CHAPTER -2

PRINCIPLES OF
MANAGEMENT
 CHAPTER -2
PRINCIPLES OF
MANAGEMENT
MEANING OF MANAGEMENT PRINCIPLE

A management principle is a broad and

general guideline for decision making
and behaviour of employees towards
organization. Principles are guidelines to
take decisions or actions.

Definition:
“ Management principles are fundamental
truth of general validity”
-Koontz and O’ Donnell
NATURE OF PRINCIPLES
OF MANAGEMENT:
(CHARACTERISTICS)
 NATURE OF PRINCIPLES OF
MANAGEMENT:
(CHARACTERISTICS)
1. Universal applicability:
Management principles are
applicable to any type of
organisations like business
organizations, police force, sports clubs
in any part of the world.
 [Link] Guidelines:
The principles are guidelines to
action. Management principles are
derived from experience and analysis
and they are in the form of mere
statements.

Example:
General Guidelines
to prevent Covid
19
[Link] by practice and
experimentation:
The principles of management
forme are
by and
d experience well
collective
wisdo
experimentati
of as as
m
on managers
 [Link]:
They are flexible and can
be modified by the manager
when the situation so
demands. They give the
manager enough discretion to
do so.
[Link] behavioural:
Management principles aim at
behavio of human beings.
influencing
ur Therefore, of
behavioural in
principle management are mainly
s
nature
 [Link] and effect relationship:

The principles of Management are

intended to establish relationship
between cause and effect so that they can
be used in similar situations in a large
number of cases.
 [Link] (Relativity):

The application of principles of

management is contingent or dependent
upon the prevailing situation at a
particular point of time.
NATURE OF PRINCIPLES OF MANAGEMENT:
(CHARACTERISTICS)

1. Universal applicability
[Link] Guidelines
[Link] by practice and experimentation
[Link]
5. Mainly behavioural
[Link] and effect relationship
[Link] (Relativity)
SIGNIFICANCE/IMPORTANCE OF
MANAGEMENT PRINCIPLES:
Managers may apply these principles to
fulfil their tasks and responsibilities.
Principles guide managers in taking and
implementing decisions.

The following points highlight the importance

of managerial management principles-
[Link] Managers with
insights
useful into reality:
The principles of management provide the
managers with useful insights into real world
situations.
When a manager follows sound managerial
principles, decisions based on them will be
perfect and accurate.
[Link] utilization of resources
and effective administration:
Management principles help
managers in taking proper decisions in
proper time. It points out how time,
money, materials and human efforts
can be used economically to improve
productivity.
[Link] decisions:
With the help of Management
Principles, managers can take
appropriate decisions in right time.
Management decisions taken on the
basis of principles are free from bias.
 [Link] changing environment
requirements:
Management principles are highly
flexible and therefore can be modified to
meet changing requirements of
environment.
 [Link] social responsibility:
A business enterprise is an integral part
of society. Proper understanding of
management principles would enable the
managers take realistic view of
organizational situations and their social
relevance.
[Link] for management training,
education and research:
Principles of management are at the
core of management theory. As such
these are used as a basis for management
training, education and research.
 EVOLUTION OF
MANAGEMENT PRINCIPLES
 School of thought may be
s
divided int 6 distinctive
o
[Link] Perspectives:
The first known management ideas were
recorded in 3000-4000 B.C. One Pyramid
built by Egyptian ruler Cheops required work
to be done by 100,000 men for over twenty
years in 2900 B.C.
[Link] management theory:
The classical management theory was
introduced during the Industrial
Revolution as a way to improve
productivity. The classical theory
developed in three streams- Bureaucracy
(Weber), Administrative Theory (Fayol),
and Scientific Management (Taylor).
[Link] classical theory — human relations
approach:
Neo-Classical theory gave
emphasis to greater man
[Link]-Classical approach
behind the may
be analysed in three parts, namely
Hawthorne— Experiment1. 2. Human
Relation Movement 3. Behavioural
Approach.
[Link] approach —
organisational humanism:
science
The underlying philosophy of
organisational humanism is
integration of knowledge that
fromand
disciplines like psychology, sociology
anthropology. other
McGregor, Abraham Maslow and
Fredrick Herzberg.
[Link] science/operational
research:
It emphasises research on
operations and use of quantitative
techniques to aid managers to take
decisions.
[Link] management:
It sees modern organisations
as complex systems and use of
modern techniques to solve
organisational and human
problems.
HENRI FAYOL’S
14 PRINCIPLES
OF
MANAGEMENT:
 Henri Fayol is popularly known as
the Father of Modern general
management.
He was born in 1841. He started his
career as a coal mine engineer in a
French Coal mining company and
later become the managing director
of the company.
 Based largely on his own management
experience, he developed his concept of
administration.
In 1916 he published these
in experience
the book “Administration Industrielle
et Générale”
It was translated in
English as ‘General and
Management’
Industrial in 1949 and is
widely considered a
foundational work in
classical management theory.
■
Fayol was the first to identify functions of
management-Plan,Organise,Command, Coordinate
and Control.
■ Fayol classified Management activities into
six .Technical;Commercial;Financial,Security;Acco
unting and Managerial.

■
Fayol also explained qualities of a Manger.
(Physical,Moral,Education etc)
■
Fayol concentrated on Top level Management-(Top -
Down Approach)
 14 PRINCIPLES OF
MANAGEMENT
DEVELOPED BY HENRY
FAYOL
[Link]
This principle states that a complex work

shouldbedividedintosmaltasks,andeach
t a s k s h o u ld b e assigned t o a particular
employee.
Division of work promotes specialization
and avo i d waste o f time and
[Link] principle is ap lied to
technical as wel as managerialduties.
EXAMPLE

ENGLISH TEACHER BUSINESS STUDIES

TEACHER – NISHITHA
ANUSH SIR MADAM

MALAYALAM TEACHER ECONOMICS TEACHER

DEEKSHA MADAM ROBITH SIR
 [Link]:
Authority is the right to give orders to the
subordinates and responsibility is the duty in which
the subordinates are expected to perform. This
principle states that authority and responsibility are
co-existing.
If the authority is granted to a person he should
also be made responsible. Similarly if anybody is
made responsible for a task , he should be given
sufficient authority to perform it.
SUPERIOR SUB-ORDINATE
 [Link]:

Discipline is the obedience to organisational

rules respect of Authority and employment
agreement which are necessary for the
working of the organisation. It ensures the
smooth running of the organization and
applicable for workers and management.
 SUPERVISOR
CHECK
ATTENDANC
E
THOSE WHO VIOLATE COMPANY RULES
WILL BE PUNISHED
 [Link] of Command:
This principle states that each employee
should receive orders from one superior only.
Dual subordination should be avoided. In the
absence of unity of command, responsibility
cannot be fixed, duplication of work ,
overlapping orders and instruction may
happen.
 Control
The worker

Mr:
Adithyan
Supervisor
5 . Un i t yo f D i re c t i o n :
This principle states that for a group
activities having the same objective, there
should be one head and one plan.
There are different departments in
an
organization for different activities,Each
group of activities having the same objective
must have one head and one plan.
 Mr:PAVIN
KUMAR
Finance Manager
Control finance dept

FINANCE DEPARTMENT
[Link] of Individual Interest
to Ge n e ra l I n te re s t :
An organization is superior to individuals.
individual
Each working in an organization has some
individual interest. The organization has its own
objectives.
According to Fayol the focus is on the
primary
organizational objectives and not on those of the
individual.
[Link]:
The overall pay and compensation should
be fair to both employees and the
organisation.
The remuneration should be sufficient to
keep employees motivated and productive. At
the same time it should be within the paying
capacity of the company.
[Link]:

Centralisation means concentration of

authority in few hands at the top level.
Decentralisation means delegation or
distribution of authority throughout all the
levels of the organization.
There should be a balance between
centralization and decentralization based
on the nature of the job.
[Link] chain:
Scalar chain refers to
‘the chain of superiors
ranking from the
ultimate authority to the
lowest level in an
organisation. Scalar
chain is the formal line
of authority (Chain of
command) which moves
from highest to lowest
rank.
Drawbacks of Scalar
chain:
a)Huge time is required
for the communication to
reach the destination.
b)There is possibility of
information distortion.
Gang Plank (Direct
Communication):
According to this concept, in case of
emergency, two executives of the organization of
different departments at the same level can
communicate directly,
[Link]:

This principle is based on the general

saying, “Have a place for everything and keep
everything in its place”.
All materials are to be kept in proper place
(Material Order) and the right man is to be
assigned the right job (Social Order).
Material Order Social Order
1 .Equity:
This principle says that superiors should be
impartial while dealing with their
subordinates.
Equity refers to kind,fair and equal
treatment for all employees. Favouritism and
nepotism should be avoided.
 AVOID DISCRIMINATION
Salary 50000

Salary 15000
Salary 35000

3 MANAGERS HOLDING SAME POSITION

[Link] e l :

According to Fayol a worker should not be

moved from one job to another frequently. Time is
necessary for employee to adapt his work and
perform it effectively..
Frequent changes of personnel increases cost of
selection and training .
 MUBASHIR ALI GOT A JOB IN ABC
TRADERS
IN JANUARY IN FEBRUARY IN MARCH
HE WORKS HE WORKS HE
IN IN WORKS
CUSTOMER MARKETING IN
CARE DEPT DEPT ACCOUNTING
DEPT

ACCORDING TO FAYOL THIS IS NOT ALLOWED

[Link]:

According to this principle ,

subordinates should be given an
opportunity to take initiative in making
and executing the plans.
Initiative meanstaking the first step with
self-motivation.
[Link](Unionisstrength):
This principle implies that there
should be coordination and team
work among the members of an
organization.
Management must take steps
to
develop a sense of belongingness
among the of the
members group. work
A manager should replace ‘I’ with
‘We’ in all his conversations with
workers to foster team spirit.
From the foregoing discussion it is clear that Fayol’s 14 principles of
management are widely applicable to managerial problems and have
cast a profound impact on management thinking today.
 [Link]’S
SCIENTIFIC MANAGEMENT
[Link]’S SCIENTIFIC MANAGEMENT:

Frederick Winslow Taylor,was born

in 1856, Philadelphia,U.S. was an
American engineer who is known as
the father of scientific management.
 He started his career as an
Engineer in Midvale Steel
Works,Later he became the
chief engineer.
Taylor thought that by
scientifically analysing work, it
would be possible to
find ‘one best
way’ to do it.
His famous book “principles
and methods of scientific
management‘ was published
in
1911.
 SCIENTIFIC
MANAGEMENT
-
MEANING AND
DEFINITION
SCIENTIFIC MANAGEMENT- MEANING
Scientific management refers to the
application of science to management
practices.
It involves the replacement of rule of
thumb or trial and error method by
scientific and systematic approach in
decision making.
SCIENTIFIC MANAGEMENT- DEFINITION

“Scientific management means

knowing exactly what you want men
to do and seeing that they do it in the
best and cheapest way.”-
Fredrick Winslow Taylor ([Link])
OBJECTIVES OF
SCIENTIFIC
MANAGEMENT
Objectives of Scientific
management:
1)Increasing production –
by the use of
standardized tools, methods
2)Increasing quality – by using
quality control and research.
3)Reducing cost – by using scientific
techniques of production.
4)Reducing wastage – by proper
handling of
resources
PRINCIPLES OF
SCIENTIFIC
MANAGEMENT
PRINCIPLES OF SCIENTIFIC MANAGEMENT:
1. Science, not rule of thumb :
Rule of thumb means application of
traditional methods or the methods decided
by the managers based on their past
experience.
All these methods are often
untested and unscientific; they do
not guarantee success.
Through scientific analysis and
investigation, the best method of
doing a work can be
developed.
REPLACE OLD
[Link], not discord (conflict):
This principle states that there should be
complete harmony between management
and the workers.
This can be achieved through a change in
the attitude of workers and the
management. Taylor calls it as “Mental
Revolution”.
Harmony
[Link]-operation, not individualism :
This principle is an extension of
“Harmony, not discord”.
This principle states that there
should be
complete cooperation between
management and workers instead of
individualism.
Competition should be replaced by
cooperation. For all important decisions taken
by the management, workers should be taken
into confidence.
[Link] of each and every person to his or
her greatest efficiency and prosperity:
Industrial efficiency depends to a large extent on
personnelcompetencies. Under scientific
management right men are selected for right
jobs.
The procedure for selection of workers should be
designed scientifically.
The management and the workers should try
to
achieve maximum output in the
place of restricted output.
 MENTAL REVOLUTION
The basic idea behind the principles of
scientific management is to change the mental
attitudes of the workers and the management
towards each other. Taylor called it “mental
revolution”,ie,
●
Increase in production,
●
Spirit of mutual trust &
●
Develop a scientific attitude for solving
problems
TECHNIQUES OF
SCIENTIFIC
MANAGEMENT
TECHNIQUES OF SCIENTIFIC MANAGEMENT:

To bring scientific management

into practice, Taylor suggested the
following 7 techniques.
[Link] foremanship:
In this technique Taylor suggested the division of
factory into two departments-Planning Department
and Production Department.
[Link] suggested that specialization should
be introduced in the factory. He advocated
‘Functional foremanship for this purpose.
Functional foremanship is a form of organization
which involves supervision of a worker by
eight
specialist foremen. Each worker will have to take
orders from these eight foremen in the
related
process or function of production.
Functional foremanship is an extension of the
principle of division of work and specialisation to
2. Standardization and simplification of work:
Standardisation involves setting up of standards in
every phases of business operation. It includes uses of
standard tools and equipment., methods or lines of
product, working conditions etc. for maximization of
output.
The objectives of standardization are -
a)To establish standards of performance of men and
machines.
b) To maintain quality standards.
c)To reduce a given line or product to fixed
types, sizes and characteristics.
[Link] study:
The objective of method study is to find out
one best way of doing the job.
There are various methods of doing the
job.
It helps a lot in
handling, transporting and storage of
raw materials and goods.
Taylor devised the concept of
Assembly assembly
line:
It is a production
line process that breaks
the manufacture of a
by using method study. good into steps
that are in
completed
defined
a pre-
sequence.
 FIND OUT
BEST METHOD
[Link] study:
Motion study involves close observation of
movements of the workers and machines to
perform a particular job.
It helps to eliminate wasteful movements
and to select the best method of doing a job.
Taylo used stopwatches and various
r and colours to identify
symbols different
motions.
TRY TO AVOID
UNNECESSARY
MOVEMENT OF WORKERS
[Link] Study:
It is the determination of time required to
complete a particular study. ie. Fixing
standard time for each job.
Time measuring devices are used for each
element of work.
The objective of time study is to determine
the number of workers to be employed, frame
suitable incentive schemes and determine of
labour costs.
[Link] study:
Continuous workcauses physical or
mental fatigue.
Fatigue study tries to identify the
amount and frequency of rest required in
completing the work.
Rest pauses and intervals should be scientifically
determined.

WORK STUDY = METHOD STUDY + MOTION STUDY + TIME STUDY + FATIGUE STUDY
[Link] Piece Rate System:
Differential piece rate system is a system of
wages’ payment in which efficient and
inefficient workers are paid at different rates.
Taylor has suggested two types of wages
for
similar work. Higher wages for
workers efficient & lower wages for
workers. inefficient
 STANDARD WAGE RATE
FOR ONE PRODUCT Rs.: 10

RAJU SANJAY
MAKES 20 UNITS A DAY MAKES 32 UNITS A DAY
&
&
GETS RS. 320
GETS RS. 200
FAYOL VERSUS TAYLOR COMPARISON
BASIS HENRI FAYOL F W TAYLOR
Emphasi Top level Lower leve
s management manageme l
nt
Concept General of Scientific
theory Manageme
administration nt
Unity of Strictly followed Not as
considered
comman important.
d
Applica Universally applicable Applies to
bil ity specialized
organizations only.