Chapter -2 Principles of Management

Principles of management are the statements of fundamental truth which proved as guidelines in making decisions and actions. Derivation of management Principles: - Management principles are derived on the basis of the following:1) Deep observations:-The researchers observe deeply while employees are working and Note down the reactions of employees on various managerial decisions. 2) Repeated Experiments: - The decision or statement which observed deeply is being tested repeatedly in various organizations, different sets of employees and workers and if the result goes in same direction, then the statement is given the name of principle. Nature of Management Principles:1) Evolutionary:- Management principles are the observations of the leaders of managements, so it is evolutionary in nature. 2) Limited Application:- It is not necessary that every principle give results in favour of every organization. Some principles could give unfavorable results in some organizations. Such as: - In some organization principle of division of work will not give favorable results. 3) Relativity:- We cannot apply the principles kindly in any organization we have to make adjustments in some circumstances. Such as, principle of fair remunerations not same for every organizations. 4) Flexibility:-Principles of management could be modified with the change in circumstances. 5) Universality:- Principles of management could be applied anywhere in the world. They will give some results everywhere. Significance of Management Principles:1) Achieving Results economically:- Management principle insists on setting of objectives with the participation of workers, so they will do the work in best and cheapest way because these are their own objectives. 2) Optimum Utilization of Resources:- Management principles insist on cut down the wasteful managements and setting up the standard time and cost of resources in terms of time, energy and money. 3) Scientific Decisions:- The management principles enable managers to take decisions scientifically and systematically, so they will take appropriate decisions according to the resources available to them 4) Change in Technology:- Every business has to make changes. Management principles train managers to make changes according to the requirement and in the perfect direction. 5) Effective Administration:- The work of administration is to make policies and planes. Management principles work as the guidelines in making planes. 6) Research and Developments. Fayals Principles of Management:1) Principles of Division of work: - According to this principle the whole work of an organization should divided into different parts and assigned to different people. Instead of giving whole work to a single person. Positive effects:- (a) Specialization, (b) Improve efficiency. For example, in a furniture manufacturing company, one worker may, asked for cut down the wood, one for join then and one for polish, so that efficiency of worker will improve and work done efficiently. 2) Principle of Authority and Responsibility:- This principle states that there should be a balance between authority and responsibility given to a person. Authority means power of taking decisions and responsibility means obligation to complete the job. Lets of authority and mare of responsibility may results in delay of work and exits of

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authority may cause misuse. For example a person has given responsibility to produce.100 units but he has not given the authority to purchase the raw material, so the work will not complete at time. Positive effects:(1) Improves efficiency, (2) Systematic working. Principle of Discipline:- Discipline refers to rules and regulations. Fayal insists that discipline needs at both. Superior as well as subordinate level. The subordinates must obey the instructions and order given by superiors. Fayal insists mare on positive discipline by promotions and faith rather than negative discipline. Positive effects of authority and responsibility:(1) No misuse of authority. (2) No delay in work. For examples, the employees must obey their commitunents towards the organized by working effectively and efficiently. On the other hand the superior must also obey their commitments by meeting their promise. Principle of Unity of Command:- It implies that an employees should receive order from one superior only . In a condition where the employee is getting the order from mare than are person at a time then the subordinate will be confused regarding where instruments are should follow. He will have option for excuse too. Besides, when there is unity of command it is easy to fix responsibilities. Consequences:1) Confusion in the mind of employee, 2) Chance to escape from responsibilities, 3) Ego clashes among the different superior 4) Difficulty in maintaining discipline. For example, if employee of production department is asked to go slow in product for the quality by production in charge and foe fasten production by the rules in charge to meet pending orders. In this situation employee will get confused. Positive Effects:1) No confusion in the mind of sub-ordinate, 2) No ego clashes, 3) No change to escape from responsibilities, 4) Improves efficiency. Principle of Unity of Direction:- Fayal advocates there should be one lead and one plan for a group of activates having same objectives. Efforts of all the members of the organization should be directed towards common goals. This principle ensures unity of action. Basics 1Meaning 2Purpose 3Relation 4Results Command One boss on one subordinate. Avoid confused and fix-up responsibility It is related to working with clarity of mind It results in systematic working and improves efficiency. Direction One head on one plan. Direct the actions of all towards the main goals. If is related to working as a unit. It results in ego-ordination of activates.

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Subordination of indivitional interest to general interest:- For the success of an organization, individual objectives should be scarified for the achievement of organizational goals management must try to reconcile individual and organizational interest, but if it is not possible, interest of the organization must supersede the interest of individuals or employees.

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Positive Effects:1) Achievement of organizational goals, 2) Co ordination between individual and organizational goals. For example, if individuals objective is to earn mare remuneration and organization is going through a situation of financial crisis and has the objective of cutting down the expenses. In this situation individual objective must sacrificed. Principle of fair Remuneration:- According to this principle employees should get fair remuneration i.e. both employees and the employer should get maximum satisfaction. The remuneration should be decided by the financial position of the company, common wage rate and wages paid by the competitor. Positive Effects:1) Employees get motivated, 2) Commitment of employees improves For example, in care of extra profits management should give bones to employees instead of distributing it among shareholders. Centralization and Decentralization:- Centralization means unification of authorities and Decentralization means disintegration of authorities. Fayal said there should be proper balance between centralization and Decentralization according to the present situations. For example, in a common size firm major manager and minor or daily decisions could be taken by the subordinates. Positive Effects:1) Benefits of bath, 2) Part decisions and strict control. Principle of Scalar Chain:-Scalar chain means line of authority from superiors to subordinates. According to Fayal all information in an organization should pass through this line only but in case of emergency the chain could be violate and gang blank could be done among two concerned authorities. This facilitates no change of information due to long change. E D C F G

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H I In above figure if B wants to convey any information will goes like BCDEFGH but in care of energy B can direct contact to H by gang blank. But gang blank could not do between the people of different level. Positive Effects:1) No Communication gap, 2) Systematic flow of information.
10) Principle of order:- According to this principle in an organization everything and

everyone should have a place for it and should be placed foot its own place. Arrangement of things called material order and arrangement of people is called social order. For example, if a person wants a tool then, he must known that in which box or tool it will be found and if he doesnt know about it there will be delay in work. Positive Effects:1) No wasting of time, 2) Smooth and systematic working.

11) Principle of Equity:- Equity refers to king and fair treatment to employees. Equity

does not mean equal salary but application of same rules to all irrespective of their grade, position and gender. For example, the rules for granting medical leave should be same for all. 1) Satisfaction of employees, 2) motivation of employers,
12) Stability of tenure of personnel:- if the workers go on changing the entire.

Production process will be distributed. If is always in the interest of the enterprises that its trusted employees to not leave the organization and on the other hand employers should not be transferred from their positions frequently. Efficiency is promoted by a stable work fares. Positive Effects:1) Improves Efficiency, 2) No Wastage of time and Resources.
13) Principal of Initiative:- The successful management provides an opportunity to its

employers to suggest their virus and experiences can be great sources of strength but initiative must not be against the established practice. For example, before setting up planes the manager must welcome the ideas of employees to allow their maximum participation. But after that no interference. For Effects:1) Develops the feting of belongings, 2) Employees get the target on time because it is their own target.
14) Principle of spirit De crops: - Spirit De crops means unity is strength. According to

this principle there should be co operation among the employees and positive thinking between management and employees. For example, if the management has given the order to produce 100 unite to 10 people in a day, so the workers should not go at their individual target of 10 but if 2 workers went sick, then also the target should achievement in a day only by rust of the workers. Positive Effects:1)Develops team spirit, 2)Achievement of group goals. Scientific Management:- Scientific management means knowing exactly what men to do and seeing that they do it in the best way. Scientific Principles of Management:i

Science, not rule of thumb:- According to this principle Taylor insists that each job performed in the organization should based upon scientific inquiry and not an intuitions, experiences and hit and miss methods. For example, in rule of thumb the standard time required to do a job is decided by managers part experiences but Fayals insists that standard time for job should be setup scientifically by performing time study. Harmony, not discard:- According to Taylor there should be pastime thinking management and workers of an organization. Generally in every organization they think and do everything as a rival of each other. Taylor says that they must change their attitude about each other. For example, the main objectives of the workers is to earn mare and objectives of the

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management is to produce mare, instead of discard of each others objectives, workers can earn mare by producing mare which will help in maximizing the production also.
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Co-operation, not individualism:- According to this principle work must be carried on in co-operation with each other, with mutual confidence and understanding with each other. The management must take workers in confidence before setting up the standard task for them because target are set up in consolation of workers, then they will try their best to achieve it. For example, while assigning the job if management ask the workers and then assign the job according to their interest then definitely the work will do more efficiently. Maximum, not Restricted Output:- According to this principle there must be efforts for continuous increase in production and productivity. On no reason production should be curtailed become surplus output means surplus income. If the production and income is longer than both the groups can have bigger and longer share. Increasing productivity is in the common interest of both management and the workers. Separation of Planning and operational Work:- According to this principle there should be separation between planning function and operating one. The persons of planning should be different from operational one. So that managers could concentrate on planning and workers on production. Functional Foremanship: - In this technique Taylor suggest that there should be separation in planning and operational work. The persons of planning should be different from operational one. For this he introduced four foremen for each department because one foreman could not expert to do every task. Four foreman under Planning Department:a) Route Clerk:- This foreman is responsible for making the path to perform a job. b) Instruction Card Clerk:- The work of this foreman is to give general instruction. c) Time & Cost Clerk:- The work of this man is to fix up the standard time and cost to perform a job. d) Disciplinarian:- This foreman is responsible for seeing the order of job. Four foreman under Operational Department:a) Gang Bars:- He arranges, machines, tools and other resources. b) Speed bars:- This foreman as severs timely completion of job. c) Repair Bars:- This foreman answer that machines and tools are kept in working position. d) Inspector:- This foreman accuses the standard quality of product.

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Scientific Techniques of Taylor:i

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Standardization of work:- It means maximum of output through the use of standard equipments and process to handle the work with ease and convenience. The objectives are as under:a) To establish interchangeability of parts, b) To establish quality in materials,

c) To reduce a given line of product, d) To establish standard performance of men and machines.
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Simplification of work:- This principle emphasis on eliminating of unnecessary diversity of products, size and types, by simplifying the task there can be economy in use of machine, and labour. It will also help in improving the quality. For example, a fruit manufacturing co reduced the verities from 200 to 32 and get effective results. Fatigue Study:- It is conducted to find out : 1)Frequency of rest intervals. 2) Duration of rest intervals. 3) Number of rest intervals. Taylor suggested that frequent rest pauses should be provided to the workers for their efficient functioning. For example, in the working of 5 hours the rest should be given some time later. Method Study:- It is concerned with methods of performing a job. Taylor suggests that management should find out one best way to perform the task. The object is to keep the production cost minimum. For example, for production of shoes there can be labour intensive and machine intensive methods. The managers should adopt the method according to the given resources. Time study:- It is the determination of standard time taken to perform a job in the organization. The time taken in doing any task is directly observed by using time measuring devices for each element of task. The objective is to determine the number of workers, to be employed, frame suitable intensive scheme and determine labour cost. Motion Study:- It explain the movements of operator and machine to perform a job so as to identify and eliminate their unnecessary movements. It makes possible to find out:1) Which movements are production, 2) Which are incidental or casual movements, 3) Which are unproductive. Actually same aliments to know whether some aliments of a job can be eliminated combine the necessary rhythm. Differential wage system:- It is to award wages to employees on the basis of their performance. Higher wages for efficient worker and lower wages for these who are performing under the standards. Mental Revolution:- Taylor insist on the change in the mental attitudes of workers and the managers. Toward each other usually they both act as rivals of each other. They should change their attitude and establish positive thinking for each other. Such change in their attitude can brought about through training and development programmers. Difference between time & motion study.

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Basics 1Meaning. 2-Purpose 3-Method of Conductin g

Time This is conducted to find out standard time To fix up the time and number of workers By stop watch

Motion This is conducted to find out total movements. To eliminate wasteful and unproductive movement.

Difference between Taylor and Fayal:-

Basics 1-Concern 2-Level 3Emphasis 4-Focus 5-Major Contributi on

Taylor He concerned with workers efficiency. The research in lowest level. The laid great emphasis on standardization of work. He laid focus on eliminating useless movements and saving the energy. The contributed with 5 principles? Techniques.

Fayal The concerned with managers efficiency. The researched in top level. He laid great emphasis on functions of managers. His focus was on development of principles for better management. The contributed with in principles. He developed a personality of researcher and become father of general management.

6Personality He developed a personality of scientist and became father of scientific management.

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