Study of management

principles applied to large scale

industries.

1.0 Explanation
Management is essential to any organisation that wishes to be e cient
and achieve its aims. Without someone in a position of authority there
would be organisational anarchy with no structure and very little, if any
focus. In this project, management principles applied in large scale
industries is discussed.

2.0 Aim of the Micro-project:

To study the management principles of large scale industries.

3.0 Course Outcomes integrated:

Use basic management principles to execute daily activities.

4.0 Actual procedure followed:

. He advised us to collect the materials as soon as possible to sort.
Every team member helped in completing the project as

quick as possible.

Firstly the data was collected through various sources such as books,
reference books available in library, internet etc. The collected content
was analysed and edited with the help and guidance of the teacher. It
was formulated again and

After forming the groups the students in the group started to work on
the Micro-

Project as guided by Mr. R.C.Lokhande

again to give the nal touch. When it got completed, it was presented
before the teacher for proof reading and nalisation. The teacher
nalised it and advised us to compile the report in proper format along
with presentation.

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5.0 Actual resources used:

6.0 Outputs of the Micro-project-

Detailed about the structure of a proper management system and about

the need of management in every function of day to day life

6.1 About Large scale industries:

There are di erent forms of business organizations ranging

from a sole proprietorship to large scale businesses that
employ over a thousand employees. Based on the scale of the
business, various classi cations can be done, such as small
scale industries, large scale industries, public enterprises and
multinational

corporations.

Large scale industries are referred to as those industries that

are having huge infrastructure, raw material, high manpower
requirements and large capital requirements. Those
organisations having a xed asset of more than 10 crore
rupees are considered to be large scale industries.

The growth of the economy is very much dependent on these

industries. Such industries work towards bringing in foreign
reserves, generating employment opportunities and paving the
way for economic growth

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6.2 Principles of Management – The Importance of the
Principles
Having a clear management structure in place is vital for any
successful organisation. E cient and well intentioned
management sets the tone for the rest of the sta . It is common
for the attitude approach of managers to lter through the
entire organisation, so having managers working in an
exemplary way is an excellent example for employees to follow.

6.3 14 Principles of management by Henry Fayol:

Henry Fayol, also known as the ‘father of modern management

theory’ gave a new perception of the concept of management.
He introduced a general theory that can be applied to all levels
of management and every department. The Fayol

theory is practised by the managers to organize and regulate

the internal activities of an organization. He concentrated on
accomplishing managerial e ciency.

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 The fourteen principles of management created by Henri Fayol
are explained below.

1. Division of Work-
Henri believed that segregating work in the workforce amongst
the worker will enhance the quality of the product. Similarly, he
also concluded that the division of work improves the
productivity, e ciency, accuracy and speed of the workers.
This principle is appropriate for both the managerial as well as
a technical work level.

2. Authority and Responsibility-

These are the two key aspects of management. Authority
facilitates the management to work e ciently, and
responsibility makes them responsible for the work done under
their guidance or leadership.

3. Discipline-
Without discipline, nothing can be accomplished. It is the core
value for any project or any management. Good performance
and sensible interrelation make the management job easy and
comprehensive. Employees good behaviour

4. Unity of Command-
This means an employee should have only one boss and follow
his command. If an

employee has to follow more than one boss, there begins a

con ict of interest and can create confusion.

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5. Unity of Direction-
Whoever is engaged in the same activity should have a uni ed
goal. This means all the person working in a company should
have one goal and motive which will make the work easier and
achieve the set goal easily.

6. Subordination of Individual Interest-

This indicates a company should work unitedly towards the
interest of a company

rather than personal interest. Be subordinate to the purposes

of an organization. This refers to the whole chain of command
in a company.

7. Remuneration-
This plays an important role in motivating the workers of a
company. Remuneration can be monetary or non-monetary.
However, it should be according to an individual’s e orts they
have made.

8. Centralisation-

In any company, the management or any authority responsible

for the decision- making process should be neutral. However,
this depends on the size of an organization. Henri Fayol
stressed on the point that there should be a balance between
the hierarchy and division of power.

9. Scalar Chain-
Fayol on this principle highlights that the hierarchy steps
should be from the top to the lowest. This is necessary so that
every employee knows their immediate senior also they should
be able to contact any, if needed.

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10. Order-
A company should maintain a well-de ned work order to have
a favourable work culture. The positive atmosphere in the
workplace will boost more positive productivity.

11. Equity-
All employees should be treated equally and respectfully. It’s
the responsibility of a manager that no employees face
discrimination.

12. Stability-
An employee delivers the best if they feel secure in their job. It
is the duty of the management to o er job security to their
employees.

13. Initiative-
The management should support and encourage the
employees to take initiatives in an organization. It will help them
to increase their interest and make then worth.

14. Esprit de Corps-

It is the responsibility of the management to motivate their
employees and be supportive of each other regularly.
Developing trust and mutual understanding will lead to a
positive outcome and work environment.

This 14 principles of management are used to manage an

organization and are bene cial for prediction, planning,
decision-making, organization and process management,
control and coordination

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 6.4 Primary Principles of Production Management In large
Scale industries:

•Shorter set-up times.

By their nature, all set-up processes result in waste; they tie up

labour and equipment without adding value. Training, improved
e ciency, and giving workers accountability for their own set-
ups allows to slash the set-up times.

•Empowering Employees
Dividing a workforce into small teams and giving them
accountability for housekeeping and various other tasks has
been shown to improve e ciency. Teams are assigned leaders,
and the workers within those teams are trained on
maintenance issues – allowing them to deal with delays in the
production process immediately.

•Equipment Maintenance
Workers on the line are best placed to deal with mechanical
breakdowns and subsequent repairs. They can react to issues
quickly and often without

supervision, which allows the production process to restart far

more quickly after a shutdown.

•Management skill
Possessing management skill is generally considered a
requirement for success. An e ective manager is the manager
who is able to master four basic types of skills: technical,
conceptual, interpersonal, and decision making.

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•Technical skills
These skills are mostly related to working with processes or
physical objects. Engineering, accounting, and computer
programming are examples of technical skills. Technical skills
are particularly important for rst-line managers and are much
less important at the top management level.

•Decision making
The ability to identify a problem or an opportunity, creatively
develop alternative solutions, select an alternative, delegate
authority to implement a solution, and evaluate the solution.

6.5 How principles are applied in the large scale industry

1) Providing managers with useful insights into reality:

The principles of management provide the managers with
useful insights into real world situations. Adherence to 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. As
managerial discretion is bounded by the principle of
contribution to organisational objectives.

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2) Scienti c decisions:

Decisions must be based on facts, thoughtful and justi able 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. Management decisions taken on
the basis of principles are free from bias and prejudice. They
are based on the objective assessment of the situation.

3) Meeting changing environment requirements:

Although the principles are in the nature of general guidelines

but they are modi ed and as such help managers to meet
changing requirements af the environment. You have already
studied that management principles are exible to adapt to
dynamic business environment. For example, Management
principles emphasise division of work and specialisation. In
modern times this principle has been extended to the entire
business whereby companies are specialising in their core
competency and divesting non-core businesses. In this
context, one may cite

the decision of Hindustan Lever Limited in divesting non-core

businesses of chemicals and seeds. Some companies are
outsourcing their non-core activities like share-transfer
management and advertising to outside agencies. So much so,
that even core processes such as R&D, manufacturing and
marketing are being outsourced today.

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 4) Ful lling social responsibility:

The increased awareness of the public, forces businesses

especially limited companies to ful l their social
responsibilities. Management theory and management
principles have also evolved in response to these demands.
Moreover, the interpretation of the principles also assumes
newer and contemporary meanings with the change in time.
So, if any were to talk of ‘equity’ today, it does not apply to
wages alone. Value to the customer, care for the environment,
dealings with business associates would all come under the
purview of this principle. As an application of this principle, we
nd that Public Sector Undertakings have developed entire
townships as, for example, BHEL has developed Raipur in
Haridwar (Uttaranchal).

5) Management training, education and research:

Principles of management are at the core of management

theory. As such these are used as a basis for management
training, education and research. You must be aware that
entrance to management institutes is preceded by
management aptitude tests. Do you think that these tests
could have been developed without an understanding of
management principles and how they may be applied in
di erent situations? These principles provide basic groundwork
for the development of management as a discipline.
Professional courses such as MBAThese principles enable
re nement of management practices as weil by facilitating the
development of new management techniques. Thus, we see
that techniques like Operations Research (OR), cost
accounting, ‘Just in Time’, ‘Kanban’ and ‘Kaizen’ have
developed due to further research on these principles. In
conclusion it can be said that understanding the meaning,
nature and signi cance of principles of management will help
us to appreciate their applicability in real life situations.

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6.6 Example:
Toyota follows certain well-de ned business principles guiding
Its functioning. These are:

1. Honour the language and spirit of law of every nation and

undertake open and fair corporate activities to be a good
corporate citizen around the world.

2. Respect the culture and customs of every nation and

contribute to economic and social development through
corporate activities in local communities.

3. To provide clean and safe products and to enhance the

quality of life everywhere.

4. Create and develop advanced technologies and provide

outstanding products and services that ful l the needs of
customers worldwide.

5. Faster a corporate culture that enhances individual creativity

and teamwork value, while honoring mutual trust and respect
between management and labor.

6. Pursue growth and harmony with global community through

innovative management.

7. Work with business partners in research and creativity to

achieve stable, long- term growth and mutual bene ts and be
open to new partnerships.

These principles, will guide the company in its global vision.

This global vision envisages continuous innovations in future,
use of environment friendly technologies, respecting and
working with di erent sections of society and establishing an
interactive relationship with society

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7.0 Skill Developed/Conclusion:

1) It has been said that management has four basic functions

– planning, organising, leading and controlling.

2) Common sense dictates that without these principles of

management being in place an organization would have trouble
achieving its aims, or even coming up with aims in the rst
place.

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