1.

Principles of Management
Principles

• “It is a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour
or for a chain of reasoning.
• “Principles means fundamental truth established with reference to cause and effect relationship between
two or more variables or events.”
Principles mean techniques or systems which give one directional result. They are general statements
or guidelines that can be used as a base for framing certain code of conduct. These are based on observation
and experimental studies. They are used in pure science and social science.

Management

“Management is an integrated set of principles, functions, processes, approaches, styles and others skills to be
used for mobilizing and utilizing resources for achieving pre-determined objectives in changing environment.”
“Management is an art of getting thing done through others”
Management is a social science; it studies the human behaviour for working. It used some principles
for getting things done from others.

Management Principles

“Management principles are the statements of fundamental truth which act as guidelines for
managerial decision making and behaviour”. They have been developed on the basis of observation and
experimentation as well as personal experiences of managers. Management principles are not as rigid as
principles of pure science. Management principles are formed to guide and influence the behavior of human
beings. Human beings never respond in an identical manner. Therefore, when managers apply management
principles in an organization, they need to make some modifications depending on the persons or situations
prevailing in an organization.

Difference between Management Principles and Principles of Pure Science

Management Principles Principles of Pure Science

Flexible in Nature Rigid in Nature
Generally management principles apply according to Scientific principles do not change with time or
the changing requirement of business environment. situations.
Management Principles are applied in human being; it Scientific principles are applied in physical matters,
will not get same result because human beings never it always show same result.
respond in an identical manner.

Nature of Principles of Management

By nature is meant features, characteristics and qualities of anything. Principles are general guidelines,
which are applicable when certain conditions are present. Management principles help managers to take
correct decisions while performing their functions like planning, organizing, directing etc. The following points
summarize the nature of Principles of Management:

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1. Universal applicability: The principles of management are applicable in all types of organizations
irrespective of their size and nature. They are applicable in a business as well as non-business
organizations, profit and non-profit, small, medium and large organizations, public sector and private
sector, manufacturing, trading, and service, Top, Middle and Lower level management, etc. E.g. – Division
of work and equity principles applied in all organizations.
2. General guidelines: The principles are guidelines to action but do not provide readymade solutions to all
managerial problems. This is so because real business situations are very complex and dynamic and are a
result of many factors. However, the importance of principles cannot be underestimated because even a
small guideline helps to solve a given problem. For example, in dealing with a situation of conflict between
two departments, a manager may emphasize the primacy of the overall goals of the organization. E.g. –
Principle of ‘fair remuneration’ guide the managers to give adequate salary to employees but what
amount of salary is ‘fair’ depends upon the nature, size and financial capacity of the organization.
3. Formed by practice and experimentation: These principles of management have been developed only
after deep and through research work. They are not developed overnight or they are not the personal
feelings of a person. Management thinkers use their knowledge and experience for developing principles.
For example – F.W. Taylor and Henry Fayol experiment their principles in their organizations then
introduced to world.
4. Flexibility: Management principles are not static and rigid nature. These are keeps changing over the time.
These are flexible and can be modified by the manager according to the requirements of the situation. E.g.
Family management is replaced by Professional management. Principle of ‘centralisation’ insists on
concentration of power and authority at top level but the degree of centralization may vary according to
the nature of organization and staff.
5. Behavioral in nature: Management is group activity. It aims at achieving certain goals through a group of
human being. So management principles are formed to guide and influence the behavior of human
beings/employees. Principles enable a better understanding of the relationship between human and
material resources in accomplishing organizational purposes. These help to improve the relationship
between superior, subordinates and all the members of an organization. For examples – equity, team
work, stability, mental revolution etc.
6. Cause and effect relationship: The principles of management are intended to establish relationship
between cause and effect so that they can be used in similar situations in a large number of cases. As such,
they tell us if a particular principle was applied in a particular situation, what would be its likely effect. The
principles of management are not perfect since they mainly apply to human behavior. In real life,
situations are not identical. So, accurate cause and effect relationships may be difficult to establish.
However, principles of management assist managers in establishing these relationships to some extent
and are therefore useful. According to one of his important principle, Henri Fayol says ‘Division of work
leads to specialisation’. Division of work is the ‘cause’ and ‘specialisation’ is the ‘effect’. Management
principles tell the manager, what would be the result, if a particular principle is applied in a particular
situation. It is very helpful for managers to take right decisions without using to ‘trial and error method’.
7. Equal importance to all: All principles of management are of equal importance. Every principle have own
benefit. Every principle differs from other. All principles try to achieve goals of organization. They try to
enhance the productivity, profitability and welfare of all the stakeholders of an enterprise.

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Significance/Importance of Management Principles
Management principles are universal nature, they are applicable everywhere and every type of
organizations. They provide general guidelines and pre-determined solutions for the managerial problems
which are recurring. Managers may apply these principles to fulfill their tasks and responsibilities. They have
gained importance with increasing professionalization of management. Following points are discussed
significance/importance of management principles.
1. Provides useful insight to managers: The principles of management provide the managers with useful
insights into real world situations. Use of these principles will add to their knowledge, ability and
understanding of managerial situations and circumstances. It will also enable managers to learn from past
mistakes and conserve time by solving recurring problems quickly. For example by following the principle
of delegation, a manager can leave routine decision making activities to subordinates to deal with only
those situations which require his expertise.
2. Efficient Utilization of Resources: Resources both human and physical (material, machines, money, etc.)
available with the company are limited. They have to be put to optimum use. By optimum use we mean
that the resources should be put to use in such a manner that they should give maximum benefit with
minimum cost and control on wastage. Principles equip the managers to foresee the cause and effect
relationships of their decisions and actions. As such the wastages associated with a trial-and-error
approach can be overcome. Manager’s decision should be free from personal bias. For example: Manager
cannot decide salaries or incentives as per his wish. He needs to follow company policy and rules to
evaluate employee performance and contribution towards organization goals
3. Scientific Decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the intended
purposes. They must be timely, realistic and subject to measurement and evaluation. Management
principles help in thoughtful decision-making. They emphasize logic rather than blind faith. For example
launching of new product in the market is not a matter of chance, it is a result of great marketing research,
competitor strategies etc.
4. Understanding Social Responsibility: Business is a social institution. Business should fulfill its social
responsibility towards various stakeholders (shareholders, directors, consumers, suppliers, employees,
government, society etc.). Principles of management have been developed in such a way that they help in
fulfilling its social responsibilities. These principles establish certain ethics in response to social
responsibility towards all stakeholders. For example principle of equity means kindness, social justice and
equal treatment to not only for employees but also for shareholders, customers, general public and
others.
5. Encourages Research and Development: Principles of management are flexible, relative and dynamic.
They can be modified as per requirement. Their nature goes on changing along with changes in the
business world. The collection of management principles serve as a foundation for fruitful research which
facilitates in expanding scope of management. Every principle provides base for other principle.
Management theories provides basement for new thinkers to develop new theories in management. The
principles of management help to increase knowledge and carry out further research in the field of
management. It provides new ideas, imaginations and visions to the organisation. Although the principles
are in the nature of general guidelines but they are modified and as such help managers to meet changing
requirements of the environment.

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 Pre-Scientific Classical Neo-Classical Modern
Management Management Management Management

'X' Theory 'Y' Theory

6. Helps to coordinate and control: The principles of management help to make optimum utilization of
natural resources. They also help to coordinate the material and human resources for the accomplishment
of common objectives. Management principles provide guidelines to create better coordination into
various departments and also control activities of them. For example: for coordination – Unity of
Command, Unity of Direction, Scalar Chain, Team work, etc. for control – Discipline, Order, Authority and
Responsibility, etc.
7. Develops Objectives Approach: Due to various management principles manager can understand the
problem and situations and try to find out solutions by applying scientific methods. He can identify the
business opportunities, find the causes of the problems in correct manner and can provide appropriate
solutions on it. It builds confidence in the minds of the managers, so management principles develop the
objective approach.

Theories of Management
Management theories are the set of general rules that guide the managers to manage an organization.
Theories are an explanation to assist employees to effectively relate to the business goals and implement
effective means to achieve the same.
Management theories are concepts surrounding recommended management strategies, which may
include tools such as frameworks and guidelines that can be implemented in modern organizations. Generally,
professionals will not rely solely on one management theory alone, but instead, introduce several concepts
from different management theories that best suit their workforce and company culture.
Until the day that machines are able to think, talk, and experience emotions, humans will remain the
most complicated beings to manage. Humans can never achieve the kind of error-free performance that
machines provide. On the upside, there are tons of things that machines aren’t capable of doing, making
humans indispensable assets. For such reason, proper management is one of the most crucial things for an
organization.
For a long time, Management Thinkers have been researching the most suitable forms of management
for different work settings. This is where management theories come into play. Although some of these
theories were developed centuries ago, they still provide stable frameworks for running businesses.
Management Thinkers Theory/Approach
Frederick W. Taylor Scientific Management Theory
Henri Fayol Administrative Theory
Max Weber Bureaucratic Theory
Elton Mayo Human relations Theory
Fred Edward Fiedler Contingency Management Theory.
Peter Drucker M.B.O (Management By Objective)
Douglas McGregor X&Y Theory
Abraham Maslow Motivational theory

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Administrative Theory of Management
Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining engineer, mining
executive, author and director of mines who developed a general theory of business administration that is
often called Fayolism.
Henri Fayol started 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 Chief Managing Director of
this mining company that employed over 1,000 people. Henri Fayol 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 the year 1916 Fayol wrote a book entitled "Administration Industrielle et Générale” in French
language. It was published in English as ‘General and Industrial Administration’ in 1949 and is widely
considered as foundation work in classical management theory. These principles act as guidelines for
managers to perform managerial activities. Henri Fayol is known as ‘Father of Modern Management’.

Administrative Management
A. Activities of Business Enterprise: According to Fayol, the business operations of an organization could be
divided into six broad activities.
1. Technical activities (production, manufacture, adaptation).
2. Commercial activities (buying, selling, exchange).
3. Financial activities (search for optimum use of capital).
4. Security activities (protection of property and persons).
5. Accounting activities (Recording and taking stock of costs, profits, liabilities, maintaining balance sheets
and compiling statistics).
6. Managerial (Administrative) activities (planning, organization, command, coordination and control).
B. Five Elements of Management: Fayol studies primarily focused on the last activity which is “Managerial
Activity”. He identified five major elements of management that depict the expected behaviors that
managers should engage in to achieve the business objectives of the organization effectively. The five
elements of management are: Planning, Organizing, Commanding, Coordinating, and Controlling.
C. Principles: The 14 principles of management given by H. Fayol are particularly focused on the five
management functions of an organization. These statements provide guidelines for decision-making and
management actions. These 14 principles are explained as follows.
1. Principle of Division of Work: This is the principle of specialization, which is very well expressed by
economists as being a necessary factor for efficiency in the utilization of labor. This principle of
management is applicable to both managerial and technical activities. Division of work means dividing
the full work of the organization among individuals and creating departments. While dividing the work
consider the employees education, experience, qualities, capacities and willingness to the work. It
leads to specialization, and specialization helps to increases efficiency, which results in improvements
in the productivity and profitability of the organization. Because of this principle, an organization is
divided into several departments such as Purchase, Stores, Production, Marketing, Sales, Finance,
Accounting, HR, etc.
2. Principle of Authority and Responsibility: Authority means the right to give orders and obtain
obedience. On the other hand, responsibility means obligation to complete the assigned task on time.

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 According to Henri Fayol, there should be a balance between Authority (Power) and Responsibility
(Duties). Authority must be equal to Responsibility. If the authority is more than responsibility then
chances are that a manager may misuse it. If responsibility is more than authority then he may feel
frustrated and lead to failure of organizational goals.
3. Principle of Discipline: Discipline means sincerity, obedience, respect of authority, observance of rules
and regulations, code of conduct for employees for how to behave in organization as well as outside
the organization. According to Fayol, discipline is the most essential thing for any organization to run
smoothly. So every employee must follow and respect the rules that govern the organization. Good
discipline is the result of effective leadership. It requires good superiors at all levels, clear and fair
agreements and judicious application of penalties.
4. Principle of Unity of Command: According to this principle, an individual employee should receive
orders from one manager and that the employee is answerable to that manager. If tasks and related
responsibilities are given to the employee by more than one manager, this may lead to confusion
which may lead to possible conflicts for employees. Besides, in the absence of unity of command,
responsibility cannot be fixed, overlapping orders, duplication of work etc. may happen. By using this
principle, the responsibility for mistakes can be established more easily.
5. Principle Unity of Direction: This management principle is all about focus and unity. All activities that
are related to each other should be categorized as one unit and carried out by one group as a team.
One head and one plan for a group of activities with the same objective. All activities which have the
same objective must be directed by one manager, and he must use one plan. For example, all
marketing activities such as advertising, sales promotion, pricing policy, etc., must be directed by only
one manager. He must use only one plan for all the marketing activities. Unity of direction means
activities aimed at the same objective should be organized so that there are one plan and one person
in charge. This ensures unity of action and coordination.
 Difference between Unity of Command and Unity of Direction
Basis Unity of Command Unity of Direction
Meaning This principle states that one subordinate This principle states each group of
should receive orders from and should be activities having the same objectives
responsible to only one boss. must have one head and one plan.
Aim To prevent dual subordination To prevent overlapping of activities
Focuses on Individual employee Entire organization
Outcome The principle leads to effective functioning The principle results in coordination of
of the subordinates. work of various employees.
Display It represents relationship between superior It represents relationship of activities as
Relationship and subordinate. per organizational plans and goals.
Need It is needed to fix the responsibility of each It is needed for sound organization of
person in the organization. activities.
6. Principle of Subordination of Individual Interest to General Interest: Every individual in any
organization has their own individual interest. However, for smooth functioning of an organization, it is
a must that these individual interests be considered as subordinate to the interest (ethics) of the
organization. This means that everybody in the organization should focus more on the organizational

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 objectives and not on those of the individual and that this principle is applied to all level of the entire
organization, from employees to the managers. The employee should protect the interest of the
organization first and his personal interest should be subordinated.
7. Principle of Centralization: Centralization means concentration or reservation of decision making
power or authority in few hands at the top level. Decentralization means delegation or distribution of
decision making power or authority throughout all the levels of the organization. Decentralization is a
situation in which an employee is given the authority to make decisions regarding work related
matters. According to Fayol an organization should not be completely centralized or decentralized,
there must be a proper balance between the two depending upon the, size and nature of the business
and also experience and ability of employees. Decentralization helps the top management to reduce
their work load and at the same time it will motivate the lower level managers.
Major decisions Centralized
Minor/routine decisions Decentralized
Experience Employees Centralized
Inexperience Employees Decentralized
Employee possess ability Centralized
Employee not possess ability Decentralized
Small-scale Organization Centralized
Large-scale Organization Decentralized
8. Principle of Remuneration of Employees: Remuneration is the price for services received. According to
this principle remuneration to the employees should be fair for both employees and the organization.
The remuneration should be sufficient to motivate employees. At the same time it should be within the
paying capacity of the organisation. It is the duty of the manager to ensure that employees are being
paid remuneration according to their work. The remuneration should be fixed by taking into
consideration the skill, experience, knowledge, tenure, cost of living, market trend, profitability of
organization, etc. If employees are not paid wages properly they may work with perfect dedication and
capacity. Remuneration should be just and equitable. This will create good relations between workers
and management.
9. Principle of Scalar Chain: An organization consists of superiors and subordinates. Scalar chain is the
formal line of authority (Chain of command) which moves from highest to lowest rank in a straight line.
The chain specifies the route through which the information is to be communicated to the desired
person. Fayol insists that this chain must be strictly followed by all managers and subordinates in an
organisation. Scalar chain or chain of command gives a clear idea about authority-responsibility
relationship and systematic communication can be ensured in an organization.
For example, in an organization there is one head A who has two lines of
authority under him. One line consists of B-C-D-E-F. Another line of
authority under A is L-M-N-O-P. According to Scalar Chain if E wants to
communicate with O he has to move through E-D-C-B-A-L-M-N and then
O. But in case of emergency a Gang Plank between E and O may be
created as shown by the dotted line in order to avoid delay.
Drawbacks of Scalar chain
Time consuming-Huge time is required for the communication to reach the
destination.
There is possibility of distortion of message in the course of its transmission.

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 Gang Plank (Direct Contact): According to this concept, in case of emergency, two executives of
the organization of different departments at the same level can communicate directly, so that speedy
decisions and actions could be taken. Gang plank allows direct communication between the officials
working at same level of authority without following every link of chain. In the above example, if
employee ‘E’ has to contact employee ‘O’, he can easily and directly communicate the information to
‘O’ using this Gang plank. Some business opportunities may be lost due to lack of timely decisions;
gang plank is a solution for this.
10. Principle of Order: This principle concerned with proper and systematic arrangement of man and
material in organization. According to Fayol, there must be a fixed place for everything (men and
materials) and everything must be in its place. Human and material resources must be in the right
place at the right time. If this order is strictly followed in an organization, there will be no hindrance in
the activities of the business/ factory. This increases the efficiency of company’s operations.
11. Principle of Equity: Equity means a combination of fairness, kindness and social justice. It refers to
kindness and justice in the behavior of managers towards workers. According to Fayol the principle of
equity should be followed by managers at all levels. There should be no discrimination against anyone
on account of gender, religion, language, caste, belief or nationality. Employees will bring their
maximum efforts only when they are treated with kindness and justice. It creates loyalty and devotion
in the employees toward the organization. If a manager is biased in dealing with employees then
employees will get dissatisfied and will not contribute to their maximum capacity.
12. Principle of Stability of Tenure of Personnel: According to this principle, employees once selected,
should be kept at their post for a minimum fixed term (tenure).Employees turnover should be
minimized to maintain organizational efficiency. They should be given reasonable time to show results.
Employees are more likely to leave the organization if there is job insecurity. Recruitment, selection
and training costs of new employees will be high.
13. Principle of initiative: Initiative refers to volunteering to do work in an innovative way. Fayol suggested
that employees in the organization must be given an opportunity to take some initiative in making and
executing a plan. Initiative gives more freedom to its employees to suggest their new ideas and more
convenient methods of work. Initiative will increase the satisfaction level of employees and brings
success to the organization. Initiative does not mean disobedience; it will develop a feeling of oneness
in employees.
14. Principle of Esprit De Corps (Union is Strength): Esprit de Corps means “Team Spirit/ Team Work/
Union is Strength”. According to Fayol management should promote a team spirit of unity or harmony
among employees. Employees should have a feeling that they are a member of that organization. A
manager should replace ’I’ with ‘We’ in all his conversations with workers. Fayol put emphasis on team
work because team contribution is always better than individual contribution. It will also minimize the
need for using penalties.

From the above discussion it is clear that Fayol’s 14 principles of management are widely applicable to
managerial problems and it will really working as a guideline for managerial decision making and behavior.
According to Fayol, the list of 14 principles discussed above is not final. With the development of
management science, the list can be modified on the basis of experience and needs.

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Scientific Management Theory
Frederick Winslow Taylor (March 20, 1856 – March 21, 1915) was an American inventor and
mechanical engineer that applied his engineering and scientific knowledge to management and developed a
theory called scientific management theory and he is known as ‘Father of Scientific Management’.
He was born in 1856 in Philadelphia, USA. In 1874 he became an apprentice machinist, learning of
factory conditions at grass-roots level. He qualified as an engineer due to evening study. In 1878 he joined
Midvale Steel Works as a mechanical engineer and rose to the position of Chief Manager of that company in
1884 at the age of 28. He was primarily concerned about the efficiency of workers and optimum utilization of
resources. He conducted a series of experiments in management science for two decades. From 1890 until
1893 Taylor worked as a general manager and a consulting engineer to management for the Manufacturing
Investment Company of Philadelphia.
1893, Taylor opened an independent consulting practice in Philadelphia. Through these consulting
experiences, Taylor perfected his management system. In 1898 he joined Bethlehem Steel to solve an
expensive machine shop capacity problem. While at Bethlehem, he discovered many management techniques.
Taylor was forced to leave Bethlehem Steel in 1901 after discord with other managers. Since then, Taylor was
promoting his management methods through his writings, lecturing and consultation. In 1911, Taylor
introduced his The Principles of Scientific Management paper to the American Society of Mechanical
Engineers (ASME). In early spring of 1915 Taylor caught pneumonia and died, one day after his fifty-ninth
birthday, on March 21, 1915.One hundred years after his death, Taylor’s findings are still relevant today.
In 1909, Taylor published “The Principles of Scientific Management”. In this book, he suggested that
productivity would increase if jobs were optimized and simplified. He also proposed matching a worker to a
particular job that suited the person’s skill level and then training the worker to do that job in a specific way.
Taylor first developed the idea of breaking down each job into component parts and timing each part to
determine the most efficient method of working.

“Scientific Management is an art of knowing exactly what you want your men to do and seeing that they do it
in the best and cheapest way”.

Principles of Scientific Management

1) Science, not Rule of Thumb: In the traditional management decisions are based on opinions, prejudices, or
rule of thumb. Rule of Thumb decisions are based on personal judgments of the manager. Its trial and
error approach, not give perfect results to organization. According to Taylor, each job should be performed
in an organisation as per the scientific approach, as there is always one best method to maximize
efficiency. This method can be developed through study and analysis. It involves the following steps:
(i) Investigation of traditional methods. (ii) Unifying the best practices.
(ii) Developing a standard method.
Selecting ‘one best method’ for activities can result in saving time, effort, money and resources. Taylor
believed that even a small activity like loading paper sheets into boxcars can be planned scientifically. This
will save time and also human energy.
2) Harmony, Not Discord: All members of the organisation (employers and employees) should work as a
team. Conflicts should be resolved by mutual discussions and coordination and disagreements should be
eliminated. All group actions should be based on mutual understanding so that group, as a whole,

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 contributes to organizational output. Taylor indicated and believed that the relationship between the
workers and management should be cordial and complete harmony. Difference between the two will
never be beneficial to either side. Management and workers should acknowledge and understand each
other’s importance. Taylor also suggested the mental revolution for both management and workers to
achieve total harmony.
3) Mental Revolution: The basic- idea behind the principles of scientific management is to change the mental
attitudes of the workers and the management towards each other. Taylor called it ‘Mental Revolution’.
Both should understand the value of each other and work with full participation and cooperation. The aim
of both should be to improve and boost the profits of the organisation. Mental Revolution demands a
complete change in the outlook of both the workers and management; both should have a sense of
togetherness.
4) Cooperation, Not Individualism: It is similar to ‘Harmony, not discord’ and believes in mutual collaboration
between workers and the management. Managers and workers should have mutual cooperation &
confidence and a sense of goodwill. The main purpose is to substitute internal competition with
cooperation. They should not promote individual interests at the cost of organizational interests. They
should cooperate with each other, promote mutual understanding in their thinking, solve each other’s
problems and work as a team to achieve organisational goals.
5) Division of Responsibility: This principle of scientific management focuses determining the real nature of
roles to be played by managers & workers at different levels. The management is responsible for planning
and organising the work while the workers should execute the work assigned to them by their managers.
Major planning is done by the top and middle level management whereas employees are concentrating on
its implementation. The reporting is done as per the instructions given by their superiors. Managers should
always help, encourage and guide the employees. It helps for best performance of managers as well as
employees.
6) Development of Employer and Employees for Greater Efficiency and Maximum Prosperity: Best
performance of any organization always depends on the skills and capabilities of its employees. They
should be developed to their full potential through scientific selection, formal education, training and
motivation to give their best to organisational output for the benefit of both; the organisation and the
workers. Training should be provided at the work place so that workers learn about new technologies and
methods of work to meet the needs of the changing environment. Due to training improved the skills and
increased the performance of employees. Employers get skilled labors and maximum output.

Techniques of Scientific Management

1) Work Study: Before assigning the work to the available workforce, proper work study should be done by
management. This will increase the quality of the output at the minimum cost. Work study is a systematic,
objective oriented, analytical and critical assessment of the performance of workers in various operations
in a workshop. Following are a few of the studies that are conducted by Taylor:
a) Method Study: There are different ways of performing and completing the job. For best quality and
cost effectiveness, identifying the best method of doing a particular job is very important and
challenging task for a manager. Method study refers to identify the most suitable way to do a
particular job. Process chart and operation research are used in order to conduct the study and the
primary objective is to minimize the production cost and maximize the levels of quality and consumer

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 satisfaction. It helps in reducing the wastage of time, raw material and in improving the utility of all
resources. It is helpful in determining the methods for handling the raw materials, transportation,
inspection, storage, etc.
b) Motion Study: Motion studies were developed by Frank and Lillian Gilbreth as an engineering and
management technique. This study refers to the study of motions that are being performed by
machines and workers while conducting the job. Motions include sitting, standing, holding, turning,
changing position etc., of workers, while performing a particular job. The main objective of this study is
to identify the motions which are productive, incidental and unproductive. This study helps in
eliminating the unnecessary movements as to complete a given task in less time and thereby
increasing the efficiency. Movie camera may be used to conduct the study and the objective of the
study is to eliminate or reduce all of the unnecessary motions which are not required for the job
thereby reducing the time required to finish a job.
c) Time Study: Time study is the technique of observing and recording the time required by an employee
of reasonable skills and ability to perform each element of the tasks in a job. This technique is based on
the study of an average worker having reasonable skill and ability. Average worker is selected and
assigned the job and then with the help of a stop watch, time is ascertained for performing that
particular job. Taylor maintained that Fair day’s work should be determined through observations,
experiment and analysis by keeping in view an average worker. The purpose of time study is to
scientifically determine the standard time for doing a job under given condition. It helps to measure
the efficiency of workers. It creates time consciousness among workers. Saving in time leads to cost
reduction and increased efficiency.
Standard Time × Working Hours = Fair Day’s Work
d) Fatigue study: Fatigue is a term used to describe an overall feeling of tiredness or lack of energy and
motivation (both physical and mental). Generally long working hours without sufficient breaks, target
pressure, heavy working tools and poor working conditions result into physical and mental fatigue. It
has adverse effect on the health and efficiency of the employees. This study refers to the frequency
and the duration of the rest intervals which are required to complete a particular job. It is often seen
that the rest refreshes the workers and when they come back the work is done at their full capacity
there for the objective of the study is to maintain a particular efficiency level of the workers. Fatigue
study was developed by Frank and Lillian Gilbreth.
2) Standardization of Tools and Equipments: Standardization is the process of setting standards for every
business activity, process, raw materials, rime, machinery and methods, to achieve efficiency. Taylor
advocated that tools & equipments as well as working conditions should be standardized to achieve
standard output from workers. Efforts should be made to provide standardized working environment and
methods of production to the workers. It would help to reduce spoilage and wastage of materials, improve
quality of work, reduce cost of production and reduce fatigue among the workers.
3) Scientific Task Setting: It is essential to set a standard task for workers. Standard task is the quantity of
work which an average worker can perform under ideal standardized conditions in one day, generally
called 'a fair day's work', which for every worker should be fixed after a scientific study. Taylor emphasized
the need for fixing a fair day’s work because it will prevent the workers from doing work much below their
capacity. By using this technique, workers will complete the work as per standards given and management
can keep proper control on optimum utilization of resources.
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4) Scientific Selection and Training: The management should design scientific selection procedure so that
right men are selected for the right jobs. It needs to fix job specification/profile. Employees are selected
according to pre-determined standards in an impartial way. After selection management should provide
the proper training programmes to increase their efficiency.
Estimating the Manpower Requirement → Recruitment → Selection → Placement and Orientation →
Training and Development
5) Functional Organization: It is also known as Functional Foremanship. This form of organisation is totally
based on the principle of specialization and makes full utilization of the expertise of various experts. In a
functional organisation, work is divided into many small parts and each part is assigned to an expert. The
purpose of functional foremanship is to improve the quality of supervision of workers by employing
specialist foremen. Taylor believed that a single foreman is not competent to supervise all functional
matters. In Taylor’s functional foremanship, planning is separated from execution. He recommended eight
foremen in all to control the various aspects of production. They are categorized as follows:
A. Planning department
1. Route Clerk: He is responsible for ascertaining the actual route through which whole work process
travel from conversion of raw materials into finished products.
2. Instruction Card Clerk: He prescribes the exact method of completing a work according to the
route specified. He records instructions to complete the work.
3. Time and Cost Clerk: He specified the standard time for the completion of the work and also fixes
the time schedule for each element of the job. He also looks after the work relating to payroll and
cost. Recent tendency is to split up the functions of this clerk into two separate units – the pay roll
department and the cost department.
4. Shop Disciplinarian: He acts as a personnel manager and deals with the cases of indiscipline and
absenteeism. Thus, his primary function is to maintain orderliness in the factory and office. He
ensures that every work is being performed in a disciplined manner.
B. At Implementation/Executive/Factory Level
1. Gang Boss: The workers are divided into various groups from the point of view of control. A group
leader is selected who is known as the gang boss. He is concerned with the preparation of work for
the machine such as the set-up of machine, moving work from machine to machine and from
machine to stores. He actually gets the work done.
2. Speed Boss: He is in charge of technical supervision of the work. Such as correcting the speed of
the work, flow of work from one place to another, etc. He ensures the work is completed in
specified time. Now-a-days he is designated as Assistant Foreman.
3. Repair Boss: He is entrusted with the task of proper repair and maintenance of the equipment and
up-keep of the plant. The main function of the repair boss is to keep the machines and tools in
working condition.
4. Inspector: The inspector is entrusted with all inspection and testing works. He is responsible for the
quality of the product. He ensures the work is done as per the specified standards.

While developing the concept, Taylor suggested that it is unscientific to over load a foreman with
entire responsibility of running a department. He advocated that the direction of work should be decided
by functions and not by authority. Hence, his main emphasis was on functions.

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 Functional organization can also operate at higher level management. The whole work of the
organization should be divided into various departments’ viz., purchase, sales, finance, production, etc.
The respective managers will be responsible for carrying out the various activities of their departments in
the organization.

6) Differential Piece-Rate Wage Plan: Remuneration should be fixed in such a way that average worker is
motivated to attain a standard output. Taylor has advised the adoption of differential wage systems in
order to motivate the employees. According to this system, wages are paid on the basis of work done and
not on the basis of time spent in doing the work. In this system two different wage rates are used: one is
the high wage rate and the other is the low wage rate. Those workers who are able to produce the
standard number of units within a fixed duration are paid as per the high wage rate, and those workers
who are not able to produce the standard number of units within the same time are paid as per the lower
wage rate.
 If the worker exceeds the standard, he will be regarded as efficient and if he fails to do so, he will
be regarded as inefficient.
 If workers are efficient, they should be paid @120% of the normal rate and if they are inefficient,
they should be paid @80% of the normal piece rate.

Comparison between Taylor and Fayol Approach for Principles of Management

F.W. Taylor and Henri Fayol are associated with the classical management theory. Both of them
contributed immensely towards the study of management as a discipline. The principles of Taylor and Fayol
are mutually complementary to each other in following terms.

Points F.W. TAYLOR HENRY FAYOL

1. Meaning F.W. Taylor is a father of scientific Henry Fayol is a father of modern
management who introduced four management who laid down fourteen
principles of management, for increasing principles of management, for improving
overall productivity. overall administration.
2. Concept Scientific Management General theory of administration
3. Focus Lower/Shop floor level management Top level management
4. Applicability Applies to specialized organizations only. Universally applicable
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5. Theory based on Observation and Experimentation Personal Experience
6. Orientation Production and Engineering Managerial function
7. System of Wage Differential Payment System Sharing of profit with managers.
Payment
8. Approach Engineer's approach Manager's approach
9. Increase Taylor give emphasis on the scientific Fayol give emphasis on the skills and
Productivity methods for increasing productivity efficiency of the personnel to increase
efficiency.
10. Major He contributes to the development of Fayol’s contribution was the
contributions scientific techniques and principles. development of 14 principles of general
management.

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