PRINCIPLES OF MANAGEMENT

1. PRINCIPLES OF
MANAGEMENT
IMRAN SIR SUCCESS POINT
IMRAN KHAN (PGT)

2. “Principles of Management are of universal nature and apply to
every type of organisation”
• It is broad and general guidelines for decision making and behavior of
manager.
• A principle refers to a fundamental truth. It establishes cause and
effect relationship between two or more variables under given
situation.
• They serve as a guide to thought & actions.
• These principles are derived: -
• On the basis of observation and analysis i.e. practical experience of
managers.
• By conducting experimental studies.

3. Features of Principle of Management
• Principles of Management are Universal
• Management principles are applicable to all kinds of organizations -
business & non business.
• They are applicable to all levels of management.
• Every organization must make best possible use by the use of
management principles.
• Therefore, they are universal or all pervasive.
• General Guideline:-
• The principles of management are definite like the principles of physics
and chemistry. The principles of physics and chemistry are very clear and
definite and their outcome can be predicted.
• Principles of management are not applied strictly.
• Principles of Management have a Cause & Effect Relationship
• Principles of management indicate cause and effect relationship between
related variables.
• They indicate what will be the consequence or result of certain actions.
Therefore, if one is known, the other can be traced.

4. • Formed by practice and Experimentation:-
• The principles of management have been formed by experience and
acquired the wisdom of managers over the years.
• Example: Through collective practice, we can see that Fayol’s Principle-
Discipline helps in increasing productivity.
• Principles of Management are Flexible
• Management principles are dynamic guidelines and not static rules.
• There is sufficient room for managerial discretion i.e. they can be
modified as per the requirements of the situation.
• Modification & improvement is a continuous phenomenon in case of
principles of management.

5. • Mainly Behavioural
• The principles of management aim at influencing the behaviour of
employees.
• With the help of principles of management, the managers try to bring
desired changes in the behaviour of employees so as to achieve the
organisational goals.
• Example:Orderliness decides behaviour among human beings in a
company. Even the behaviour between men and machine can be
decided by this principle of Management.
• Contingent
• As the application of principles of management depends upon prevailing
situations and needs, so their results may not be uniform as expected.
• Example:
• Remuneration of employees should be just and equitable, yet it may vary
from person to person depending upon various situations.
• Remuneration can be dependent on:
• Industrial standard.

6. IMPORTANCE OF PRINCIPLES OF MANAGEMENT
• (1) Providing Managers With Useful Insights Into Reality
• The application of principles of management helps the managers to take right
decisions at the right time.
• These principles of management help managers to tackle the diverse problems in
a dynamic business environment.
• (2) Optimum Utilisation of Resources & Effective Administration
• Resources are always scarce and limited.
• By applying the management principles, the managers can focus on optimum use
of available resources so as to achieve productive results at minimum cost and
maximum profits.
• It results in effective administration by channelising resources (human and
material) into the best possible way.
• (3) Scientific Decisions
• Application of principles of management makes the manager more realistic,
thoughtful, justifiable and free from personal bias.
• The decisions taken on the basis of principles of management are subject to
evaluation and objective assessment.

7. • (4) Meeting Changing Business Environment
• Although the principles are in the nature of general guidelines, they are modified and
help managers to meet the changing requirements of the environment.
• Example:
• With the rapid rise of online market sellers, offline vendors have also started selling
their goods on online platforms.
• (5) Fulfilling Social Responsibility
• Principles of management not only help in achieving the goals of the organisation
effectively and efficiently, but they also guide the managers to fulfil their commitment
towards its employees and society.
• Example:
• Principles of fair remuneration and equity ensure social justice to employees and
compliance with government norms towards corporate social responsibility which
improves the company’s image in the society.
• (6) Management Training, Education and Research
• Proper understanding of principles is the base of training, research and development
in the field of management.
• Management is taught on the basis of these principles, which help the management
institutes prepare future managers.
• These Principles help managers to take decisions and actions in the right manner.
• Application of these principles by the managers brings innovation in the field of
management.
• Example:
• It is the result of such training, education and research that Sunil Mittal could run Airtel
in a successful way.

8. FUNDAMENTALPRINCIPLES OF MANAGEMENT
• Henry fayol was born in 1841 in France. His full name is Jules Henri Fayol.
• In 1860 he complete his engenerring in mining and start working as engineer
in Coal Mining company.
• In 1888 due to his hard work he was a Managing Director in that company.
• He retire after 30 years on that company as a strong leading company.
• Henry Fayol a famous industrialist of France has described 14 principles of
management in his book “General and Industrial Management”.
• Henry Fayol explain the difference between Principles and elements he make
it clear that the principles of management are fundamentally true and
establish a relationship between cause and effect while the element of
management points towards its functions.
• While presenting the principles of management Fayol has kept two things in
mind firstly the list of the principles of management
should not be long but should be suggestive secondly
the principles of management should be flexible and not
rigid so that changes can be made in them in case of need.

9. 14 PRINCIPLES OF MANAGEMENT
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• R
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10. DIVISION OF WORK
• The intent of division of work is to produce more and better work for the same
effort. Specialization is the most efficient way to use human efforts.
• The Principles of division of work are given below:
• 1. Work should be divided into small tasks/jobs.
• 2. Each job should be performed by a trained specialist to achieve efficient
and effective output.
• 3. Entire organisation should be divided into separate departments. For
example finance, purchase, Sales, Production, Marketing etc.
• 4. Each department should be managed by specialized persons, who
individually motivate their teams to achieve the departmental goals effectively
and efficiently.
• 5. All departments unify the individual efforts
To collectively achieve the orgainsational goals.
For example:- In a school, the principal look
After administration and under him/her, there
Are individuals incharge for academics,
Discipline , admission, co-curricular activities etc.

11. AUTHORITYAND RESPONSIBILITY
• Authority and responsibility should go hand in hand. It means that when a
particular individual is given a particular work and he is made responsible for
the result, this can be possible only when he is given sufficient authority to
discharge his responsibility.
• Enterprise must maintain balance between authority and responsibility.
• Authority is formal and informal.Formal authorityis fixed as per stated rules
and regulation of the organisation and informal authority is the power to
negotiate the stated authority.
• For example:- A sales manager has responsibility to achieve sales target. He
has authority to plan his visits to customer’s, present organisation offers and
scheme. At the same time he has authority to negotiate prices with
customers.

12. DISCPLINE
• The organizational rules and employment agreement should be obeyed by
both the superior and subordinates which are necessary for the successful
working of the organization.
• The organisation must have clear and fair agreements.
• The clearly stated penalties.
• A disciplined organisation has a better reputation among the people.
• Increase in the efficiency of the employees.
• Better labour management relation.
• For example:- If the company has fixed standards for production, wages rate
and incentives plans then company. must pay to its workers according to
targets achieved. The workers also must try to achieve the targets and if they
are unable to achieve the targets then they must accept the differential wage
rate without any prejudice against the company.

13. UNITY OF COMMAND
• An individual employee should receive orders from only one superior at a
time and that employee should be answerable only to that superior.
• There is no confused situation for the subordinates.
• Order/Instruction from only one superior provide clear direction to perform a
task.
• It is easy to fix responsibility.

14. UNITY OF DIRECTION
• It means that there should be one head and one plan for a group of activities
having the same objective.
• For example:- Suppose an automobile company is manufacturing two
products, namely scooters and cars, hence having two divisions . At each
product has its own markets and problems there fore each division must have
its own heads.

15. SUBORDINATION OF INDIVIDUALINTERESTTO GENERALINTEREST
• The interest of an organisation should take priority over the interest of any
one individual employees.
• Coordination between the individual and organisational objectives.
• For example:-A purchase manager of a company has to purchase 100 tonnes
of raw material. His son happens to be a supplier along with other supplier in
the market. The manager purchase the raw material form the firm of his son
at a higher rate than the market rate. This will profit the manager personally ,
but the company will incur heavy loss. This situation is undesirable.

16. REMUNERATION OF EMPLOYEES
• The employees should be paid fair remuneration which should give them at
least a reasonable standard of living.
• Increase in the encouragement and satisfaction of the employee.
• Development of the spirit of dedication among the employees.
• Decline in the labour turnover.
• For example:- A company which pays fair and competitive wages to its
employees, will always have a satisfied and motivated staff, the relationship
between management and staff will be harmonious and the working in the
organisation will be smooth.

17. CENTRALISATIONAND DECENTRALISATION
• The superior should adopt effective centralisation instead of complete
centralisation and complete de centralisation.
• The authority to take core decision must be retained by top level
management(Centralisation).
• The authority to take routine or day to day business decision must be
delegated to middle level and lower level management (decentralisation).
• Decrease in the work load of superior.
• Better and quick decision
• Increase in the encouragement to the subordinates.
• For example:- The decision in respect of determining the objective and
policies expansion of business etc should remain in the hand of superiors. On
the other hand authority for the purchase of raw material , granting leave to
the employees etc should be delegated to the subordinates.

18. SCLAR CHAIN
• It refers to a formal line of authority and communication which moves from
highest to the lowest ranks in a straight line.
• Flow of orderly information.
• Better relations because of absolute respect of authority.
• An organisation consists of superiors and subordinates where superiors give
instruction or directions to subordinates.
• In case of emergency the chain of authority may be violated through Gang
Plank.
• Gang plank concept was developed to established a direct contact with the
employees of equal rank in case of emergency to avoid delay in
communication.

19. ORDER
• A right person should be placed at the right post and a right thing should be
placed at the right place.
• The fixed or assigned places for all resources remove hindrances while
conducting business activities.
• The orderliness increases efficiency and productivity.
• For example :- In your school there is a fixed place for keeping sports
equipment, lab equipment etc even you have a fixed classroom. All this
maintain orderliness in school.
• According to Fayol, every enterprises should have two different orders
Material order for physical resources and social order for human resources.

20. EQUITY
• The manager should treat their subordinates as fairly as possible so that they
develop a feeling of dedication for their work.
• Management must appreciate efficiency and penalize underperformance or
inefficiency.
• The employees remained satisfied.
• Unskilled employees try to achieve to achieve some skill.
• For example:- A labourer complete 10 units of goods in a day. Another
labourer who happens to be a relative of the superior complete 8 units but
both get equal salary. This violates the principles of equality. The second
Labourer should get less remuneration than the first one.

21. Stability of Personnel
• There should be a stability of tenure of the employees so that the work
continues efficiently.
• Increase in the confidence of the employees.
• Increase in the reputation of the company.
• Skilled employees are inclined towards the company.
• Less expenses on training.
• The selection procedure must be framed in such a manner that it is able to
select the personnel who are most suited for the job.
• The tenure of appointment must be fixed for a minimum period to provide
stability to both company and new appointees.

22. INITATIVE
• Employees in the organization must be given an opportunity in making and
executing plans.
• Increase in the thinking power of the employees.
• Increase in the sense of attachment in the organization.
• Cooperation of the employees in implementing decisions.
• For example:-A sale manager may give suggestion to make marketing
strategies more customer oriented but he/she should not change the pricing
policy of the company to receive bigger orders or favour specific customers.

23. ESPRIT-DE-CORPS
• Management should promote a team spirit of unity and harmony among
employees.
• In this principles Fayol replaced the Word I by We.
• Teamwork should be promoted for effective coordination and realization of
organisational goals.
• Sweet relationship.
• For example :- A manager should always say that we will do this work
instead of I will do it.

24. SCIENTIFIC PRINCIPLES OF MANAGEMENT
“Scientific management attempts to eliminate to ensure max
production at minimum cost”
• F.W.Taylor was born in 1856 in USA.
• According to Poonam Gandhi he joined the midval steel company in 1878 as
a mechanical engineer.
• According to R.K.Singla. He joined the midval steel company in 1878 as a
labour and due to his hard work he was able to reach the position of chief
engineer in short period of time 6 year.
• Taylor principle and techniques were based on observation
• His book are Shop management in 1903 and Principles of scientific
management in 1911.
• He died in 1915.

25. Features of scientific Management
• Systematic Approach:-
• Being Complete mental Change
• Discard Traditional Management
• Improve the efficiency of worker.
• Requires strict observance of Rules

26. Principles of Scientific Management
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27. SCIENCE NOT RULE OF THUMB
• This principle say that we should not get stuck in a set routine with the old
techniques of doing work, rather we should be constantly experimenting's to
develop new techniques which make the work simple, easier and quicker.

28. HARMONY NOT DISCORD
• Taylor emphasized the fact that for any business to be successful,
management and workers must work in complete harmony.
• Conflicts or differences of opinion amongst management and workers affects
productivity and efficiency therefore it is important that there is complete
openness among management and employees.
• Management should be willing to share all the relevant information and
accept ideas given by employees.
• Workers also must have positive attitude and openness to accept the
changes for the good of the company.
• Workers must work hard to achieve higher profit for the company and
management in return must share the gains with workers.
• Taylor has referred to such a situation as a Mental revolution.

29. COOPERATION NOT INDIVIDIUSALISM
• Management must not maintain distance from employees rather employees
must be part of management through their representatives.
• Management must work towards employees growth and development must
have confidence in its employees and seek their suggestions before taking
crucial decisions for the company.
• According to taylor there should be an almost equal division of work and
responsibility between workers and management.

30. DEVELOPMENT OF EACHAND EVERY PRERSON TO
HIS/HER OUR GREATEST EFFICIENCYAND PROSPERITY
• The efficiency of each and every person should be taken care of right from
his selection.
• A proper arrangement of everybody’s training should be made.
• It should also be taken care that each individuals should be allotted work
according to his ability and interest.

31. TECHNIQUE OF SCIENTIFIC PRINCIPLES OF MANAGEMENT

32. TECHNIQUE OF SCIENTIFIC MAN.
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33. Functional Foremanship
• It refers to that techinque of scientific management which makes possible the
full utilisation of the principles of specialisation.
• In Functional organisation work is divided into many small parts and each part
is assigned to an expert. IN this manner all the benefits of specialisation are
availed of.
• The taylor has suggested the division of work of factory manager into two sub
departments.

34. • The planning incharge would be appoint four experts:-
• Route clerk:-To specify the production route
• Instruction Card clerk:- For drafting instruction for workers and hands them
over to the gang boss.
• Time and cost clerk:-For preparing time and cost sheet
• Discipline officer:- For maintaining discipline in the factory.
• The production incharge would be appoint four experts:-
• Gang Boss:- He/she is responsible to keep machine and tools ready for
operation.
• Speed Boss:- He/she is responsible to complete the job accurately and timely
• Repair boss:-He/she is responsible for keeping the machines and tools in a
proper working conditions.
• Inspector:- He/she will be responsible to check and maintain quality of work.

35. Standardization and Simplification of Work
• Standardization refers to the process of setting standard for various business
activities.
• For example:- The amount of work to be done by a worker in a day may be
standardised.In the same manner standards may also be set for raw material,
machine and tools, techniques , condition of work etc.
• Simplification refers to that technique which is used to put an end to
unnecessary types, qualities, sizes, weights etc of products.
• For example:- It is all right for a shoe manufacturing company to manufacture
shoes of 0,1,2,3,4,5,6,7,8,9…… but if it starts manufacturing shoes of
0,0.5,1,1.25,1.50,1.75,2,2.25,2.50,2.75,3,……..it will be simply worng.

36. WORK STUDY
• Method study:-It refers to identifying the most suitable way to do a particular
activity.
• Motion Study:- It refers to a technique to study the movement those are
necessary for doing a well defined job work.
• Fatigue study:- It refers to determining the duration and frequency of rest
interval to complete a particular job.
• Time study:- It refers to determining the standard time required to complete a
particular activity.

37. Differential wage system/ Differential piece Rate
• It refers to that technique of scientific management which differentiates
between efficient and inefficient workers.
• According to this system wages are paid on the basis of work done not on the
basis of time spent in doing the work.
• In this system two different wage rates are used one is the high wage rate
and the other is the low wage rates.

38. Mental Revolution
• It refers to the change in the attitude of management and workers towards
one another from competition to cooperation.

39. Difference between Taylor and Fayol