Principles of Management

Presentation on Chapter 2 i.e. Principles of Management

1. PRINCIPLES OF MANAGEMENT Prepared by Samar Singh, Class XII

2. MEANING OF PRINCIPLES OF MANAGEMENT A Principle refers to a statement which reflects the fundamental truth about some phenomenon based on cause and effect relationship. Management principles are broad and general guidelines for decision making and behavior of managers.

3. NATURE/FEATURES/CHARACTERISTICS OF MANAGEMENTS PRINCIPLES 1. Universal application ( pervasive): The principles of management are universal in nature that means they can be applied to all types of organisations irrespective of their size and nature. 2. General guidelines: Management principles are guidelines to actions but these principles do not provide readymade solution for any problem . 3. Formed by practice and experiments: The managements principles are developed only after deep and thorough research work . They are not developed overnight. 4. Flexible: Management principles can be applied differently under different conditions . Some changes can be made in application of principles according to the requirement of the company.

4. 5. Mainly behavioral : Management principles are formed to guide and influence the behavior of employees . These principles insist on improving relationship between superior, subordinates and all the members of organization. 6. Cause and effect relationship: Management principles are based on cause and effect that means these principles tell us if a particular principle is applied in a situation, what might be the effect. 7. Contingent: Management principles are contingents or dependent upon the situations prevailing in organization.

5. Features of management principles Universal application General guidelines Formed by practice and experiments Flexible Mainly behavioral Cause and effect relationship Contingent

6. Significance/ importance of management principles Providing managers with useful insight into reality: Management principles act as guidelines for the managers . These principles improve knowledge, ability and understanding of managers under various managerial situations. Optimum utilization of resources: The managements principles insist on planned activities and systematic organization of men and materials in the organization. Scientific decision: Managers have to take number of decisions every day. The management principles enable the managers to approach various problems systematically and scientifically.

7. 4. Meeting changing environment requirement: Every businessman has to make change in the organization according to changes taking place in the business environment. 5. Efficient administration: The management principles act as guidelines and base to form various administrative policies to have systematic working in the organization. 6. Fulfilling socials responsibilities: Managements principles not only act as guidelines for achieving organizational objectives but these principles also guide the managers to perform social responsibilities. 7. Managements training, education and research: These principles provide organized body of knowledge to perform research work and generate more and more knowledge they have provided new ideas, imagination and base for base for research and development.

8. Importance of management principles Providing managers with useful insight into reality Optimum utilization of resources Scientific decisions Meeting changing environment requirement Effective administration Fulfilling social responsibilities Management training, education and research

9. SCIENTIFIC PRINCIPLE OF MANAGEMENT BY F.W. TAYLOR Science, not rule of thumb: According to this principle Taylor insists that each job performed in the organization should be based on scientific enquiry and not on hit and trial method. Taylor believed that there is only one best method to maximize efficiency this method can be developed through work, study and analysis.

10. 2. Harmony, not discord: According to this principle worker and management must work in harmony that is with mutual give and take and proper understanding. Taylor insists that there is need for both the group to change their attitude for each other. He insists on Mental revolution which means complete change of attitude and outlook for each other.

11. 3. Cooperation, not individualism: According to this principle work must be carried on in cooperation with each other with mutual understanding and confidence for each other. To have cooperation , management should welcome good suggestion of employee and they should be rewarded for their suggestions. At the same time workers should not go on strike and make unreasonable demands.

12. 4. Development of workers to their greatest efficiency and prosperity: Taylor insisted that due care should be taken while selecting the employees and after selecting they must be given job according to their qualification. Employee must be sent for training from time to time to update their knowledge.

13. Scientific principle management by f.w. taylor SCIENCE, NOT RULE OF THUMB HARMONY, NOT DISCORD COOPERATION, NOT INDIVIDUALISM DEVELOPMENT OF WORKERS TO THEIR GREATEST EFFICIENCY AND PROSPERITY

14. Techniques of scientific management be f.w. taylor Functional foremanship: Taylor advocated separation of planning and executors function. Under the factory managers there was a planning in-charge and a production in-charge. Under planning in-charge four personnel namely- 1. instruction card clerk: this foreman is responsible for giving general instructions necessary to carry on the job in a specified manner. 2. route clerk: this foreman is responsible to fix up the sequence of steps for performing mechanical or manual job. 3. time and cost clerk: this foreman is responsible to fix up the time for starting and completing of job. He also prepare the cost sheet for every job. 4. disciplinarian worker: this foreman is responsible for performance of job in orderly and systematic way.

15. Under production in-charge four personnel namely- Gang boss: he arranges all the machines, tools and other resources required for performance of the job so that there is no delay. Speed boss: the foreman assures timely completion of job. Repair boss: this boss ensures that machines and tools are kept in working conditions. Inspector: this boss keeps a check on quality control of the output. Foreman should have intelligence, education, special knowledge and energy, honesty and good health. Since all these qualities could not be found in a single person.

16. 2. Standardization and simplification of work Standardization refers to the process of setting standard for every business, it can be standardization of process of raw material, time, product, machinery, method or working condition. Simplification aims at eliminating superfluous varieties, size and grades of the product manufactured by the organization.

17. 3. Method study The objective of method study is to find out one best way of doing the job. The objectives of the whole exercise is to minimize the cost of production and maximize the qualities and satisfaction of the customers. 4. MOTION STUDY . Motion study refers to the study of movements like lifting, putting object, sitting and changing position etc. unnecessary movement are sought to be eliminated. 5. TIME STUDY . It determines the standard time taken to perform a well-defined job.

18. 6. Fatigue study Fatigue study seeks to determine the its amount and frequency of intervals in completing of task. 7. DIFFERENTIAL PIECE WAGE SYSTEM . Piece wage system differentiates between efficient and inefficient worker . Taylor introduced different rate of wages payment for those who perform above standard and those who perform below standard.

19. HENRY FAYOL’S PRINCIPLEs OF GENERAL MANAGEMENT DIVISION OF WORK As per this principle, the work of an organization is divided into smaller jobs or tasks. Each job is assigned to different individuals as per their ability and experience. Positive effect Specialization : whenever work is divided according to qualification then automatically it leads to specialization. Improve efficiency : when employee is performing only one part of job then he becomes expert in that and results in less wastage of resources. Negative effect Lack of efficiency There will be no specialization Chances of duplication of work

20. 2. AUTHORITY AND RESPONSIBILITY Authority means power to take decisions. Responsibility means obligation to perform the assigned task. According to this principle, there should be balanced between authority and responsibility. Positive effect No misuse of authority Help in meeting responsibility on time without any delay Negative effect Delay in work or in completion of work due to less authority Misuse of authority due to excess of authority Overburden with work with excess responsibility

21. 3. DISCIPLINE Discipline means respect the rules and regulation of an organization. Positive effects Systematic working in the organization Improves efficiency Negative effects Disorder, confusion and chaos Wastage of resources in absence of discipline Delay in work due to absence of rules and regulation

22. 4. UNITY OF COMMAND As per this principle, a subordinate should not receive order from more than one boss at a time. Positive effects No confusion in the mind of subordinate No ego clashes Improves effectiveness in working Negative effects Confusion in the mind of employee Subordinate will get chance to escape from responsibilities by giving excuses Ego clashes among the different superiors Difficulty in maintaining discipline in the organization

23. 5. UNITY OF DIRECTION According to this principle, each group of similar activities having the same objectives must have one head and one plan. Positive effects Achievement of organizational goal. Efforts of all employees get unified towards one direction only. Negative effects Lack of coordination. Wastage of efforts and resources by working in different directions. Difficulty in achieving organizational goal.

24. 6. SUBORDINATION OF INDIVIDUALS INTEREST TO GENERAL INTEREST. As per this principle, in situation of conflict the interest of organization should be given priority over an individuals interests. Positive effects Achievement of organizational goals. Coordination between individual and organizational goal. Negative effects No achievement of organizational goals. Even employee will also suffer in long run.

25. 7. REMUNERATION OF EMPLOYEES This principle states that remuneration payable to employee should be just and fair. Remuneration paid to employees should provide them reasonable standard of living. And it should be within the paying capacity of the organization. Positive effects Employees get motivated Devotion and commitment of employee improves Negative effects Increase in turnover of employee Dissatisfaction and demotivation of employee.

26. 8. CENTRALISATION AND DISCENTRALISATION Centralization refers to concentration of power in few hands. Decentralization refers to distribution of power at all levels of managements. Principle of centralization and decentralization states that there should be effective centralization instead of complete centralization or decentralization. Positive effects Benefits of centralization and decentralization. Fast decision at operational level and strict control by the top level Negative effects Complete centralization will results in delay in decision. Complete decentralization will results in misuse of authority.

27. SCALAR CHAIN Scalar chain refers to chain of communication from highest to lowest authority. The principle states that this formal chain of communication should be followed in the organization. Exception to the principle of scalar chain Gang plank : In case of emergency employees working at the same levels but at different department can communicate with each other. Positive effects Systematic follow of information. No communication gap in the organization Negative effects There may be communication gap. No clarity in authority responsibility relationship.

28. 10. ORDER This principle states that there should be proper arrangement of things and people in an organization. Fayol has suggested two types order in an organization: Social order : it refers to fixed place for everyone and everyone in his/her place. Material order : it refers to a fixed place for everything and everything in place. Positive effects No wastage of time in search of men or material. Smooth and systematic working of organization. Negative effects Wastage of time and energy in search of men and material. No able to contact the people at the right time.

29. 11. EQUITY This principle states that a manager should treat all the employee in just and fair manner. There should be no discrimination between employee on any ground. Positive effects Employee get satisfied. Motivate the employee and boost up the morale of the employee. Negative effects Dissatisfaction in employee. Increase in turnover. Unhealthy relation between superior and subordinates.

30. 12. STABILITY OF PERSONNEL As per this principle, employee should be kept at their post for a minimum fixed period of time. Positive effects Improves efficiency level of employee. No wastage of time and resources. Negative effects Wastage of resources in learning the new job. Frustration and dissatisfaction among employee.

31. 13. INITIATIVE According to this principle, worker should be encourage to give his/her suggestion. Company should also reward employee for good suggestion Positive effects Develops feeling of belongingness in employee Employees achieve the target on time if they are set up with their consultation. Negative effects Employee will not work to the best of their ability. Demotivation among employees.

32. 14. ESPIRIT DE CORPS This principle states that management should promote team spirit in an organization. “I” should be replaced with “WE”. Positive effects Develops team spirit. Achievement of group goals. Negative effects Team goals may not be achieved. No team spirit and more stress on individuals.

33. Fayol’s principles of management DIVISION OF WORK AUTHORITY AND RESPONSIBILITY DISCIPLINE UNITY OF COMMAND UNITY OF DIRECTION SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST REMUNERATION OF EMPLOYEE CENTRALIZATION AND DECENTRALIZATION SCALAR CHAIN ORDER EQUITY STABILITY OF PERSONNEL INITIATIVE ESPIRIT DE CORPS