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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
- Formed by Practice
- General Guidelines
- Universal
- Flexible
- Behavioural
- Contingent
- Cause and Effect relationship
Significance of Principles of Management
- Increase in efficiency
- Optimum utilisation of resources
- Scientific decision making
- Adaptation to changing environment
- Fulfilling social responsibilities
- Proper research and development
- Training managers
- Effective administration
Principles of Scientific Management
- Science, Not rule of thumb
- Substitution of traditional methods
- Method of Scientific enquiry
- One best method
- Harmony, Not Discord
- Less of conflicts
- Mental Revolution
- Prosperity of employer as well as employees
- Co-operation, Not Individualism
- Co-operation b/w workers and management
- Competition replaced by co-operation
- Reward for suggestions
- Paternalistic style of management
- 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.
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.
14 Principles of Management by Henry Fayol
- 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.
Check your understanding