CHAPTER-2
Principles
of Management
Principles
of Management – Concept and Significance
Ø Nature or Features of Management
Principles
(i)
Universal
applicability : Applicable in all types of organisations,
irrespective of size, nature and objectives.
(ii)
Formed by practice and experience : Formed by
experimentation, experience and collective wisdom of the managers.
(iii)
General guidelines : Guidelines
to actions are available but they do not provide ready made solution to all managerial problems.
(iv) Flexible : Can be modified by a manager
according to the situation, They are not rigid prescriptions.
(v)
Mainly
behavioural : These mainly influence the behaviour of human
beings.
(vi)
Cause and effect relationship : Establish
relationship between cause and effect i.e., if a particular principle is
applied in a particular situation, what would be its likely effect.
(vii)Contingent : The use of management principles
is contingent or dependent upon the prevailing situation at a particular point of time.
Ø Significance of Principles of Management
(i)
Provide useful insights into reality to the managers : Use of these principles increases managerial efficiency by adding to their knowledge and
ability to understand various real world situations more accurately into real
world.
(ii)
Optimum utilisation of resources and effective administration : The principles help the managers to
foresee the cause and effect relationships of their decisions and reduce
wastage associated with trial and error approach. They help in effective
administration by making managerial decisions free from personal prejudices.
(iii)
Scientific decisions : The
principles help in taking decisions scientifically based on logic and objective assessment of situations rather than
blind faith and personal prejudices.
(iv)
Meeting requirements of changing environment : Principles of Management are modified to help the managers to meet requirements of changing environment.
(v)
Fulfilling social responsibility : The
management principles have been developed in such a way that they help in fulfilling social
responsibilities of the organisation.
(vi)
Management training, education and research : Principles of Management are the basis of management theories, which are used in management of training, motivation,
research and development.
Fayol’s Principles of Management
Ø 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 is 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 fortunes of the
company. For his contributions, he is well known as the “Father of General
Management”.
Ø Fayol’s Principles of Management
(i)Division of Work : Work is to be divided into small
tasks and it should be completed by a specialised worker only.
(ii)Authority
and Responsibility : There should be a balance between authority and
responsibility.
(iii)
Discipline
: Obedience of organisational rules and employment
agreements.
(iv)
Unity of Command : Each employee should receive
orders in a hierarchy and should be responsible to only one superior.
(v)
Unity of
Direction : A group of activities having same objective must
have one head and one plan.
(vi)
Subordination of Individual Interest to General Interest : Organisational interest should supercede individual interest.
(vii)
Remuneration of Employees : Pay and
compensation should be fair to both, the employees and the organisation.
(viii) Centralisation and Decentralisation : Balance
the involvement of the subordinates through decentralisation and retention of final authority with
managers through centralisation.
(xi) Scalar Chain : A chain of authority and
communication should be there, from top to bottom levels of management.
(x)Order : People
and resources should be in suitable places at appropriate time for maximum
efficiency.
(xi)
Equity : Kind and
just behaviour with all employees without discrimination.
(xii) Stability of Personnel : Minimise
employee turnover to maintain organisational efficiency.
(xiii) Initiative
: Encourage employees to take initiative in thinking
and executing the plans.
(xiv) Esprit de
Corps : Promote a team spirit of unity and harmony among
the employees.
Taylor’s Scientific Management-Principles and
Techniques
Ø Principles of Scientific Management
(i)
Science,
not rule of thumb: Decisions on the basis of scientific study and
analysis rather than traditional methods
of trial and error.
(ii)
Harmony,
not discord: Eliminate class-conflict and develop harmony
between the management and the workers.
(iii) Co-operation, not individualism: Competition
should be replaced by co-operation. Both should realise that they need each other.
(iv) Development of each and every person to his or her
greatest efficiency and prosperity: Personnel competencies should be developed by scientific selection and
training should be given for maximum organisational progress.
Ø Techniques of Scientific Management
(i)
Functional Foremanship : Separation of planning and
execution function.
(ii)
Standardisation
and Simplification : Setting standards for every business activity and
eliminating unnecessary diversity of
products.
(iii) Method Study : Identify one best way to do a job.
(iv) Motion Study : Eliminate wasteful and unnecessary movements.
(v)
Time Study : Determine standard time required
to perform a job.
(vi) Fatigue study : Determine the amount and frequency of rest intervals of workers.
(vii) Differential piece wage system : Different wage rates for
efficient and inefficient workers.
(viii)Mental Revolution : Total change in the attitude of both management and
workers.
Know the Terms
Ø Principles of Management : These are
broad and general guidelines for decision making and about behaviour of
managers. They are not rules, but only a guide to action.
Ø Scientific Management : Knowing
exactly what you want employees to do and thereby monitoring that they do it in
the best and in the cheapest way.
Ø Just in
time manufacturing :
Improve
return on investment by reducing inventory and its associated cost.
Ø Six sigma
: Bring down inefficiencies and
save time and money by reducing ‘quality variations’.
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