Principles of Management Keywords and Brief Notes

Meaning of Principles of Management:

  • Broad and general guideline for decision making and behaviour.
  • Different from principles of pure science which are more rigid.
  • Different from techniques of management which are procedures or methods.
  • Different from values that have moral connotations.

Features of Principles of Management

  1. Formed by Practice
  2. General Guidelines
  3. Universal
  4. Flexible
  5. Behavioural
  6. Contingent
  7. Cause and Effect relationship

Significance of Principles of Management

  1. Increase in efficiency
  2. Optimum utilisation of resources
  3. Scientific decision making
  4. Adaptation to changing environment
  5. Fulfilling social responsibilities
  6. Proper research and development
  7. Training managers
  8. Effective administration

Principles of Scientific Management

  1. Science, Not rule of thumb
  • Substitution of traditional methods
  • Method of Scientific enquiry
  • One best method
  1. Harmony, Not Discord
  • Less of conflicts
  • Mental Revolution
  • Prosperity of employer as well as employees
  1. Co-operation, Not Individualism
  • Co-operation b/w workers and management
  • Competition replaced by co-operation
  • Reward for suggestions
  • Paternalistic style of management
  1. Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity
  • Workers’ training
  • Scientific selection of workers
  • Work assigned according to capabilities.

 

 

Principles of Management Keywords and Brief Notes

Techniques of Scientific Management

Functional Foremanship

  • Improving work at shop floor
  • Separation of Planning and Execution.
  • Eight specialists, 4 under Planning and Production incharges each
  • Instruction card clerk, route clerk, time and cost clerk and a disciplinarian under Planning incharge
  • Speed boss, gang boss, repair boss and inspector under Production incharge
  • Extension of Principle of Division of Work and Specialisation.

Standardisation

  • Process of setting standards/Benchmarks
  • r.t. process, raw material, time, product, machinery, methods, working conditions.
  • To reduce given line or product to fixed types and improve interchangability.

Simplification

  • Eliminating superfluous varieties, sizes and dimensions of products
  • Results in saving cost of labour, reduced inventories, fuller utilization of resources and increase turnover.

Method Study

  • Find one best way of doing the job.
  • Concept of assembly line.
  • Objective is to minimise the cost of production and maximize quality and satisfaction of customer.

Motion Study

  • Study of movements like lifting, putting objects, sitting and changing positions.
  • Eliminating unnecessary movements.
  • Use of stop watches, symbols, colours to identify different motions.

Time study

  • Standard time for task.
  • Objective is to determine number of workers to be employed; frame suitable incentive schemes and determine labour costs.

(Motion study should be conducted before the Time study.)

Fatigue study

  • Rest while working.
  • Regain stamina.
  • Objective is to determine the amount and frequency of rest intervals.

(Work Study: Method study, motion study, time study and fatigue study are collectively called work study.)

Differential Piece Wage System:

Using different piece wage rate to differentiate efficient and inefficient workers

Mental Revolution

  • Change in the attitude of workers and management.
  • Aim to increase size of surplus/profits.

Principles of Management Keywords and Brief Notes

14 Principles of Management by Henry Fayol

  1. Division of Work
  • Work divided into small tasks.
  • Competent specialist is required.
  • Leads to specialization.
  • Increase in efficiency effective output.
  • This principle is all pervasive.

2. Authority and Responsibility

  • Balance between authority and responsibility.
  • If Authority is more than Responsibility – subordinate is overburdened.
  • If Responsibility is more than Authority – Misuse of authority.
  • Manager has right to punish for willfully not obeying a legitimate order.

3. Discipline

  • Obedience to organizational rules.
  • Employment agreement.
  • Good superiors needed at all levels.
  • Need of clear and fair agreements.
  • Judicious application of penalties.
  • Honor commitments without prejudice.

4. Unity of Command

  • Only One boss for every employee.
  • Employee must get Order only from one superior.
  • Avoidance of Dual subordination.

5. Unity of Direction

  • Common objectives through coordinated and focused efforts.
  • One head one plan.
  • Unity of action and co-ordination.
  • Each division has its own incharge.

6. Subordination of individual interest to General Interest

  • Larger interests of workers and stakeholders are more important than that interest of any one person.
  • Manager should not misuse his power for any individual.

7. Remuneration of employees

  • Fair pay and compensation.
  • Giving reasonable standard of living.
  • Just and equitable remuneration.
  • Helps in congenial atmosphere and good relations.

8. Centralization and Decentralisation

  • Concentration of authority at top level is centralization.
  • Dispersal of authority upto the lowest level is Decentralisation.
  • Balance subordinate involvement through decentralisation.

9. Scalar chain

  • Formal line of authority from highest to lowest levels is called Scalar Chain.
  • Chain of authority and communication.
  • Gang plank (shorter route for communication) in case of emergency.

10. Order

  • A place for everything and everything in place.
  • For increased production and efficiency.
  • People and Materials at right place i.e. social order and material order

11. Equity

  • Fair and equal treatment with all employees.
  • Kindliness and justice in the behaviour of manager.
  • Increase in loyalty and devotion.
  • No discrimination on the basis of caste, creed, age etc.

12. Stability of Personnel

  • Stability of tenure.
  • Minimise employee turnover.
  • Selection of employees after due and rigorous process.
  • No adhocism, high cost of recruitment, selection and training.

13. Initiative

  • Taking first step with self-motivation.
  • Thinking out and executing the plan.
  • Employee suggestion system and rewards for suggestion.

14. Espirit De Corps

  • Team spirit of unity and harmony.
  • Replace ‘I’ with ‘we’.
  • Mutual trust and belongingness.

If you have not studied this chapter, go to Fayol’s Principles of Management

Planning Keywords and Brief Notes

 

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