Principles of Management: The Concept

A management principle is a broad and general guideline for managerial decision-making and behaviour. These principles are fundamental truths that provide a guide to managerial thought and action. Unlike rigid rules, they offer a flexible framework that managers can adapt to different situations. For instance, when deciding on an employee's promotion, a manager might use the principle of merit, which suggests that the most capable and deserving individual should be promoted, rather than relying solely on seniority.

The principles of management have evolved over time and are still in a continuous process of evolution, adapting to the changing business environment. As seen in the case of Toyota Motor Corporation, well-defined principles like contributing to economic development, providing clean and safe products, and fostering a culture of teamwork guide the company's vision, operations, and interactions with stakeholders, forming the foundation of its corporate culture and success.

Distinction from Techniques and Values

It is important to distinguish management principles from techniques and values to understand their true nature.

Principles vs. Techniques:

• Principles are guidelines for action and decision-making. They are more flexible and provide a general direction. For example, the principle of 'Division of Work' suggests that work should be divided, but it does not specify how to divide it.

• Techniques are procedures or methods that involve a series of steps to be performed to accomplish a desired goal. Techniques are more rigid and represent a specific way of doing things. For example, 'Time Study' is a technique with specific steps used to determine the standard time for a job, which is an application of the broader principle of scientific management.

Principles vs. Values:

• Principles are basic truths or guidelines for behaviour in a work environment. They are technical in nature and are formed after research and experimentation in work situations. Their primary objective is to improve organisational performance and efficiency.

• Values are general rules for behaviour in society that are considered desirable or acceptable. They have moral connotations and are formed through common practice and social beliefs. For example, 'honesty', 'fairness', or 'social responsibility' are values. While practising management principles, managers cannot neglect values, as businesses have a social and ethical responsibility to fulfill.

Nature of Principles of Management

The nature of management principles refers to their inherent qualities and characteristics. They are general propositions developed through observation and experimentation that help in explaining and predicting managerial behaviour. Understanding their nature is essential for their correct application.

(i) Universal Applicability

Management principles are intended to be applicable to all types of organisations—business and non-business, large and small, public and private sectors, manufacturing and service sectors. For example, the principle of Division of Work is applicable in a government office (clerk, officer), a hospital (doctor, nurse, admin), a school (teacher, principal), and a large corporation like Tata Group (finance, marketing, production departments). However, the extent and manner of their applicability may vary depending on the nature, size, and specific circumstances of the organisation.

(ii) General Guidelines

These principles are guidelines to action but are not readymade, straitjacket solutions to all managerial problems. This is because real business situations are very complex and dynamic. A manager must use their judgment and creativity to apply these principles effectively. For example, in a conflict between two departments, a manager can use the principle of 'Subordination of Individual Interest to General Interest' to remind them of the organisation's overall goals, but how the manager resolves the conflict will depend on the personalities involved and the specifics of the situation.

(iii) Formed by Practice and Experimentation

The principles of management are developed over a long period through two main sources: the experience and collective wisdom of managers (practice) and in-depth research and experimentation. For instance, the principle that discipline is essential for any successful venture is a product of common experience. On the other hand, principles like those of 'Scientific Management' were developed through extensive experimentation, such as Taylor's time and motion studies, to find the most efficient ways to perform tasks.

(iv) Flexible

Management principles are not rigid prescriptions that must be followed absolutely. They are flexible and can be modified by the manager to suit the specific situation. Unlike principles of pure science, which are absolute, management principles deal with human behaviour and thus need to be applied creatively. For example, the principle of Centralisation and Decentralisation provides a guideline on the concentration of authority. The degree to which authority should be centralised or decentralised depends on the size of the organisation, the competence of subordinates, and the nature of the business.

(v) Mainly Behavioural

Management principles are primarily behavioural in nature as their main aim is to influence the behaviour of human beings. Since management involves "getting work done through people," these principles are designed to guide and direct human efforts. They enable a better understanding of the relationship between human and material resources in accomplishing organisational goals. For example, the principle of 'Esprit de Corps' aims to foster team spirit and unity among employees, directly influencing their behaviour and morale at work.

(vi) Cause and Effect Relationships

The principles of management are intended to establish a relationship between cause and effect, so they can be used in similar situations and help predict outcomes. They tell us the likely effect if a particular principle is applied in a particular situation. For example, applying the principle of division of work (cause) will lead to specialisation and increased efficiency (effect). However, since these principles apply to complex human behaviour, the cause-and-effect relationships are not always absolute and can be influenced by other factors.

(vii) Contingent

The application of management principles is contingent or dependent upon the prevailing situation at a particular point in time. The application must be changed and adapted as per the requirements of the situation. For example, the principle of 'Remuneration of Employees' suggests that employees deserve fair pay. But what is 'fair' is contingent on multiple factors, such as the employee's contribution, the company's financial capacity, the prevailing wage rate in the industry for that occupation, and legal regulations.

Significance of Principles of Management

The principles of management derive their significance from their utility in the real world. They provide useful insights into managerial behaviour and influence managerial practices, helping managers fulfill their tasks and responsibilities effectively. Their importance can be understood through the following points.

(i) Providing Managers with Useful Insights into Reality

Management principles act as a guide for managers, providing them with useful insights into real-world situations. Adherence to these principles improves their knowledge, ability, and understanding of various managerial circumstances. It enables managers to learn from the past mistakes of others and saves time by helping them solve recurring problems quickly. This, in turn, increases overall managerial efficiency.

(ii) Optimum Utilisation of Resources and Effective Administration

Organisational resources, both human and material, are limited and must be used optimally to deliver maximum benefit with minimum cost. Principles like 'Division of Work' and 'Method Study' equip managers to streamline activities and cut down on waste. They help foresee the cause-and-effect relationships of their decisions, overcoming the wastages associated with a trial-and-error approach. For effective administration, principles like 'Unity of Command' and 'Order' limit managerial discretion, ensuring that decisions are based on organisational needs rather than personal prejudice and bias.

(iii) Scientific Decisions

Management principles help in making thoughtful, logical, and objective decisions. They emphasise logic and reason rather than blind faith or intuition. Decisions taken on the basis of principles are based on an objective assessment of the situation and are therefore free from bias. This scientific approach ensures that decisions are timely, realistic, justifiable, and subject to measurement and evaluation.

(iv) Meeting Changing Environment Requirements

Though they are general guidelines, the principles are flexible and can be modified to help managers meet the changing requirements of the dynamic business environment. For example, the principle of 'Division of Work' and 'Specialisation' is still relevant, but its application has evolved. In modern times, this principle has been extended to the entire business, with companies specialising in their core competency and outsourcing non-core activities (BPO, KPO), as seen in the case of Hindustan Unilever Limited divesting its non-core businesses of chemicals and seeds.

(v) Fulfilling Social Responsibility

The increased awareness of the public forces businesses, especially limited companies, to fulfill their social responsibilities. Management principles have also evolved in response to these demands. For instance, the interpretation of the principle of 'Equity' has expanded beyond just fair wages to include providing value to the customer, caring for the environment, and having fair dealings with business associates. The efforts of organisations like BHEL in developing entire townships and Shri Mahila Griha Udyog Lijjat Papad in combining business with Gandhian values are excellent examples of applying this broader interpretation of management principles.

(vi) Management Training, Education and Research

Principles of management are the core of management theory and serve as the essential foundation for management training, education, and research. Professional courses like MBA (Master of Business Administration) and BBA (Bachelor of Business Administration) teach these principles as part of their curriculum. They provide a basic groundwork for the development of management as a discipline. Furthermore, these principles enable the refinement of management practices by facilitating research and development of new management techniques, such as Operations Research (OR), Just-in-Time (JIT), and Kaizen.

Taylor’s Scientific Management

Fredrick Winslow Taylor (1856-1915), an American mechanical engineer, is widely regarded as the ‘Father of Scientific Management’. Working during the era of the industrial revolution, he observed that factory management was largely amateurish and based on personal judgment or 'rule of thumb'. He sought to improve industrial efficiency by applying the scientific method to management practices. Taylor believed that by scientifically analysing work, it was possible to find the 'one best way' to do any job. His core philosophy was that the interests of employers and employees were fundamentally the same, and that prosperity for both could be achieved through a partnership between a trained and qualified management and a cooperative and innovative workforce.

Principles of Scientific Management

Taylor proposed four main principles of scientific management to replace the inefficient 'rule of thumb' approach. The foundation for these principles was the idea of a 'Mental Revolution'.

Mental Revolution

This was the cornerstone of Taylor's philosophy. It involved a complete change in the attitude and outlook of both management and workers towards one another, from competition and conflict to cooperation. Both sides should realise that they require one another. Instead of fighting over the distribution of surplus (profits), they should work together to increase the size of the surplus. Management should share a part of this increased surplus with the workers, and workers should contribute their best efforts. This harmonious attitude, he believed, would be beneficial for both the employees and the company's long-term prosperity.

1. Science, Not Rule of Thumb

Taylor advocated for replacing the old rule-of-thumb methods with methods based on scientific study and analysis. He believed that there was only one best method to maximise efficiency for any job. This method should be developed by investigating traditional methods through work-study, unifying the best practices, and developing a standard that should be followed throughout the organisation. This principle insists that managerial decisions should be based on facts, cause-and-effect analysis, and scientific investigation rather than on intuition, experience, or guesswork.

2. Harmony, Not Discord

This principle extends the idea of the Mental Revolution. Taylor emphasised that there should be complete harmony and understanding between management and workers. He recognised that the inherent conflict between the two groups (managers wanting more work, workers wanting more pay) was detrimental to everyone. Both should realise that they are important to the organisation's success. Management should take care of workers' needs, and workers should work hard for the good of the company. The Japanese work culture, with its paternalistic style of management and openness between management and workers, is a classic example of this principle in practice.

3. Cooperation, Not Individualism

This principle is a direct extension of 'Harmony, Not Discord'. It states that there should be complete cooperation between the labour and the management instead of individualism. Competition should be replaced by cooperation. Management should not close its ears to any constructive suggestions made by the employees and should reward them for suggestions that lead to cost reduction. Workers should be part of management, and if any important decisions are taken, they should be taken into confidence. At the same time, workers should desist from going on strike and making unreasonable demands. Taylor advocated for an almost equal division of work and responsibility between workers and management.

4. Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity

Industrial efficiency depends greatly on the competencies of its personnel. This principle advocates for the development of workers to their fullest potential for their own benefit and for the prosperity of the company. This process starts right from the process of employee selection, where each person should be scientifically selected for the job that best suits their physical, mental, and intellectual capabilities. After selection, they must be given the required training to learn the 'best method'. Efficient employees would produce more and, under a proper wage system, earn more. This ensures their greatest efficiency and prosperity, which in turn benefits the company.

Techniques of Scientific Management

Frederick Winslow Taylor and his followers developed several techniques to put the principles of scientific management into practice. These techniques were designed to enhance efficiency at the operational level by standardising work and optimising human effort.

1. Functional Foremanship

Taylor observed that a single foreman (or supervisor) could not possibly possess all the qualities required for effective supervision, such as intelligence, education, tact, judgment, and special knowledge. He therefore advocated for a system of Functional Foremanship, which involves the separation of planning and execution functions. This technique is an extension of the principle of division of work and specialisation to the shop floor, aiming to have each worker supervised by specialists in different aspects of their job.

He suggested that under a factory manager, the work should be divided between a Planning In-charge and a Production In-charge. Each in-charge would have four specialists working under them, and every worker on the shop floor would have to take orders from these eight foremen. This violates the principle of 'Unity of Command' but ensures specialised supervision.

Specialists under the Planning In-charge (The 'Thinkers'):

• Instruction Card Clerk: Responsible for drafting detailed instructions for the workers regarding the nature of work, procedure, materials, and tools.

• Route Clerk: Responsible for specifying the exact sequence and route through which production must move from one stage to another.

• Time and Cost Clerk: Responsible for preparing time and cost sheets for each job and for setting the standard time for completion.

• Disciplinarian: Responsible for ensuring that rules and regulations are followed and that order and discipline are maintained in the factory.

Specialists under the Production In-charge (The 'Doers'):

• Speed Boss: Responsible for ensuring that the work is completed in a timely and accurate manner as per the set standard.

• Gang Boss: Responsible for keeping all machines, tools, and materials ready for the workers so that they do not have to waste time.

• Repair Boss: Responsible for ensuring the proper working condition of all machines and tools and undertaking timely repairs.

• Inspector: Responsible for checking the quality of the work produced and ensuring it conforms to the set standards.

2. Standardisation and Simplification of Work

Taylor was a strong advocate for standardisation and simplification as means to improve efficiency.

Standardisation refers to the process of setting standards for every business activity. This can be standardisation of process, raw material, time, product, machinery, methods, or working conditions. These standards act as benchmarks, which must be adhered to during production. The key objectives of standardisation are:

• To reduce a given line or product to fixed types, sizes, and characteristics.

• To establish interchangeability of manufactured parts and products.

• To establish standards of excellence and quality in materials.

• To establish standards of performance for men and machines.

Simplification aims at eliminating superfluous varieties, sizes, and dimensions of products. It involves eliminating unnecessary diversity to bring about economy in the use of machines, labour, and tools. This results in reduced inventories, fuller utilisation of equipment, increased turnover, and lower costs.

3. Work Study

Work study is a comprehensive term for the techniques of method study, motion study, time study, and fatigue study. It is a systematic, objective, and critical examination of all the factors governing the operational efficiency of any specified activity in order to effect improvement.

a) Method Study

The objective of method study is to find out the 'one best way' of doing a particular job. It involves a critical analysis of the existing method to develop a new, improved method that is more efficient. The entire production process is analysed, from the procurement of raw materials to the delivery of the final product to the customer. Techniques like process charts and operations research are used to identify and eliminate non-value-adding activities. The goal is to minimise the cost of production and maximise the quality and satisfaction of the customer. Ford Motor Company's successful use of the assembly line concept is a classic example of applying method study on a large scale.

b) Motion Study

Motion study is the science of eliminating wastefulness resulting from using unnecessary, ill-directed, and inefficient motions by workers. It involves the close observation of the movements of a worker's body and limbs while performing a job. The goal is to eliminate unproductive motions and design tools and equipment that minimise the number of motions required. Motions are categorised as:

• Productive: Motions that are essential to the job.

• Incidental: Motions like going to the stores to get raw materials.

• Unproductive: Wasteful motions like searching for tools.

For example, Taylor's associate Frank Gilbreth, through motion study, was able to reduce the number of motions in bricklaying from 18 to just 5, which increased productivity by about four times.

c) Time Study

Time study determines the standard time required to perform a well-defined job. Time measuring devices like a stopwatch are used to measure the time taken for each element of a task over several readings to get an average, reliable time. This standard time is then used to determine a fair day's work for a worker. The objectives of time study are:

• To determine the number of workers to be employed for a particular job.

• To frame suitable incentive schemes and wage plans.

• To determine labour costs.

Answer:

d) Fatigue Study

A fatigue study seeks to determine the amount and frequency of rest intervals required in completing a task. A person is bound to feel tired, both physically and mentally if they work continuously without rest. This fatigue reduces their efficiency. Rest intervals help them to regain stamina and work again with the same capacity. The causes of fatigue can be long working hours, doing unsuitable work, having uncordial relations with the boss, or bad working conditions like poor lighting or ventilation. This study helps in scheduling work and breaks to optimise worker productivity and well-being.

4. Differential Piece Wage System

Taylor was a strong advocate of a piece wage system that could sharply differentiate between efficient and inefficient workers. He wanted to reward efficient workers and provide a strong incentive for inefficient workers to improve. Under this system, two different wage rates are set based on the standard task determined by the work study:

• A higher piece rate is offered to workers who produce the standard output or more.

• A lower piece rate is offered to workers who produce less than the standard output.

This difference in wages is designed to be significant enough to motivate the inefficient worker to perform better and reach the standard.

Answer:

Fayol’s Principles of Management

Henri Fayol (1841-1925), a French mining engineer and management theorist, is known as the ‘Father of General Management’. While Taylor focused on improving efficiency on the shop floor (a bottom-up approach), Fayol's work focused on the functions of top-level managers and the principles for improving overall administration (a top-down approach). Fayol was the first to identify the main functions of management—Plan, Organise, Command, Coordinate, and Control—which are the basis for our modern understanding of management functions. Based on his experience as a managing director, he proposed 14 principles of management that serve as flexible guidelines for all managers.

Fayol's 14 Principles of Management

1. Division of Work

Work should be divided into small, specialised tasks, and each job should be performed by a trained specialist. This leads to specialisation, which allows workers to become more proficient and efficient in their tasks. Fayol believed this was the most efficient way to use human effort, leading to the production of more and better work. For example, in a bank, one person handles cash receipts (cashier), another handles account opening, and another handles loan processing.

2. Authority and Responsibility

Authority is the right to give orders and the power to obtain obedience. Responsibility is the obligation to perform the assigned task. Fayol stated that there must be a balance between authority and responsibility. A manager should have enough authority to carry out their given responsibility. Giving authority without assigning responsibility can lead to misuse of power, while assigning responsibility without granting necessary authority will render the manager ineffective.

3. Discipline

Discipline is the sincere obedience to organisational rules and the employment agreement, which are necessary for the smooth functioning of an organisation. According to Fayol, discipline requires good superiors at all levels, clear and fair agreements between management and employees, and the judicious application of penalties for violations.

4. Unity of Command

This principle states that each employee should receive orders from and be responsible to only one superior. If an employee has to report to more than one boss, it creates confusion, undermines authority, can lead to conflicting instructions, and threatens discipline. This principle is essential to prevent chaos and ensure clear lines of accountability.

5. Unity of Direction

This principle states that all the units of an organisation should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan. This ensures unity of action and prevents the overlapping of activities. For example, if a company is manufacturing both motorcycles and cars, it should have two separate divisions, each with its own head, plans, and resources.

6. Subordination of Individual Interest to General Interest

The interests of the organisation as a whole must always take priority over the interests of any one individual employee. This is because the larger interests of the stakeholders (owners, employees, customers, society) are more important than the interest of any single person. A manager must ensure this by setting an exemplary example and not misusing their position for personal or family benefit.

7. Remuneration of Employees

The overall pay and compensation for work done should be fair to both employees and the organisation. Employees should be paid fair wages that provide them with at least a reasonable standard of living. At the same time, the remuneration should be within the paying capacity of the company. A just and equitable remuneration system helps in ensuring a congenial atmosphere and good relations between workers and management.

8. Centralisation and Decentralisation

Centralisation refers to the concentration of decision-making authority in a few hands at the top level. Decentralisation refers to its dispersal among more than one person, typically down the levels of management. Fayol believed that there is a need to balance subordinate involvement through decentralisation with a manager's retention of final authority through centralisation. The degree of centralisation will depend on the circumstances in which the company is working. For example, panchayats in our country have been given more powers to decide on and spend funds, which is an example of decentralisation at the national level.

9. Scalar Chain

An organisation consists of a hierarchy of superiors and subordinates. The formal line of authority from the highest to the lowest ranks is known as the scalar chain. Fayol insisted that this chain must be strictly followed in the normal course of formal communication. However, to avoid delays in communication during emergencies, he permitted a shortcut known as a 'Gang Plank'. This allows for direct communication between two employees at the same level of authority in different departments, provided their immediate superiors are kept informed.

10. Order

This principle states that there should be a place for everything (and everyone) and everything (and everyone) should be in its (or their) place. It implies orderliness. Material order means a proper place for every tool and material, and social order means a designated place or role for every employee. If this principle is followed, there will be no hindrance in the activities of the business, leading to increased productivity and efficiency.

11. Equity

This principle emphasises kindliness and justice in the behaviour of managers towards workers. Managers should be fair and impartial and should not discriminate against anyone on account of sex, religion, language, caste, or belief. This will ensure loyalty and devotion from employees. Fayol does not rule out the use of force; he suggests that lazy personnel should be dealt with sternly to send the message that everyone is equal in the eyes of the management.

12. Stability of Personnel

Employee turnover (the rate at which employees leave an organisation) should be minimised to maintain organisational efficiency. Personnel should be selected and appointed after a due and rigorous procedure, and once selected, they should be kept at their post or position for a minimum fixed tenure. They should be given a reasonable amount of time to show results. Frequent transfers or terminations create instability and insecurity among employees, leading to high recruitment, selection, and training costs.

13. Initiative

Workers should be encouraged to develop and carry out their plans for improvements. Initiative means taking the first step with self-motivation; it involves thinking out and executing a plan. It is a source of strength for the organisation. A good company should have an employee suggestion system whereby suggestions that result in substantial cost or time reduction are rewarded. This fosters a sense of belonging and motivates employees to contribute.

14. Esprit De Corps

This principle means 'union is strength'. Management should promote a team spirit of unity and harmony among employees. A manager should replace 'I' with 'We' in all conversations with workers to foster teamwork. This gives rise to a spirit of mutual trust and belongingness among team members and helps in achieving organisational objectives. It will also minimise the need for using penalties.

Fayol Versus Taylor — A Comparison

Both Henri Fayol and F.W. Taylor have made immense and lasting contributions to management thought. While their approaches had different focuses, their principles are not contradictory but are, in fact, complementary. They both recognised the need for a systematic approach to management to improve organisational efficiency. A comparison helps in understanding their unique perspectives.

In essence, Fayol's principles provide a broad framework for managing the entire organisation, while Taylor's techniques provide a specific toolkit for optimising work on the factory floor. A successful organisation often benefits from applying both perspectives harmoniously.

Very Short Answer Type

Answer:

Answer:

Answer:

Answer:

Answer:

Answer:

Short Answer Type

Answer:

Answer:

Answer:

Answer:

Answer:

The principle of Scalar Chain, as given by Henri Fayol, refers to the formal line of authority and communication that runs from the highest to the lowest ranks in an organisation. Fayol insisted that this chain must be followed strictly, and information should pass through every key of the chain.

For example, if 'E' needs to communicate with 'O' in an organisation, the message should typically flow from E -> D -> C -> B -> A -> L -> M -> N -> O.

---

However, Fayol recognized that following this chain could lead to long delays in communication, especially in emergencies. To overcome this, he introduced the concept of the 'Gang Plank'.

A Gang Plank is a shorter, direct route of communication between two employees at the same level of authority in different departments. It can be used in case of an emergency to avoid delays, provided both employees have the permission of their immediate superiors. In the example above, E can directly communicate with O using the gang plank.

Answer:

Long Answer Type/ Essay Type

Answer:

Answer:

Answer:

Answer:

Answer:

Answer:

Answer: