Introduction to Creative Business

and Management
University for the Creative Arts
Introduction to Creative Business &
Environment
Unit 3
 Outline

1. Principles of Management
2. SWOT Analysis

……
1. Principles of Management
……
What is “Principles of Management”?

Management principles are the

statements of fundamental truth based on
logic which provides guidelines for
managerial decision making and actions.
 Why Management Principles?

The utility of principles lies in the

foundation they provide for its
efficient conduct, by making out
the basic features that must
characterize the practice for
management irrespective of where
it is occurring.
Features of Principles of Management

1. Principles of Management are Universal

2. Principles of Management are Flexible

3. Principles of Management have a Cause & Effect

Relationship

4. Principles of Management - Aims at Influencing

Human Behavior

5. Principles of Management are of Equal Importance

14 Principles of Management
 14 PRINCIPLES OF MANAGEMENT

1. Division of Labor
The specialization of jobs. Work of all kinds must be divided
& subdivided and allotted to various persons according
to their expertise in a particular area.
2. Authority & Responsibility
Authority & responsibility are co-existing. Authority refers to the right
of superiors to get exactness from their sub-ordinates whereas
Responsibility means obligation for the performance of the job
assigned.

3. Unity of Command
It provides the enterprise a disciplined, stable
& orderly existence. It creates harmonious relationship
between superiors and sub-ordinates.
 14 PRINCIPLES OF MANAGEMENT

4. Unity of Direction
According to this principle, efforts of all the members of the organization should be
directed towards common goal. Fayol advocates one head one plan which means that
there should be one plan for a group of activities having similar objectives.

5. Equity
It implies that managers should be fair and impartial while dealing with the
subordinates. They should give similar treatment to people of similar position. Equity is
essential to create and maintain cordial relations between the managers and sub-
ordinate.

6. Order
This principle is concerned with proper and systematic
arrangement of things and placement of people.
 14 PRINCIPLES OF MANAGEMENT

7. Discipline
According to Fayol, “Discipline means sincerity, obedience,
respect of authority & observance of rules and regulations of the
enterprise”. This principle applies that subordinate should respect
their superiors and obey their order.
8. Initiative
Fayol advised that management should provide opportunity to its
employees to suggest ideas, experiences & new method of work. It helps in
developing an atmosphere of trust and understanding.

9. Fair Remuneration
The method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory & rewarding of the efforts. Logical & appropriate wage
rates and methods of their payment reduce tension & differences between
workers & management creates harmonious relationship and pleasing
atmosphere of work.
 14 PRINCIPLES OF MANAGEMENT

10. Stability of Tenure

According to Fayol. “Time is required for an employee to get used to a
new work & succeed to doing it well but if he is removed before that
he will not be able to render worthwhile services”. As a result, the
time, effort and money spent on training the worker will go waste.

11. Scalar Chain

Fayol defines scalar chain as ’The chain of superiors ranging
from the ultimate authority to the lowest”. Every orders,
instructions, messages, requests, explanation etc. has to pass
through Scalar chain.
 14 PRINCIPLES OF MANAGEMENT

12. Sub-Ordination of Individual Interest to General Interest

An organization is much bigger than the individual it constitutes

therefore interest of the undertaking should prevail in all
circumstances. As far as possible, reconciliation should be achieved
between individual and group interests. But in case of conflict,
individual must sacrifice for bigger interests.

13. Espirit De’ Corps

It refers to team spirit i.e. harmony in the work groups and
mutual understanding among the members. Fayol cautioned that,
face to face communication should be developed. The managers
should infuse team spirit & belongingness. There should be no place
for misunderstanding. People then enjoy working in the organization
& offer their best towards the organization.
 14 PRINCIPLES OF MANAGEMENT

14. Centralization & De-Centralization

Centralization means concentration of authority at the top

level. In other words, centralization is a situation in which
top management retains most of the decision making
authority.

-Decentralization means disposal of decision making

authority to all the levels of the organization. In other
words, sharing authority downwards is decentralization.
2. SWOT Analysis
……
 What is SWOT analysis

Researchers in strategic management

agree SWOT or Strengths, Weakness,
Opportunities, and Threats analysis that
provides the foundation for
understanding organizational issues
(Ansoff, 1965; Andrews, 1987; Porter,
1991; and Mintzberg et al., 1998) .
 Deeper into it....
It has grown as a key tool for addressing complex strategic situations
by reducing the amount of information to improve decision-making.

SWOT has been used by countless practitioners, marketing

researchers, and is a frequent and popular tool for business
marketing and strategy students.

Glaister and Falshaw (1999) agree SWOT analysis is one of the most
respected and prevalent tools of strategic planning. Dickson (2002)
agrees the traditional SWOT analysis can be re-conceptualized in
terms of the direction and momentum where the market can still be
changed.
Use of SWOT

SWOT analysis was frequently applied to

organizational
assessments for strategic planning. Studies report
use of the tool for individual organizations, for
comparing two companies, and for assessing
several companies (but not the entire group of
companies comprising an industry).
6 Priorities - Why to use SWOT
1. Managing risk and building a communication plan which include
keeping products/services up-to-date and/or being state-of-the-
art;
2. Gaining and maintaining market share and/or serving
customers;
3. Minimizing confusion by building an infrastructure and systems
to establish and sustain high performance;
4. Improving processes and procedures for efficiency;
5. Quality and return, developing committed and competent
workforce and/or building a supportive environment and
identity; and
6. Positioning for the long-term by identifying trends, assumptions
and issues that offer opportunities or potential threats.
SWOT main components - Internal
SWOT main components -

External environment
Book

Stueart, Robert D. (2007). Library and Information Center

Management. (p. 167-179). London: Libraries Unlimited.
Assignment
berlinsbi.com