philosophy on management
'general administration'. principles as scientific
management.
2. Area Fayol's principles have Taylor's principles and
consider relevance in techniques are relevant
functional areas and can be mainly with respect to
applied to all kinds of production activities and factory
activities. focused on
management. So Lhis
principles are directly
applicable at the shop floor.
3. Efficiency Fayol's management Taylor's principles and
principles are focussed on techniques aimed at
achieving managerial improving productivity of
efficiency. labour and following or
worker's efficiency.
4. Approach Fayol analysed management Taylor's appraisal on the
from the angle of top management from the
management based on top supervisory viewpoint and
downward approach. suggested, principles with
bottom upward approach.