Principles of management notes

1. The Evolution of Management Thought
• Scientific management
– Frederick Taylor, Henry Gantt, Frank & Lillian Gilbreth
• Modern operational management theory
– Henry Fayol
• Behavioural sciences
– Hugo Munsterberg, Walter Dill Scott, Max Weber, Vilfredo Pareto, Elton
Mayo & F J Roethilisberger
• Systems theory
– Chester Bernard
• Modern management thought
– Peter F Drucker, W Edwards Deming, Laurence Peter, William Ouchi,
Thomas Peters and Robert Waterman

2. Henri Fayol’s 14 Principles of Management
1. Division of labour
2. Authority
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to Common Good
7. Remuneration
8. Centralization
9. The Hierarchy
10. Order
11. Equity
12. Stability of staff
13. Initiative
14.,Esprit de Corps

5. Principle of division of work: This principle of Fayol states that
as far as possible the work should be divided into different
parts and each individual should be assigned only one part of
the work according to his ability and capability.
Principle of Esprit de corps: Fayol states the need for unity
among employees. Esprit de corps means that unity is
strength.
Principle of Discipline: states that there should be obedience,
proper conduct in relation to others, respect of authority and
complying with the rules and regulations of the organisation.
Principle of initiative: Fayol's principle of initiative
recommends that workers should be encouraged to develop
new ideas and suggestions for the betterment of the
organisation.

6. Should a large sized organisation be totally
centralised or decentralised? Give your
opinion.
 Centralization means concentration of all decision making
functions at the top of the management hierarchy.
 Therefore, Managers have less freedom of action.
 The pattern of authority in which people at all levels of
management are involved in decision-making is called
decentralization.
 A large sized organization cannot be totally Centralized or
Decentralized.
 An organization should move towards decentralization as it
grows in size.
 It allows for better control of tasks at each level of
management.

7. BUSINESS PORTFOLIO MATRIX
HIGH
GROWTH IN MARKET
LOW
High Market Growth
& High Market Share.
STARS
Maintain/raise the
status.
High Market Growth
& Low Market Share.
QUESTION MARK
Analyse:
Invest?
Divest?
Low Market Growth
But High Market Share.
CASHCOWS
Make Money as long as
possible.
Low Market Growth
And Low Market Share.
DOGS
Close operations.
Withdraw.
STRONG MARKET SHARE WEAK