PRINCIPLES OF MANAGEMENT

UNIT 2 PRINCIPLES OF MANAGEMENT (7 MARKS) SHAH FAISAL KHAN 9412645522 DMA, MODIPUR, RAMPUR Henry Fayol has given 14 principles of management. These principles are universal in nature and applicable to all sorts of organisations. Characteristics of Principles of Management Universally Accepted: Management principles are universal because they can be applied to all managerial situations irrespective of size and nature of business. Formed by practice and experimentation: These principles have been made after long observation and research. Flexible: These principles can be used in different ways with modification in various situations. Mainly behavioural: They aim at influencing behaviour of human beings. They enable a better understanding of relationship between human and physical resources. General guidelines: They are not readymade solution to all management problems. They only serve as guidelines in solving problems. Contingent: Their application is dependent upon the situation at a given point of time. Their application has to be changed as per requirement. Cause & effect relationship: These principles are intended to establish a cause & effect relationship so that they can be applied in similar situations. Significance of management principles They provide managers useful insights into reality: These principles help the manager in knowing the real world situations. Following these principles gives them knowledge, ability and understanding of managerial situations. They make fewer mistakes and are able to solve problems quickly. Optimum utilisation of resources and effective administration: Resources are limited and so they have to be utilized in the best possible manner. The knowledge of management principles helps managers to foresee the effect of their decisions. They formulate way & means for optimum utilisation of resources instead of trial and error. Manager becomes impartial and discreet in his conduct and is able to exercise effective administration Scientific Decisions: Decisions based on these principles are logical, rational and scientific. It leaves no scope for personal bias. They help in meeting the changing environment requirement: Business operates in a dynamic environment. It is necessary for all mangers to make changes in business according to the changes in environment of business. Fulfilling social responsibility: Management principles have been evolved taking into consideration the requirements of society. Knowledge of these principles is essentials for bringing welfare to the society. Management training, education & research: Management principles are used as a basis of training, education and research. They provide ground for the development of management as a discipline. 14 Principles of Henry Fayol Scalar chain: It refers to the chain of authority in the order of hierarchy (sequence). According to it, a subordinate should contact his immediate superior. There is an arrangement of GANG PLANK. Through this, managers of same level may communicate directly with each other. This saves time and energy. Unity of command: Every subordinate should receive order and instruction only from one superior and he should be accountable only to him. This avoids confusion and conflicts. (one man one boss) Unity of direction: Every department should have a well defined goal and the activities of all the workers of the department should be directed towards the achievement of that goal (one head one plan). The working of two departments should never overlap. Division of work (specialisation): Each work should be divided into independent activities and each worker should be given one type of activity so that he becomes perfect in it. This improves efficiency and speed and leads to increase in out put through specialization. Parity of authority and responsibility: Authority means the power to take decisions and responsibility means answerability. A person should be given authority and responsibility in same ratio. Authority without responsibility is misutilised and responsibility without authority can not be completed. Fair remuneration (salary, Wages): Salary should be paid as per the nature and requirements of job. Every worker should get fair salary for his work. Equity: All workers should be treated equally. The manager should not discriminate between workers. Everybody should be given justice and fair dealing. Stability of personnel: Every worker should be assured of permanency of his job which means he will not be terminated without proper reasons and will be given reasonable time to show results. The job of worker should not be changed again and again. Otherwise, he will not be perfect in that job. Order: there should be a fixed place for materials and equipments so that time is not wasted for searching things (order of machine). Right person should be placed at the right job (order of man). Discipline: Discipline is the obedience of rules and regulations. It means the workers should have feeling of commitment and honouring promises. Espirit de corpse: It refers to team spirit. There must be team spirit and coordination among the members of the organisation. They all should work like a team and there should be no discord between them. Sub-ordination of individual interest to general interest: Employees should surrender their personal interest before the general interest of the enterprise. Some times the employees due to their ignorance, selfishness and emotional pleasure outlook the interest of organisation which proves harmful. Initiative: It means involvement of workers in decision making process. Workers should be encouraged to develop and carry out their plans. Centralisation and decentralisation: Centralisation means concentration of decision making authority in few hands and decentralisation means distribution of authority to large number of managers. There should be a balance between centralisation and decentralisation. SCIENTIFIC MANAGEMENT It refers to development of science for each element of man’s work. It refers to scientific selection & training, scientific & rational solution to management problems & decision making. It discards the old methods of trial & error. F.W.Taylor is regarded as father of scientific management. PRINCIPLES OF SCIENTIFIC MANAGEMENT:- SCIENCE NOT RULE OF THUMB Old & primitive methods should be replaced by modern & scientific methods. Standard methods should be developed which are followed throughout the organization . 2. HARMONY BETWEEN WORKERS & MANAGEMENT (HARMONY NOT DISCORD) It means improved relationship. Management should not exploit workers & workers should be loyal to management. Management should share the gains of the company with workers & workers should work hard. Both should be part of the family. 3. DEVELOPMENT OF EVERY PERSON TO HIS GREATEST EFFICIENCY & PROSPERITY Every worker should be selected & trained scientifically. The work assigned to him should match his physical, mental & intellectual ability. They should also be trained if required. 4. COOPERATION NOT INDIVIDUALISM Workers & Management should not compete with each other. They should join hands & try to achieve organizational objectives. Management should listen to the suggestions of workers & implement them if they are worth. Similarly workers should avoid strike and unreasonable demands. TECHNIQUES OF SCIENTIFIC MANAGENENT 1. TIME STUDY It determines the standard time taken to perform a particular job. An average worker is selected to complete a job & his time is recorded with the help of a stop watch. This process makes a distinction between efficient & inefficient workers. Its objective is to determine the number of workers to be employed, to frame suitable incentive schemes & determine labour costs. 2. MOTION STUDY It refers to study of movements of a worker while doing a job so that his unnecessary movements may be removed & he can be given a proper posture of performing his job. 3. FATIGUE STUDY Fatigue causes decrease in efficiency. A worker should be carefully studied to find out the level of fatigue so that breaks & intervals can be given to maintain efficiency. 4. METHOD STUDY There are various methods of doing a job. Method study is done to find the best method. This method is made standard for all the workers of an organisation. 5. STANDARDISATION & SIMPLIFICATION OF WORK Standardisation refers to the process of setting standards for every business activity like process, time, machinery, methods or working conditions. OBJECTIVES OF STANDARDISATION: *To reduce a given line or product to fixed types, sizes & characteristics. *To establish interchange ability of manufactured parts & products. *To establish standards of excellence & quality in materials. *To establish standards of performance of man & machines. Simplification aims at eliminating unnecessary varieties, sizes & dimensions for savings of cost of labour, machines & tools. It implies reduced inventories, fuller utilisation of equipment & increased turnover. 6. FUNCTIONAL FOREMANSHIP One person is never an expert in all the fields. Thus a worker should be supervised by eight different specialists/foreman. Four from planning department (time & cost clerk, instruction card clerk, route clerk & shop disciplinarian) and four from production department (gang boss, repair boss, speed boss & inspector). 7. DIFFERENTIAL PIECE WAGE SYSTEM Every worker should be paid according to his efficiency which means that efficient worker should get more wages than inefficient workers. 8. MENTAL REVOLUTION There should be a complete change in the thinking of both workers & management. The workers should work hard for the growth of the organisation & the management should pay them proper wages & salaries. SHAH FAISAL KHAN 9412645522