THE INDIAN PUBLIC SCHOOL, ERODE

ACADEMIC YEAR 2022-2023

BUSINESS STUDIES

FAYOL’S PRINCIPLES OF MANAGEMENT

1. Division of Work

Merits

1. It leads to specialisation as work is divided as per qualification.

2. It simplifies the work and increases the efficiency as same work is performed repeatedly.

Consequences of violation:

1. There will be lack of efficiency and specialisation.

2. There will be waste of time and efforts due to changes from one work to another.

2. Authority and Responsibility

Merits:

1. It prevents misuse of authority.

2. It helps in fixing responsibility.

Consequences of Violation

1. If responsibility exceeds authority, then subordinate cannot perform his duties.

2. If authority exceeds responsibility, subordinate may misuse it.

3. Unity of command

Merits

1. There will be no confusion in the minds of subordinates.

2. Responsibility can be easily fixed.

3. Better performance as subordinate to receive orders from one superior only.

Consequences of violation

1. It creates confusion for subordinate as to whose order to be complied or followed.

2. It will be difficult to fix responsibility.

3. Lack of discipline.
4. Unity of direction

Merits

1. It emphasizes the importance of common goals and helps in achieving them.

2. It ensures unity of action and facilitates coordination.

Consequence of violation

1. Unnecessary duplication of effort and wastage of resources.

2. There will be lack of coordination.

5.Discipline

Merits

1. Smooth and systematic functioning of the business.

2. Better relations between management and employees.

Consequence of violation

1. There may be disobedience of rules and regulations by employees.

2. Relation between management and employees may not be so cordial.

6. Subordination of individual interest to general interest

Merits

1. It helps in achieving goals of the organisation.

2. It brings coordination between individual and organisational objectives .

Consequences of violation

1. The firm will not be able to achieve its goals.

2. Lack of coordination between individual and organisational objectives.

7.Remuneration of employee

Merits-

1. High level of motivation as they are paid fully for services rendered.

2. Cordial relation between employees and the management.

3. Improvement in commitment of employees towards the organisation.

Consequences of violation

1. Lack of motivation among employees .

2.Unhealthy relations between employees and the management.

3. Increase in labour turnover.

8.Centralisation and decentralization

Merits

1. It leads to quick decisions at middle and operational level.

2. It decreases workload of the superiors.

3. Increase in the encouragement and motivation level of the subordinates.

Consequences of violation

1. Slow decision making in case of complete centralisation.

2. Risk of misuse of authority in case of complete decentralization.

9. Scalar Chain

Merits

1. Orderly and smooth flow of information.

2. Clear lines of authority and responsibility relationship.

3. Better relations between subordinate and superior due to absolute respect for authority.

4. Unity of command is possible as there will be no confusion of dual order.

Consequence of violation

1. Information may not flow in the orderly direction.

2. Authority and responsibility relationship will not be clear.

3. Unhealthy relations between subordinate and superior.

4. Lack of unity of command.

10. Order

Merits

1. Efficient use of resources as no time is wasted in tracing the resources.

2. Smooth and systematic working of an organisation.

Consequence of violation

1. Inefficient use of resources due to loss of the time and energy in search of resources.

2. Lack of display in the organisation.

11. Equity

Merits

1. Improve satisfaction and motivation level among the employees.

2. Cordial relations between employees and Management.

Consequences of violation

1. Decrease in satisfaction and motivation level of employees.

2. Unhealthy relations between employees and Management.

12. Stability of personnel

Merits

1. Increase in efficiency of employees due to the feeling of job security.

2. Better reputation and goodwill of the company.

Consequences of violation

1. Unnecessary labour turnover creates an atmosphere of disbelief.

2. Decline in the reputation of the company.

3. Increase in the cost of recruitment selection and training.

4. Wastage of considerable time in learning a new job.

13. Initiative

Merits

1. Increase in mental growth and feeling of belongingness among the employees.

2. It increases commitment of employees towards the organisation.

Consequences of violation

1. Leads to frustration among the employees.

2. Lack of initiative may create an atmosphere of non-cooperation.

14. Esprit de Corps ( unity is strength)

Merits

1. Develops an atmosphere of mutual trust.

2. Helps in achievement of group goals.

3. Leads to cordial relations between employees and the management.

Consequences of violation

1.Lack of team spirit and employees may not co-operate with each other.

2. Group goals may not be achieved.

3. Unhealthy relations between employees and the management.

**********************************************************************************