Principles of management by Anoop Saini

1. PRINCIPLES OF MANAGEMENT
CHAPTER: 2
ANOOP SAINI

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.
“Principles of management refer to the guidelines for managerial behaviour in
various situations and problems. The principles of management guide managers in
decision making. That is, the principles of management are not applied as they are in
real business situations; rather, they need to be modified by the manager according
to the situation and the requirement”.

3. NATURE/FEATURES/CHARACTERISTICS OF MANAGEMENT
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
1. Universal application
2. General guidelines
3. Formed by practice and experiments
4. Flexible
5. Mainly behavioral
6. Cause and effect relationship
7. Contingent

6. Significance/Importance of Management Principles
1. 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.
2. Optimum utilization of resources: The managements principles insist on
planned activities and systematic organization of men and materials in the
organization.
3. 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
1. Providing managers with useful insight into reality
2. Optimum utilization of resources
3. Scientific decisions
4. Meeting changing environment requirement
5. Effective administration
6. Fulfilling social responsibilities
7. Management training, education and research

9. HENRI FAYOL’S PRINCIPLES OF GENERAL
MANAGEMENT

11. FAYOL’S 14 PRINCIPLES
1. 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
1. Specialization : whenever work is divided according to qualification then automatically it
leads to specialization.
2. 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
1. Sometimes there will be no specialization
2. Chances of duplication of work

12. 1. DIVISION OF WORK

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

14. 2. AUTHORITY AND RESPONSIBILITY

15. 3. DISCIPLINE
Discipline means respect and obeying the rules and regulation of an organization.
Positive effects
1. Systematic working in the organization
2. Improves efficiency
Negative effects
1. Disorder, confusion and chaos
2. Delay in work due to absence of rules and regulation

16. 3. DISCIPLINE

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

18. 4. UNITY OF COMMAND

19. 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
1. Achievement of organizational goal.
2. Efforts of all employees get unified towards one direction only.
Negative effects
1. Lack of coordination.
2. Wastage of efforts and resources by working in different directions.
3. Difficulty in achieving organizational goal.

20. 5. UNITY OF DIRECTION

21. 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
1. Achievement of organizational goals.
2. Coordination between individual and organizational goal.
Negative effects
1. No achievement of organizational goals.
2. Even employee will also suffer in long run.

22. 6. SUBORDINATION OF INDIVIDUALS INTEREST TO
GENERAL INTEREST.

23. 7. REMUNERATION OF EMPLOYEES
This principle states that remuneration payable to employee should be justifiable 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
1. Employees get motivated
2. Devotion and commitment of employee improves
Negative effects
1. Increase in turnover of employee
2. Dissatisfaction and demotivation of employee.

24. 7. REMUNERATION OF EMPLOYEES

25. 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
1. Benefits of centralization and decentralization.
2. Fast decision at operational level and strict control by the top level
Negative effects
1. Complete centralization will results in delay in decision.
2. Complete decentralization will results in misuse of authority.

26. 8. CENTRALISATION AND DISCENTRALISATION

27. 9. 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
1. Systematic follow of information.
2. No communication gap in the organization
Negative effects
1. There may be communication gap.
2. No clarity in authority responsibility relationship.

28. 9. SCALAR CHAIN

29. 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:
1. Social order : it refers to fixed place for everyone and everyone in his/her place.
2. Material order : it refers to a fixed place for everything and everything in place.
Positive effects
1. No wastage of time in search of men or material.
2. Smooth and systematic working of organization.
Negative effects
1. Wastage of time and energy in search of men and material.
2. No able to contact the people at the right time.

30. 10. ORDER

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

32. 11. EQUITY

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

34. 12. STABILITY OF PERSONNEL

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

36. 13. INITIATIVE

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

38. 14. ESPIRIT DE CORPS

39. F.W. TAYLOR

40. SCIENTIFIC PRINCIPLES OF MANAGEMENT
BY F.W. TAYLOR

41. SCIENTIFIC PRINCIPLES OF MANAGEMENT
BY F.W. TAYLOR
1. 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 just 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”.

42. 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”.

43. 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”.

44. 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”.

45. Techniques of scientific management by F.W. Taylor

46. Techniques of scientific management by F.W. Taylor
1. 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.

47. 1. Planning In charge has 4 personnel or workers
a. Instruction card clerk: this foreman is responsible for giving general
instructions necessary to carry on the job in a specified manner.
b. Route clerk: this foreman is responsible to fix up the sequence of steps for
performing mechanical or manual job.
c. 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.
d. Disciplinarian worker: this foreman is responsible for performance of job in
orderly and systematic way.

48. 2. Production in-charge also has 4 personnel or workers namely-
a. Gang boss: he arranges all the machines, tools and other resources required
for performance of the job so that there is no delay.
b. Speed boss: the foreman assures timely completion of job.
c. Repair boss: this boss ensures that machines and tools are kept in working
conditions.
d. 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”.

49. 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.

50. 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.

51. 6. Fatigue study: Fatigue study seeks to determine the its amount and
frequency of intervals in completing of task.

53. 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.

54. Power Booster