Unit 2: Principle of Management

Concept of principle of management:

Management principles are fundamental truth of general validity which has
values in predicting the result of management action. It is derived through the
series of experiments and observations. Principle of management are
universally used not just for managing business organizations, they are also
applied to various other types of organizations, educational, social, military
and government.

Features of principle of management:

1. It is universal in nature. It means that the principle of management is

applicable throughout the world. its principles are applicable in
business, organizations, schools and colleges hospital, Social service
organization.
2. The principle of management is flexible in nature. It means that the
principles cannot be applied equally all the time in all the situation. the
principle which is suitable in one condition may not be suitable in
another condition. So, the principle is subject to change in accordance
with change in context.
3. It establishes cause and effect relationship. It gives information about
consequences for example the quantity demanded decreases when the
price rises.
4. All the management principles are equally important. No single
principle has great important than the other as all the principle are
applicable in some way or other.

Principles of management:

1. Scientific management: F.W. Taylors is widely known as father of

scientific management. F.W. Taylors was born in 1856 in US.
2. Fayol's administrative management
3. Bureaucracy theory.

Concept of scientific management:

Scientific management means application of principal and methods of science
in in the field of management. It is an art of knowing best and cheapest way of
utilizing the human, physical and financial resources of an organization for
optimum benefits. It is the art of knowing exactly what is to be done? By whom
it is to be done? And what is the best and cheapest way of doing it? Scientific
method are applied in the field of management in i.e. recruitment, selection
training placement of workers and methods and work in best and cheapest
way.
According to F.W. Taylor " Scientific management is doing exactly what you
want from mean seeing that they do it in the best and cheapest way."

Principles of scientific management:

1. Replacing rule of thumbs with science:

scientific management replaces the working procedure based on rules
of thumbs. Scientific study and analysis of each job is required in order
to replace the old rule of thumb approach. True scientific investigation
the best way of doing would can be developed.
2. Harmony: F.W. Taylor emphasized the harmony and mutual relationship
among management and employers to attain common goals. Satish K
track mutual beneficial relationship should be established among them.
they should be good cooperation between employees and management
of Organization in order to make the work done exactly and to receive
the original good more effectively and efficiently.
Maximum output: F.W. Taylor is more concerned with continuous
production and productivity. The aim of both management and
employees should be to maximize the output. This should be done by
both parties in their own sales interest. maximum output and optimum
utilisation of resources will bring higher profit for the business and better
wages for the employees.
3. Corporation (not individual): dish assumption clearly says that
cooperation between management and labour is the foundation of
scientific management. Co-operation creates change any feeling of
mutuality e in all aspects instead of individual. If it exists in the firm,
maximum it can be guaranteed.
4. Financial incentives: Taylor tactfully suggested that workers should be
given financial incentives. This financial institutes may help the
Organization was to motivate the workers towards the job
performances. Thus, he introduced the differential price, rate, system.
According to this approach, the visit should be based on individual
performance of the workers.
5. Development of employees: scientific management suggests, scientific
section of employees and their proper training and development is
essential for efficiency in production. Employees that are selected most
be given training to develop their abilities and improve performance. If
you should be made to take up his employees for his/her greatest
efficient and prosperity.
Limitations of scientific management:

1. No one best way of doing work: the scientific management assume that
there is one best way for each job to be done what the way of doing job
depends on the situations and conditions.
2. Mechanistic (related with machine and production): the scientific
management is mechanistic. It is more useful for only stable and simple
Organization then for the dynamic Organization of today. He does not
consider the human element. Taylor considered worker as robots, which
can speed of the work at any cost.
3. Neglect human aspects of workers: the scientific management neglects
women respect of workers at the workplace. They are treated is
machine. Importance was given to productivity which creates
aggressive attitude among workers. Therefore, many employees joined
trade union. This also resulted in mistrust between management and
employees.
4. Focus on production: scientific management focuses on production to
the exclusion of marketing, finance and other functional area. Thus, it
tends to be more of industrial engineering then a theory of
management.

Contributions of scientific management:

The main contributions of scientific management are as follows:

1. Scientific management principles can be applied to solve problems in

the Organizations.
2. It helps to increase production and productivity increasing the efficiency
and effectiveness of workers involved.
3. It focuses on economic of scale lowering cost of production by using
latest machines and tools.
4. It is to change the attitudes or behavior of the managers and workers in
the Organization by developing and trusting each other.
5. It aims to increase and improve living standards of the employee or
workers.
6. It helps to increase the knowledge, skills, capacity and effectiveness of
workers in the Organizations by organizing and emphasizing training
and development programmes to them.
7. It promotes the use of scientific method in place of traditional rule of
thumb.
8. It promotes the cooperation between managers and workers.
 9. It encourages to have right person on the right job through scientific
selection and proper training.
10. It motivates workers to work by using incentive wage payment
system.

Fayol's administrative management theory Henry Fayol (1841-1925)

Henry Fayol is the father of modern theory of general and industrial

management. he is also considered to be the father of administrative
management theory. In Henry Fayol's book, "general and industrial
management" (1916) he describes numbers of management principles. he
had developed 14 principles of management through his experiment and
experiences the principles are as follows:

1. Division of work: Division of work means distribution of right work to the

right person. Each person should perform only the assigned part of the
job. This leads to develop the concept of specialization in efficiency
among the workers.
2. Authority and responsibility: The right to give order and power is called
authority. On the other hand, responsibility means obligation to perform
the work in the manner described and directed by superior authorities.
authority and responsibility is the major part of an Organization.
responsibility without authority cannot perform work confidently and
authority without responsibility make a person irresponsible.
3. Discipline: Discipline implies obedience and respect of authority. It is
essential for the smooth running of an Organization. discipline denotes
the obedience to authority, observation of the rules and service norms
of performance, respect of agreement and respect for supervision.
4. Unity of command: Our employees should be given order by one
person. If many persons order to 1 employee there may be conflict in
command, confusion and in delay in work arise.
5. Unity of direction: Unity of direction signifies that each group of activities
having the same objective must have one head and one plan. According
to entry, there should be one head and one plan for a group activity
having the same objective. it is essential for better coordination among
various activities to be performed by an Organization.
6. Subordination of individual interest to the organizationally interest: If
Organizational interest is achieved, individual interest can be achieved
automatically. Show Organizational interest should be given first priority.
Individual interest will not be given more importance than the
Organizational interest.
7. Remuneration: According to this principle proper and fair remuneration
should be given to the employees. The rate of remuneration should be
based on general business condition cost of living productivity of
concerned employees and the capacity of Organization to play Fayol
suggested extra remuneration should be respectfully given for extra
work.
8. Centralization: Centralization reduce subordinate’s roles whereas
decentralization increases it. According to Fayol, manager should retain
final responsibility but the subordinates should be given enough
authority to do their jobs properly. Hence, there must be good balanced
centralization and decentralization of authority and power.
9. Scalar chain: Fayol describe the scalar chain is the chain of superiors
ranging from the ultimate on top of it to the lowest rank. it is the line of
authority that run in the order of rank from top level management to the
lower level management. The scalar chain is chain of command as well
as chain of communication.
10. Order: This principle is related to arrangement of materials and
people. Material order implies a proper price for everything and
everything in its right place. Similarly, every man in the Organization
should be properly placed. The right man in the right job is very
important for the successful functioning of an Organization.
11. Equity: Equity refers to equality in all aspect or equality of fair
treatment. No one should be discriminated on the basis of caste and
creeds for equal job all should be made equally responsible. Thus,
equity insurers healthy industrialization between management and
labour.
12. Stability: Employees and managers must have job security like
security of income and employment. It minimizes the term over rate of
employees.
13. Initiative: Employee should not remain like a machine only waiting
for the order of their boss. they should take initiative to work with new
thought and Idea even if there may be little mistakes. That means they
should use their wisdom and judgement. The initiation makes every
work possible is it encourages and boost up the moral of employees.
14. Esprit de crops (group activities): it refers to union i.e. strength. It
means we must do the work unitedly in order to materialize the goods of
an organization age single effort is not enough. We must work together
in a cooperative manner with positive attitude.
Contribution of administrative management:
Sales contribution to management thought is significance. The contribution of
administrative management are as follows:

1. Under administrative management, business activities are classified is

technical, commercial, financial, security an administrative activity.
2. Under administrative management managerial function classified is
planning, organizing, commanding, coordinating and controlling.
3. Under administrative management, Fayol was the first to list and
describe management principles systematically.
4. Under administrative management, qualities of managers are classified
as physical, mental, moral, educational, technical or professional
qualities and experience.
5. The concept that management is a separate body of knowledge is
applicable to all forms of individual as well as group activities.
6. A first complete and comprehensive theory of management which could
be applied to all organization.
7. The concept of teaching and developing management curriculum in
colleges and universities.

Bureaucratic theory Max Weber's (1864-1920)

Max Weber was German sociologist. He described an ideal type of

organization with equal of bureaucracy. Bureaucracy is much more useful to
operate large and complex organization. Max Weber has advocated for
bureaucracy that it is logical rational and effective. Therefore, bureaucracy is a
model of organization based on defined position, formal authority and
regulated environment that included well-documented rules, policies and
procedures.
Principle of bureaucracy theory:

1. Job specialization: work is to be done by specialist and people are

organized into units based on type of work they do or skills they have. It
focuses on specialization rather than generalization of work. According
to the principle, the top level executive should be well acknowledgeable,
skilled, trained and learned to carry out different function in an
organization.
2. Formal selection: organization member is to be selected on the basis of
technical qualification and competences demonstrated by training
education of formal examination.
 3. Impersonality: rules and controls and applied uniformly evading
involvement with politicians and personal preference of employees.
Organization should run on the impersonal reflection.
4. Formal rules and regulations: to ensure uniformity and to regulate action
of employees, major most depend heavily upon formal organizational
rules and regulation. Thus, rules of law lead to infertility in interpersonal
relations.
5. Authority hierarchy: position organized in a hierarchy with a clear chain
of command in an organization. Hierarchy is a system of ranking various
position in the descending scale from top to bottom.

Important questions

1. Explain briefly principle of administrative management as developed by

H. Fayol.
2. Give the meaning of scientific management. Explain the principle of
scientific management.
3. Explain the Max Weber's principle of Bureaucracy theory.
4. Describe Fayol's contributions in the development of management.
5. Explain briefly the contribution of Taylor's scientific managements.