Ch.6 Principles of Management Flashcards
Meaning of principles of management
Principles of management are fundamental truths that explain the relationship between two or more variables under given situations. These principles establish the relationship between causes and their effects.
Management principles provide guidelines for managerial decision-making and action.
These are helpful in predicting the results of managerial actions and are flexible.
Management principles can be derived from the following methods:
i) Observation Method: They analyse what is observed and gain experience which is used in the future as guide.
ii) Experiment Method - On the basis of these studies they develop certain principles and test their validity.
Nature (Characteristics) of principles of management
- Universality - Principles of management are fundamental statement of truth having universal validity. These principles can be applied in different types of organisations. Eg. business, government, hospital. army, university etc. The basic task of every manager is the same i.e. to get the desired results by effectively coordinating human and physical resources.
- Dynamism or Flexibility - Principles of management are not rigid but flexible and dynamic in nature. These principles can be modified to suit different situations and all kinds of changes in the business environment.
- Influencing Human Behaviour - Management is a social science and it deals with human behaviour. Human behaviour is complex and cannot be tested under controlled laboratory conditions. Therefore, principles of management are not as exact as the principles of physical sciences (eg. physics, chemistry etc.)
- Contingent - The principles of management are relative not absolute. These principles should be applied carefully according to organisational needs.
- Equal Importance - All the principles of management are equally important.
Need for principles of management
- To increase efficiency - Principles of management have been developed from experiences of various experts. These principles provide necessary guidelines to managers as to how they should function in different situations to obtain the best results. Principles of management help to improve managerial efficiency.
- To crystallise the true nature of management - In the absence of principles, it would not have been possible to develop a scientific and organised body of knowledge in management. Fundamental principles and basic concepts have helped to develop the science of management.
- To train managers - Formal methods of training managers in institutes and universities are possible only when there are fundamental principles and concepts.
- To improve research - Management principles provide new ideas, vision and imagination for conducting research studies in management.
Taylor’s principles of scientific management
F.W. Taylor, an American, laid the foundations of management as a science consisting of fundamental principles.
According to F.W. Taylor, “Scientific management is the art of knowing exactly what you want your men to do and then seeing that they do it in the best and cheapest way”.
The basic principles of scientific management are:
i) Science not Rule of Thumb - Each and every job and the method of doing it should be based on scientific study and analysis rather than on trial and error. The task to be performed should be scientifically planned.
ii) Harmony not discord - Management should adopt an enlightened attitude and share the gains of productivity with workers. Workers on their part should work with discipline and loyalty.
iii) Maximum not restricted output - Conflict between management and workers arises mainly on division of surplus. Taylor suggested that the best way to resolve the conflict is to increase the size of surplus so that each side can have a large share. Management and workers have a common interest in increasing productivity.
iv) Division of work and responsibility - Taylor suggested separation of planning from operational work. Management should concentrate on planning the job of the workers and the workers should concentrate on the performance of their work.
Worker’s objections to scientific management
- Overburdening - treats feeder to machines rather than human beings
- High performance standards
- Attack on unity of workers through differential piece rate system
Fayol’s principle of management - classification of business activities
Henri Fayol (1841-1925) was a French industrialist.
Fayol classified all business activities into six categories:
1. Technical (production or manufacturing)
2. Commercial
3. Financial
4. Security
5. Accounting
6. Managerial
Fayol’s principle of management - elements of management
i) Forecasting and planning
ii) organising
iii) commanding
iv) coordinating
v) controlling
Fayol’s principle of management - managerial qualities and training
i) Physical
ii) Mental
iii) Moral
iv) Educational
Fayol’s principles of management
- Division of work - Division of work means division of the total task into compact jobs and allocating these compact jobs to different persons so that an employee can concentrate on only one type of work. It helps to improve efficiency by avoiding wastage of time and effort caused by change from one type of work to another.
- Authority and responsibility - Authority is the right to get work done from others and responsibility is the obligation to perform the assigned task. Authority and responsibility are coexistent and they must go hand in hand. Authority without responsibility leads to irresponsible behaviour while responsibility without authority will make a person ineffective. Therefore, there should be parity between authority and responsibility.
- Discipline - Discipline implies obedience, respect of authority and observance of the established rules and regulations. Discipline is essential for the smooth running of every organisation. According to Fayol, good supervision in required at all levels.
- Unity of command - According to this principle an employee should receive orders from one superior only and be accountable to him. No person can serve several masters at the same time.
Violating the principle of unity of command leads to:
(a) Overlapping or orders
(b) Confusion and indiscipline
(c) Duplication of work
(d) Disrespect for superiors
- Unity of direction - There should be one head and one plan for a group of activities having the same objectives. In other words, each group of activities with the same objective must have one plan of action and must be under the control of one superior.
- Subordination of individual interest to general interest - An organisation is bigger than an individual. Therefore, the interests or goals of the organisation must prevail upon the personal interests of individuals.
- Remuneration - The remuneration payable to workers must be fair, reasonable and satisfactory both to the employees and the employer. It must reward effort so as to motivate higher productivity.
- Centralisation - According to Fayol, everything that increases the importance of subordinates’ role is decentralisation and everything that reduces it is centralisation.
- Scalar chain - It refers to the chain of superiors ranging from the ultimate authority (top) to the lowest rank (bottom). However, to facilitate quick communication between two links in the chain, a gang plank (direct contact) may be created.
Diagram - Order - There must be material and social order in an enterprise. Material order implies “a proper place for everything and everything in its right place”. Similarly, social order means “a place for everyone and everyone in his appointed place”.
- Equity - Management should treat the employees with justice and kindness. There should be equity of treatment in dealing with subordinates and no discrimination should be made between them.
- Stability of tenure - Stability of tenure helps to develop loyalty and an attachment on the part of employees.
- Initiative - Employees at all levels should be encouraged to think out and execute the assigned tasks in a better way. Initiative is a source of strength for an organisation. Therefore, subordinates should be inspired to suggest improvements in the formulation and implementation of plans.
- Esprit de corps - ‘Unity of strength’ and the strength of an enterprise lies in the cooperation and harmony in individual efforts. Group efforts are more than the aggregate of individual contributions on account of esprit de corps.
Fayol’s principle of management diagram
Relevance of principles today
Table
Comparison between Taylor and Fayol
Table
Universality of management principles
Universality of management principles means the basic principles are applicable in all types of organisations. Therefore, managerial knowledge and skills can be transferred from one organisation or country to another.
According to F.W. Taylor, the fundamental principles of management are applicable to all kinds of human activities from simplest work to get corporation.
The application of management principles, however, differs from one organisation to another depending upon on the culture and needs of the particular business organisation.
But the degree of division of work may be different in different business enterprises.
