1 The Principle of Management

THE BASIC PRINCIPLE OF MANAGEMENT

A. Management Funcion

The 4 basic management functions that make up the management process are described
in the following sections:

1. PLANNING:
Planning involves choosing tasks that must be performed to attain organizational goals,
outlining how the tasks must be performed, and indicating when they should be
performed. Planning activity focuses on attaining goals. Managers outline exactly what
organizations should do to be successful. Planning is concerned with the success of the
organization in the short term as well as in the long term.
2. ORGANIZING:
Organizing can be thought of as assigning the tasks developed in the planning stages, to
various individuals or groups within the organization. Organizing is to create a
mechanism to put plans into action. People within the organization are given work
assignments that contribute to the company’s goals. Tasks are organized so that the
output of each individual contributes to the success of departments, which, in turn,
contributes to the success of divisions, which ultimately contributes to the success of the
organization.
3. INFLUENCING:

Influencing is also referred to as motivating,leading or directing.Influencing can be

defined as guiding the activities of organization members in he direction that helps the
organization move towards the fulfillment of the goals. The purpose of influencing is to
increase productivity. Human-oriented work situations usually generate higher levels of
production over the long term than do task oriented work situations because people find
the latter type distasteful.

4. CONTROLLING:

Controlling is the following roles played by the manager:

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 Gather information that measures performance.

 Compare present performance to pre established performance norms.
 Determine the next action plan and modifications for meeting the desired
performance parameters.
 Controlling is an ongoing process.
B. Management Principles
Management principles developed by Henri Fayol:
1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure
that effort and attention are focused on special portions of the task. Fayol presented work
specialization as the best way to use the human resources of the organization.
2. AUTHORITY: The concepts of Authority and responsibility are closely related.
Authority was defined by Fayol as the right to give orders and the power to exact
obedience. Responsibility involves being accountable, and is therefore naturally
associated with authority. Whoever assumes authority also assumes responsibility.
3. DISCIPLINE: A successful organization requires the common effort of workers.
Penalties should be applied judiciously to encourage this common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards a common
objective in a common direction.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS:
The interests of one person should not take priority over the interests of the organization
as a whole.
7. REMUNERATION: Many variables, such as cost of living, supply of qualified
personnel, general business conditions, and success of the business, should be considered
in determining a worker’s rate of pay.
8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the
subordinate role. Decentralization is increasing the importance. The degree to which
centralization or decentralization should be adopted depends on the specific organization
in which the manager is working.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each
manager, from the first line supervisor to the president, possess certain amounts of
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authority. The President possesses the most authority; the first line supervisor the least.
Lower level managers should always keep upper level managers informed of their work
activities. The existence of a scalar chain and adherence to it are necessary if the
organization is to be successful.
10. ORDER: For the sake of efficiency and coordination, all materials and people related to a
specific kind of work should be treated as equally as possible.
11. EQUITY: All employees should be treated as equally as possible.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should
always be a high priority of management. Recruitment and Selection Costs, as well as
increased product-reject rates are usually associated with hiring new workers.
13. INITIATIVE: Management should take steps to encourage worker initiative, which is
defined as new or additional work activity undertaken through self direction.
14. ESPIRIT DE CORPS: Management should encourage harmony and general good
feelings among employees.
C. Organizing Management

Organizing is the process of establishing orderly uses for all resources within the
management system. Here, Orderly signifies the emphasis on the attainment of management
system objectives and assist managers not only in making objectives apparent but in
clarifying which resources will be used to attain them.

1. Importance of organizing:
 The organizing function is extremely important to the management system
because it is the primary mechanism mangers use to activate plans.
 Organizing creates and maintains relationships between all organizational
resources by indicating which resources are to be used for specified activities and
when,where, and how they are to be used.
 A thorough organizing efforts helps managers to minimize costly weaknesses,
such as duplication of effort and idle organizational resources.
 If there were to be an organizing department, it’s responsibilities will include:
 Reorganization plans that make the management system more effective and
efficient.
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 Plans to improve managerial skills to fit current management system Needs.

 An advantageous Organizational climate within the Management System.
2. General guidlines

Henri Fayol developed 16 general guidelines for organizing resources:

1. Judiciously prepare and execute the operating plan.

2. Organize the human and material facets so that they are consistent with objectives,
resources and requirements of the concern.
3. Establish a single component, energetic guiding authority i.e. a Formal Management
Structure.
4. Co-ordinate all activities and efforts.
5. Formulate clear, distinct and precise decisions.
6. Arrange for efficient selection so that each department is headed by a component,
energetic manager and all employees are placed where they can render the greatest
service.
7. Define duties.
8. Encourage initiative and responsibility.
9. Offer fair and suitable rewards for services rendered.
10. Make use of sanctions against faults and errors.
11. Maintain discipline.
12. Ensure that individual interests are consistent with the general interests of the
organization.
13. Recognize the Unity of Command.
14. Promote both material and human coordination.
15. Insitute and Effect Controls.
16. Avoid regulations, red tape and (excessive) paper work.
3. Organizing Process

5 Step Organizing Process:

 Reflect on Plans and Objectives.

 Establish major Tasks.
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 Divide major tasks into subtasks

 Allocate resources and directives for subtasks.
 Evaluate the results of implemented organizing strategy.
D. Organizational Structure
1. STRUCTURE:

In any organizing effort, managers must choose an appropriate structure. Structure refers
to the designated relationships among resources of the management system. Its purpose is
to facilitate the use of each resource, individually and collectively, as the management
system attempts to attain its objectives.

2. ORGANIZATIONAL CHART:

An organizational chart is constructed in pyramid form, with individuals toward the top
of the pyramid having more authority and responsibility than those toward the bottom.

The relative positioning of individuals within boxes on the chart indicates broad working
relationships, and lines between boxes designate formal lines of communication between
individuals.

3. AUTHORITY & RESPONSIBILITY

The dotted line is not part of the organization chart but has been added to emphasize the
chart’s pyramid shape. The locations of the positions also indicate broad working
relationships.

4. FORMAL & INFORMAL STRUCTURE

Formal structure is defined as the relationships among organizational resources as

outlined by Management. It is represented primarily by the Organization Chart.

Informal Structure is defined as the patterns of relationships that develop because of

informal activities of organization members. It evolves naturally and tend to be molded
by individual norms and values and social relationships.

5. DEPARTMENTALIZATION & FORMAL STRUCTURE:

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Department is a unique group of resources established by management to perform some

organizational task. The process of establishing departments within the management
system is called DEPARTMENTALIZATION.

6. FUNCTIONAL DEPARTMENTALIZATION

The most widely used basis for establishing departments within the formal structure is the
type of work functions (activities) being performed within the management system.

Functions are typically divided into major categories like marketing, production and
finance, etc.,

7. PRODUCT DEPARTMENTALIZATION

Organization structure based primarily on product departmentalizes resources according

to the products being manufactured. As the company grows and as their product range
grows, it becomes increasing difficult for management to coordinate activities across the
organization.

Organizing on the lines of products and product groups permits the logical grouping of
resources across the organization.

8. GEOGRAPHICAL DEPARTMENTALIZATION

Structure based primarily on territory departmentalizes according to the places where the
work is being done or the geographic markets on which the management system is
focusing.

The physical distances can range from quite short (between 2 points in the same city) to
quite long ( between 2 points in the same state or different states or countries or
continents).

9. CUSTOMER DEPARTMENTALIZATION

Structure based primarily on the customer establishes departments in response to the o

rganization’s major customers.
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This structure,of course, assumes that major customers can be identified and divided into
logical categories.

10. MANUFACTURING PROCESS DEPARTMENTALIZATION

Structure based primarily on manufacturing process departmentalizes according tot he

major phases of the process used to manufacture products.

E. Forces Influencing
According to Shetty & Carlisle, the formal structure of a management system is
continually evolving. 4 Primary forces influences this evolution:
 Manager
 Task
 Environment
 Subordinates

The evolution of a particular organization is actually the result of a complex and dynamic
interaction among these forces.

1. Manager:

Each manager perceives the organizational problem in a unique way. Naturally,

knowledge, experience, background and values influence the manager’s perception of
what the organization’s formal structure should be or how it should be changed

2. Task:
Task includes the degree of technology involved in performing the task and the task’s
complexity. As task activities change, a force is created to change the existing
organization.
3. Environment:

Environment include the customers and suppliers of the management system, along with
existing political and social structures.

4. Subordinates:
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Sub ordinates include the needs and skill levels of subordinates. Changes in the
environment or subordinate dynamics can effect a change in the organization.

D. Strategy Implementation & Strategy control

All sectors and Education and For Entrepreneurs and For Large Corporates and
Government & Not for Profit and SME Sector STRATEGY, strategy control, Strategy
Implementation, strategy implementation skills.

Strategy Implementation, the 4th step of the strategy management process, is putting
formulated strategies into action.

Without successive implementation, valuable strategies deeloped by managers are

virtually worthless.

The successful implementation of strategy required 4 basic skills:

1. INTERACTING SKILL:

Interacting Skill is the ability to manager people during implementation. Managers who
are able to understand the fears and frustrations others feel during the implementation of a
new strategy tend to be the best implementers. These managers empathize with
organization members and bargain for the best way to put a strategy into action.

2. ALLOCATING SKILL:

Allocating skill is the ability to provide the organizational resources necessary to

implementing a strategy. Successful implementers are talented at scheduling jobs,
budgeting time and money, allocating other resources that are critical for implementation.

3. MONITORING SKILL:

Monitoring skill is the ability to use information to determine whether a problem has
arisen that is blocking implementation. Good Strategy Implementers set up feedback
systems that continually tell them about the status of strategy implementation.

4. ORGANIZING SKILL :
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Organizing skill is the ability to create throughout the organization a network of people
who can help solve implementation problems as they occur. Good implementers
customize this network to include individuals who can handle the special types of
problems anticipated in the implementation of a particular strategy.

5. STRATEGIC CONTROL:

Strategic Control, the last step of the Strategy Management Process, consists of
monitoring and evaluating the strategy management process as a whole to ensure that it
is operating properly.

Strategic Control focuses on the activities involved in environmental analysis,

organizational direction, strategy formulation, strategy implementation, and strategy
control itself – checking that all steps of the strategy management process are
appropriate, compatible and functioning properly.

http://managementinnovations.wordpress.com/2008/12/10/strategy-implementation-strategic-
control/

6. FUNDAMENTALS OF STRATEGIC PLANNING

All sectors and Education and For Entrepreneurs and For Large Corporates and
Government & Not for Profit and SME Sector and Uncategorized strategic planning,
STRATEGY,
1. STRATEGIC PLANNING:

Strategic Planning is the long range planning that focuses on the organization as a
whole. In doing strategic planning, managers consider the organization as a total
unit and ask themselves what must be done in the long term( 3 to 5 years) to attain
organizational goals.

In strategic planning, managers try to determine what their organization should do

to be successful 3 – 5 years from now. The most successful managers tend to be
those who are capable of encouraging innovative strategic thinking within their
organization.
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2. STRATEGY MANAGEMENT:

Strategy management is the process of ensuring that an organization possesses and

benefits from the use of an appropriate organization strategy. An appropriate
strategy is one best suited to the needs of an organization at a particular time.

The strategy management process is generally thought to consist of 5 sequential

and continuing steps:

1. Environmental Analysis
2. Establishment of an Organizational Direction.
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control

CLOSING

Similarly, we can describe the material that is the subject of this paper, of course, there are still
many shortcomings and weaknesses, because they lack the knowledge and the lack of reference
or the reference has to do with the title of this proposal. Author much hope dear readers,
providing constructive criticism and suggestions for the perfect proposal to the author in the
writing of the proposal in the next opportunities.

Hopefully this paper is useful for writers in particular are also dear readers in general. Such
review this time, may be useful for you and also inspire.
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REFERENCE

http://managementinnovations.wordpress.com/2008/12/09/fundamentals-of-strategic-planning/

http://managementinnovations.wordpress.com/2008/12/18/chain-of-command/

http://managementinnovations.wordpress.com/2008/12/16/organizing-16-general-guidelines-by-
henri-fayol/

http://managementinnovations.wordpress.com/2008/12/16/organizational-structure/