ch 2 Principles of management class 12.pptx

principles

1. Principles of management Chapter 2

2. MEANING A managerial principle is a broad and general guideline for decision making and behaviour. They differ from the principles of pure science in following areas: They are not rigid as principles of pure science. They deal with human behaviour and are to be applied creatively according to the situation. These principles have to keep pace with the changing business environment.

3. PRINCIPLES VS TECHNIQUES Techniques are procedures or methods, which involve a series of steps to be taken to accomplish desired goals. Principles are guidelines to take decisions or actions while practicing techniques. PRINCIPLES VS VALUES Values are something which are acceptable or desirable. They have moral connotations. Principles are basic truths or guidelines for behaviour. But Values are general rules for behaviour of individuals in society. Principles are formed after research in work situations which are technical in nature. But values are formed through common practice. However while practicing principles of management, values cannot be neglected.

4. NATURE AND PRINCIPLES OF MANAGEMENT Derivation of these principles may be said to be a matter of science and their creative application may be regarded as an art. 1)UNIVERSAL APPLICABILITY: The principles of management are applied to all types of organizations. But the extent of their applicability varies with the nature of the organization, business activity, scale of operations etc. 2) GENERAL GUIDELINES: The principles are guidelines to action. Due to the complexities of business situations, they do not provide readymade, straightjacket solutions to all managerial problems. 3) FORMED BY PRACTICE AND EXPERIMENTATION: The principles are formed by experience and collective wisdom of managers as well as experimentation. They are the results of various problems faced by the professional people.

5. 4) FLEXIBLE: The principles are flexible and can be modified by the manager when the situation so demands. 5)MAINLY BEHAVIOURAL: Management principles aim at influencing the behaviour of human beings 6) CAUSE AND EFFECT RELATIONSHIP: Management principles assist managers in establishing cause and effect relationships to some extent and are therefore useful. They specify what the ultimate outcome will be if in a particular situation, work is done in a particular manner. 7) CONTINGENT: Management principles are contingent or dependent upon the prevailing situation at a particular point of time. They are not fixed or permanent. The decision to implement them or not is taken according to the situations or circumstances.

6. SIGNIFICANCE OF PRINCIPLES OF MANAGEMENT PROVIDING MANAGERS WITH USEFUL INSIGHTS INTO REALITY : Management principles provide managers with useful insights into real world situations. It also helps them to learn from past mistakes and conserve time by solving problems quickly, thus increasing managerial efficiency. 2) OPTIMUM UTILISATION OF RESOURCES AND EFFECTIVE ADMINISTRATION: Principles equip the managers to foresee the cause and effect relationships of their decisions and actions. Thus the wastages associated with a trial-and-error approach can be overcome and resources can be put to optimum use. 3) SCIENTIFIC DECISIONS: Management principles help in thoughtful decision-making. They emphasize logic rather than blind faith. Management decisions taken on the basis of principles are free from bias and prejudice. They are based on the objective assessment of the situation.

7. 4) MEETING CHANGING ENVIRONMENT REQUIREMENTS: Management principles are flexible enough to adapt to dynamic business environment. 5) FULFILLING SOCIAL RESPONSIBILITY: The increased awareness of the public, forces businesses to fulfil their social responsibilities. Management theory and management principles have also evolved in response to these demands. 6) MANAGEMENT TRAINING, EDUCATION AND RESEARCH: Principles of management are used as a basis for management training, education and research. These principles provide basic groundwork for the development of management as a discipline. They enable refinement of management practices and facilitates development of new management techniques.

8. PRINCIPLES OF SCIENTIFIC MANAGEMENT The principles of scientific management are as follows: SCIENCE NOT RULE OF THUMB: Each and every task performed in an organisation should be based on a scientific study and analysis instead of the hit and trial method. There should be a scientific plan along with standardised equipment to do work efficiently and effectively.  Hence to simplify the tasks, and promote ease in its performance, new techniques and methods need to be developed and the management should not keep using the age-old methods and techniques. 2) HARMONY, NOT DISCORD: There should be complete harmony between management and workers in order to achieve the organisational goals. It implies that there should be a healthy working environment. In order to respect each other’s roles and avoid any kind of conflict, Taylor brought a complete revolution in management policies (Mental Revolution).

9. 3) COOPERATION, NOT INDIVIDUALISM: There should be complete cooperation and coordination between the labour and management so as to achieve organisational goals instead of individualism. Constructive suggestions from employees must be encouraged which will also refrain workers from going on a strike and making unreasonable demands. 4) DEVELOPMENT OF EACH AND EVERY PERSON TO HIS OR HER GREATEST EFFICIENCY AND PROSPERITY: Industrial efficiency depends to a large extent on personnel competencies. Each person in the organization need to be scientifically selected. They should be given the required training. This will ensure their greatest efficiency and prosperity for both company and workers.

10. TECHNIQUES OF SCIENTIFIC MANAGEMENT FUNCTIONAL FOREMANSHIP: Functional foremanship is a technique in which planning and execution are considered different. Supervision is divided into several specialised functions and each function is to be entrusted to a foreman. This principle is an extension of Fayol’s principle of division of work and specialisation. It takes place through eight personnel, namely divided under heads Planning and Production Incharge

11. Specialists of planning department: Instruction Card Clerk – He drafts instructions for the workers. It contains information about the nature of work, procedure of doing it, material to be used and the details about machinery. Route Clerk – He specifies the route of production. He also decides the job to be done for the day and where it is to be done. Time and Cost Clerk – He prepares the time and cost sheet. He sets the time taken for the whole work and the cost incurred for that. Disciplinarian – He ensures discipline in the factory.

12. Specialists of production department: Speed Boss – He is responsible for timely and accurate completion of job. He ensures that the workers performs the work at the required or expected speed. Gang Boss – He is in charge of a group of workers and keeps machines and tools etc. ready for operation by workers. Repair Boss – He ensures proper working condition of machines and tools. Inspector – He checks the quality of work produced and compares it with the standard quality.

13. 2) STANDARDISATION AND SIMPLIFICATION OF WORK Standardisation refers to the process of developing standards for every business activity in order to maximise output. The standards can be set through work-study techniques. The objectives of standardization are: To reduce a given line of product to fixed types, sizes and characteristics. To establish interchange ability of manufactured parts and products. To establish quality standards. To establish standards of performance of men and machines.

14. Simplification aims at eliminating unnecessary diversity of products in terms of sizes, qualities, types, dimensions etc. The objectives of simplification are: Savings of cost of labour, machines and tools. Reduced inventories. Fuller utilization of equipment. Increase turnover.

15. 3) WORK STUDY TECHNIQUES The work study techniques aim at setting standards of production in different areas. They aim at standardizing the work. A) Method Study – The purpose of the method study is to find out the best possible way of doing the job in order to attain maximum efficiency and for optimum utilisation of resources and to improve quality and satisfaction of customers. Find out one best way of doing job. Minimize the cost of production. Maximize the quality and satisfaction of the customer.

16. B) Time Study – It determines the standard time needed to perform a well-defined job. The objective of the time study is to determine the number of workers to be employed, frame suitable incentive schemes & determine labour costs. The objective is to: Determine the number of workers required. Determine labour costs. Determine the suitable incentive schemes.

17. C) Motion Study – It is the science of identifying and eliminating wasteful movements in the process of work resulting from unnecessary, incidental and unproductive motions of the workers. This will help to complete the task in less time. The objective of this study is to Eliminate unnecessary movements. Complete the job efficiently in less time. Increase productivity.

18. D) Fatigue Study – A fatigue study determines the time and frequency of rest intervals in completing an assigned task. Workers will be able to replenish their lost energy during rest time, avoiding accidents, rejections, and industrial illness. The objective of this study is to Maintain the efficiency level of workers. Increase productivity.

19. 4) DIFFERENTIAL PIECE WAGE SYSTEM: It refers to that technique of scientific management which differentiates between efficient and inefficient workers. Here wages are paid on the basis of work done and not on the basis of time spent in doing the work. Taylor introduced different rate of wage payment for those who performed above standard and for those who performed below standard. Mental Revolution: It involves a change in the attitude of workers and management towards one another from competition to cooperation. Both should realize that they require one another. Management should share a part of surplus with workers. Workers should also contribute their might so that the company makes profits.

20. FAYOL’S PRINCIPLES OF MANAGEMENT DIVISION OF WORK: Work is divided into small tasks/jobs. Division of work leads to specialization. This results in efficient and effective output. 2 ) AUTHORITY AND RESPONSIBILITY: Authority refers to the power or right to take decisions and get the work done whereas responsibility refers to the obligation to complete the job assigned on time.  3) Discipline: Discipline means obedience, respect of authority and following the rules and regulations. It is necessary to ensure a smooth working environment in an organisation. Good supervision at all levels and an established system of penalties will help to maintain discipline in the organisation.

21. 4) Unity of command: According to Fayol, for every individual employee there should be only one superior who can assign him responsibilities and to whom he is accountable. This will avoid confusion, conflict and duplication of work. 5) Unity of direction: It means that there should be one head and one plan for a group of activities having the same objective. It ensures unity of action and coordination. It prevents overlapping of activities. 6) Subordination of individual interest to general interest: The interests of an organization should take priority over the interests of any one individual employee. This is because larger interests of the workers and stakeholders are more important than the interest of any one person. 7) Remuneration of employees: All the employees working in the organisation should have fair pay and compensation. To establish a reasonable standard of living, the employees should be given fair wages. The remuneration should be according to the paying capacity of the organisation.

22. 8) Centralisation and decentralisation: Centralisation means concentration of decisions making authority with centre, whereas its dispersal among more than one person is Decentralisation. No organisation can be completely centralised or completely decentralised, so a balance of both must be created. 9) Scalar chain: The formal lines of authority and flow of communication between superiors and subordinates from the highest to the lowest ranks is known as scalar chain. This chain should not be violated but in case of emergency employees at the same level can contact through Gangplank by informing their immediate superiors in order to make quick communications.

23. 10) order: In an organisation, there must be material and social order. According to Fayol “People and material should be in suitable places at appropriate times for maximum efficiency”. Material order means a place for everything and everything in the right place and social order means a place for everyone  and everyone should be at their designated place. 11) Equity : Management should treat employees with justice and equality. Good sense and experience are needed to ensure fairness to all employees who should be treated as fairly as possible without any sort of discrimination. Hence, irrelevant favouritism or penalties should be avoided. 12) Stability of personnel: There should be a stability of tenure of the employees so that the work continues efficiently. Employee turnover should be minimized to maintain organizational efficiency. Violation of this principle will create instability/insecurity among employees. This also will increase the recruitment, selection and training cost.

24. 13) Initiative: This principle states that the employees in the organization must be given an opportunity in making and executing plan. Initiative means taking the first step with self-motivation. A good company should have an employee suggestion system and best suggestions should be rewarded. 14) Espirit de corps: According to Fayol, management should promote a team spirit of unity and harmony among employees. A manager should replace ‘I’ with ‘We’ in all his conversations with workers. This will give rise to a spirit of mutual trust and belongingness among team members.

25. FAYOL VS TAYLOR BASIS FAYOL TAYLOR Basis of formation Personal experience Observations and experimentation Focus Improve overall efficiency of the management Increase the productivity of people working in the enterprise Applicability Universal applicability Applicable only to specialised situations Perspective Top level of management Operative level of management Personality Practitioner and researcher Scientist (known as father of scientific management) Techniques General theory on management Scientific management

26. Unity of command vs unity of direction BASIS UNITY OF COMMAND UNITY OF DIRECTION Meaning An employee should get orders from one superior only and be accountable to him only There should be one head and one plan for a group of activities having the same objective Purpose To prevent overlapping of orders and instructions, duplication of work, confusion and indiscipline To prevent overlapping of activities Relation It relates to the functioning of people It relates to the activities of the organisation outcome It results in effective and efficient functioning of both superior as well as subordinates It leads to unity of action and coordination of efforts Relationship It deals with the relationship of superior and subordinate It deals with the relationship of activities in support of organisational plans and objectives Importance It helps to fix the responsibility of each person in the organisation It results in efficient functioning of group activities to achieve organisational goals