Unit 2: Principles of Management Principles of Management - concept and significance Fayol's principles of management Taylor's Scientific management - principles and techniques Understand the concept of principles of management. Explain the significance of management principles. Discuss the principles of management developed by Fayol. Explain the principles and techniques of ‘Scientific Management’. Compare the contributions of Fayol Management principles are the fundamental truth which helps the managers to take actions and decisionsManagement differently under different conditions. Some changes can be made in applications of principles according to the requirement of the company. These are not rigid statement. PRINCIPLES OF MANAGEMEN GHARACTERISTICS / _ FEATURES OF MANAGEMENT PRINCIPLES 1.GENERAL GUIDELINES Management principles are guidelines to action but these principles do not provide ready made solution for any problem it means blindly you can not apply these statements in any situations. Principles can be applied 3.FORMED BY PRACTICE AND EXPERIMENTS The management principles are developed only after and through research work. They are not developed overnight. Proper observations and experiments are conducted before developing them.Takada Pe ee (PERVASIVE):=i The principle of management are universal in nature that means they can be applied to all types of organisation irrespective of their size and nature, business or non-business, small as well as large public sector as well as private sector. E.g. Principle of division of work can be applied to any organisation. eee ee Management Principles are formed to guide and influence the behaviour of employees. These principles insist on improving relationship between superior, subordinates and all the member of organisations. Ce re ee As you all know that management principles are developed after continuous practice and research work, So these are based on cause and effect that means these principles tell us if a particular principles is applied on a particular situation, what might be the effect.PRINCIPLES OF MANAGEMEN IMPORTANCE//SIGNIEICANCE 2.PROVIDE GUIDELINES TO MANAGER various managerial situations Management principles are scientific decision. It means these are made with proper logic, reason and facts. So these principles helps manager to take scientific decisions. Management Principles give guidelines to the manager. These principles improve knowledge, ability and understanding of manager under 3.FULFILLING SOCIAL RESPONSIBILITY Management principles plays an important role in fulfilling the responsibilities towards management do something for society.rasa OPTIMUM UTILISATION ola exe ey Management principles help manager to reduce the cost of production by optimum utilisation of resources management principles helps to remove the wasteful movement and setting up of standard time to complete a task. 5.MEETING CHANGES IN ENVIRONMENT Every business man has to make changes in the organisation according to change takes place in the business environment management principles helps manager to adopt these changes (mr —— Management Principles are those scientific decision which provides guidelines to the manager so that they can fulfilling social responsibility, optimum utilisation of resources and meeting change in environmentGit te ese Ne aa aie Henri Fayol was a French mining engineer Born on 29 July 1841, Istanbul, Turkey. He wrote a famous book “Henri Fayol’s classic general and industrial management” He became famous as “Father of management studies and thoughts.”r 1. DIVISION OF WORK According to this principles the whole work must be divided into small units and one person is to assign only unit of work matching to his skill, Qualification, Interest and Experience this leads to Specialisation and improve efficiency. Consequences of violation of this principles a)Lack of efficiency b)Changes of duplications of work c)No specialisation d)Delay in achievement of goal 2. AUTHORITY AND RESPONSIBILITY Authority means power take decision. Responsibility means obligation to complete the job assigned on time. According to this principle there must be balance or parity between the authority and responsibility. *Excess authority leads to misuse of authority *Excess responsibility leads to overburden ‘This principle helps management to meet the responsibility on time and there is no misuse of authority. Consequences of violation of this principles a)Misuse of authority due to excess authority b)Overburden due to excess responsibility c)Delay in work due to less authority3. DISCIPLINE Discipline means respect for the rules and regulations of the organisation. It is required at every level. Superior and subordinate both have to maintain the discipline. This leads to systematic working in the organisation and improve efficiency sometimes organisation may put penalties on employees when they do not maintain discipline. Consequences of violation of this principles a)Delay in work due to violation of this principle b)Waste or resources and Chaos & Confusion 4. UNITY OF COMMAND According to this principle an employees should receive order from one boss only because if he receiving order from more than one boss. Then he will confused and will not be able to understand that whose order must complete first. Consequence of violation of this principles a)Confusion in the mind of employee b)Subordinate will give excuses c)Difficulty in maintaining discipline in this organisation *Ego clashes among the different superiors eee a5. UNITY OF DIRECTION (ONE HEAD/UNIT ONE PLAN) According to this principle all the members and employees of organisation must be directed towards one direction that is the achievement of organisational goal. “One Unit One Plan” Consequence of violation this principles a)Organisational goal is not achieved b)Lack of coordination c)Wastage of efforts and resources 6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST According to this principle individual goal is to be sacrificed for achievement of organisational goal. Goal of individual must be directed towards the achievement of organisational goal. Manager must take all the decision in the organisational interest and not his personal interest. This also improves the coordination between individual and organisational goal. Consequence of violation this principles a)No achievement of organisational goal b)Even employee will also suffer in long run., 7. REMUNERATION TO PERSONS 1.According to this principle employees in the organisation must be paid fair remuneration which gives them maximum satisfaction this will motivate to perform with there best ability. Consequence of violation this principles a)Increase in employee Turnover b)Dissatisfaction and demotivation of employees 8. CENTRALISATION AND DECENTRALISATION Centralisation refers to concentration of authority or power in few hands at the top level. Decentralisation means every distribution of power at every level of management. According to fayol a company must not be completely centralised or completely decentralised, but there must be combination of both. This leads to achievements of organisational goal and work load of manager reduced Consequence of violation this principles a)Complete Centralisation will result in delay in decision b)Complete decentralisation will result in misuse of authorityi 9. PRINCIPLE OF SCALAR CHAIN Scalar chain means line of authority or chain of superiors from highest to lowest rank. Fayol insists that this chain must be followed strictly in the organisation. Information must pass _ through everyone no skipping is allowed but in case of any urgent information fayol suggested a short-cut called gang plank. This lead to systematic flow of information and no communication barrier (or) Gap but many delay in action. Consequence of violation this principles There may be communication gap No clarity in authority responsibility relationship 10. PRINCIPLE OF ORDER In this principle order does not mean command but it refers to orderly arrangement of men and material. That is a fixed place for everything and everyone in the organisation. It leads to save time energy in search of men and material and smoothly working in an organisation11. PRINCIPLE OF EQUITY Equity refers to kind, fair and just treatment to employees. Employees will put their maximum efforts only when they are treated with kindness and justice. If a manager is biased in dealing with employees then employees will get dissatisfied and will not contribute to their maximum capacity. Equity does not mean equal salary to a peon and supervisor but equity mean application same disciplinary rules, leave rule in the same way irrespective of their grade, position and gender, language, caste, belief or nationality. If organisation follow this principle the morale of employee and motivate level boost up. 12. STABILITY OF TENURE OF PERSONNEL According to this principle the management must provide the feeling job security. Among the employees. Because with the feeling of insecurity for the job the employees cannot contribute their maximum frequent turnover of employees is bad for organisation and such decision must be taken when they are almost unavoidable. Company spend too much on a new employees by provide them training if they leave the job after training it would be a loss for company. Organisation should give proper time to settle the employees. Consequence of violation this principles a)Wastage of resources in learning the new job b)Frustration and dissatisfaction among employees c)Difficult to find new employeesA ee Wh 3 Initiative refers to taking the first step with self- motivation Fayol suggested that employees the organisation must be given an opportunity to take some initiative in making and executing a plan. This will motivate employee. So manager must welcome their suggestions and ideas of employees before framing the plan. This would create a feeling of belonginess and organisation of goal can be achieved on time Consequence of violation this principles a)Demotivation among employees b)Employees will not work with their best ability 14. ESPRIT DE CORPS A manager should replace “I” with “We”. This will give rise to mutual trust manager should encourage and promote team sprit group efforts is more powerful than individual effort. Organisation goal can be achieved easily through group contribution. Consequence of violation this principles Team goal not be achieved More stress on individualismIt means Application of science for each and every element of Management Frederick Winslow Taylor was an American Born on 20th march 1856 in Pennsylvania, USA He was known as “Father of Scientific management” Taylor formulated 4 principles of scientific management SCIENCE NOT RULE OF THUMB HARMONY NOT DISCORD DEVELOPMENT OF WORKERS TO THEIR GREATEST EFFICIENCY(1. SCIENCE NOT RULE OF. THUMB According to this principle Taylor insists that each job performed in the organisation should be based on scientific enquiry and not on basis of experience. Rule of thumb means dictatorship of manager where as scientific decisions are based on cause and effect relationship. For example : in rule of thumb the standard time required to do a particular job is decided by the manager on the basis of his past experience. But Taylor insists that standard time for a job should be set up scientifically be conducting time study. 2. HARMONY NOT DISCORD} Harmony, Not Discord: According to this principle, there should be harmony bev ‘management, This coordination will help in minimizing conflicts between them. Perfect understandi between employees and m ent will be helpful in creating healthy work environment for achioving the desired goal i.e, success, E.G. SHARING THE GAINS BETWEEN MANAGERS ‘AND WORKERS, ORGANIZATION CLIMATE. Di3 CO-OPERATION NOT, MYA U7 Vay According to this principle work must be carried on in co-operation with each other with mutual confidence and understanding for each other. The management must take workers in confidence before setting up the standard task for them. Managers should welcome suggestions and rewards also given for good suggestion. At the time workers should not go on strike and make unreasonable demands. Manager should work side by side with workers. E.g. No lunch time for today due to heavy load, welcoming employees suggestions, No unreasonable strikes and Demands, Paternalistic style,Participation of workers, etc. A. , DEVELOPMENT OF WORKERS TO, Meee "EFFICIENCY? According to this principle the efficiency of each and every person should be, taken are of right from his selection. A proper arrangement of every body’s training should be made. Company should try to update the knowledge of employees time to time. Employees should given promotional opportunities and also job security. This will ensure greatest efficiency and prosperity for both workers and the company.SCIENTIFIC Cla UEWAon According to Taylor factory should be divided into two department planning and production department. Taylor felt that workers must before from burden of planning and they must concentrate on work and production and planning department should focus on planning, policy, strategy making. To develop specialisation in both department Taylor suggested 4 expert in each department because one person is not expert in every field of work. Four Experts under each department PLANNIG DEPARTMENT OPERATIONAL DEPARTMENT 1. Route clerk boss 2. Instruction card clerk 2. Speed boss 3. Time and cost clerk 3. Repair boss CRSP) elearclaclal 4. Inspector2. STANDARDISATION AND SIMPLIFICATION OF WORK Scientific management always insists on maintaining quality standard. Standard should maintain from the beginning like selection of tools, Equipment, raw material & machine. Standard size, weight, etc. also keeps in mind. Simplification means elimination of unnecessary division of product, size and types. This also reduced cost and improves quality. 3. WORK STUDY It ensures maximum production at minimum cost and getting best contribution from every factor it includes Fatigue study Method Study Time study Motion Study= 3(A) FATIGUE STUDY It is a conducted to find out the frequency or rest intervals, duration of rest intervals and the number of rest intervals. A persons is bound to get tired when he his performing a job for long period of time. There is always need for rest interval. These interval are decided with the help of scientific approach. To conduct fatigue study Taylor suggested to observe an average worker when he is per a job and note down the time when that worker starts getting tired and when efficiency level starts decreasing then give him break. Similarly rest of frequency also decided. 3(B) METHOD STUDY The method study technique of scientific management is conducted to find out the one best method or way of performing the job which keeps production cost minimum and makes maximum use of resources of the organisation.= 3(C) TIME STUDY The technique of time study is conducted to determine or the objective of time study are (i)The Standard time required to perform a job (ii)Setting up the standard target for workers (iii)Determining the numbers of worker required to perform a job (iv)Categorising the workers in efficient and inefficient categories 3(D) MOTION STUDY This study is conducted to determine the productive and unproductive movements, cutting down the unproductive and wasteful movements to conduct motion study Taylor suggested to observe an average worker when he is performing the job note down all the movement he is doing. How many times he is getting up from his place repeat if for 100 times with different workers, after writing all the movements classify them in productive and unproductive movements.OMT ead his = SYSTEM (STRONGEST MOTIVATOR) * Taylor was of the opinion that there should be differentiation between efficient and inefficient workers + Efficient workers should be rewarded * So for this he introduced different rate of wage payment for those who performed above standard and those who performed below standard + Fair Day’s Work = Wages per hour x no. Of hours worked per day 5. MENTAL REVOLUTION The objective of this technique is to change the negative attitude of workers and management towards each other. There should be co- operation between workers and management both should realise that each one is important for this both had to change their thought’s for each other, this is known as mental revolution.