Page 1 :
II Year_Business Studies_Chapter 2, , Chapter2, , Principles of Management, Techniques of Scientific Management:, Functional Foremanship: Foreman is a managerial person who have direct contact with, employees. He is the person responsible for the implementing the activities at floor level. Taylor, concentrate on the improvement of qualities of foreman or supervisor. He advocated separation of, planning and execution function. It is known as functional foremanship. Under the factory manager, there was a planning incharge and a production incharge., Under Planning Incharge there are fours specialists:, a) Card clerk - Give instructions for the workers, b) Route clerk - Specify the route of production, c) Time and Cost clerk - Prepare time and cost sheet, d) Disciplinarian - Ensure discipline, Under Production Incharge there are another four specialists:, a) Speed boss - Timely and accurate completion of job, b) Gang boss – Keeping machines and tools etc.,ready for operation by workers, c) Repair boss – Ensure proper working condition of machines and tools,, d) Inspector – Check the quality of work, Functional foremanship is an extension of the principle of division of work and specialisation.Each, worker have to receive orders from these eight foremen in relation to various area of operations., Foreman should have the intelligence, education, judgement, special knowledge. Etc. But a single, person should not have all these qualities. So Taylor suggests eight specialists given work, according to their area of specialisation., Standardisation and Simplification of Work: Scientific method should be used to analyse, methods of production. Best methods can be kept and further refined to develop a standard., Analysis of methods are done through Work Study which includes time study, motion study, fatigue, study and method study. Standardisation refers to setting standards for every business activities., Standards are set for process, raw material, time, product, machinery, methods or working, conditions. These standards are the benchmark which has to be compared with actual, performance. Objectives of standardisation are:, i) To reduce a given line or product to fixed types, sizes and characteristics., (ii) To establish interchange ability of manufactured parts and products., (iii) To establish standards of excellence and quality in materials., (iv) To establish standards of performance of men and machines., Simplification aims at eliminating unnecessary diversity of products. It results in saving cost, of materials, labour, machine and tools. It leads to fuller utilisation of resources and increasing, sales volume., Method Study: The objective of method study is to find out one best way of doing the job. To find, the best method several parameters are to be considered. Method study aims to minimise the cost, of production and maximise the quality and customer satisfaction. Techniques like process charts, and operations research etc are used to identify the best method., Motion Study: It refers to study of movements like lifting, putting objects, sitting and changing, positions etc while doing a particular job. Eliminates unnecessary movements and take less time to, complete the job. Motions may be: (i) Motions which are productive, (ii) Motions which are, incidental, Eg. Going to store and (iii) Motions which are unproductive. Different symbols and, colours are used to identify different motions. Uuitable equipment and tools are designed to, educate workers on their use., Time Study: It determines the standard time taken to perform a particular job. Standard time is, fixed for the whole of the task by taking several readings. Objective of time study is to determine, , Prepared by Dr.K.R.Rajesh babu, GHSS, Thottada, Kannur (9447793940, 8848951808)

Page 2 :
II Year_Business Studies_Chapter 2, , the number of workers to be employed, frame suitable incentive schemes and determine labour, costs., Fatigue Study: Fatigue study determines the amount and frequency of rest intervals required in, completing a task. Rest intervals will helps the workers to regain stamina and work again with the, same capacity., Differential piece Wage System: Taylor proposed for differentiate between efficient and inefficient, workers. Standard time and other parameters are determined for each job on the basis work study., Workers can be classified as efficient or inefficient on the basis of standards. Workers perform, above the standard will be paid at a higher rate. (Efficient workers). Workers perform below the, standard will be paid at a low rate. (Inefficient workers). Taylor says that workers and managers, should work in harmony for increasing the output rather than restricting it. This concept is called as, mental revolution. Mental revolution involves a change in the attitude of workers and management, towards one another from competition to cooperation. Management and worker should aim to, increase the volume of Profit., Latest development in Scientific Management is ‘LEAN MANUFACTURING’. Robotics and, computers are used in production and other business activities. Techniques of operation research, are developed and used as a result of scientific management., Fayol’s Principles of Management:, Henri Fayol (1841-1925) was a French management, theorist whose theories are widely influenced in the beginning of twentieth century. He graduated in, mining engineering from the Mining Academy of St. Etienne in 1860. His writings “Administration, industrielle et générale” was published in English as “General and Industrial Management”., He firstly identify the four functions of management, ie, Planning, Organising, Directing and, Controlling. He divided all the activities of industrial undertakings in to Technical, Commercial,, Financial, Security, Accounting and Managerial. He suggested that qualities a manager must, include Physical, Moral, Education, Knowledge and experience., 14 Principles of Management:, (i) Division of Work: Work in an organisation is divided into small tasks/jobs. Division of work, leads to specialisation. Main objective of division of work is to produce more and better work for the, same effort. Work can be performed more efficiently if it is divided into specialised tasks. Each, worker becomes specialists in their area of operations., (ii) Authority and Responsibility: Authority is the right to give orders and obtain obedience., Responsibility is the end result of authority. Two types of authority, Official authority - authority to, command, the, subordinates, and, Personal, authority, –, authority, of, the, individual manager. There may be formal and informal authority. There should be a balance between, authority and responsibility. A manager should havevnecessary authority to carry out his, responsibility., (iii) Discipline: Discipline refers to obedience to organisational rules and employment agreement., Discipline requires good superiors at all levels, clear and fair agreements and judicious application of, penalties. Discipline aims that workers and management both honour their commitments., (iv) Unity of Command: According to this principle One and only one boss for every individual, employee. Unity of command states that each employee in an organisation should receive orders from and be, responsible to only one superior. This is to prevent confusion regarding works to be performed., (v) Unity of Direction: Each group of activities having the same objective must have one head and one, plan. This ensures unity of action and coordination., Differences between Unity of Command and Unity of Direction, Basis, Unity of Command, Unity of Direction, 1. Meaning, , One subordinate should receive Each group having same objective must, orders from and responsible to, have one head and one plan., only one superior., , Prepared by Dr.K.R.Rajesh babu, GHSS, Thottada, Kannur (9447793940, 8848951808)

Page 3 :
II Year_Business Studies_Chapter 2, , 2. Aim, , Prevents dual subordination., , Prevents overlapping of activities., , 3. Implications, Affects an individual employee., Affects the entire organisation., (vi) Subordination of Individual Interest to General Interest: Interests of an organisation should, have priority over the interests of an employee. The interests of the group/company will supersede the, interest of an employee. Because larger interests of the workers and stakeholders are more important, than the interest of any one person., (vii) Remuneration of Employees: Employees should be paid fair wages for their work leading a, reasonable standard of living. Pay and compensation should be fair to both employees and the organisation., Pay and allowances should be within the paying capacity of the organisation. Remuneration should be just, and equitable., (viii) Centralisation and Decentralisation: Concentration of decision making power is called, centralisation. Dispersal of decision making power among more than one person is called, decentralisation. Employee involvement through decentralisation with managers must be balanced with, the retention of final authority at the top through centralisation. The degree of centralisation will depend, upon the circumstances in which the organisation is working., , (ix) Scalar Chain: Formal lines of authority from top level, to lower levels are known as scalar chain. Organisations, should have a chain of authority and communication from top, to bottom and should be followed by all., ‘A’ who has two lines of authority, (a) A-B-C-D-E-F & (b) L-M-N-O-P, If E wants to communicate with O (same level) it is possible, only through the line. But in emergency, E can directly contact, with O., This is called Gang Plank., (x) Order: People and materials in an organisation must be in right places at right time for maximum, efficiency. It states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’., This will lead to increased productivity and efficiency., (xi) Equity: Equity means no discrimination against anyone on account of sex, religion, language, caste,, belief or nationality etc. This principle states that equal opportunities are available for everyone., (xii) Stability of Personnel: Employee turnover should be minimised to maintain organisational, efficiency. Once an employee is selected, he should be kept at his post for a fixed period. An, employee should be given reasonable time to show the results of his work., (xiii) Initiative: Initiative means taking the first step with self-motivation. Initiative should be, encouraged. But it does not mean going against the established rules of the organisation for the, sake of being different. Employee initiative/suggestions result in cost/time reduction should be, rewarded., (xiv) Espirit De Corps: Espirit de corps means union is strength. Management should promote a, team spirit of unity and harmony among the employees. Manager should use “WE” instead of “I” in, conversation with workers to promote team spirit. It helps to rise to a spirit of mutual trust and, belongingness among team members., $$$$$$$$$$$$$$$$$$$$$$$$$, , Prepared by Dr.K.R.Rajesh babu, GHSS, Thottada, Kannur (9447793940, 8848951808)