PRINCIPLES OF

MANAGEMENT

PREPARED BY – CHHAYA N SINGH

CONCEPT OF PRINCIPLES OF MANAGEMENT

 Principles of Management are broad and

general guidelines for decision making and
behavior of managers.
 Principles of management are guidelines to action
while functions of management are actions to be
taken while practicing management.
 Principles of management helps managers to take
decisions while performing these functions.
 For eg – use of “principle of discipline” leads to
smooth and systematic functioning of the business
and helps in improving efficiency.
DERIVATION OF PRINCIPLES OF MANAGEMENT

o OBSERVATION – management principles are

derived/formulated on the basis of observation and
analysis of situations which managers face in actual
practice.
Eg – “principle of division of work” says that if work is
divided between people based on their knowledge and
experience, it will lead to efficiency. This principle was
formulated when it was observed that dividing work
results in improved performance.

o EXPERIMENTATION – Under this method, the

management researchers may conduct experiments to
derive management principles and to test their validity.
Eg – suggestions are invited from employees and out of
suggestions best one is applied and the organisation is
benefited. This led to formation of ‘Principle of
Initiative’.
PRINCIPLES OF MANAGEMENT
V/S
PRINCIPLES OF PURE SCIENCE

o Principles of management are quite

flexible whereas principles of pure
science are rigid.
o Principles of management deal with
human behaviour and cannot be tested
in laboratories like principles of pure
science.
PRINCIPLES OF MANAGEMENT
V/S
TECHNIQUES OF MANGEMENT

 Techniques are procedures or

methods, which involve a series of
steps to be taken to achieve desired
goals.
 Principles of guidelines to take
decisions or actions while practising
techiques.
PRINCIPLES OF MANGEMENT
V/S
VALUES
 Values are something which are acceptable or
desirable. They have moral connotations.
Principles are basic truths or guidelines for
behavior.
 Values are general rules for behavior of
individuals in society formed through common
practice. Principles of management are formed
after research in work situations, which are
technical in nature.
However, while practicing principles of
management values cannot be neglected since
business have to fulfill social and ethical
responsibilities towards society.
NATURE OF PRINCIPLES OF MANAGEMENT
(UGF FMCC)

o Universal Applicability - principles are

universal in nature. They are applicable to all
types of organisation- business or non-
business, small and large, at all levels and at
all times. But the extent of their application
depends on nature and size of organisation.
o General Guidelines – they only act as a
guideline for decision making and action. But
they do not provide readymade solutions to
all managerial problems. It is because real
business situations are complex and dynamic
due to many factors. But these principles are
still important.
o Formed by Practice and Experimentation
– principles are formed only after deep
and thorough research work. They are not
developed automatically or based on
personal feeling. They are derived on the
basis of observation and analysis of
events which managers face in actual
practice and also after conducting
experimental studies.
o Flexible – principles are flexible in nature,
they can be modified by the managers
according to given situations. These
principles are not rigid statements.
o Mainly Behavioural – principles are behavioural in nature since
they are devised to influence human behaviour. These principles
enable in better understanding of the relationship between
human and physical resources to achieve goal.
But principles of management may not bring the desired results
due to complex and unpredictable nature of human behaviour. Eg-
division of work is supposed to make task easier but repeated
tasks may make workers feel bored.
o Cause and Effect Relationships – principles establish a relationship
between cause and effect so that they can be used in similar
situations in large number of cases. When principle is applied in a
particular situation, it is called ‘cause’ and the result of the
application of principle is called ‘effect’. Thus, principles tells
managers if principle is applied in a situation and what may be its
likely effect.
As per ‘Principle of Division of Work’, work is divided among
workers as per their skills an capability which increases
specialisation and efficiency. So division of work is cause and
efficiency is the effect.
o Contingent (Careful Application) –
management principles are not absolute
or static in nature. Their use is
contingent depending upon the
prevailing situation at a particular point
of time. They must be applied very
carefully depending upon the
organisational requirements and
situational demands.
Eg- ‘Principle of Fair Remuneration’, where
fair and just wages should be given to the
employees. But it depends upon multiple
factors such as paying capacity of the
employer, contribution of employees,
prevailing wage rate etc.
IDENTIFY NATURE OF PRINCIPLE (PRACTICE)
 They do not provide readymade solutions as business environment is
dynamic.
GENERAL GUIDELINES
 Their applicability depends upon the prevailing situation at a
particular point of time.
CONTINGENT
 They can be applied in all types of organisations.
UNIVERSAL APPLICABILITY
 They tell if a particular principle was applied in a particular situation,
what would be its likely effect.
CAUSE AND EFFECT RELATIONSHIP
 They are developed after a thorough research work on the basis of
experiences of managers.
FORMED BY PRACTICE AND EXPERIMENTATION
 The principles of management aim at influencing behavior of human
beings.
MAINLY BEHAVIOURAL
 The principles of management are not rigid prescriptions, which have
to be followed absolutely.
FLEXIBLE
IMPORTANCE OF PRINCIPLES OF MANAGEMENT
 Providing managers with useful insight into reality – principles
help in increasing managerial efficiency by adding to their
knowledge and ability to understand the various situations.
They guide managers to take right decisions, at the right time
by improving their knowledge, ability and understanding of
managerial situations. Managers are able to learn from their
past mistakes and to save time by solving recurring problems
quickly.
 Optimum utilisation of resources and Effective Administration
– management principles aim at optimum utilisation of
resources, provide maximum benefit with minimum cost.
Principles of Management helps to formulate various
administrative plans and policies. They help to make
administration better by discouraging personal prejudices and
biases. They insist on objectivity and scientific decisions.
 Scientific Decisions –Management principles helps in
thoughtful decision making. They emphasize on logic rather
than blind faith. principles of management enable the
managers to approach various problems systematically and
scientifically, leading to timely implementation of right
decisions.
 Meeting changing environment requirements –
principles helps the managers in meeting changing
environmental requirements because they can be
modified since these principles are flexible.
Managers modify principles when situation
demands.
 Fulfilling Social Responsibility – principles not only
act as a guideline for accomplishing goals but also
guides managers in performing social
responsibilities.
 Management Training, Education and Research –
these principles of management are used as a basis
for management training, education and research.
Entrance to management institutes is preceded by
management aptitude tests. These tests could not
have been prepared without proper understanding
of management principles.
Professional Courses like MBA, BBA teach these
principles as a part of their curriculum.
IDENTIFY THE SIGNIFICANCE OF PRINCIPLES OF MANAGEMENT
o Management principles helps in thoughtful decision making. They
emphasize on logic rather than blind faith.
SCIENTIFIC DECISIONS
o Management principles guide managers to take right decision in real
world situations.
PROVIDING MANAGERS WITH USEFUL INSIGHT INTO REALITY
o Principles of Management not only help in achieving organisational
goals but also guide managers in fulfilling their social obligations.
FULFILLING SOCIAL RESPONSIBILITY
o Principles equip the managers to forsee the cause and effect
relationships of their decisions and actions. As a result the wastages
associated with trial and error approach can be overcome.
OPTIMUM UTILISATION OF RESOURCES
o Professional courses BBA also teach these principles as a part of
their curriculum.
MANAGEMENT TRAINING, EDUCATION AND RESEARCH
o Principles of management can be modified according to the changes
taking place in the environment.
MEETING THE CHANGING ENVIRONMENTAL REQUIRMENTS
 HENRI FAYOL
• Life time – 1841 – 1925
• Henri Fayol was born in 1841 in France.
• He completed his graduation in Mining
Engineering.
• At the age of 19, he started working as an
engineer in a mining company.
• In 1888, he became the Managing Director of the
company. At the time the company was nearly
bankrupt. His managerial excellence was
reflected by the fact that he not only save a large
coal and steel company from bankrupt but turned
the losing company into flourishing organisation.
• After his retirement in 1916 he devoted himself
for writing principles and practice of
management.
 HENRI FAYOL’S CONTRIBUTION
o He classified industrial activities into Technical,
Commercial, Financial, Security, Accounting
Management and Managerial.
o He was the first to define the four functions of
management – Planning, Organsing, Directing and
Controlling ; although his version was slightly
different.
o He laid down 14 principles of management in his
original classic book known as “Administration
Industrielle at Generale” was written in French
and published in 1916, which was translated in
English in 1929 under the heading, General and
Industrial Management.
For his contribution Henri Fayol is called “FATHER OF
GENERAL MANAGEMENT”.
 PRINCIPLES OF MANAGEMENT DEVELOPED BY HENRI FAYOL
1. DIVISION OF WORK AND SPECIALISATION
 According to this principle, the entire work should
be divided into different tasks and instead of
assigning the entire to one person, one task or
work should be assigned to individuals according
to their competence, qualification and experience.
 When a person is performing a part of the whole
job repeatedly, he will become an expert in doing
that and his efficiency level will increase. Thus,
division leads to specialisation.
 This principle also helps to avoid waste of time
caused by change from one work to another. It is
because of this principle we have separate
Fig: DIVISION OF WORK departments for production, marketing, finance,
human resource etc in an organisation.
 Eg – Tommy Hilfiger, a famous brand name divides
its work among different groups. One group is
responsible for making collars, others are
responsible for stitching buttons, yet another is
engaged in packing shirts and so on.
2. AUTHORITY AND RESPONSIBILITY

o Authority is the right of superior to give orders to his

subordinates and obtain obedience.
o Responsibility means obligation to carry out an assigned job
on time.
o There are two types of authority – official authority and
personal authority. Official authority means authority to
command and Personal authority means authority of the
individual manager.
o As per Henri Fayol this principle means “authority is the right
to give orders and obtain obedience and responsibility is the
corollary of authority”.
o There should be parity or balance between authority and
responsibility. It means they should go hand in hand. Like
granting authority without matching responsibility leads to
irresponsible use of authority whereas assigning responsibility
without providing necessary authority will make the
subordinates ineffective, he will not be able to discharge his
duties properly.
o Eg – if the worker is given responsibility to produce 100 units
per day, then he must be given authority to achieve this
target. If he is not given required authority to draw tools and
material from the Store Department, then he cannot be
blamed for not achieving the target.
3. DISCIPLINE

o Discipline is essential for smooth

running of the organisation. It is
required not only on the part of
employees but also on the part of
managers.
o According to Fayol, discipline requires
good superiors at all levels, clear and
fair agreements and judicious
application of penalties.
o Eg – if the company has entered into
an agreement with employees about
their wages for four years then the
company should honour it. Similarly
the employees should also honour
the commitments made by them.
4. UNITY OF COMMAND

 This principle states that a subordinate should

receive orders/instructions from only one
superior at a time and that subordinate should
be accountable only to that superior. Dual
subordination should be avoided.
 If a subordinate receives orders from more than
one superior at a time, then he will get utterly
confused and will not be able to decide that
whose orders must be carried out first.
 Henri Fayol observed that if this principle is
violated, then ‘is undermined, discipline is in
jeopardy, order is disturbed and stability
threatened’. This principle resembles military
organisation.
 Eg – if an employee of production department is
asked to go slow in production to maintain
quality standard by the production head and
sales incharge instructs the employee to fasten
the production to meet the pending orders. In
this case employee will get confused as to whose
instructions he should follow.
5. UNITY OF DIRECTION
o All the units of an organisation should be
moving towards the same objectives
through coordinated and focussed efforts.
o Unity of direction states that there should
be ‘ONE HEAD AND ONE PLAN’ for a
group of activities having the same
objective.
o The objective of this principle is to avoid
duplication of efforts and wastage of
resources.
o Eg – if a company is manufactuing
motorcycles as well as cars, then it should
have two separate divisions. Each division
should have its own incharge, plans and
resources. The working of the two
divisions should not overlap on any
account.
DIFFERENCE BETWEEN UNITY OF COMMAND AND UNITY OF DIRECTION
BASIS UNITY OF COMMAND UNITY OF DIRECTION

Meaning It means that an employee It means that there

should receive orders from should be ‘ONE HEAD
one and should also be AND ONE PLAN’ for a
accountable to one superior group of activities
only. having the same
objective.
Aim It prevents dual subordination. It avoids duplication of
efforts and wastage of
resources.
Necessity/ It is necessary to fix It facilitates
Significance responsibility of each coordination between
subordinate. activities and
achievement of group
goals.
Implications It affects an individual It affects the entire
employee. organisation.
6. SUBORDINATION OF INDIVIDUAL INTEREST TO
GENERAL INTEREST
 It means that the interest of the organisation must be
given priority over the interest of the individuals or
employees.
 This principle calls for reconciliation of individual
interest with organisational goal.
 If the objectives of employees are in the same
direction as of the organisation then there is no
problem but in case of conflict between individual and
organisational goals then it is the duty of the
management to reconcile them and if it is not possible
then general interest must be given priority.
 Eg – a purchase manager Balram has to purchase 150
tonnes of raw material. His son Kunal is a supplier in
the market. Balram purchases raw material from Kunal
at higher rate than the market rate. This will profit
Balram, purchase manager personally but results in
heavy loss of the company. This situation violates
principle of Subordination of Individual Interest to
General Interest.
7. REMUNERATION OF EMPLOYEES
 This principle states that the overall pay and
compensation should be fair to both
employees and the organisation.
 The employees should be paid fair wages,
which should given them atleast a
reasonable standard of living.
 It should also be within the paying capacity
of the company.
 Remuneration should be just and equitable.
 Eg – if in a particular year company has
earned good profit, then it should not be
distributed only amongst shareholders
rather some part of the profit must be given
to the employees in the form of bonus. This
will encourage and motivate them to
perform the best of their capacity and
increase the profit of the company.
8. CENTRALISATION AND DECENTRALISATION
 Centralisation means the concentration of
authority at the top management.
Decentralisation means sharing of authority at all
levels of management.
 Fayol suggested that an organisation should strive
to achieve proper balance between centralisation
and decentralisation. He feels that the top
management should keep the authority of taking
important decision in their own hand whereas
the operational authority should be given to
middle and lower levels management.
 Henri Fayol states that , “Everything which
increases the importance of subordinates role is
decentralisation, everything which goes to reduce
it is centralisation”.
 Small organisation have greater centralisation
due to small range of activities and vice versa.
 The Panchayat System in our country is a good
example of decentralisation at the national level.
 9. SCALAR CHAIN
 It refers to the formal lines of authority or chain of
superiors from highest to lowest rank.
 According to Henri Fayol, “Organisation should have
a chain of authority and communication that runs
from top to bottom and should be followed by
managers and the subordinates.
 All managers are linked together in their positions
from the highest to lowest level through scalar
chain.
 But communication through the scalar chain leads
to delays. To avoid delays, distortion and facilitate
FIG. SCALAR CHAIN quick communication, Fayol suggested the idea of
‘Gang Plank’ as shown by the dotted line from F to
P. Gang Plank enables communication directly in
In the given figure there is one case of emergency.
head ‘A’ who has two ladders of
authority under him. One ladder
 Gang Plank is a shorter route in scalar chain which
consists of A to G and the other
permits two persons at the same level to
communicate directly with each other. However,
one consists of A to Q. If F has to subordinates must inform their respective superiors
communicate with P, then the about the communication exchanged between
information will first flow from F them.
to A through E, D, C, and B, and
 Gang Plank is the exception of the principle of
then downward from A to P
Scalar Chan. It shows that Fayol’s principles of
through L.M,N and O according management are not rigid
to the principle of Scalar Chain.
 10. ORDER
• This principle states that an in an organisation there
should be place for everything and everyone in the
organisation at the right place.
• Henri Fayol insists that people and materials should
be in suitable places at appropriate times for
maximum efficiency.
• This principle is concerned with proper arrangement
of things and placement of people.
• There are two types of Order – MATERIAL ORDER and
SOCIAL ORDER. Arrangement of things is called
Fig: PRINCIPLE OF ORDER MATERIAL ORDER whereas placement of people is
called SOCIAL ORDER.
• Eg – the head of the marketing department may be
alloted an office room, the typist a particular table
etc. These persons should remain in their allotted
places during working hours so that they can be
easily contacted whenever necessary.
• Eg – if a worker needs tools then he must know the
place where he can get his tools.
11. EQUITY
 The principle suggests that managers should
be fair and impartial while dealing with their
subordinates. No worker should be favoured
or unduly punished. For eg – workers
performing similar jobs should be paid same
wages.
 According to Fayol, good sense and
experience are needed to ensure fairness to
all employees, who should be treated as
fairly as possible. It emphasises justice in the
behaviour of managers towards workers.
 Eg – if two employees are latecomers, then
same treatment should be given to both.
 Eg – in a MNC, people of different nations
work together in an environment which is
free from all kinds of discrimination.
 Eg – the rules of granting medical leave to an
employee should be same irrespective of
their position, gender, age etc.
12. STABILITY OF TENURE OF PERSONNEL
o It states that management should remove the
feeling of job insecurity from the minds of
employees because if job of a person is
insecure, he will be on lookout for job
elsewhere and cannot contribute his
maximum.
o The period of service in a position should be
fixed and employees should not be moved or
rotated from their positions very frequently.
o Stability of tenure is essential to enable
employees to become familiar with jobs.
o Fayol also suggested that employee turnover
should be minimised to maintain organisational
efficiency.
o This principle is important for following
reasons:
 Insecurity and instability among employees tends
them to leave the organisation
 Recruitment, selection, training costs of new
employees will be high.
13. INITIATIVE
• This principle states that employees at all levels
should be given an opportunity to take initiative in
work related matters.
• Henri Fayol, “workers should be encouraged to
develop and carry out their plans for improvement”.
• It means taking the first step with self-motivation.
• A good company has an employee suggestion
system whereby initiative/suggestions which result
in substantial cost/time reduction are rewarded.
• However, it does not mean freedom to do whatever
people like.
• Eg – a worker suggests his production manager to
implement a new time saving technique of
production. But his manager does not pay attention
and warned him not to come with any suggestions.
In such a case this principle is violated.
14. ESPIRIT DE CORPS (unity is strength)
o It means team spirit or harmony in group
effort and mutual understanding among
employees.
o A manager should replace ‘I’ with ‘We’.
o When there is team spirit and mutual
understanding, it inspires people to work
with full dedication and improve the quality
of work.
o Eg – if a production manager assigned target
of producing 200 to a group of 10 members,
who divide among themselves to produce 20
units each. As per this principle, they should
not only concentrate on achieving individual
targets but also on achieving group targets. If
any member of the group falls sick, then
other members should divide the work and
try to accomplish group target.
 PRINCIPLES BY HENRI FAYOL
(DAD U C USSR- O I SEE)
• Division of work and specialisation
• Authority and responsibility
• Discipline
• Unity of command
• Centralisation and decentralisation
• Unity of direction
• Subordination of individual interest to general interest
• Scalar chain
• Remuneration of employees
• Order
• Initiative
• Stability of tenure of personnel
• Equity
• Espirit de corps
IDENTIFY THE PRINCIPLE
• When a subordinate receives order from two seniors.
UNITY OF COMMAND
• When the tools and raw materials are not found at the right place in the
company.
ORDER
• When the employee is given responsibility to achieve the target of 200
units per day with no authority to access over raw materials.
AUTHORITY AND RESONSIBLITY
• When manager grants one month medical leave to a superior with pay
and only week medical leave to accountant.
EQUITY
• When a manager awards contract for supply of raw material to a
particular party, which happens to be owned by his relative ignoring
other parties, who can supply the same at cheaper rate.
SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST
• When a subordinate habitually contacts higher authorities I the
company by passing his/her immediate superior.
SCALAR CHAIN
• This principle requires application of penalties by the management.
DISCIPLINE
• It points out the danger and costs of unnecessary labour turnover.
STABILITY OF TENURE OF PERSONNEL
• Manager should replace I with We.
ESPIRIT DE CORPS
• Workers should be encouraged to develop and carry out plans for
improvement.
INITIATIVE
• One head for one plan.
UNITY OF DIRECTION
• Panchayat in our country have been given powers to decide and
spend funds granted to them by the government for the welfare of
villages.
DECENTRALISAITON
• A and B are working as sales manager in a company. They both have
similar responsibilities but A gets higher salary than B.
EQUITY
• This principle promotes specialisation.
DIVISION OF WORK
 FREDERICK WINSLOW TAYLOR
(F.W.TAYLOR)
• Lifetime – 1856 – 1915
• Began his career as a machinist in Midvale Steel
Company in Philadelphia, USA and rose to the
position of chief engineer.
• Taylor was primarily concerned with problmes of
increasing the efficiency of workers, eliminate
wastages in factories and maximum utilisation of
resources.
• Taylor conducted a series of experiments with his
ideas and made significant contribution in the theory
of management.
• He was the first management pioneer who insisted
on the introduction of scientific methods of
management.
• He developed a theory of management, which is
called Scientific Management.
• He is called the FATHER OF SCIENTIFIC
MANAGEMENT.
MEANING OF SCIENTIFIC MANAGEMENT

It means the application of science to

management. It means conducting
business activities according to
standardised tools, methods and
trained personnel in order to increase
the output, improve its quality and
reduce the costs and wastes.
It emphasis on replacement of rule of
thumb by science and adopting
scientific methods in decision making
to resolve management problems.
PRINCIPLES OF SCIENTIFIC MANAGEMENT
1. Science, not Rule of Thumb
• According to this principle, Taylor stressed that each
job performed in the organisation should be based
on scientific enquiry and not an intuition,
experience and hit and miss methods.
• Rule of thumb means decisions taken by manager
on the basis of subjectivity, prejudice and whims
whereas scientific decisions are based on cause and
effect.
• The work assigned to any employee should be
observed and analysed with respect to each
element or part and the time involve in it.
• The objective of such observation and analysis is to
determine the ‘one best way’ of performing the
work and to determine the standard output.
• Eg – in case of rule of thumb the standard time
required to do a particular job is fixed by the
manager on the basis of his own past experience.
Taylor emphasised that standard time for job should
be decided by analysing the work scientifically and
then target should be fixed.
 2. HARMONY, NOT DISCORD (CONFLICT)
• This principle suggests that there should be complete harmony
and proper understanding between the management and
workers and they should work together for achieving
organisational goals.
• Taylor insisted that there should be complete harmony between
the management an workers. If there is any conflict between
them it is not beneficial for either of them.
• Both should realise the importance of each other and feel that
they are part of same family.
• Taylor recommended complete ‘Mental Revolution’ on the part
of both management and workers. It means that there should be
total change in the outlook and attitude of management and
workers towards each other from competition to cooperation.
SHARING OF GAINS BETWEEN
• Management should adopt an enlightened attitude and share
MANAGEMENT AND WORKERS
the gains of the company with workers and workers should work
LEADING TO COMPLETE
with utmost loyalty and discipline.
HARMONY • It states that prosperity for the employer cannot exist for a long
time unless it is accompanied by prosperity for the employees
Japanese work culture is a classic and vice versa
example of such a situation.. • Eg – the main objective of workers is to earn more whereas the
There is complete openness objective of management is to produce maximum. Instead of
between the management and discord for each other’s objective workers can earn more by
workers. If at all workers go to
strike they wear a black badge
producing more which will help in maximising production also.
but work more than normal
working hours to gain the
sympathy of the management
 3. COOPERATION, NOT INDIVIDUALISM
• This principle is an extension of principle of ‘Harmony, not Discord’.
• This principle states that there should be complete cooperation
between management and workers.
• Instead of individualism or competition, close cooperation between
management and workers is necessary to ensure that workers work is
done in accordance with the plans and standards of performance.
• To achieve cooperation, management should welcome suggestions
from employees and reward them if their suggestions prove to be
beneficial for the organisation.
• Management should take workers into confidence while taken
important decisions. At the same time workers should resist from
going on strike and making unnecessary demands.
• There should also be equal division of work and responsibility between
workers and management.
• Management should work almost side by side with the workers
helping, encouraging and smoothing the way for them. This is called
paternalistic style of management whereby the employer takes care
of the needs of the employees.
• Eg – while assigning job to workers if management asks them about
their interest and then work is assigned as per their interest, then the
workers will perform it more efficiently.

WELCOMING SUGGESTIONS
FROM EMPLOYEES FOLLOWS
COOPERATION NOT,
INDIVIDUALISM
4. DEVELOPMENT OF EACH AND EVERY PERSON
TO HIS/HER GREATEST EFFICIENCY AND
PROSPERITY
• Taylor insisted that due care should be taken
while selecting the employees and after
selection, they must be given jobs according
to their qualifications, physical, mental and
intellectual capabilities.
• The selected employees must be sent for
training from time to time to improve their
skills and work performance.
• Eg – most of the companies are sending their
employees to attend seminars, workshops,
training sessions etc of various management
experts for their mental growth.
TECHNIQUES OF SCIENTIFIC MANAGEMENT
1. FUNCTIONAL FOREMANSHIP
• Taylor suggested that specialisation should be introduced at
the supervisory level. He recommended Functional
Foremanship for this purpose. It states that the task of
supervision is divided into several specialised functions and
each function is entrusted to a specialist foreman.
• The technique of functional foremanship is an extension of
the principle of division of work or specialisation but it
violates the principle of unity of command.
• In this technique, Taylor advocated separation of planning
and execution function so that the foreman under ‘planning
incharge’ may concentrate on planning the job of workers, and
the foremen under ‘production incharge’ may involve
themselves in execution of job.
• Taylor proposed eight specialist foremen, four under each
department (planning department and production
department).
 FACTORY
MANAGER

PLANNING INCHARGE PRODUCTION

INCHARGE

1. Instruction Card Clerk 1. Speed Boss

2. Route clerk 2. Gang Boss
3. Time and Cost Clerk 3. Repairs Boss
4. Disciplinarian 4. Inspectors

WORKMAN

FUNCTIONAL FOREMANSHIP
Role of Foreman under Planning Incharge
• Instruction Card Clerk – drafting instructions for
workers
• Route Clerk – specifying the route of production
• Time and Cost Clerk – preparing time and cost sheet
• Disciplinarian – ensuring discipline

Role of Foreman under Production Incharge

• Speed Boss – timely and accurate completion of job
• Gang Boss – keeping machines and tools ready for
operation by workers
• Repairs Boss – ensuring proper working conditions of
machines and tools
• Inspector – checking the quality of work
2. STANDARDISATION AND SIMPLIFICATION OF
WORK
STANDARISATION OF WORK
Standardisation of work refers to the process
of setting standards for every business
activity eg standardisation of process, raw
material, time, product, machinery,
methods and working conditions.
• To reduce a given line or product to fixed
types, sizes and characteristics.
• To establish standards of excellence and
quality in materials.
• To establish standards of performance of
men and machines
• To establish interchange ability of
manufactured parts and products.
SIMPLIFICATION OF WORK
Simplification of work aims at
eliminating unnecessary diversity of
products and product features.
• It results in savings of cost of labour,
machines and tools.
• It implies reduces inventories, fuller
utilisation of equipment and
increasing turnover.

COMPARISON
Thus, Simplification aims at eliminating
superfluous varities, sizes and
dimensions while standardisation
implies devising new varieties
instead of existing ones.
 3. WORK STUDY
it is a systematic, objective and critical examination of all factors
relating to work so as to maximise efficiency.
a) METHOD STUDY
• It refers to finding out one best way of doing a
particular job
• The main objective is to minimise the cost of
production and maximise the quality and satisfaction
of the customer.
• Taylor used this technique in devising the concept of
assembly line.
• The method of production should not be decided by
rule of thumb approach but all the methods should be
applied in the organisation and the method which
brings maximum benefits with minimum cost should
be adopted
• Ford Motors Company used this method very
successfully.
b) MOTION STUDY

• It is the technique used to study the various

movements like lifting, putting objects, sitting and
changing positions etc of workers, while
performing a particular task.
• The objective of motion study is to identify
wasteful or unnecessary motions/movements and
eliminate them to determine the best way of
doing the particular job.
• Taylor used stop watches and various symbols and
colours to identify different motions.
• Eg – if it observed through motion study that
workers has to move frequently for taking tools
from the tool box, then such wasteful movements
can be eliminated by keeping the tool box near
the worker, it will increase the productivity as well
efficiency level of the worker.
c) TIME STUDY
• It determines the standard time taken to perform a well-defined
job. Under time study, the job operation is divided into a series
of elements and time taken in performing each element of task
is recorded with time measuring devices such as stop watch etc.
• The standard time is fixed for the whole task by taking several
readings/observation.
• The objective of time study is to determine the number of
workers to be employed, frame suitable incentive schemes and
determine labour costs.
• The method of time study will depend upon
– the volume and frequency of the task
– The cycle time of the operation
– Time measurement costs
• Eg – on the basis of several observations it is determined that
standard time taken by a worker to make 100 pens is 20
minutes. So in one hour, a worker will make 300 pens. Assuming
that a worker works for 8 hours a shift and after deducting one
hour for rest and lunch it is determined that in 7 hours a worker
will make 2100 pens (300 pens per hour). Thus, this is the fair
day’s work standard for a worker.
d) FATIGUE STUDY
• A person is bound to feel physically and mentally tired if he keeps
on working without rest for a long time. In such cases, he will not
be able to work with full capacity. If he is allowed rest intervals,
he will regain the energy lost in continuous work and start
working with same potential.
• Fatigue study seeks to determine the amount and frequency of
rest intervals required in completing a task.
• Fatigue study is used to find out how long a person can person
perform the standard task without any adverse effect on his
health and efficiency.
• The causes of fatigue (tiredness) are continuous long working
hours, doing unsuitable work, unhealthy relations with
management, bad working conditions like poor lightening,
ventilation etc.
• Eg – in a factory there are three shifts of work, if after one shift
worker gets physically and mentally tired then he can be assigned
first and third shift and given rest interval in second shift. During
one shift also term breaks can be given if it is observed that
within a shift worker become more fresh with small rest interval.
4. DIFFERENTIAL PIECE WAGE SYSTEM
• This concept was introduced by Taylor in order to
attract highly efficient workers.
• It is a method of wage payment in which efficient and
inefficient workers are paid at different rates.
• This technique is the strongest motivator for the
workers to reach standard performance because in this
technique incentive is directly linked with productivity.
• Taylor suggested two wage rates. One is higher piece
wage rate and another is Iower. Higher piece wage rate
for those workers who perform upto or above standard
within standard time and lower piece wage rate for
those workers who produce less than the standard
output.
• The main objective of fixing two rates is to differentiate
efficient and inefficient workers and to suitably reward
the efficient workers.
• Due to different wage rates for efficient and inefficient
workers, it is known as differential piece wage system
 DIFFERENTIAL PIECE WAGE SYSTEM (Example)
The wages of the workers can be calculated using formular :
Wages = Actual Output * Wage Rate
For eg, Kapoor Ltd give 2 rupees per piece if in one day 50 or more units are
produced and 1.50 rupee per unit for less than 50 units.
Standard Ouptut (per worker per day) = 50 units
Worker ‘M’ produces 40 units in a day
He will get = 60 rupees (40*1.50/Lower Output*Lower Rate)
Worker ‘N’ produced 70 units in a day
He will get = 140 ruppes (70*2/Higher Output*Higher Rate)
The gap of 30 unit only will amount to a loss of 80 rupees to ‘M’
According to Taylor, this loss will be the strongest motivator for worker M to
reach standard performance the next time.
WORKER STANDARD ACUTAL OUTPUT WAGE RATE AMOUNT OF
OUTPUT (RUPEES) WAGES
(RUPEES)
M 50 40 1.50 60
N 50 70 2 140
 IDENTIFY THE TECHNIQUE OF MANAGEMENT
• It helps in establishing interchange ability of manufactured parts and
products.
STANDARDISATION OF WORK
• This technique is given by Taylor violates principle by Henri Fayol.
FUNCTIONAL FOREMANSHIP
• It aims at elimination of superfluous varieties, sizes and dimensions of the
products.
SIMPLIFICATION OF WORK
• This technique of Taylor is an extension of the principle by Fayol.
FUNCTIONAL FOREMANSHIP
• It refers to finding out one best way of doing a particular job.
METHOD STUDY
• It seeks to determine the amount and frequency of rest intervals in
completing a task.
FATIGUE STUDY
• Its objective is to identify wasteful movements and eliminate them to
determine best way of doing a particular job.
MOTION STUDY
• In this technique efficient and inefficient workers are paid at different rates.
DIFFERENTIAL PIECE WAGE SYSTEM
BASIS OF DIFFERENCE TAYLOR’S CONTRIBUTION FAYOL’ CONTRIBUTION
Expression Scientific Management General theory of management

Personality He was a Mechanical He was a Mining

Engineer/Scientist. Engineer/Practitioner

Principle and Techniques He introduced the principles of He introduced 14 principles of

scientific management and management.
techniques as well.

Application of the Principles are applicable to specialised These are accepted everywhere
principles situations. and are universal in nature.
Perspective Based on improving the conditions of Based on the functions of the top
the shop level of a factory. level management.

Emphasis and Focus Increasing productivity along with Focus on improving the overall
workers’s efficiency. administration of the organisation

Title Father of Scientific Management Father of General Managment

Basis of Formation Observation and Experimentation Personal Experience

Unity of Command He did not follow this principle and He was a strict follower of the
stressed on minimum eight bosses. principles of unity of command
• Principles of management are NOT
a) Universal b) Flexible
c) Absolute d) Behavioral
ANS: C

• How are principles of management formed

a) In a laboratory b) by experiences of managers
c) by experiences of customers d)by propagation of social scientists
ANS: B

• The principles of management are significant because

a) Increase in efficiency b) Adaptation to changing technology
c) Optimum utilization of resources d) Initiative
ANS:A

• Henri Fayol was a

a) Social scientist b) Mining Engineer
c)Accountant d) Production engineer
ANS: B
• Which statement best describes the ‘division of work’
a) work should be divided into small tasks
b) labour should be divided
c) resources should be divided among jobs
d) it leads to specialisation
ANS: A

• ‘She/he keeps machines, materials, tools, etc ready for

operations by concerned workers’. Whose work is
described by this sentence under functional
foremanship?
a)instruction card clerk b) repair boss
c) gang boss d) route clerk
ANS: C
• Which of the following is NOT a principle of mgt. given
by Taylor?
a) Science, not rule of thumb
b) Functional Foremanship
c) Cooperation, not individualism
d) Harmony not Discord
ANS:B

• Management should find ‘one best way’ to perform a

task. Which technique of scientific management is
defined in this sentence?
a) Time study b) Motion study
c) Fatigue study d) Method study
ANS: D
• Which of the following statements best describes
‘Mental Revolution’ ?
a) it implies change in attitude
b) the management and workers should not play the
game of one upmanship
c) both the management and workers require each
other
d) workers should be paid more wages
ANS: A
•An employee directly contacts the CEO with a complaint
regarding working conditions in the factory. Which
principle is violated?
a) Unity of command b)Unity of Direction
c) Scalar Chain d) Discipline
ANS: C
• Same battery can be used in different mobile
phones of a particular brand. This is an
example of which of the following technique of
management.
a) Standardisation b) Simplification
c) Method study d) Functional
foremanship
ANS: A
• Name the following principle of management :
a) that prevents dual subordination
- Unity of Command
b) that prevents overlapping of working of two divisons
-Unity of Direction

• Which technique is an extension of principle of division

of work and specialisation to the shop floor?
- Functional Foremanship

• Name the four personnel under production incharge.

- Speed boss, gang boss, repairs boss and Inspector
• On which principle of management, Taylor’s
technique of functional foremanship is based?
- Division of Work

• Which principle suggests that the employees are

to be treated with justice and kindness?
- Equity

• “Accurate cause and effect relationships cannot

be established by the principles of
manangement”. Why?
- because principles of mgt. mainly apply to
human behaviour. In real life, situations are not
identical
• Give any one reason why principles of mgt. are
not rigid prescriptions.
- Because they are flexible in nature as they can
be modified by the managers according to the
given situation.

• Name the principle that cannot be applied in the

technique of functional foremanship.
- Unity of Command

• Name the technique which helps in establishing

interchangeability of manufactured parts and
products
- Standardisation of Work
• Name the technique of scientific management which
helps in eliminating unnecessary diversity of products
and thus results in saving cost.
- Simplification of Work

• Why did Fayol introduce Differential Piece Wage

System?
- to differentiate efficient and inefficient workers
and suitably reward the efficient workers

• Name the technique of scientific mgt. which is the

strongest motivator for a worker to reach standard
performance.
- Differential Piece Wage System
• What is the objective of Fatigue Study?
-to determine the amount and frequency of rest
intervals in completing a task

• What is determined by Time Study?

- it determines the standard time taken to
perform a well-defined job.

• Name the technique which separates Planning

and Execution function.
- Functional Foremanship
IDENTIFY THE SCIENTIFIC PRINCIPLE

• This principle demands paternalistic style of

management.
COOPERATION, NOT INDIVIDUALISM
• This principle states that prosperity for the employer
cannot exist for a long time unless it is accompanied by
prosperity for the employees and vice versa.
HARMONY NOT DISCORD
• This principle states that work should be assigned
according to the physical, mental and intellectual
capabilities of the employees.
DEVELOPMENT OF EACH AND EVERY PERSON TO HIS/HER
GREATEST EFFICIENCY AND PROSPERITY
• This principle involves scientific enquiry and
investigation of each task.
SCIENCE, NOT RULE OF THUMB
 CASE STUDY

• The principles of Taylor and Fayol are mutually

complementary. One believed that the mgt. should
share the gains with the others while the others
suggested that employees compensation should
depend upon the earning capacity of the company and
should give them a reasonable standard of living.
Identify and explain the principles of Taylor and
Fayol referred above.

ANS:
Principle of Taylor- Harmony, not Discord
Principle of Fayol- Remuneration of Employees
• . Sanchit an entrepreneur of a famous coffee shop with the
specialty of wide variety of flavors, but somehow the
business wasn’t doing well. He took feedback from the
clients and found that they were not happy with the long
waiting time to process the order. There were unnecessary
obstructions in the business which were to be eliminated.
He fixed a standard time for processing the order. There
were some flavors not in demand and so they decided to
stop sale of such flavors.
Identify and explain the techniques of Scientific
Management used above.
ANS
The techniques highlighted above are:
• Motion study
• Time study
• Simplification of work
• Rajat as a CEO of a firm addressed the employees. He believed that a
good company should have a employee suggestion system and wished
to minimize the employee turnover to maintain efficiency. He ensured
that all agreements were clear, fair and there was judicious application
of penalties. He believed that the lazy personnel would be dealt
sternly and everyone would be equal in the eyes of management. He
also wanted to promote team spirit, unity and harmony among the
employees. He presented that the interests of the organization should
take priority over interests of employees.
a) Identify and explain the principles highlighted above.
ANS
The principles highlighted are:
• Principle of Initiative
• Principle of Stability of Tenure
• Principle of Discipline
• Principle of Equity
• Principle of Espirit De Corps
• Principle of Subordination of Individual Interest to General Interest
• The principles of Taylor and Fayol are mutually
complementary. One believed that mgt. should
not close its ears to constructive suggestions
made by the employees while the other
suggested that a good company should have an
employee suggestion system whereby
suggestions which results in substantial time or
cost reduction should be rewarded.
Identify and explain the principles of Taylor
and Fayol referred .
ANS:
Principle of Fayol- Initiative
Principle of Taylor- Cooperation and not
Individualism
• Vinod who is appointed as a mechanic in the company. He is not allotted a
particular place and everyday he has to carry tools from one place to
another. As a result, workers have to search for vinod in case of any
problem in the machine. Which principle is violated?
ANS: Principle of Order
• Ritesh is working in a shoe manufacturing company. The management
asked him to work overtime so as to produce more in order to meet
increase in the demand in the market. But he was not paid adequate
wages for the extra time and so he never contributed to the maximum.
a) Identify the principle violated

ANS: remuneration to the employees

• Anushka and Deepak, having the same educational qualifications are

working as managers in Pvt Ltd. Anushka belongs to a rural area where
employment opportunities are very less whereas Deepak belongs to a
urban area. Ignoring many other differences they get the same salary
package of 35000 per month.
a) Name and explain the principle followed in the above case

ANS: Principle of Equity

• Nikhil is the production manager and is not in good
terms with the marketing manager. The boss had
tried to sort out the problem but he was
unsuccessful.
The production manager instructed his foremen
to restrict the supply to the marketing manager so
that he is not able to achieve the target.
a) Identify and explain the principle ignored.

ANS: Subordination of individual interest to general

interest.
• What is meant by principles of management ?
- These are statements of fundamental truth which
provide guidelines for managerial action and decision
making.

• Difference between principles of mgt. and mgt values?

- Principles of mgt. are the guidelines for managerial
action whereas values are the rules for behavior of
individuals in society.

• How are the principles of mgt. derived?

-Mgt. principles are formulated by :
a)Observation
b) Experimentation
• The priniciples of mgt are not rigid prescriptions.
Which nature of principle of mgt. is highlighted?
- Management principles are flexible

• Give any one reason why principles of mgt are

called contingent.
-Because the application of management of
principles is dependent upon the situation
prevailing at a particular point of time

• A company has separate departments for finance,

marketing ,production and human resource
department. Identify the principle of mgt.
- Division of Work
• Name the principle of mgt. which requires
judicious application of penalties by the mgt.
-Discipline

• Name the principle of Taylor which suggests that

the job to be performed should be based on
scientific enquiry and not on intuition.
-Science ,rule of thumb

• “Workers should be encouraged to develop and

carry out the plans for development”. Identify the
principle by Fayol
- Principle of Initiative
• Shreya, a ,manager feels that employees should get
enough time to adopt to a new environment to show
results. By doing so she is following which principle of
mgt.
- Stability of tenure of personnel

• Shenoy and sagar are typists in a company having same

educational qualifications . Shenoy is getting 10,000
per month and sagar is getting 8000 per month as
salary for the same working hours . Which principle is
violated?
- Principle of ‘Equity’

• Which device permits direct communication between

employees working at the same level?
-Gang Plank
• Identify the technique of scientific management:

1. to determine standard time taken to perform a well-defined job

Time study
2. to find one best way to do a job
Method study
3. giving variable wages to workers based on their performance
Differential piece wage system
4. when uniformity is introduced in materials, machines, tools,
methods of work and working conditions after due research
Standardisation of work
5. change in the attitude of workers and management towards each
other
Mental Revolution
6. When many specialists supervise each workers
Functional Foremanship
• Taylor’s techniques of management are
universally applicable. Do you agree? Give
reasons to support of your answer.

ANS:
No, some techniques of management are not
universally applicable under some situations.
These are :
- Functional foremanship: not in case of small
organisations
- Differential piece wage system: not applicable
in those organisations that follow the principle of
equity as it differentiates workers and pays
different wages.
• The production manager wants to increase the speed of
packaging. In order to identify and eliminate needless and
unproductive movements of workers in packaging, he
installed a movie camera in the factory.
Which technique is adopted ?
ANS: Motion Study
• A worker is regularly provided instructions by one of the
superiors. Another superior lays down the sequence of
operations. His speed, efficiency and quality of work are
also supervised by different superiors who specialize in
their specific fields.
a) name the technique of scientific management followed.
b) this technique is an extension of which principle of fayol
ANS: a) Functional Foremanship
b) Division of work
• Hritik is desirous of setting up of a small factory to manufacture
different kinds of eco-friendly packaging materials. He proposes to
adopt a logical approach to his business rather than hit and trial
method as he knows that this can result in tremendous savings of
human energy as well wastage of time and materials. He plans to
adopt paternalistic style of management in order to avoid any kind
of class-conflict that may emerge between him and workers.
Moreover, he plan to seek the opinion of his workers before taking
any important decisions and offer incentives to them for providing
valuable suggestions for the business.
a) Identify and explain various principles of scientific management
applied.
ANS
a) The principles applied are:
1. Science,not rule of thumb
2. Harmony, not discord
3. Cooperation, not individualism
• Varun is engaged in manufacturing electrical appliances. The company
has been facing a lot of problems for the last few months because of
chaos between two departments i.e. Production department and Sales
department. They blame each other for delayed production. The force
that integrates the department is missing.
Moreover, in the production department both the ‘management’ and
‘workers’ do not realise the importance of each other. There is a lack of
cooperation, mutual trust and sense of goodwill between the managers
and workers.
a) Identify the missing force in the above case
b) Identify and explain the principle of scientific management referred
above

ANS: a) Coordination
(characteristics of coordination)
1. integrates group efforts
2. ensures unity in action
b) Harmony, not Discord
• Daksh Ltd. Has been established for more than
ten years . Having made good profits in the past,
they wanted to expand further and hence did not
declare bonus the previous year. The workers got
agitated and trade unions declared strike and
demanded bonus and other facilities. The
management decided not to give into their
demands.
a) Identify and explain the scientific principle
violated .
ANS: a) Harmony, not Discord
• Radhika opens a jewellery showroom in Jaipur. She has
employed eleven persons in the showroom. For greater
productivity she divides the work into small tasks and each
employee is trained to perform his/her specialized job. The
sales person are allowed to close the deal with the buyer
by giving a maximum of 10% discount, whereas the
decision to give any further discount rests within radhika’s
authority. In the earlier days, five of her employees were
asked to put in extra hours of work. In return she had
promised to give them special incentive within year.
Therefore, after six months when the business was doing
well, she awarded a cash bonus to each of the employee to
honor her commitment. However, when it comes to settling
of the conflicts among her employees, she tends to become
more biased towards her female employees.
a) identify and explain the principles applied by radhika by
quoting the lines
b) identify and explain the principles violated by radhika by
quoting the lines
 a) The principles applied are:
1.Principle of Division of Work
“for greater productivity………specialised job”
2.Principle of Centralisation and Decentralisation
“the sales persons are allowed to…………..final authority”
3.Principle of Discipline
“therefore, after six months ………………honour her
commitment “

b) The principles violated are :

1.Principle of Equity
“ However, when it comes to …………………..female
employees”