PRINCIPLES OF

MANAGEMENT
INTRODUCTION
A principle refers to a fundamental truth.
It establishes cause and effect relationship between
two or more variables under given situation.
They serve as a guide to thought & actions.
These principles are derived: -
•On the basis of observation and analysis
•By conducting experimental studies
Learning How to Manage
 Many disciplines have contributed to the study of management, such as social
scientists, psychologists, sociologists and others. Consider management a
social phenomenon and the manager to be an important social resource to
scientifically understand and study. Other professions like mathematics,
accounting, philosophy and numerous others have contributed applications to
the practice of management.
 In the end contemporary management knowledge is the product of 3 basic
approaches:

 The Classical Approach

 The Behavioral Approach
 The management Science Approach
 The Classical Approach
 The serious study of management began in the late 19th
century with the need to increase the efficiency and
productivity of the workforce.

 The classical approach to management can be understood

by looking at 2 perspectives:
1. Scientific management concentrated on the problems
of lower level managers
2. Classical organizational theory focused on problems
of top-level managers.
 SCIENTIFIC MANAGEMENT
 It is defined as the use of the scientific method to determine the
“one best way” for a job to be done. The most important
contributor in this field was Frederick W. Taylor who is known
as the “father” of scientific management. Using his principles of
scientific management, Taylor was able to define the “one best
way” for doing each job.

 In simple words it is just an application of science to

management.

 The systematic study of the relationships between people and

tasks for the purpose of redesigning the work process to increase
efficiency.
 The Classical Approach

 Frederick W. Taylor made an important contribution to

scientific management. He observed workers producing far
less than capacity in steel firms. He recognized their were no
studies to determine expected daily output per worker in the
form of work standards and the relationship between these
standards and wages. Then he tried to find the one best
way to do a job, determining the optimum work pace, the
training of people to do the job properly and successful
rewards for performance but using an incentive pay system.
 Early Management Principles

• Henri Fayol: Fayol’s14 Principles (Father of modern

management)
• Frederick Taylor: Scientific Management (Father
of scientific management)
: Taylorism
• Frank and Lillian Gilbreth: Motion Studies
 The Contributors to Classical
Organizational Theory: Weber and Fayol
Henri Fayol and Max Weber were the two most prominent proponents of the general
administrative approach. Fayol focused on activities common to all managers. He
described the practice of management as distinct from other typical business functions.
He stated 14 principles of management which are as follows:

1. Division of Labor
2. Party of Authority & Responsibility
3. Principle of One Boss/Unity of Command
4. Unity of Direction
5. Equity
6. Order
7. Discipline
14 PRINCIPLES OF MANAGEMENT
DESCRIBED BY HENRI FAYOL
8. Initiative
9. Fair Remuneration
10. Stability of Tenure
11. Scalar Chain
12. Sub-Ordination of Individual Interest to General Interest
13. Espirit De’ Corps
14. Centralization & De-Centralization
1. DIVISION OF LABOUR

The responsibility of workers and management

should be properly divided & communicated so
that they can perform them in an effective way
and should be reward for the same.
 2. Party of Authority &
Responsibility
 co-existing
 Authority is given to a person, he should also be
made responsible.
 He should also have concerned authority, if anyone is made
responsible.
 Authority refers to the right of superiors. responsibility means
obligation for the performance of the job assigned.
 The right to issue commands, along with which must go
the balanced responsibility for its function
 3. Principle of One
Boss/Unity of Command
 A sub-ordinate should receive orders and be accountable to only boss at a
time.
 a sub-ordinate should not receive instructions from more than one person

 Dual sub-ordination should be avoided

 The enterprise a disciplined, stable & orderly existence

 Harmonious relationship between superiors and sub-ordinates

 Employees must obey, but this is two-sided: employees will only obey
orders if management play their part by providing good leadership.
4. UNITY OF DIRECTION

 A single plan of action to guide the organization.

 People engaged in the same kind of activities must have the same
objectives in a single plan. This is essential to ensure unity and
coordination in the enterprise. Unity of command does not exist
without unity of direction but does not necessarily flows from it.
 All workers should be committed to the same plan of action.
 5. Equity
• In running a business a ‘combination of
kindliness and justice’ is needed. Treating
employees well is important to achieve equity.
• Workers are expected to perform at high levels and
to be treated with respect and justice.
• Loyalty and devotion should be elicited from
personnel by a combination of kindliness and
justice on the part of managers when dealing with
subordinators.
 6. Order

• Concerned with proper & systematic arrangement of

things and people.
• Arrangement of things is called material order.
• Placement of people is called social order.
• Material order-should be safe, appropriate and specific place
for every article
• Both material order and social order are necessary. The former
minimizes lost time and useless handling of materials. The
latter is achieved through organization and selection.
 7. Discipline
 Sincerity, Obedience, Respect of Authority & Observance of Rules
and Regulations of the Enterprise.

 subordinate should respect their superiors and obey their order.

 smooth running of the enterprise

 subordinates but also on the part of management.

 Discipline can be enforced if -

- Good superiors
- Clear & fair agreements with workers
- Sanctions are judiciously applied
 8. INITIATIVE
 Managers must encourage workers to act on their own to benefit the
organization.
 Initiate actions without being asked to do

 Management should provide opportunity to its employees

 Helps in developing an atmosphere of trust

 Enjoy working in the organization because it adds to their zeal and

energy
 Allowing all personnel to show their initiative in some way is a
source of strength for the organization. Even though it may well
involve a sacrifice of ‘personal vanity’ on the part of many managers.
 9. Fair Remuneration

 Managers should use reward systems, profit sharing and bonuses to

acknowledge high performance.
 Paid to the workers should be fair of the efforts
 Satisfaction to both employer and the employees
 Determined on the basis of cost of living, work assigned etc,
 Provision of other benefits such as free education, medical & residential
facilities to workers
 Payment is an important motivator although by analyzing a number of
possibilities, Fayol points out that there is no such thing as a perfect
system
 10. Stability of Tenure
 Employees should not be moved frequently from one job
position to another
 Once they are appointed their services should be served
 Time is required for an employee to get used to a new
work –fayol
 Money spent on training the worker will go waste
 Employees work better if job security and career progress
are assured to them. An insecure tenure and a high rate
of employee turnover will affect the organization
adversely.
 Long term employment helps employees develop the
skills to make significant contributions.
 11. Scalar Chain

 The chain of superiors ranging from the ultimate

authority to the lowest
 Every orders, instructions etc. has to pass through Scalar
chain.
 For the sake of convenience & urgency, this path can be
cut this short cut -Gang Plank
 Temporary arrangement between two different points to
facilitate quick & easy communication
 Modified as per the requirements of situations.
12. Sub-Ordination of Individual
Interest to General Interest
 An organization is much bigger than the individual
 As far as possible, reconciliation should be achieved
between individual and group interests.
 Case of conflict, individual must sacrifice for bigger
interests
 Management must see that the goals of the firms are
always paramount.
 13. Espirit De’ Corps
• Management must foster the morale of its employees. He
further suggests that: “real talent is needed to coordinate
effort, encourage keenness, use each person’s abilities, and
reward each one’s merit without arousing possible jealousies
and disturbing harmonious relations.”

• This is principle that “in union there is strength” as well as an

extension of the principle of unity of command, emphasizing
the need for teamwork and the importance of
communication in obtaining it.
 14. Centralization &
De-Centralization
 Managers must decide how much authority to centralize at the top
and how much to give to workers.
 De-centralization-disposal of decision making authority to all the
levels of the organization
 Increases the role of subordinate is decentralization & Decreases
the role of subordinate is centralization
 This is a matter of degree depending on the condition of the
business and the quality of its personnel.
Taylor’s contribution to
management
 Frederick Winslow Taylor (20 March 1856-21 March 1915),
widely known as F. W. Taylor, was an American mechanical
engineer who sought to improve industrial efficiency.

 He is regarded as the father of scientific management, and

was one of the first management consultants.

 Scientific management was concerned essentially with

improving the operational efficiency at the shop floor level
 The Classical Approach
Taylor’s work lead to the following 4 principles:
Principle 1. Study the way workers perform their tasks, gather all
the informal knowledge that workers possess, and experiment
with ways to improves the performance of tasks.
Principle 2. Codify the new methods of performing tasks into written
rules and standard operating procedures (sops).
Principle 3. Carefully select workers so that they possess skills and
abilities that match the needs of the task and train them to perform
according to rules and procedures.
Principle 4. Establish a fair or acceptable level of performance for a
task and then develop a pay system that awards acceptable
performance.
THANK YOU