CHAPTER- PRINCIPLES OF MANAGEMENT

[Link]. CONCEPTS KEYWORDS

Principles of Management Broad guidelines

" Functions of Scientific Management
1 Science, Not rule of thumb . Method of Scientific enquiry
One best method developed through study and analysis
" Investigation of traditional methods
2 Harmony, Not Discord Get work done' from the workers
Kind of class conflict
Mental Revolution
Prosperity for employer accompanied by prosperity of
employees
3 Co-operation, Not Complete co-operation b/w workers and management
Individualism
Competition replaced by co-operation
Reward for suggestions
" Paternalistic style of management
4 Development of Each and Workers' training
Every Person to His or Her Scientific selection of workers
Greatest Efficiency and
Work assigned should suit capabilities.
Prosperity
Techniques of Scientific Management
1 Functional Foremanship Improving factory set up.
Separation of Planning and Execution.
Shop Floor.
" Extension of Principle of Division of Work and
Specialisation.
Eight specialists.
2 Standardisation Process of setting standards.
Benchmarks.
To reduce given line or product to fixed types.
To establish interchange ability.
3 Simplification Eliminating superfluous varieties, sizes and dimensions
Eliminating unnecessary diversity of products.
Results in saving of cost of labour, reduced inventories,
fuller utilization and increase turnover.
4 Method Study Find one best way of doing the job.
Concept of assembly line.
Objective is to minimise the cost of production and
maximize quality and satisfaction of customer.
5 Motion Study Study of movements like lifting, putting objects, sitting
and changing positions.
Eliminating unnecessary movements.
Use of stop watches, symbols, colours to identify different
motions.

6 Time study Standard time for task.

Objective is to determine number of workers to be
employed; frame suitable incentive schemes and
determine labour costs.
7 Fatigue study " Rest while working.
Regain stamina.
Objective is to determine the amount and frequency of rest
intervals.
Differential Piece Wage Differentiate efficient and inefficient workers.
System
Mental Revolution Change in the attitude of workers and management.
Aim to increase size of surplus.
14 Principles of Management by Henry Fayol
Division of Work Work divided into small tasks.
Competent specialist is required.
Leads to specialization.
Increase in efficiency effective output.
This principle is all pervasive.
Authority and Responsibility e Balance b/w authority and responsibility.
Manager have right to punish for willfully not obeying a
legitimate order.
3 Discipline Obedience to organizational rules.
Employment agreement.
Good superiors at all levels.
Clear and fair agreements.
 " Judicious application of penalties.
Honor commitments without prejudice.
Unity of Command One boss for every employee.
Order from one superior.
Dual subordination should be avoided.

5 Unity of Direction Common objectives through coordinated and focused

efforts.

One head one plan.

Unity of action and co-ordination.
Each division should have its own incharge.
6 Subordination of individual Larger interests of workers and stakeholders are more
interest to General Interest important that interest of any one person.
Manager should not misuse his power for any
individual.

Remuneration of employees " Fair pay and compensation.

Giving reasonable standard of living.
Just and equitable remuneration.
Helps in congenial atmosphere and good relations.
Centralization and Concentration of authority is centralization.
Decentralisation
Managers' retention of final authority through
centralization.

Dispersal of authority among more than one person is

Decentralisation.
Balance subordinate involvement through
decentralisation.
Panchayats is example of decentralisation at National
level.
9 Scalar chain A formal line of authority from highest to lowest ranks
is called Scalar Chain.
 Chain of authority and communication.
Gang plank (shorter route for communication)in case
emergency.
10 Order A place for everything and everything in place.
Helps in increased production and efficiency.
People and Materials at right place.
" Orderliness

11 Equity Fair and equal treatment with all employees.

" Kindliness and justice in the behaviour of manager.
Increase in loyalty and devotion.
" No discrimination on the basis of caste, creed, age etc.
12 Stability of Personnel Minimise employee turnover.
Selection of employees after due and rigorous process.
Stability of tenure.
" No adhocism. High cost of recruitment, selection and
training.
13 Initiative Taking first step with self-motivation.
K " Thinking out and executing the plan.
" Employee suggestion system resulting in decrease in
cost and time.

Rewards to employee for suggestion.

14 Espirit De Corps Team spirit of unity and harmony.
Replace T' with 'we'.

" Mutual trust and belongingness.

While Taylor succeeded in revalutionising the wodcing of factory shop-loor in terms of devising the best
method, fair day's work, differential piece-rate system and functional foremanship: Henri Fayol explained
what amounts to a managers work and what principles should be followed in doing this work. If workes'
cfficiency mattered in he factory system, so does he managerial efidency. Ths, their contributions are
complementary to cach ohet
We can make out the following points of difference betwocn their contributions:
S. No. Basis of difference Henri Fayol E W. Taylor
1. Perspective Fayol's perspecive was on the top Taylor's perspective was on he shop floor level of
level of management. afactory.
2. Ualty of comnnd Fayol was a staunch proponent of Taylor did not feel chat it is important as under
unity of command. functional forem anship a wodker received orders
from eight specialists.
3 Focus Fuyol focused on improving overall Taylor focused on increa sing productivity af
administration. workers
4. Expression Fayol used he expresion 'General Taylor used the expresion Scieniic
Theory of Administration'. Management'.
Appllcablity Fayol's pindpls are appliable Tiylor's pinciples are appliable to specialised
niverally,. situations.
6. Basis of fornation Principles were based on his personal Prindples were based on observations and
experience. experimentation.
7. Personality Practitioner Scientist

Today, maay sew techaiques hae been developed as a sequel to scieatihe managemeat Operatioas research was devalopod
in tbo second Wold War to ophimise he doploymeat of war matecal Siniaty asvenbly liae was also dscovered by FW.
Taylor, mhich as ued ey suecesfully by Ford motor conpany for maanfactnring Modal T car for the muses. This
concopt is nuch wed sow. The Latest dovelopmeat in scieothe mangeat is TEAN MANUFACTURING. Nowadays,
roboties and computers are being used ia prodsetion 2nd oher business acivities. This is part of scieathe mangomoat of
these activites t has inereased productity levels
RECAP
UGC FB
Nature/Characteristics/Features of Principles of Management
1. Generalguidelines: The principlesofmanagementareguidelinesto action butdo notprovide readymade, straitjacket solutions
to al managerial problems since real business situations are very complex and dynamic and are a resut of many factors
2. Formed by practice and experimentation: The principles of management are derived by observation, experimentation and
personal experience of managers.
3. Universal applicability: The principles of management apply to alltypes of organisations, at all levels and at al times.
4 Flexible: They are not rigidbut are fleible and can be modified by the manager when the situation so demands.
5. contingent: The applicabon of principles of management is contingent or dependent upon the prevailing situation at a
particular point of time.
6. Behavioural: Management principles aim at influencing behaviour of human beings
7. Cause and effect relaionships: The principles of management establish cause and efect relationship so that they can be
used in similar situations in a large number of cases. Since principles of management mainly apply to hunan behaviour,
accurate ause and eflect relationships may be difficut to establish.
Significance of Management Principles TOP SMS
[Link] provide the managers with useful insights into real workd situations. Principles of management provide useful insights
into reality by enabling the managers to learn from past mistakes and conserve time by solving recurring prcblems quickly
Adherence to these principles adds to their knowledge, ability and understanding of managerial situations and aircumstances.
2. They help in opimum uilisation of resources as the wastages associated with trial and error approach can be overcome.
They help in effective administration as the decisions are free from personal bias.
3. They help managers in taking scientific decisions because the decisions based on principles are free from bias. They are
based on the objective assessment of the situation.
4 They help in meeting changing ervironment requirements as theycan be modifed according to the needs ofthe ervironment.
5. They help in fulfiling social responsiblity by responding to the demands of the public
6. They are used as abasis for management training, education and research by providing the basic groundwork for the
development of management as a discipline.

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