Fundamentals of

Management
By
Dr Jitender Kumar
Principle
A principle is a fundamental statement of truth that
provides guidance to thought and action.

Principles of Management
Principles of management are broad and general
guidelines for managerial decision making and
behavior (i.e. they guide the practice of management).
What is Management?????

 Management is a vital aspect of the economic life of man, which is an

organized group activity. It is considered as the indispensable institution
in the modern social organization marked by scientific thought and
technological innovations. One or the other form of management is
essential wherever human efforts are to be undertaken collectively to
satisfy wants through some productive activity, occupation or
profession.
 It is management that regulates man's productive activities through
coordinated use of material resources. Without the leadership provided
by management, the resources of production remain resources and
never become production.
Definitions
 Peter F. Drucker defines, "management is an organ; organs
can be described and defined only through their
functions".
 According to Terry, "Management is not people; it is an
activity like walking, reading, swimming or running.
People who perform Management can be designated as
members, members of Management or executive leaders.“
 Ralph C. Davis has defined Management as, "Management
is the function of executive leadership anywhere."
Definitions
 According to Mc Farland, "Management is defined for
conceptual, theoretical and analytical purposes as that
process by which managers create, direct, maintain and
operate purposive organization through systematic,
coordinated co-operative human effort."
 Henry Fayol, "To mange is to forecast and plan, to
organize, to compound, to co-ordinate and to control."
 Harold Koontz says, "Management is the art of getting
things done through and within formally organized group."
Nature of Principles of Management

The nature of principles of management can be described in the

following points:
 1. Universal applicability i.e. they can be applied in all types of
organizations, business as well as non-business, small as well as
large enterprises.
 2. General Guidelines: They are general guidelines to action and
decision making however they do not provide readymade
solutions as the business environment is ever changing or
dynamic.
Cont.….
 3. Formed by practice and experimentation: They are
developed after thorough research work on the basis of
experiences of managers.
 4. Flexible: Which can be adapted and modified by the practicing
managers as per the demands of the situations as they are man-
made principles.
 5. Mainly Behavioral: Since the principles aim at influencing
complex human behavior they are behavioral in nature.
Cont.….
 6. Cause and Effect relationship: They intend to establish
relationship between cause & effect so that they can be used in
similar situations.

 7. Contingent: Their applicability depends upon the prevailing

situation at a particular point of time. According to Terry,
“Management principles are ‘capsules’ of selected management
wisdom to be used carefully and discretely”.
 Significance of the Principles of Management

 1. Providing managers with useful insights into

reality: Management principles guide managers to take right
decision at right time by improving their knowledge, ability
and understanding of various managerial situations and
circumstances.
 2. Optimum utilization of resources and effective
administration: Management principles facilitate optimum use
of resources by coordinating the physical, financial and human
resources. They also help in better administration by
discouraging personal prejudices and adopting an objective
approach.
Cont.…
 3. Scientific decisions: Decisions based on management principles tend to be
more realistic, balanced and free from personal bias.
 4. Meeting the changing environmental requirements: Management principles
provide an effective and dynamic leadership and help the organization to
implement the changes.
 5. Fulfilling social responsibility: Principles of management not only help in
achieving organizational goals but also guide managers in performing social
responsibilities. Example : “Equity” and “Fair” remuneration.
 6. Management training, education and research: Management principles are
helpful in identifying the areas in which existing and future managers should be
trained. They also provide the basis for future research.
Scholars Contribution

 Fayol’s Principles of Management

About Henry Fayol: Henry Fayol (1841-1925) got degree in
Mining Engineering and joined French Mining Company in
1860 as an Engineer. He rose to the position of Managing
Director in 1988. When the company was on the verge of
bankruptcy. He accepted the challenge and by using rich and
broad administrative experience, he turned the fortune of the
company. For his contributions, he is well known as the
“Father of General Management”.
 1. Division of Work-
 Henri believed that segregating work in the workforce amongst the worker will
enhance the quality of the product. Similarly, he also concluded that the division
of work improves the productivity, efficiency, accuracy and speed of the
workers. This principle is appropriate for both the managerial as well as a
technical work level.
 2. Authority and Responsibility-
 These are the two key aspects of management. Authority facilitates the
management to work efficiently, and responsibility makes them responsible for
the work done under their guidance or leadership.
 3. Discipline-Without discipline, nothing can be accomplished. It is the core
value for any project or any management. Good performance and sensible
interrelation make the management job easy and comprehensive. Employees
good behavior also helps them smoothly build and progress in their
professional careers.
 4. Unity of Command-This means an employee should have only one boss and
follow his command. If an employee has to follow more than one boss, there
begins a conflict of interest and can create confusion.
 5. Unity of Direction-Whoever is engaged in the same activity should have a
unified goal. This means all the person working in a company should have one
goal and motive which will make the work easier and achieve the set goal
easily.
 6. Subordination of Individual Interest-This indicates a company should work
unitedly towards the interest of a company rather than personal interest. Be
subordinate to the purposes of an organization. This refers to the whole chain of
command in a company.

 7. Remuneration-This plays an important role in motivating the workers of a

company. Remuneration can be monetary or non-monetary. However, it should be
according to an individual’s efforts they have made.

 8. Centralization-In any company, the management or any authority responsible

for the decision-making process should be neutral. However, this depends on the
size of an organization. Henri Fayol stressed on the point that there should be a
balance between the hierarchy and division of power.
 9. Scalar Chain-Fayol on this principle highlights that the hierarchy steps should
be from the top to the lowest. This is necessary so that every employee knows
their immediate senior also they should be able to contact any, if needed.

 10. Order-A company should maintain a well-defined work order to have a

favorable work culture. The positive atmosphere in the workplace will boost
more positive productivity.

 11. Equity-All employees should be treated equally and respectfully. It’s the
responsibility of a manager that no employees face discrimination.
 12. Stability-An employee delivers the best if they feel secure in their job. It is
the duty of the management to offer job security to their employees.

 13. Initiative-The management should support and encourage the employees to

take initiatives in an organization. It will help them to increase their interest and
make then worth.

 14. Esprit de Corps-It is the responsibility of the management to motivate their

employees and be supportive of each other regularly. Developing trust and
mutual understanding will lead to a positive outcome and work environment.

 These 14 principles of management are used to manage an organization and

are beneficial for prediction, planning, decision-making, organization and
process management, control and coordination.
Thanks