ISSN: 0972-5814

Volume 22, Number 1 • January - June 2022

Varun Gupta Reneging and Balking in Resource Sharing Systems

Franco Gandolfi and Toxic Leadership: Behaviors, Characteristics, and Consequences

Seth Stone

Varsha Gondaliya Financial Anxiety, Financial Literacy and their Relationship with
Financial Advice Seeking: A Literature Review

Md. Zohurul Islam, Practices of Fayol's Principles in Bangladesh Public Sector

Shamim Hosen, Organizations: An Empirical Evidence
Mohammad Sohrab Hoshen
and Md. Mahbub-ul-Alam

Arindam Banerjee Measurement of Intellectual Capital

a Biannual Journal of
South Asia Publications, New Delhi (India) Research in Management
 Journal of
Management Research
Volume 22, Number 1 • January - June 2022

Contents

3 
Reneging and Balking in Resource Sharing Systems
Varun Gupta

19 Toxic Leadership: Behaviors, Characteristics, and Consequences

Franco Gandolfi and Seth Stone

28Financial Anxiety, Financial Literacy and their Relationship with

Financial Advice Seeking: A Literature Review
Varsha Gondaliya

39 Practices of Fayol’s Principles in Bangladesh Public Sector

Organizations: An Empirical Evidence
Md. Zohurul Islam, Shamim Hosen, Mohammad Sohrab
Hoshen and Md. Mahbub-ul-Alam

51 Measurement of Intellectual Capital

Arindam Banerjee

Journal of Management Research, its editors and publisher disclaim responsibility and liability for any
statement of facts and opinion, originality of contents, and of any copyright violations by the authors.
Journal of Management Research
Vol. 22, No. 1, January - June 2022, pp. 39-50

Practices of Fayol’s Principles in Bangladesh Public Sector

Organizations: An Empirical Evidence
Md. Zohurul Islam, Shamim Hosen, Mohammad Sohrab Hoshen and
Md. Mahbub-ul-Alam

Abstract

This study examines the Fayol’s principles, practices, uses and applications as an effective management tool in
public administration. Also, it attempts to find out the relationship among the Fayol’s principles with effective
management and to assess it’s impact on it. The study is based on a structured questionnaire survey with
scale variables. Pearson’s correlation with regression analysis was used to test research model and hypotheses.
Finally, factor analysis was used to identify significant factors from 14 principles of Fayol’s concept. It was
found that two factors have significant impact on effective management in public administration. In the first
regression model with 14 principles, nine independent variables are shown positive and have significant
impact on effective management. Code of conduct and harmonious relationship demonstrate positive and
significant (p<.000) 22.1% and 20.9% of total variance. Thus, policy maker should think about those variables
for effective management in public administration.

Keywords: F ayol’s Principles, Field Administration, Effective Management, Public service

INTRODUCTION In his book on ‘General Industrial Management’,

Bangladesh Public Administration (PA) System
as the legacy of British colonial rule (Parnini,
2009) can be understood by providing goods or
services to citizens by utilization instruments.
With the change of time, the government role is
changing,which requires efficient and effective
functionality, and thus the Bangladesh Public
Administration reform committee recommended
good governance in 2000 (Parnini, 2009;
Commission, 2000). In this context, it is pertinent
to note that Public Administration is practicing
the format of Henri Fayol’s contribution as
Fayol’s outstanding work is still valid in today’s
administration for operating management
(Rodrigues, 2001).
Fayol focused on ‘administrative management’ and
categorized managerial activities into six groups
(Fayol, 1949). More specifically, Fayol has explained
administrative theory and management by 14
Principles of Management (Fayol, 1949). These
Principles are: i. Division of labor ii. Authority &
responsibility iii. Discipline iv. Unity of command
v. Unity of direction vi. Common interest
vii. Remuneration viii. Central vs decentralization
ix. Scalar chain x. Order xi. Equity xii. Stability
of Personnel xiii. Initiative xiv. Morale. These 14
Principles of administrative management can manage
an organization and are valuable tools for forecasting,
planning, process management, organization
management, decision-making, coordinating, and
control with feedback (Fayol, 1949; Carter, 1986).

Md. Zohurul Islam is Director (Research and Development) at Bangladesh Public Administration Training Centre, Savar,
Dhaka-1343, Bangladesh. Shamim Hosen and Mohammad Sohrab Hoshen are Assistant Directors at Bangladesh Public
Administration Training Centre, Savar, Dhaka-1343, Bangladesh. Md. Mahbub-ul-Alam is Member Directing Staff (MDS),
Bangladesh Civil Service Administration Academy, Dhaka-1000, Bangladesh.
In Bangladesh, numerous Nation Building
Department (NBD) render their respective services
from its window towards the citizens. The lower
tier of Public Administration, especially in Upazila,
has almost 26 NBDs. All these departments play
a vital role in achieving the government’s vision
and SDGs (UN, 2015). Departmental managers
are responsible for attaining sectoral vision,
and therefore, Fayol’s 14 Principles would be an
excellent example of a practical management
approach.
In the changing era of public administration,
work nature is shaping in a different dimension.
Public administration work culture is also given
transformational change, from traditional to
modernization. The increasing demand for
technological uses in public Administration
is noteworthy. Many jobs are given priority to
redesign, same as work culture pattern is also
changed. Scholars and practitioners have developed
a proposition that effective management practices
an effective public administration, who will work
as proactive agents (Rodrigues, 1998). In Fayol’s
principles of management concept, each employee
has their specific jobs, but now a day employees’
job environment takes place rapidly. Many jobs
are not well defined, thus an application of
specialization is less. Employee’s job authority
and responsibility are always essential to carry out
and accomplished one’s job. Fayol’s study in line
with authority and responsibility in Bangladesh
Public Administration requires importance to
see its practices as effective management for
rendering services. It is notable that for effective
management practices in public administration,
discipline requires maintaining rules and work
procedures. Receiving one direction from one
boss is a standard, but in public Administration,
many orders come from different corners, which
causes less quality output from the employees.
Thus, unique directions do merely necessary
in hierarchical organizations. One more critical
element is that subordination of individual
interests is seen high priority in every public
sector office, which Henri Fayol’s principles do
not support. Therefore, employees must sacrifice
40
their interests for the better of the organizational
interests or goals. In public sector administration,
participative decision making found very example;
thus, centralization decisions are made by the top-
level bureaucrats or management. It is said that
too much centralization leads to an ineffective
organization. A core principle of Fayol’s is ‘order’
organizational resources should be placed at the
right time and right place. Thus, resources should
be distributed for the employees to carry out their
job with the physical requirement. In public sector
offices, resources are not properly distributed; even
the organizational resources are not placed at the
right time or place. Therefore, Fayol’s management
principles in public administration and its practices
in public sector organizations require visiting
how those principles are worked. The public
administration work process has been changed in
many folds, but still, Fayol’s principles are exits in
the organization.
Thus, this study would be able to get the answers
to some questions, and they are: (a) Do Fayol
14 Principles of management matter in Today’s
organization? If so, it is to examine the significance
of the Fayol’s principles’ practices in Today Public
Administration for effective management? (b)
How are 14 principles associated with each other
to determine the relationship between them
and level of significance? (c) Do the principles
have an impact on the effective management of
public administration? If so, to what extent do
those impact on effective management in public
administration?
The paper is organized into five parts; part one
is all about introduction, part tow illustrated
with literature view and hypotheses development
material and method is described in part three.
In contrast, part four displays data analysis and
discussion finally conclusion and recommendation
are drawn in part five.
HYPOTHESES DEVELOPMENT ON
FAYOL’S PRINCIPLES
Although enunciated almost a century ago, Fayol’s
portrayal of management remains one of the
Journal of Management Research
most cited practices of modern times (Mc Lean,
2011). These management principles are flexible
and adaptive to every need, whether from a public
or private dome. Therefore, it is believed that
every organization today, one way or the other,
implements Fayol’s management principles. Within
this framework, Bangladesh’s very pertinently
Public Administration system, struggling for
reforms, can be reviewed considering these
principles. Thus, this analysis looks critically into
applying the Fayol’s 14 principles of management,
focusing on the practices and applicability in field-
level public administration of Bangladesh.
According to Henry Fayol’s first principle for
management, employees assigned to work
consistent with their specialty perform better in the
workplace (Fayol, 1949). So,the workload should
be divided amongst people capable of doing the
job and not be overloaded to a concentrated few
(Godwin et al., 2017). Rolling with this principle,
Bangladesh’s public administration system is
found in another way. There is over-centralization
encouraging mal and slowing down the
administrative system. Biswas and Rahman (2018)
found that due to lack of decentralization and
delegation of official authority, it takes a long time
to get a decision, which would ensure maximum use
of labor, time, and cost by exercising this principle
of division of work.
Thus, we hypothesized that, division of labor has
a relationship with effective management in public
administration.
Fayol’s principle of authority points out that
managers need authority to give subordinates
commands so that they can perform their duties
and be accountable for their actions. Pathak (2015)
sees it as the power to give orders and get them
obeyed, or in other words, it is the power to take
decisions. In this case, looking at the public admin
of Bangladesh, there is a lack of coordination in
the implementation of policy and project at the
top 18 and field level of administration. Sarker et
al. (2017) found that the significant aspects like
coordinating the several departmental objectives
in one overall, balanced plan, and coordination of
Volume 22, Number 1 • January - June 2022
planning, financing, and execution and coordination
of departmental goals require a planning unit
independent of any ministry. This is crucial
and can be linked up with the success of field-
level administration of Bangladesh as a realistic
representation.
Thus, we hypothesized that, authority has a relationship
with effective management in public administration.
Another notable principle is discipline that upholds
clearly defined rules and regulations intended to
achieve good employee discipline and obedience.
While checking out this principle, Uzegbu (2015)
thinks, Fayol must have observed the natural human
tendencies to lawlessness. Bangladesh’s colonial
legacy-driven public administration system needs to
look into have organizational order as it is ‘blotted’
and ‘indiscipline’ so far (Biswas & Rahman, 2018).
This is a relevant aspect of management because
leaders are expected to be conversant with the
activities carried out by their teams as is known
all organizations needs ‘coordination and control’
(Hage et al, 1971;Cavaleri and Obloj, 1993).
Thus, it is hypothesized that, discipline has a relationship
with effective management in public administration.
To avoid internal confusion and conflict in an
organization, the principle of Unity of Command
is followed. It suggests that any employee receives
an order from only one person for an activity
(Peaucelle and Guthrie, 2013). Biswas and Rahman
(2018) identified some factors that create hurdles
towards public administration performance,
including weakness of supervision, a span of
control, and unity of command. However,
comparative analyses show that Henry Fayol’s
fundamental proposition that a plan should
follow only one head is no longer sustainable in
some cases. When looking at a few organizations,
employees belonging to a group will probably take
orders from several coordinators or supervisors
at once; for example, the head of the admin may
instruct a finance employee (Godwin et al., 2017).
So, it is very typical for any staff member to take
instruction from outside the department,their
immediate unit or superiors (Nwachukwu, 1988).
With a reasonably similar underlying message,
41
the principle of Unity of Direction states that all
employees in an organization should have one
direction, moving towards the same goals through
concerted and focused efforts (NCERT,2015).
In this context, interknitted coordination in the
policy implementation framework of Bangladesh
is not yet well-practiced, which shows the need for
further development. Panday (2007) summarized
the policy implementation problems of Bangladesh,
saying, ‘once coordination within an organization is
problematic, policy implementation is hampered,
resulting in a delay in project completion, increase
of cost, and unsatisfactory public service delivery.
Therefore, it is likely that these principles need to
be perceived and practiced in public administration
establishments.
Therefore, we hypothesized that, unity of command and
unity of direction has an impact on effective management in
public administration.
The principle of Subordination of Individual
Interests to Organization’s Interests, fundamentally,
suggests that employees must give up their
interests for the organization’s good, meaning
the organization must take precedence over the
interests of individuals or groups of individuals in
the organization (Rodrigues, 2001). In the case of
Bangladesh, the functionality of the bureaucracy is
stuck between the tension over taking forward the
interest of the civil servant and the organization
itself. There are loads of examples of back
passing, misuse of power, corruption, fractional
practices, procrastination (Biswas and Rahman,
2018), favoritism, nepotism (Sarker and Prodhan,
2017) are rampant in Bangladesh bureaucracy
that practically inconsistent in taking precedence
organizational interest over the personal interest.
On the other side of coin, as an example from
developed nation, now the management of US
organizations demonstrates more commitment to
its employees than in the past (Rodrigues, 2001).
So, we hypothesized that, subordination of individual
Interests to organizational interests has a relationship with
effective management in public administration.
Taking forward a motivating factor, Fayol suggests
that a fair, satisfying, reasonable remuneration
42
should be paid to the employees to reward their
effort (Mtengenzo, 2009). According to Fayol,
employees are more likely to accelerate their
actions and do better if rewarded adequately
for outstanding performance (Pryorn & Taneja,
2010). Bangladesh introduced a new pay scale in
2015 with a significant rise in remuneration for
public servants. But, still, its’ positive impact is
yet to be worked out as Rather an incompetence
and corruption are sitting in the driver’s seat
to push back the entire public admin system.
On this account, the ‘performance-based pay
system’ recommended by Wallace and Fay (1988)
is what can be considered in the public sector in
Bangladesh, which Biswas and Rahman (2018) think
as the ascertained amount of pay.
Thus, we hypothesized that, remuneration has a relationship
with effective management in public administration.
Fayol’s prescription for the decision-making process
is about Centralization and Decentralization.
It means top management should deliver the
decisions and order to the middle management,
while findings are transformed into strategies and
explained to line workers who implement them
(decentralization) (Uzuegbu, 2015). In the case of
Bangladesh, as Sethi (1983) remarks, bureaucracy
has become the most significant barrier to the
emergence of any participating model. Sarker and
Prodhan (2017) specified that directly elected local
governments should be established according to
the decentralization of administrative power, which
removes channel-based corruption and conspiracy.
Some other recommendations are also found
in Public Administration Reform Commission
(PARC) report to reconstruct and decentralize field
administration (see GoB, 2000; Sarker, 2006).
Therefore, we hypothesized that centralization and
decentralization have an impact with effective management
in public administration.
Fayol’s Scalar Chain principle, also known as the
hierarchy principle, is the formal output of an
organization (Uzuegbu, 2015). It states that the
communication process in organizations should
be vertical i.e., a single, uninterrupted flow of
authority should extend from the highest level
Journal of Management Research
to the lowest position of the organization. In
Bangladesh, most of them are vertical, and various
private organizational structures are based on this
Fayol’s principle and significantly many future
organizations may relate this principle to their
situations.
Thus, we hypothesized that, Scalar Chain has a relationship
with effective management in public administration.
Another important principle in Henri Fayol’s 14
principles of management is the maintenance of
Order. It requires that people and other resources
be in the right place at the right time (Ramasamy,
2009; Rao & Pande, 2009). It is not necessarily
about placing commands and throwing down
orders to the lower-level employees a boss sitting
at the top. Linking with the Bangladesh case, most
civil officers lack the necessary professionalism
among them (Biswas & Rahman, 2018). Sarker
& Prodhan (2017) showed that the bureaucracy
is politicized and polarized in Bangladesh due to
significant internal and external interruptions on
bureaucracy. The absence or weak presence of
balanced and constructive bureaucracy can create a
bar to achieve the objective of governance; thus,
Fayol is relevant.
Thus, we hypothesized that, order (resources) distribution
has an impact on effective management in public
administration.
Fayol suggested a principle on maintaining
impartiality, fairness, and continuity in the
administration regarding rewards, sanctions, and
penalties for employees. These issues refer to
equity, which means a combination of fairness,
kindness & justice towards employees (Mtegenzo,
2009). In their study, Biswas & Rahman (2018)
presented domination of any single cadre of
Bangladesh civil service created intra and inter
cadre conflicts. Besides, in many cases, employees
do not get the opportunity to perform their duties
according to their qualifications and abilities.
Genuinely, Sarker & Prodhan (2017) stated that
the various financial gain with police appointment,
promotion, transfer, etc. are mostly done based
on political criteria rather than merit, experience,
and seniority. Therefore, as an essential condition
Volume 22, Number 1 • January - June 2022
of establishing good governance, transparent and
distinct policies are required through which the
recruitment and promotion of public servants
should be conducted based on their ability to work
efficiently and efficiently.
Thus, we hypothesized that, reward has a relationship and
impact on effective management in public administration.
Fayol is also concerned about retaining an
employee for a long time at their work which
brings out one of the critical principles of Fayol
tilted stability of tenure. Fayol coupling the stability
with organizational growth as ‘the loyalty of the
employees to the employer is enhanced when there
is the stability of tenure of personnel’ (Poperwi,
2018). Considering the underlying keynote of
this principle, although public jobs are somewhat
secured, frequent transfer and posting at field
level administration of Bangladesh can be noted
as a barrier for playing the influential role of an
administrator.
Thus, we hypothesized that, stability of tenure has a
relationship and impact on effective management in public
administration.
Moreover, according to Fayol’s advice, a good
authority should have an effective employee
counseling system to reward practical initiatives of
its employees. It means management should provide
creative ideas, assistance, and useful methods to
perform the work in the organization from time
to time (Godwin. et al., 2017). As Zafarullah and
Hoque (2001) identified that the poor performance
of the public administrative system has been due to
structural procedural convolution originating in the
traditional model of organizing and managing the
public sector. Therefore, experts are crying out for
reforms to create trust and openness in the public
workplace with new public management (Sarker,
2006). In modern days, public organizations focus on
a ‘pro-people approach’ (Nisar, 2012). Consequently,
they should encourage employees to take the
initiative, which will help achieve competitive
advantages (Poperwi, 2018).
Thus, we hypothesized that, initiative has a relationship and
impact on effective management in public administration.
43
In his last principle, Fayol used the French phrase
“Esprit de Corps” to emphasize enthusiasm and
devotion for teamwork. It is the intensity and
strength of feeling that works and builds support
among the members of a group (Boyt, et al., 2005).
As a matter of course, Fayol (1949) opined that
teamwork and team spirit should be encouraged
in organizational management, other than those
organizational objectives are challenging to achieve.
Therefore, managers will develop an environment of
mutual trust and understanding by maintaining high
morale and unity among staff (Uzuegbu, 2015).
Thus, we hypothesized that, Esprit de Corps has a
relationship and impact on effective management in public
administration.
To look around the application of Fayol’s 14
principles of management in contemporary
management, organizational structure of Bangladesh
is found that it is following this hierarchical format
(Zafauallah, 1998, Ferdous, 2016, Islam, 2016).
However, from this similarity of theoretical aspects,
the extent to which practice exists can be analyzed
from the point of view. Going over the literature on
Henry Fayol’s management principles has also helped
shape the research to fact findings. It comes out with
critical areas of concentration and areas that require
more deep-set study to address the knowledge gaps.
MATERIAL AND METHOD
The study has been designed based on the ‘deductive
approach’ (O’Reilly, 2009). A structured and
quantitative perception (scale variable) questionnaire
survey tool has been used to obtain respondents’
data (Kaplan, 2009). The research sites are the
Public Administration offices at Bangladesh’s
district and Upazila (sub-district) level. The head
of the section or offices are respondents for this
study. Notably, this study has covered the 8 (eight)
Administrative Division, 15 Districts, and 30 Upazila
located around the different demographic corners
of Bangladesh. The study respondents were chosen
as a simple random sampling method. The sample
size has been determined from the population
using Yamane’s mathematical formula to select the
sample size (Yamane, 1967). Fayol’s 14 Principles
44
of Management are the independent variables of
this study, whereas effective management denotes
the dependent variable. Both types of variables
items internal consistency have been checked using
Cronbach’s Alpha test (Cronbach, 1951). Reliability
result found that item Cronbach’s alpha was more
than 0.70, which is satisfactory (Hair et al., 2010).
This study has collected data from the field level
public administration, which authenticate the
effective and smart management depends on the
independent variables of this research. Therefore,
this study is logically and ontologically reliable, valid,
and important.
DATA ANALYSIS AND DISCUSSION
The structure questionnaires were distributed
among 26 government offices in 15 districts and
29 Upazila of Bangladesh. The valid response rate
was 52.33% from the grade 9 to above employees
who were the department’s head. Among the
respondents, there were 263(83.8%) male and
51(16.2%) female. Job experience of 42.1% of
respondents is within ten years, and 19.4% are
about 15 years of work experience.
Descriptive Statistics and Data
Distribution Pattern
Fayol’s 14 principles are measured with a 5-point
scale. Therefore, the ranging scale is measured with
‘1’ to ‘5’. The valid respondents were 314. Table 01
presents results with descriptive statistics like mean,
SD, and Skewness-Kurtosis value. Considering
the ‘mean’ value of all principles items, most of
the items scored more than the ‘4’ mean value,
indicating that respondents feel those are still
important in public administration as a functional
management tool. Some of the items do not get
high scores, which indicates that those are not well-
practiced in public administration.
Correlation Matrix among the Fayol’s
Principles Items
Correlation analysis is used to describe the strength
and direction of the linear relationship between
Journal of Management Research
two variables. In this study, Fayol’s principles item
as the independent variable is measured with 14
items. The study performed Pearson correlation
coefficient (r) can only take on values from -1
to +1. A perfect correlation of 1 or -1 indicates
that the value of one variable can be determined
precisely by knowing the value of the other
variable. Here, a bivariate correlation matrix was
performed. The correlation matrix table result
revealed that all the variables have significant
relationships (p<.01 and p<.05). Correlation results
suggest regression analysis.
value is .584, indicating 58.4% of the total
variance explained.
Analysis of Variance
Analysis of Variance (ANOVA) result indicates that
the model is significant (p<.05). In the ANOVA
table, F-value explains the ratio of two variances.
Thus, variances are a measure of dispersion, which
means scattered data from the mean. Here, the
F result is 31.866, larger F value indicates a high
satisfactory level of the model.

Regression Analysis Independent Variables Impact on

This study has independent and dependent
variables. Dependent variable items are measured
with six items related to effective management.
The dependent variable is computed with the six
items. Fayol’s 14 principles are the independent
variables in this study. With the dependent
and independent variables, model summary as
Analysis of Variance (ANOVA) is performed
for model test. And found regression model
is significant (p<.05). The model correlation
(r=.776) result is .776, and the adjusted R-square
Dependent Variable and Collinearity
Statistics
In this regression model, 14 independent variables’
impact is measured on effective management
in public administration. It is discussed in the
regression model summary that the model is
significant. However, among the 14 independent
variables, all are not equally influencing effective
management in public administration, and
all are not significant impact as well. Overall,
as the model explained 60.3% of the total

Table 1: Descriptive Statistics on Fayol’s Principle Items

Variable items Mean Std. Skewness Kurtosis

Deviation
Division of work 4.40 .833 -1.659 .138 2.971 .274
Authority 4.31 .825 -1.281 .138 1.685 .274
Code of conduct/discipline 4.35 .814 -1.325 .138 1.809 .274
Unity of command 3.84 1.139 -.755 .138 -.453 .274
Unity of direction 3.94 .956 -.772 .138 .137 .275
Organizational goal given priority 4.27 .883 -1.230 .138 1.276 .274

Fair remuneration 4.11 .951 -1.175 .138 1.192 .275

Centralized authority 4.27 .819 -1.060 .138 .870 .275
Contact with immediate boss/scalar chain 3.68 1.179 -.513 .138 -.914 .274
Proper use of resources/order 3.75 1.003 -.892 .138 .454 .274
Attitude of equality 3.99 1.011 -.964 .138 .424 .274
Minimize employee turnover 3.87 .849 -.544 .138 .135 .275
Suggest new idea/initiative 4.09 .952 -.963 .138 .466 .274
Esprit de corps 3.76 1.060 -.638 .138 -.261 .274

Volume 22, Number 1 • January - June 2022 45

variance. Now individual factors have different
standardized coefficient results and their level
of significance. The study result explained that
individually ‘division of work’ has explained
16.3% of the total variance on the dependent
variable (effective management) and significant
(p<.05). Same as “authority” has got significant
impact (p<.05) and it has a 13.2% impact on
effective management in public administration.
‘Code of conduct’, as an independent variable,
has a positive and significant (p<.05) influence
(22.1%) on effective management as the dependent
variable in public administration. Thus, the result
revealed that in public administration ‘code of
conduct’ matters on effective management, which
explained 22.1% of the total variance. Another
independent variable ‘one boss’ has an impact on
effective management in public administration.
This component is significant (p<.07) and
explained 8% of the total variance. ‘Contact with
immediate boss’ is an independent variable and
has significant impact on effective management,
influencing 9% of the total variance. ‘Proper uses
of resources or order’ positively and significantly
(p<.05) impact on effective management.‘Equality
attitude’ in public administration is important for
public service delivery and managing resources
at the office. This independent variable has a

Table 2: Correlation Matrix among the Fayol’s Principles Items

Items 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Q1: Division of work 1 .587** .587** .219** .282** .357** .374** .268** .187** .411** .385** .321** .382** .254**

Q2: Authority 1 .530** .257** .295** .407** .427** .290** .215** .310** .315** .212** .270** .225**
Q3: Code of 1 .177** .211** .309** .385** .258** .101 .236** .332** .263** .315** .264**
conduct
Q4: Reporting boss 1 .497** .189** .157** .227** .342** .233** .339** .236** .137* .124*
is only one
Q5: One boss for 1 .220** .315** .207** .340** .297** .334** .223** .224** .166**
similar objective
Q6:Organizational 1 .358** .417** .023 .229** .226** .230** .188** .145**
goal given priority
Q7: Fair 1 .291** .061 .241** .345** .181** .321** .273**
remuneration
Q8: Centralized 1 .106 .089 .193** .216** .095 .185**
authority
Q9: Contact with 1 .325** .222** .163** .168** .139*
immediate boss
Q10: Proper uses 1 .356** .374** .355** .177**
of resources
Q11: Attitude of 1 .382** .330** .206**
equality
Q12: Minimize 1 .327** .257**
employee turnover
Q13: Suggest new 1 .345**
idea
Q14: Harmonial 1
relationship

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

46 Journal of Management Research

 Table 3: ANOVA and Model Summary

Model R R Square Adjusted R Std. Error of F Sig.

Square the Estimate
1 .776a .603 .584 .38964 31.866 000a
b. Dependent Variable: MGT

a. Predictors: (Constant), Q14: Harmonial relationship, Q4: Reporting boss is only one, Q6: Organizational goal given
priority, Q11: Proper uses of resources, Q3: Code of conduct, Q10: Contact with immediate boss, Q13: Minimize
employee turnover, Q8: Centralized authority, Q14: Suggest New idea, Q7: Fair remunaration, Q12: Attitude of equality,
Q5: One boss for similar objective, Q2: Authority, Q1: Division of work

Table 4: Coefficient Table

Model Unstandardized Standardized t Sig. Collinearity

Coefficients Coefficients Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) .913 .180 5.060 .000
Q1: Division of work .121 .039 .163 3.102 .002 .490 2.043
Q2: Authority .098 .037 .132 2.649 .009 .540 1.852
Q3: Code of conduct .164 .036 .221 4.538 .000 .570 1.756
Q4: Reporting boss is only one -.013 .024 -.025 -.566 .572 .678 1.476
Q5: One boss for similar .051 .029 .080 1.768 .078 .653 1.531
objective
Q6: Organizational goal given .050 .030 .073 1.641 .102 .678 1.474
priority
Q7: Fair remuneration .009 .029 .014 .317 .751 .658 1.519
Q8: Centralized authority .020 .032 .027 .633 .527 .738 1.355
Q9: Contact with immediate -.046 .022 -.090 -2.128 .034 .750 1.333
boss
Q10: Proper uses of resources/ .051 .028 .083 1.820 .070 .655 1.526
order
Q11: Attitude of equality .071 .027 .118 2.652 .008 .684 1.462
Q12: Minimize employee .019 .031 .027 .628 .530 .731 1.368
turnover
Q13: Suggest new idea .088 .028 .138 3.164 .002 .714 1.400
Q14: Harmonial relationship .119 .023 .209 5.128 .000 .816 1.225

a. Dependent Variable: MGT

significant positive relationship with effective
management, which influenced 11.8% of the
total variance explained. ‘Welcoming new ideas or
suggestion’ is the core component of the Fayol
principle of management. This independent
variable has a positive and significant (p<.05)
relationship with effective management in public
administration and explained 13.8% of the total
variance. Among the 14 principles of Fayol,
‘Espirit de scrop’ or harmonious relationship is an
important principle. For this study, this individual
and independent variable have got positive and
significant (p<.05) impact on effective management
in public administration and this component
herself explained 20.9% impact on the dependent
variable (effective management). This study

Volume 22, Number 1 • January - June 2022 47

performed collinearity statistics to find out the
multicollinearity, and the result found that there is
no multicollinearity.
Decision of Formulated Hypotheses
According to Fayol’s management principles,
this study developed 14 hypotheses on effective
management in public administration. Division
of labor, authority, code of conduct, one boss
for similar objective, contact with immediate
boss, proper use of resources/order, attitude of
equality, suggest new idea, and Esprit de Corps
have positive and significant (p<.07) relationship
with effective management in public administration.
Those significant values indicate that these eight
hypotheses are accepted.
CONCLUSION
Henri Fayol developed 14 principles of
management for the effective functioning of the
administration. Fourteen principles of management
were designed and practiced in industry sector
management. Later, the public administrator-
defined Fayol as a thought of public administration.
Therefore, those 14 principles of management
are widely practiced in public administration
organizations as well. This study attempted to
examine the Fayol’s principles practices in today’s
public administration for effective management;
also attempt to find out the level of relationship
among the 14 principles of management in the
field level public administration organizations;
moreover, this study objectively assesses the impact
of 14 principles on effective management in public
administration in the context of Bangladeshi public
sector organizations. This study has only focused
on field-level public administration organizations,
called nation-building organizations. Attending
study objectives, only a quantitative research
approach was used and applied a model. Apart
from the respondents’ profile figures and statistics,
48
other statistical results were presented appropriately.
The study has two variables, and related hypotheses
were formulated and tested by adopting statistical
tools and techniques. The respondents were
public sector officials or managers, who dealt with
management issues and have work experiences at
the field level offices. According to the frequency
and percent value of 14 elements of Fayol’s
principles, study results confirmed that some of
the principles are still not practiced for effective
management for service delivery. Among the 14
principles of management elements ‘Esprit de
Corps’ or harmony, the relationship is essential for
a cordial working environment at the office. Results
found that this element did not practice enough as
‘strongly agreement’ (27.4%).
On the other hand, descriptive statistics results
identified essential elements for effective
management in public administration. Moreover,
all the elements’ Pearson correlation result
confirmed that they have a positive and significant
relationship. The study has a specified model,and
the model was tested through regression analysis
and found that the model was significant that
independent variables as predictor’s component
have a significant relationship and explained
60.3% (R-square) of the total variance. Therefore,
the model has identified a 60.3% impact on
effective management in public administration.
Where ‘division of work’ has influenced 16.3%
on motivation to transfer of training. Like as
‘authority’ has an impact (13.2%) on motivation
to transfer of training. ‘Code of conduct’ element
also has a positive impact on motivation to transfer
training (22.1%, p<.05). Regression coefficient
result found that a major and important element
of 14 principles ‘esprit de corps’ has a positive
and significant impact on motivation to transfer
training (22.1%, p<.000). Therefore, the ‘esprit de
corps’ culture should be well-practiced in public
administration for effective management.
Journal of Management Research
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END NOTE

CONFLICT OF INTEREST AND FUNDING

There is no potential for a conflict of interest in this study. The research is a unique project that adheres
to strict ethical guidelines. The authors received government funding from the Bangladesh Civil Service
Administration Academy (BCSAA), Dhaka, Bangladesh, to do, publish, or distribute this research.

50 Journal of Management Research

Journal of Management Research
Vol. 22, No. 1, January - June 2022, pp. 51-69

Measurement of Intellectual Capital

Arindam Banerjee

Abstract

This paper presents a simple and efficient IC measurement framework with four fold objectives. Exploring the
parameters that characterize intellectual capital, ways to measure intellectual capital, identify how different
successful entrepreneurs measure their intellectual capital and explore newer ways that can enhance the
measurement of intellectual capital. This research paper is an exploratory research, which means that the
problem has not been clearly defined. Because of this, the main purpose of this research paper is to identify a
standard measurement method of intellectual capital. The proposed framework deals with the determination
of the key parameters of IC measurement techniques and the organization’s current status of IC, measuring the
performance of technology, as well as, identification of process effectiveness. Study and investigation of the
existing IC measurement techniques, as well as, discussion with the experts are emphasized at the beginning of
the framework. The paper presents an IC measurement framework that addresses the issues of organizational
growth and economic success. Measurement frameworks for human and organizational capital, thus capturing
the people, process and technology aspects of IC valuation. Customer capital or social networks are also
captured via debriefing forms to include for social IC valuation. In addition, we include financial measures to
correlate the traditional OEC framework with bottom line performance measures.

Keywords: Intellectual Capital, Intellectual Capital Measurement, Human Capital, Economic Value Added
(EVA)

INTRODUCTION of success (output). However, currently there is no

Intellectual Capital (IC), which is based on human
knowledge, is a powerful asset. IC can be shared,
combined and developed into a more powerful
meaning towards competitive advantage for an
organization. The IC is just like a nuclear power
in the new millennium as it may conquer and
control the world. A single idea from IC may
change the profit margin of an organization
and, it provides effects on other organizations.
IC is invisible, intangible and sometimes it is too
abstract that makes it hard to define, identify,
capture, measure, or even to record. IC is becoming
more crucial; people are hunting for strategic IC
to gain competitive advantage in order to lead
the business world. It is important to know the
contribution (input) of an IC into the organization,
as it will influence the key performance indicator
standardized measurement method that is used by
all organizations worldwide to measure IC. Because
of this one standardized measurement method
needs to be developed in order to measure IC in
each organization. The primary aim of this paper
is to study the characteristics of intellectual capital,
how to measure it and how to standardize the
measurement procedure.
RESEARCH PROBLEM
Knowledge is now a crucial factor underpinning
economic growth. Producing goods and services
with high value added is all the core of improving
economic performance and international
competitiveness. Increasing intangible investment
has become a major issue for enterprise and
governments. We are very much moving in to

Arindam Banerjee is associate professor and Assistant Dean of SP Jain School of Global Management, Dubai PO: 502345.