CompanyLOGOProf. Preeti BhaskarSymbiosis Centre for Management Studies, NoidaPrinciples of Management
According to G.R. Terry,“ Principle is a fundamental statement ortruth providing a guide to thought or action”
How principles of management arederived ?On the basis of observationOn the basis of experimental studies
Significance principles of management To increase the managerial effectiveness and efficiency. To coordinate material and human resource To train managers To improve research Helps in decision making Fulfilling social responsibility
SCIENTIFIC MANAGEMENTF. W. TAYLORFrederick WinslowTaylor is often called the“father of scientificmanagement”
Frederick Winslow TaylorFrederick Winslow Taylor was engineer and inventorExperiment to solve the issue of “SOLDIERING”Soldiering refers to the practice of employee deliberately workingat a pace slower than the capabilitiesREASONS OF SOLDIERING Worker feared that if they increased their productivity, otherworkers would loose their jobs. Faulty wages system employed by the organization encouragedthem to work at a slower pace. Outdated methods of working handed from generation togeneration leads to great deal of wasted efforts and resources
Definition“Scientific management meansknowing exactly what you want mento do and seeing that they do it inthe best and cheapest way”F. W. TAYLOR
Objective of Scientific ManagementTheoryImproving economic efficiency, especially laborproductivityTo increase productivity by increasing efficiency andwages of the workersIt finds out the best method for performing each job
Principles of scientific management1. Science, not rule of Thumb2. Scientific Selection, Training & Development of Workers3. Harmony, not discord4. Mental revolution5. Cooperation, not individualism6. Development of each and every person to his or hergreatest efficiency and prosperity
Development of Science for each part of men’sjob (replacement of rule of thumb) This principle suggests that work assigned to any employeeshould be observed, analyzed with respect to each andevery element and part and time involved in it. This means replacement of odd rule of thumb by the use ofmethod of enquiry, investigation, data collection, analysisand framing of rules. Under scientific management, decisions are made on thebasis of facts and by the application of scientific decisions
Scientific Selection, Training & Development ofWorkers There should be scientifically designed procedure for the selection ofworkers. Physical, mental & other requirement should be specified for each andevery job. Workers should be selected & trained to make them fit for the job. The management has to provide opportunities for development ofworkers having better capabilities. According to Taylor efforts should be made to develop each employee tohis greatest level and efficiency & prosperity.
Co-operation between Management &workers or Harmony not discord Taylor believed in co-operation and not individualism. It is only through co-operation that the goals of the enterprisecan be achieved efficiently. There should be no conflict between managers & workers. Taylor believed that interest of employer & employeesshould be fully harmonized so as to secure mutuallyunderstanding relations between them.
Division of Responsibility This principle determines the concrete nature of roles to beplayed by different level of managers & workers. The management should assume the responsibility ofplanning the work whereas workers should be concerned withexecution of task. Thus planning is to be separated from execution.
Mental Revolution The workers and managers should have a complete change of outlook towards theirmutual relation and work effort. It requires that management should create suitable working condition and solve allproblems scientifically. Similarly workers should attend their jobs with utmost attention, devotion andcarefulness. They should not waste the resources of enterprise. Handsome remuneration should be provided to workers to boost up their moral. It will create a sense of belongingness among worker. They will be disciplined, loyal and sincere in fulfilling the task assigned to them. There will be more production and economical growth at a faster rate
Maximum Prosperity for Employer & Employees The aim of scientific management is to see maximumprosperity for employer and employees. It is important only when there is opportunity for each workerto attain his highest efficiency. Maximum output & optimum utilization of resources will bringhigher profits for the employer & better wages for the workers. There should be maximum output in place of restricted output. Both managers & workers should be paid handsomely.
Problems with Scientific ManagementManagers frequently implemented only the increasedoutput side of Taylor’s plan.Specialized jobs became very boring, dull. Workers ended up distrusting the Scientific Managementmethod.Workers could purposely “under-perform.” Management responded with increased use of machines
Techniques of scientific managementTechniques of scientificmanagementFunctionalforemanshipStandardizationand simplificationof workWork studyDifferential piecewage systemPlanninginchargeProductioninchargeStandardizationSimplificationMethod studyMotion studyTime studyFatique studyJIT (just in time)LeanmanufacturingKaizenSix sigmaOperationresearch
Principles of Management:Henri FayolProf. Preeti BhaskarSymbiosis Centre for Management Studies,Noida
Henri FayolFather of “GENERAL MANAGEMENT”• French mining engineer and director ofmines• Henri Fayol was the first to identify thefour functions of management:planning, organizing, directing, andcontrollingand conduct of business.• He published his "14 principles ofmanagement" in the book "administrationindustrielle et generale."
• Henri Fayol (1841-1925)– General and Industrial Management– Principles and Elements of Management - how managersshould accomplish their managerial duties– PRIMARY FOCUS: Management(Functions of Administration)– More Respect for Worker than Taylor• Workers are motivated by more than money• Equity in worker treatment
Fourteen Principles ofManagement: Henri Fayol• Division of work• Authority• Discipline• Unity of Command• Unity of direction• Subordination ofindividual interests tothe general interest• Remuneration• Centralization andDecentralization• Scalar chain• Order• Equity• Stability of tenure ofpersonnel• Initiative• Esprit de corps
Division of Labor• Henry Fayol has stressed on the specialization of jobs.• He recommended that work of all kinds must be divided & subdividedand allotted to various persons according to their expertise in aparticular area.• Subdivision of work makes it simpler and results in efficiency.• It also helps the individual in acquiring speed, accuracy in hisperformance.• Specialization leads to efficiency & economy in spheres of business.
Authority & Responsibility• Authority & responsibility are co-existing.• If authority is given to a person, he should also be made responsible.• In a same way, if anyone is made responsible for any job, he should alsohave concerned authority.• Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance ofthe job assigned.• There should be a balance between the two i.e. they must go hand in hand.• Authority without responsibility leads to irresponsible behavior whereasresponsibility without authority makes the person ineffective.
Unity of command• A sub-ordinate should receive orders and be accountable to one and only one boss ata time.• In other words, a sub-ordinate should not receive instructions from more than oneperson because –• - It undermines authority- Weakens discipline- Divides loyalty- Creates confusion- Delays and chaos- Escaping responsibilities- Duplication of work- Overlapping of efforts• Unity of command provides the enterprise a disciplined, stable & orderly existence.• It creates harmonious relationship between superiors and sub-ordinates.
Unity of Direction• Fayol advocates one head one plan which means that there should beone plan for a group of activities having similar objectives.• Related activities should be grouped together. There should be oneplan of action for them and they should be under the charge of aparticular manager.• According to this principle, efforts of all the members of theorganization should be directed towards common goal.• Without unity of direction, unity of action cannot be achieved.• In fact, unity of command is not possible without unity of direction.
Equity• Equity means combination of fairness, kindness & justice.• The employees should be treated with kindness & equity if devotion is expected ofthem.• It implies that managers should be fair and impartial while dealing with thesubordinates.• They should give similar treatment to people of similar position.• They should not discriminate with respect to age, caste, sex, religion, relation etc.• Equity is essential to create and maintain cordial relations between the managers andsub-ordinate.• Fayol was of opinion that, “at times force and harshness might become necessary forthe sake of equity”.
Order• This principle is concerned with proper & systematic arrangement ofthings and people.• Arrangement of things is called material order and placement ofpeople is called social order.• Material order- There should be safe, appropriate and specific placefor every article and every place to be effectively used for specificactivity and commodity.• Social order- Selection and appointment of most suitable person onthe suitable job. There should be a specific place for every one andeveryone should have a specific place so that they can easily becontacted whenever need arises.
Discipline• According to Fayol, “Discipline means sincerity, obedience, respectof authority & observance of rules and regulations of the enterprise”.• This principle applies that subordinate should respect their superiorsand obey their order.• It is an important requisite for smooth running of the enterprise.• Discipline is not only required on path of subordinates but also on thepart of management.• Discipline can be enforced if -• - There are good superiors at all levels.- There are clear & fair agreements with workers.- Sanctions (punishments) are judiciously applied.
Initiative• Workers should be encouraged to take initiative in the work assigned to them.• It means eagerness to initiate actions without being asked to do so.• Fayol advised that management should provide opportunity to its employees tosuggest ideas, experiences& new method of work.• It helps in developing an atmosphere of trust and understanding.• People then enjoy working in the organization because it adds to their zeal andenergy.• To suggest improvement in formulation & implementation of place.• They can be encouraged with the help of monetary & non-monetaryincentives.
Fair Remuneration• The quantum and method of remuneration to be paid to the workers shouldbe fair, reasonable, satisfactory & rewarding of the efforts.• As far as possible it should accord satisfaction to both employer and theemployees.• Wages should be determined on the basis of cost of living, work assigned,financial position of the business, wage rate prevailing etc.• Logical & appropriate wage rates and methods of their payment reducetension & differences between workers & management createsharmonious relationship and pleasing atmosphere of work.• Fayol also recommended provision of other benefits such as freeeducation, medical & residential facilities to workers.
Stability of Tenure• Fayol emphasized that employees should not be moved frequently from onejob position to another i.e. the period of service in a job should be fixed.• Employees work better if job security and career progress are assured tothem. An insecure tenure and a high rate of employee turnover will affect theorganization adversely• Stability of job creates team spirit and a sense of belongingness amongworkers which ultimately increase the quality as well as quantity of work.
Scalar Chain• Fayol defines scalar chain as ’The chain of superiorsranging from the ultimate authority to the lowest”.• Every orders, instructions, messages, requests, explanationetc. has to pass through Scalar chain.• But, for the sake of convenience & urgency, this path can becut short and this short cut is known as Gang Plank.
A Gang Plank is a temporary arrangement betweentwo different points to facilitate quick & easycommunication as explained below:In the figure given, if D has to communicatewith G he will first send the communicationupwards with the help of C, B to A and thendownwards with the help of E and F to G whichwill take quite some time and by that time, itmay not be worth therefore a gang plank hasbeen developed between the two.Gang Plank clarifies that managementprinciples are not rigid rather they are veryflexible. They can be moulded and modified asper the requirements of situations
Sub-Ordination of Individual Interestto General Interest• The interest of the organization takes precedence over that ofthe individual employee.• As far as possible, reconciliation should be achieved betweenindividual and group interests.• In order to achieve this attitude, it is essential that -• - Employees should be honest & sincere.- Proper & regular supervision of work.- Reconciliation of mutual differences and clashes by mutualagreement. For example, for change of location of plant, for
Espirit De’ Corps• It refers to team spirit i.e. harmony in the work groups and mutualunderstanding among the members.• Fayol cautioned the managers against dividing the employees into competinggroups because it might damage the moral of the workers and interest of theundertaking in the long run.• To inculcate Espirit De’ Corps following steps should be undertaken -– There should be proper co-ordination of work at all levels– Subordinates should be encouraged to develop informal relations amongthemselves.– Efforts should be made to create enthusiasm and keenness amongsubordinates so that they can work to the maximum ability.– Efficient employees should be rewarded and those who are not up to themark should be given a chance to improve their performance.– Subordinates should be made conscious of that whatever they are doing is
Centralization & De-Centralization• Centralization means concentration of authority at the top level. In other words,centralization is a situation in which top management retains most of thedecision making authority.• Decentralization means disposal of decision making authority to all the levels ofthe organization. In other words, sharing authority downwards isdecentralization.• According to Fayol, “Degree of centralization or decentralization depends onno. of factors like size of business, experience of superiors, dependability &ability of subordinates etc.• Anything which increases the role of subordinate is decentralization & anythingwhich decreases it is centralization.• Fayol suggested that absolute centralization or decentralization is not feasible.An organization should strike to achieve a lot between the two.