Principles Of Management

The principles of management are not rigid and extremely flexible. The manager has enough discretion to modify the principle of management to be applied according to the demands of the situation. For example, the decision of centralization or decentralization depends upon the situation and the circumstances arising. The individual principles are like individual tools which can be applied on the basis of the circumstances by the manager.

Time study determines the standard time taken to perform a job. The method of time study depends upon the volume and frequency of the task, the cost of time and the cycle time of the operation. There are three objectives of time study:

a. Determine the number of workers.

b. Determine labour cost.

c. Frame a suitable worker incentive scheme.

Cooperation, not individualism is an extension of the second principle. The work must be done with cooperation, mutual understanding and confidence with each other.

The two causes of fatigue that may create hindrance in the employee’s performance are long working hours and uncordial relations with the boss.

The principle of management followed by Wales Limited is stability of personnel. According to Fayol, employee turnover should be minimized to maintain organizational efficiency. The employees should be selected after the rigorous procedure and ones selected they should be kept at their position for a minimum fixed tenure. They should be given a reasonable amount of time to show the result.

Differential piece wage scheme is used by Taylor to differentiate between efficient and inefficient workers. It implies a different rate of wage payment for those who performed above standard and for those who performed below standard.

• The principle of unity of command states that every subordinate must receive orders from one boss.

• This is because if he receives orders from more than one boss it would be difficult for him to clearly understand the task to be executed.

• It would also help to increase accountability to his task.

• It would help to maintain a clear cut system of discipline and order throughout the organisation.

The concept of scientific management was introduced by Winslow Taylor in the USA at the beginning of the 20th century. It was later developed by other researchers as well. Scientific management is concerned with knowing exactly what you want it your men to do and seeing that they do it in the best and the cheapest manner. There are three principles of scientific management which are explained below:

a. Science, Not rule of thumb: According to Taylor, scientific management must be put into practice and not the rule of thumb. Rule of thumb refers to the practice of handling the situation as and when it arises by the manager. It heavily relies on the trial and error system. Taylor had suggested that a thorough study of the different methods of solving a problem must be done and the most appropriate solution should be adopted and followed by all the managers in your organisation. This would help to reduce cost and improve efficiency.

b. Harmony not discord: According to this principle, there must be a healthy relationship between the managers and the workers in an organisation. Both of them are dependent on each other. The worker has to take instructions from the manager and the managers have to get the work done through the workers. The management should take complete care about the needs of the workers and the workers should work with utmost dedication and efficiency. This type of harmonious environment would lead to the achievement of the goals of the organisation.

c. Personal development: If the company wishes to effectively and efficiently achieve its goals, it must be taken into consideration that the overall efficiency of the company depends upon the individual abilities. The employees must be properly trained and developed so that their productivity can be increased.

If an organisation does not provide the right place for physical and human resources in an organisation, the principle of order is violated. It refers to the orderly arrangement of men and material in a fixed place for everyone and everything.

The consequences of it are:

• It would lead to a delay in the decision-making process.

• It will be an obstacle for the activities.

• A lot of time will be wasted in finding the resources.

• Wastage of time.

• Delay in contacting the people.

The principles of management are extremely important in directing the organisation towards taking the best course of action and the most appropriate decision. The following points highlight its significance:

a. The principles of management are based upon various theories and principles that have been revised over time. It is more suitable for a manager to make decisions based on these principles of management to avoid any form of trial and error. This would help to reduce a lot of time as well as cost.

b. The principles of management help in the optimum utilization of the available resources. It helps to predict the exact cause and effect relationship. The wastage of resources using the trial and error method can be avoided easily.

c. The principles of management are based upon logic and not blind faith. The decisions are based upon an objective assessment of the situation.

d. These principles form the basis of the management study in the educational institution. It provides the framework for the development of Management as a subject. Various professional courses teach these principles as a part of the curriculum

Scalar chain refers to the line of authority for the chain of superior ranking from the highest to the lowest. Fayol had insisted upon using this chain in every organisation. Every information must pass through every level without skipping any one of them.

In the above figure, A is the head of the organisation with two separate departments. One of the departments consist of B, C, and D, and the other department consists of E, F and G. B and EE are at the same level, followed by C and F, and D and G. If D wanted to contact with G, the line of communication will be D-C-B-A-E-F-G. If this chain of communication is broken, it will lead to a communication gap in the organization.

At times it may cause a lot of delay in passing out of information, which will eventually led to delay in decision making. To resolve this issue, Fayol has suggested a gang plank, which is a short cut chain, in which D can directly contact G.

Mr. Rathore had violated the principle of subordination of individual interest over the general interest.He preferred his own interests by giving the supply order to his family member at a higher price but not to the supplier who was providing the same at a lower cost. This might have led to his achieving personal goal but not the organization’s goal.

The concept of scientific management was introduced by Winslow Taylor in the USA at the beginning of the 20th century. It was later developed by other researchers as well. Scientific management is concerned with knowing exactly what you want it your men to do and seeing that they do it in the best and the cheapest manner. There are three principles of scientific management which are explained below:

a. Science, Not rule of thumb: According to Taylor, scientific management must be put into practice and not the rule of thumb. Rule of thumb refers to the practice of handling the situation as and when it arises by the manager. It heavily relies on the trial and error system. Taylor had suggested that a thorough study of the different methods of solving a problem must be done and the most appropriate solution should be adopted and followed by all the managers in your organisation. This would help to reduce cost and improve efficiency.

b. Harmony not discord: According to this principle, there must be a healthy relationship between the managers and the workers in an organisation. Both of them are dependent on each other. The worker has to take instructions from the manager and the managers have to get the work done through the workers. The management should take complete care about the needs of the workers and the workers should work with utmost dedication and efficiency. This type of harmonious environment would lead to the achievement of the goals of the organisation.

c. Personal development: If the company wishes to effectively and efficiently achieve its goals, it must be taken into consideration that the overall efficiency of the company depends upon the individual abilities. The employees must be properly trained and developed so that their productivity can be increased.

d. Cooperation, not individualism: It is an extension of the second principle. The work must be done with cooperation, mutual understanding and confidence with each other.

Unity of direction - Unity of direction means one unit one plan. All the units in an organisation must be moving forward in the same direction. This would help to achieve the common goal as well as coordination. Each group should have its head and the working of two groups should not be overlapped.

Equity- The concept of equity focuses on a kind, fair and just treatment of employees. It would improve the loyalty of the employees. The equity means the equal treatment of all without any discrimination based on gender, religion, caste or nationality. The promotions must only be based on the work done.

Esprit de corps-This principle encourages building harmony and Team Spirit among the employees. The concept of I must be replaced with we. It would bring cooperation and coordination in the organisation. Mutual trust and confidence would be developed in one another. Teamwork is extremely important in large organizations which have a large workforce.

Order- Order basically means a place for everything and everyone in an organisation. The right arrangement of men and material will help to carry out the task smoothly. For example, if the files in an organisation are kept in an orderly manner it would help to reduce the Chaos and the time required to find each and every file.

Centralization and decentralization-Centralization refer to the centration of authority in the hands of a few. The decision making power is concentrated only to the head of the organisation. Decentralization refers to the dispersal of authority among more number of people. Fall has suggested a balanced concept of both.

Initiative-The workers should be self-motivated and should be encouraged to develop and carry out their plans for more improvement within the organisation. The higher authorities must take regular suggestions from them. Initiatives must be encouraged but they must be within the line of the rules of the organisation.

Functional foremanship is a technique given by Taylor to free the workers from the burden of planning and concentrating on production. He suggested the division of the factory into two parts of the planning department and production department. There must be a functional expert leading the department who would supervise and give orders to the workers. Every person would be specialized in one aspect of the work.

The planning department would consist of the following people:

a. Instructional card clerk who would give instructions to the worker.

b. Route clerk to show the route of production.

c. Time and cost club to take care of the time and cost.

d. Discipline area would ensure that discipline is being maintained

The production department would consist of the following people:

a. Speed boss to ensure timely completion of the task.

b. Gang Boss to keep the Machines ready for the workers.

c. Repair Boss to ensure the proper working on the Machines

d. Inspector to control the quality of the work done

Mental revolution: Mental Revolution refers to the understanding that both the workers and management are important for one another. Only if they work together in harmony and peace, the goals of the organisation can be achieved smoothly.

It has three major objectives:

a. Developing a sense of cooperation between the workers and the management.

b. Changing the mental attitude of the worker and management towards each other.

c. Eliminating any feeling of suspicion from the minds of both the worker and the management and adopt a systematic method of Thinking.

a. Time Study-Time study determines the standard time taken to perform a job. The method of time study depends upon the volume and frequency of the task, the cost of time and the cycle time of the operation. There are three objectives of time study:

a. Determine the number of workers.

b. Determine labour cost.

c. Frame a suitable worker incentive scheme.

To conduct a study, Taylor has suggested to observe a worker while doing his job with a stopwatch in hand and note down the time taken to complete the work. This time should be considered as the average time required for the performance of the job. Keeping this time in mind, the target for workers should be fixed and those workers who were able to achieve these targets are called average workers. If a worker can achieve the target before the standard time he is called an efficient worker. If he is not able to achieve the target before the standard time he is called and inefficient work.

b. Motion Study-Motion study refers to the movement such as lifting, changing position, sitting, etc. There are three types of motions- productive, incidental and productive.

To conduct a motion study, Taylor has suggested to observe an average worker when he is performing a job and note all his movements. All the unwanted motions should be eliminated so that the work can be completed in lesser time. All movements must be classified as productive, unproductive and incidental. All the unproductive movement must be eliminated.

c. Fatigue Study-The study determines the amount and frequency of rest intervals that a person takes to complete a task. A person would be tired both physically and mentally if it does not take a rest while working. This would allow the workers to work again with the regained stamina and the same efficiency. This study identifies the interval that is required while completing a task.

d. Method Study-Method study aims at determining the best method to complete a task. All the different managers can employ different methods for the same but there is one method which is the most optimum of all. The main objective is to minimize the cost of production and maximize the satisfaction of the consumer. The Assembly line of Ford motor is an example of the same.

e. Simplification and standardization of work- Standardization refers to the process of setting a standard for every business activity. It establishes the standards of excellence and quality in material and Standards of performance of man and machine.

Simplification refers to the elimination of unnecessary diversity of products. It helps to utilize the resources in the most optimum whey and remove unnecessary costs.

The differences between the contributions of Taylor and Fayol are:

The relevance of Taylor and Fayol’s contribution in the contemporary business environment are:

a. Both Fayol and Taylor focused on maximising the efficiency.

b. Both suggested division of work and specialization.

c. The principles of both of them are used as a basis for research in the field of management studies.

d. Both insisted on cooperation among the managers and workers.

e. Both gave more importance to organizational interest over the individual’s interest.

a. The principles of management that will be violated by the company are unity of command, unity of direction,order, initiative, discipline, remuneration, division of work and subordination of individual interest to general interest.

b. The principles are explained below:

i- Unity of command - The principle of unity of command states that every subordinate must receive orders from one one boss. This is because if he receives orders from more than one boss it would be difficult for him to clearly understand the task to be executed. It would also help to increase accountability to his task. It would help to maintain a clear cut system of discipline and order throughout the organisation.

ii- Unity of direction- All the units in an organisation must be moving forward on the same path to achieve the goals of the organisation. Each department must be having the same objective that would help them to achieve the overall goals of the organisation.

iii- Order- Employees and the materials must be used in suitable places at the appropriate time to increase efficiency.

iv - Initiative-The employees must be motivated and dedicated to their job. They must be given enough freedom in the organisation to work with creativity and innovation. Timely suggestions must also be taken from them.

v- Discipline- all the employees of the organisation must follow the ethical code of conduct, prescribed guidelines, rules, and regulations, etc to maintain discipline in the organisation.

vi - Remuneration- The workers should be able to receive fair wages for their work done at regular intervals.

vii- Division of work-The work must be divided among the employees as per their specialization in different fields.

viii- The subordination of individual interest to the general interest-The interest of the individual employees should be linked with the goals of the organisation.

c. The following steps should the company management take in relation to the above principles to restore the company to its past glory:

i- There should be only one boss to give command.

ii-All the functions must be performed under one head one plan.

iii-Work must be divided into small tasks and should be divided to the workers on the absi of their specialisation.

iv-The workers must receive a fair compensation timely.

v- The workers must be self motivated and timely suggestions must be taken from them as well.

There must a formal code of conduct to guide the actions of the employees.

vi- The interest of the employee must be linked with the goals of the organization.

vii- A formal system must be maintained.

a. Although scientific management is an extremely good condition it would not be able to give effective results due to the following reasons:

a. The principle of the initiative will not help if functional foremanship is adopted.

b. A lot of stress would be generated in the organisation.

c. The adoption of professionals would lead to an increase in cost.

d. Market research will be of little help due to the increased competition.

e. With the introduction of the differential piece wage system, only the efficient workers would gain. The others would face a lot of instability if the target is not met.

b. The company should take the following precautions to implement the changes as they would not be readily accepted by everyone:

a. The company must appoint trained workers only in a few areas.

b. Extreme care must be undertaken while production planning.

c. Functional foremanship can be introduced but the workers must be consulted for the suggestion.

d. Optimum utilisation of time and money must be promoted.

e. Standardization must be implemented for material and machine.

f. Instead of introducing the differential wage system, financial incentives must be given to the workers who get more work done.