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The principles of management, then, are the means by which you actually manage, that is, get things done through others—individually, in groups, or in organizations. Formally defined, the principles of management are the activities that “plan, organize, and control the operations of the basic elements of [people], materials, machines, methods, money and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise. ”For this reason, principles of management are often discussed or learned using a framework called P-O-L-C, which stands for planning, organizing, leading, and controlling. Managers are required in all the activities of organizations: budgeting, designing, selling, creating, financing, accounting, and artistic presentation; the larger the organization, the more managers are needed. Everyone employed in an organization is affected by management principles, processes, policies, and practices as they are either a manager or a subordinate to a manager, and usually they are both.
Managers do not spend all their time managing. When choreographers are dancing a part, they are not managing, nor are office managers managing when they personally check out a customer’s credit. Some employees perform only part of the functions described as managerial—and to that extent, they are mostly managers in limited areas. For example, those who are assigned the preparation of plans in an advisory capacity to a manager, to that extent, are making management decisions by deciding which of several alternatives to present to the management. However, they have no participation in the functions of organizing, staffing, and supervising and no control over the implementation of the plan selected from those recommended. Even independent consultants are managers, since they get most things done through others—those others just happen to be their clients! Of course, if advisers or consultants have their own staff of subordinates, they become a manager in the fullest sense of the definition. They must develop business plans; hire, train, organize, and motivate their staff members; establish internal policies that will facilitate the work and direct it; and represent the group and its work to those outside of the firm.
The main features of management principles are given below:
1. Behavioural in nature: Management principles are formed to guide and influence the behaviour of employees. These principles insist on improving relationship between superior, subordinates and all the members of organisation. They also establish relations between human and material resources.
2. Evolutionary/formed by practice and experiments: The management principles are developed only after deep and thorough research work. They are not developed overnight or they are not the personal feelings of any person. Proper observations and experiments are conducted before developing them. These are the expressions of deep experiences of the leaders of management thoughts. Therefore they are evolutionary in nature.
3. Universal application: The principles of management are universal in nature that means they can be applied to all types of organisations irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organisations. For example, the principle of division of labour can be applied to all the organisations and results in specialization although the degree of specialization may vary depending upon the nature and size of the organisation.
4. Flexibility: Management principles can be applied differently under different conditions. Some changes can be made in application of principles according to the requirement of the company. These are not set of rigid statements. These can be modified by the managers who are using them. For example, the principle of centralisation insists on concentration of power and authority at top level but the extent and degree of centralisation may vary according to nature of organisation and centralisation does not mean total centralisation, there can be use of decentralisation at lower level if organisation demands it.
5. General guidelines: Management principles are not static or absolute statements. These cannot be applied blindly in all the situations. The applicability of management principles depends on conditions and nature of organisation. The manager must apply these principles according to the size and nature of organisation keeping in mind the requirements of the organisations. A management principle gives guidelines to solve the problems these principles do not provide readymade solution for all the problems. For example, the principle of fair remuneration insists on fair or adequate salary to employee but what amount of salary is fair depends upon the nature, size and financial capacity of the company. Fair may mean Rs. 50,000 p.m. to a multinational company and it may mean Rs 5000 p.m. to a small company. So principles do not specify the absolute amount to be paid but there is relativity depending upon paying capacity of the different companies.
6. Contingent: Management Principles are contingent or dependent upon the situations prevailing in organisation. Their application and effect depend upon the nature of organisation. The application of principle has to be changed according to the nature, size and type of organisation.
7. Based on cause and effect relationship: Management Principles are based on cause and effect that means these principles tell us if a particular principle is applied in a situation, what might be the effect. Although these principles cannot state perfectly absolute result because these are applied on human being but it helps in knowing some idea about the effect. When principles are applied in similar situation in different organisations then their effects can be known with more perfection.
The father of scientific management, Frederick w Taylor propounded the scientific management theory. He spent the part of his life in Midvale steal company U.S,A as an ordinary worker, then he also work as an operating manager over there. He aimed at making the management as science base well organized with rule of thumb clearly defined and fixed principles instead of unclear ideas. He laid upon the stress on the following things for enhancing productivity of workers-
1. Science not rule of thumb
2. Harmony not discord
3. Cooperation not individualism
4. Maximum output not restricted output
5. Developing each men to his greater efficiency and prosperity
In simple words we can say scientific management applies the art of knowing what to do and how to do. In this scientific techniques are applied for recruitment selection and training of workers. According to F. W. Taylor management is “knowing exactly what you want your men to do and seeing that they do it in a best way.” The two fold techniques of scientific management are-
1. To discover a best method for performing a particular work
2. To use the best method to meet a given situation.
1. To use scientific techniques in methods of work for recruitment selection and training
2. It is a systematic, analytical and objective approach to tackle industrial problem
3. It discovers the best method of doing the work at cheapest cost.
4. It replaces old age methods with scientific techniques.
5. It brings change in mental attitudes of workers.
1. By standardizing tools equipment and methods it accelerates the rate of productivity.
2. It improves the quality of the product by research, quality control and effective inspection.
3. It ensures regular supply of goods to consumers at reasonable prices.
4. It ensures the placement of right person at right job.
5. It reduces the cost of production by system planning and cost control techniques.
1. Scientific Task and Rate-Setting (work study): Work study may be defined as the systematic, objective and critical examination of all the factors governing the operational efficiency of any specified activity in order to effect improvement. Work study includes.
(a) Methods Study: The management should try to ensure that the plant is laid out in the best manner and is equipped with the best tools and machinery. The possibilities of eliminating or combining certain operations may be studied.
(b) Motion Study: It is a study of the movement, of an operator (or even of a machine) in performing an operation with the purpose of eliminating useless motions.
(c) Time Study (work measurement): The basic purpose of time study is to determine the proper time for performing the operation. Such study may be conducted after the motion study. Both time study and motion study help in determining the best method of doing a job and the standard time allowed for it.
(d) Fatigue Study: If, a standard task is set without providing for measures to eliminate fatigue, it may either be beyond the workers or the workers may over strain themselves to attain it. It is necessary, therefore, to regulate the working hours and provide for rest pauses at scientifically determined intervals.
(e) Rate-setting: Taylor recommended the differential piece wage system, under which workers performing the standard task within prescribed time are paid a much higher rate per unit than inefficient workers who are not able to come up to the standard set.
2. Planning the Task: Having set the task which an average worker must strive to perform to get wages at the higher piece-rate, necessary steps have to be taken to plan the production thoroughly so that there is no bottlenecks and the work goes on systematically.
3. Selection and Training: Scientific Management requires a radical change in the methods and procedures of selecting workers. It is therefore necessary to entrust the task of selection to a central personnel department. The procedure of selection will also have to be systematised. Proper attention has also to be devoted to the training of the workers in the correct methods of work.
4. Standardization: Standardization may be introduced in respect of the following.
(a) Tools and equipment: By standardization is meant the process of bringing about uniformity. The management must select and store standard tools and implements which will be nearly the best or the best of their kind.
(b) Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely to result in damage to machinery.
(c) Conditions of Work: To attain standard performance, the maintenance of standard conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.
(d) Materials: The efficiency of a worker depends on the quality of materials and the method of handling materials.
5. Specialization: Scientific management will not be complete without the introduction of specialization. Under this plan, the two functions of ‘planning’ and ‘doing’ are separated in the organization of the plant. The `functional foremen’ are specialists who join their heads to give thought to the planning of the performance of operations in the workshop. Taylor suggested eight functional foremen under his scheme of functional foremanship.
(a) The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it.
(b) The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work.
(c) The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper returns of work from them.
(d) The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.
(e) The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal motions in the quickest and best way.
(f) The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers.
(g) The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around him and his machines.
(h) The Inspector: To show to the worker how to do the work.
7. Mental Revolution: At present, industry is divided into two groups – management and labour. The major problem between these two groups is the division of surplus. The management wants the maximum possible share of the surplus as profit; the workers want, as large share in the form of wages. Taylor has in mind the enormous gain that arises from higher productivity. Such gains can be shared both by the management and workers in the form of increased profits and increased wage.
The benefits of scientific management are:-
1. Replacement of traditional rule of thumb method by scientific techniques.
2. Proper selection and training of workers.
3. Incentive wages to the workers for higher production.
4. Elimination of wastes and rationalization of system of control.
5. Standardization of tools, equipment, materials and work methods.
6. Detailed instructions and constant guidance of the workers.
7. Establishment of harmonious relationship between the workers.
8. Better utilization of various resources.
9. Satisfaction of the needs of the customers by providing higher quality products at lower prices.
1. Worker’s Criticism:
(a) Speeding up of workers: Scientific Management is only a device to speed up the workers without much regard for their health and well-being.
(b) Loss of individual worker’s initiative: Scientific Management reduces workers to automatic machine by taking away from them the function of thinking.
(c) Problem of monotony: By separating the function of planning and thinking from that of doing, Scientific Management reduces work to mere routine.
(d) Reduction of Employment: Scientific Management creates unemployment and hits the workers hard.
(e) Weakening of Trade Unions: Under Scientific Management, the important issues of wages and working conditions are decided by the management through scientific investigation and the trade unions may have little say in the matter.
(f) Exploitation of workers: Scientific Management improves productivity through the agency of workers and yet they are given a very small share of the benefit of such improvement.
2. Employer’s Criticism:
(a) Heavy Investment: It requires too heavy an investment. The employer has to meet the extra cost of the planning department though the foreman in this department do not work in the workshop and directly contribute towards higher production.
(b) Loss due to re-organization: The introduction of Scientific Management requires a virtual reorganization of the whole set-up of the industrial unit. Work may have to be suspended to complete such re-organization.
(c) Unsuitable for small scale firms: various measures like the establishment of a separate personnel department and the conducting of time and motion studies are too expensive for a small or modest size industrial unit.
i. Henry Fayol’s principle of management
ii. Contribution of Fayol
Henry Fayol was born in 1941 at Constantinople in France. He graduated as a mining engineer in 1860 from the National School of Mining. After his graduation, he joined a French Coal Mining Company as an Engineer. After a couple of years, he was promoted as manager. He was appointed as General Manager of his company in 1888. At that time, the company suffered heavy losses and was nearly bankrupt. Henry Fayol succeeded in converting his company from near bankruptcy to a strong financial position and a record of profits and dividends over a long period.
Concept of Management: Henry Fayol is considered the father of modern theory of general and industrial management. He divided general and industrial management into six groups:
1. Technical activities: Production, manufacture, adaptation.
2. Commercial activities: buying, selling and exchange.
3. Financial activities: search for and optimum use of capital.
4. Security activities: protection of property and persons.
5. Accounting activities: stock-taking, balance sheet, cost, and statistics.
6. Managerial activities: planning, organisation, command, co-ordination and control.
These six functions had to be performed to operate successfully any kind of business. He, however, pointed out that the last function i.e., ability to manage, was the most important for upper levels of managers. The process of management as an ongoing managerial cycle involving planning, organising, directing, co-ordination, and controlling, is actually based on the analysis of general management by Fayol. Hence, it is said that Fayol established the pattern of management thought and practice. Even today, management process has general recognition.
The principles of management are given below:
1. Division of work: Division of work or specialization alone can give maximum productivity and efficiency. Both technical and managerial activities can be performed in the best manner only through division of labour and specialization.
2. Authority and Responsibility: The right to give order is called authority. The obligation to accomplish is called responsibility. Authority and Responsibility are the two sides of the management coin. They exist together. They are complementary and mutually interdependent.
3. Discipline: The objectives, rules and regulations, the policies and procedures must be honoured by each member of an organisation. There must be clear and fair agreement on the rules and objectives, on the policies and procedures. There must be penalties (punishment) for non-obedience or indiscipline. No organisation can work smoothly without discipline – preferably voluntary discipline.
4. Unity of Command: In order to avoid any possible confusion and conflict, each member of an organisation must received orders and instructions only from one superior (boss).
5. Unity of Direction: All members of an organisation must work together to accomplish common objectives.
6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is also called principle of co-operation. Each shall work for all and all for each. General or common interest must be supreme in any joint enterprise.
7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator for good performance. Exploitation of employees in any manner must be eliminated. Sound scheme of remuneration includes adequate financial and non-financial incentives.
8. Centralization: There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided.
9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all members of the organisation from the top to the bottom. Scalar denotes steps.
a. Order: Fayol suggested that there is a place for everything. Order or system alone can create a sound organisation and efficient management.
b. Equity: An organisation consists of a group of people involved in joint effort. Hence, equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint collaboration.
c. Stability of Tenure: A person needs time to adjust himself with the new work and demonstrate efficiency in due course. Hence, employees and managers must have job security. Security of income and employment is a pre-requisite of sound organisation and management.
d. Esprit of Co-operation: Esprit de corps is the foundation of a sound organisation. Union is strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible for good performance.
e. Initiative: Creative thinking and capacity to take initiative can give us sound managerial planning and execution of predetermined plans.
| Basis | Fayol’s | Taylor’s |
| Meaning | Henry Fayol, is a father of modern management who laid down fourteen principles of management, for improving overall administration. | F.W. Taylor, is a father of scientific management who introduced four principles of management, for increasing overall productivity. |
| Basis of formation | Personal Experience | Observation and Experimentation |
| Concept | General theory of administration | Scientific Management |
| Emphasis | Top level management | Low level management |
| Approach | Manager’s approach | Engineer’s approach |
| System of Wage Payment | Sharing of profit with managers | Differential Payment System |
| Applicability | Universally applicable | Applies to specialized organizations only. |
In any organization all those who are responsible for the work of others are known as managers. Though their primary task remains the same – getting the things done by other people, wide variances exist with regard to the authority and responsibility of managers. These differences are largely due to the differences in the levels of management. Based on the scope of authority and responsibility, management job requires many skills and talents. As a matter of custom and convenience, we normally visualize a company’s management as a pyramid.
The three levels of management that are commonly found in any organisation are lower or front-line, middle and top management
1. Front-Line or Supervisory Management: This is the lowest level in the hierarchy of management. Usually the jobs at this level are the entry level positions into management profession. Managers at this level direct the operating employees (workers). They are close to the action for their job involves supervising the activities of operatives. Front-Line managers in the production department are called foreman, supervisor, superintendent, inspector and so on. For instance, in a manufacturing concern, in marketing, finance and others departments, they are called management trainees or junior executives. Similarly, in a government office, the term superintendent or section officer is preferred.
2. Middle level Management: Middle management level includes in many organizations more than on level. Managers who work at levels between the lower and top levels constitute the middle management. Departmental heads, Regional managers, Zonal managers and so on fall in this category. They report to top managers. Their principal responsibilities are to direct the activities of lower level managers who implement the organization’s policies.
3. Top level Management: Top management constitutes the highest level in the management hierarchy. This is the policy making level in any organization. This level consists of a small group of executives. Board of Directors, Chairman, Managing Director and the top functional heads such as COO, CIO, and such other C-suite managers, and divisional managers comprise this level. Top managers are responsible for the overall management of the organization. They decide the enterprise objectives, policies and strategies to be pursued to achieve the objectives. They provide direction to the organization by its interactions with the environment.
Harold koontz has classified various approaches into the schools of management theory.
The five schools of management theory-
1. The Operational school
2. The Empirical school
3. The Human Relation or Human Behavior school
4. The Decision Theory school
5. The Social System school
The primary function of the management is to see that how to get things done through and with other people as an individuals or groups. According to this school management is universally applicable body of knowledge which is pervasive in nature. This school classifies the function of management into the basic principles. It attempts to analyze the intellectually the nature, purpose, structure and process of each of function of management.
The thought of this school of management is propounded by Henry Fayol. He attempted the systematic analyses of overall management process. His idea of administrative management was later evolved as management process school.
This approach is also known as “Traditional Approach” “Universalist Approach” and “The Classicist Approach.” Fundamental beliefs of this approach are as follows:
1. Management is an operational process which van be divided into various functions.
2. Management principles are never untrue even if a practitioner ignores them in a given situation.
3. Management is an art but it relies on its principles.
4. Management’s job may be affected by external factors but management science need not cover all the fields of knowledge in order to serve as a foundation of management.
5. Principles of management can be tested through research and experiment to find their validity.
The operational school of management has been criticized on following grounds:
1. It has been losing its validity over the period of time.
2. The universality of the principles of management has failed to stand the test of empirical scrutiny.
3. In the dynamic conditions, the organization searching for universality may not always proved to be a full proof exercise.
Despite all the criticism the school has certainly provided a concept framework which can be beneficially utilized to identify essentials of management.
This is also called management by custom school according to the empirical school management is the study of past experience of managers. The important contributors associated with the school hour earnest dale the researcher from Harvard business school and the management association in different countries. According to them:
1. Management is the study of experience.
2. The managerial experience can be gainful utilized by passing it over to the practitioner, students etc. and also the driving generalisation on management activities
3. The success and the failure of management in the process of decision making can provide the fruitful guidance to manager in a similar situation that may arise in the future
4. Theoretical research shall be based on practical experience.
The empirical school depends on how the manager handles precedent connected with managerial situation and their own experience on the ground. The research and thought involved in the course of studying is sure to help in ready verification of principles.
It is also known as case study approach as it involves case study of management. In this approach case studies are analysed certain generalization are drawn and applied as useful guides for future thought or action.
This approach has many defects as critics field manager has to work under dynamic conditions which is different from past. Harold Koontz opines that “Management unlike law is not a science based on precedents and situation in future exactly comparable to the past are exceedingly unlikely to occur. There is positive danger in relying too much on positive and on history on managerial problem solving for the simple reason, technical approach found right in the past may not fit in future” In this study we should know that past situation may not occur in same pattern and techniques evolved to solve them may be irrelevant .
Moreover learning of management through experience is a time consuming process and top level executives have neither patience nor time to learn about the management in this fashion.
Elton Mayo proponent of The Human Behavior School, he has also directed The Hawthorne Experiment. According to this school human behavior is the focal point of the management action. It focuses more on human sciences, sociology and psychology. Being the founder father Elton Mayo advocated human values in management. Management is not a technical process but it is established that relationship between morale and productivity has been over simplified. It focuses more on human behavior, their roles and relationships. With its major emphasis on human relation, informal groups, communication, employment, motivation and leadership style the behavior approach to management has drawn attention to a wide range socio- psychological phenomenon like the dynamics of organization behavior. This approach is also called “The leadership Approach” as it views the managers as the leaders.
Important aspect of behavioural science approaches are:
1. Employee Development: the employee development is done with continued upgradation of employee skills and management skills.
2. Communication: strong communication is required to understand persons in an organization
2. Employee motivation: all the factors that increases the productivity of the employee and higher morale are motivating factors.
3. Organization and social system: it includes study of role, social symbol and function of informal group.
4. Leadership: this school focuses on the role of managers as the leaders. The scope of this school is the study of human relation and study of manager as the leader.
The new thinking in management started as the need hierarchy theory of the Abraham Maslow followed by the works of Herzberg, McGregor and Likert. Human element is the key factor in the success and failure of an organization. Job enlargement, employee participation and decision making process are some human tools suggested by the contributors of this era for increasing the productivity of human beings.
Like other approaches even this approach has many defects. This approach leans heavily on human psychology. It focuses on the point that human has to be made happy for increased productivity and effective functioning of an organization. The study of human interaction is not only important but also cannot be disputed. But the field of human behavior alone cannot cover all the functions of the management.
This school theory has been led by Simon. It concentrate on the decision making the most important managerial function is decision making. To take decision means to make a rational choice among different alternatives within given constraints. This school lays the focus on study of alternatives through right assessment of different variables. “In this school we study about the selection from the rational approach among possible alternatives of course of action. According to this approach one has to deal with the decision itself or an individual or the group making the decision.
The exponents of this school includes decision making, entire range of human activities in an organization as well as all the macro factors of an environment. This school studies not only decision making process but also the behavior of decision maker. It looks the entire field of management through this keyhole.
This school uses models mathematical tools and techniques and rational research tools to take decisions with regard to great variety of problems faced by the management such as work study, work flow, inventory control, incentive marketing, communication etc. The method of decision making has also undergone the radical changes now new approaches has been developed in this field such as “Sub-Optimization”,” Marginal Decisions” and “ Muddling Flow”. The superficial way of decision making are giving way to real situation oriented approach to management
According to this school the development of management discipline revolves around the decision making.
This school of thought is heavenly oriented to sociological content. According to this school the theory of management is based on the understanding of interaction of social groups. Hence, we can say that this school is related to human behavior school of management. According to this, management as a social system is system of cultural interrelationships. The term organization is used which states that system is limited to formal organization and is equivalent to enterprise rather than theory activity concept used.
The father of social system school Chester Barnard examine the interrelationship within the organization and develop the concept of formal organization. He visualize management as a cooperative system where persons are ready to communicate with each other and contribute towards a conscious common goal. From common to individual endeavour he ended with functions. Max Weber, Maslow, Argyris, March and Simon, Herzberg and Likert are the major exponents of this school of thought. Different aspects of social system are:
1. Organisation is composed of cultural system where group of people work in cooperation.
2. To achieve the goal of organization members as well as group should have c cooperation.
3. There should be relationship between external and internal environment and change can be easily identified.
4. All the group of the management should aim at establishing harmony between goals of organization, goals of group and individualism.
The criticism of this school of management is as follows:
1. To understand the organization sociology is important as social system has to work under different types of cultural pressure and conditions.
2. It does not do justice with technological factors, human behavior factors, sociological factors which are connected with the organization.
3. This term is broader than management in practice and overlooks techniques of management.
The schools of management overlaps each other and different disciplines has contributed towards its growth. Management is the discipline which sees managerial problems with different views. Managerial problems cannot be viewed only from one angle but from various perspectives. Contribution of disciplines should integrate management in such a way that it does not loses its identity.
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