Nature of principles of management
A principle is a basic truth that guides thinking and action. Principles of management are general guidelines for decisions. They are not rigid like laws of physics.
- Universal: used in all kinds of organisations.
- General guidelines: they guide but do not give ready answers.
- Formed by practice and experiment: managers tested them over years.
- Flexible: can be changed to suit the case.
- Mainly behavioural: they deal with people.
- Cause and effect: they tell what result will likely follow an action.
- Contingent: their use depends on the situation.
Significance of principles of management
- Give managers useful insight: better understanding of real situations.
- Optimum use of resources: less waste of men, money and material.
- Scientific decisions: decisions based on facts, not personal bias.
- Meet changing needs: flexible rules adapt to change.
- Fulfil social responsibility: e.g. fair pay and equity.
- Help in management training, education and research: a base for teaching and new ideas.
Fayol's 14 principles of management
Henri Fayol (1841–1925), a French mining engineer, is called the father of general management.
- Division of work: split work into small tasks; each person specialises.
- Authority and responsibility: power to give orders must match the duty given.
- Discipline: follow rules and agreements; good superiors and fair penalties.
- Unity of command: each worker gets orders from only one boss.
- Unity of direction: one head and one plan for a group of activities with the same aim.
- Subordination of individual interest to general interest: the firm's goal comes first.
- Remuneration of employees: fair pay that gives a decent living.
- Centralisation and decentralisation: keep a balance between keeping power at the top and sharing it.
- Scalar chain: a formal line of authority from top to bottom. In an emergency, a gang plank lets two people at the same level talk directly.
- Order: a place for everything and everyone, and everything in its place.
- Equity: kindness and justice to all, no bias of caste, gender or religion.
- Stability of tenure: staff should not be moved or removed too often.
- Initiative: encourage workers to suggest and try new ideas.
- Esprit de corps: team spirit and unity; managers say "we" not "I".
Unity of command vs unity of direction
Unity of command is about one boss per worker and stops confusion of orders. Unity of direction is about one plan per group of activities and stops overlap of work.
Taylor's scientific management: principles
F.W. Taylor (1856–1915), an American engineer, is called the father of scientific management. Scientific management means doing work by the one best way found through study, not by guesswork.
- Science, not rule of thumb: replace guesswork with methods found by study and experiment.
- Harmony, not discord: managers and workers must see each other as partners. Taylor called this change of attitude a mental revolution.
- Cooperation, not individualism: workers and managers work together; workers' ideas are welcomed and managers share the load.
- Development of each person to his or her greatest efficiency: choose workers carefully and train them.
Techniques of scientific management
- Functional foremanship: 8 specialist bosses. Planning side: route clerk, instruction card clerk, time and cost clerk, disciplinarian. Production side: speed boss, gang boss, repair boss, inspector. It uses specialisation but breaks unity of command.
- Standardisation and simplification of work: fix standards for tools, methods and output; cut needless varieties of products and sizes.
- Method study: find the best way to do a job.
- Motion study: study body movements; remove useless ones.
- Time study: find the standard time for a job, using a stopwatch.
- Fatigue study: decide how many rest breaks and how long, so workers stay fresh.
- Differential piece wage system: two rates: a higher rate per unit for those who reach the standard, a lower rate for those below it.
Fayol and Taylor compared
Fayol looked from the top (general management, any organisation). Taylor looked from the shop floor (production efficiency). Fayol stressed unity of command; Taylor's functional foremanship used many bosses. Both help each other.
Key formulas and definitions
- Principle = broad, flexible guideline for decisions and action.
- Unity of command = one boss; unity of direction = one plan (one head) per group of activities.
- Scalar chain: formal line top → bottom; gang plank for emergency same-level talk.
- Differential wage: units ≥ standard → high rate × units; units < standard → low rate × units.
- Functional foremanship: 4 planning bosses + 4 production bosses = 8.
Worked examples
1. A salesman gets orders from both the sales manager and the regional head, and they conflict. Which principle is broken?
Unity of command (one worker, one boss).
2. A company makes both shampoos and biscuits, each run by one head with its own plan. Which principle is followed?
Unity of direction: one plan and one head for each group of activities.
3. Standard output is 20 units a day. Rates: ₹6 per unit at or above standard, ₹5 below. Ravi makes 21 units, Sita makes 19. Find their wages.
Ravi: 21 × 6 = ₹126. Sita: 19 × 5 = ₹95. Two units' difference gives ₹31 more pay.
4. In the case above, how much would Sita earn if she made just one more unit?
20 units reaches standard, so 20 × 6 = ₹120. That is ₹25 more than ₹95, a strong push to reach the standard.
5. A factory studies each movement of a worker packing boxes and removes three useless movements. Which technique?
Motion study.
6. A manager is given duty to raise sales by 20% but no power to hire staff or give discounts. Which principle is broken?
Authority and responsibility: the duty given is not matched by power.
Common mistakes
- Mixing unity of command (one boss) with unity of direction (one plan).
- Thinking principles are rigid rules like science laws. They are flexible and contingent.
- Saying functional foremanship follows unity of command. It breaks it (8 bosses).
- Calculating differential wages at the high rate for workers below standard.