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14 PRINCIPLES OF MANAGEMENT
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Henry Fayol, also known as the ‘father of modern management theory’ gave a new perception of the concept of management. He introduced a general theory that can be applied to all levels of management and every department. The Fayol theory is practiced by the managers to organize and regulate the internal activities of an organization. He concentrated on accomplishing managerial efficiency.
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Activity 1, PRODUCTION MANAGER OF VISTA LTD TOOK SPECIAL CARE OF THE INTEREST AND ABILITY OF HIS SUBORDINATES WHILE DISTRIBUTING WORK AMONG THEM. HE WAS OF THE FIRM OPINION THAT A WORKER SHOULD BE GIVEN ONE WORK AGAIN AND AGAIN SO THAT HE MAY BECOME EXPERT IN IT.
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(1) Division of Work:, This principle of Fayol tells us that as far as possible the whole work should be divided into different parts and each individual should be assigned only one part of the work according to his ability and taste rather than giving the whole work to one person., When a particular individual performs the same job repeatedly, he will become an expert in doing that particular part of the whole job. Consequently, the benefits of specialization will become available.
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Activity 2, THE SALESMAN OF ABC LTD COLUD NOT ACHIEVE HIS SALES TARGET OF 1000 UNITS. ON ENQUIRY IT WAS FOUND THAT HE WAS NOT ALLOWED TO TAKE DECISION RELATED TO GIVE DISCOUNT OR CREDIT TO ANY OF HIS CUSTOMER.
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(2) Authority and Responsibility:, According to this principle, authority and responsibility should go hand in hand. It means that when a particular individual is given a particular work and he is made responsible for the results, this can be possible only when he is given sufficient authority to discharge his responsibility.
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Activity 3, THE MANAGEMENT AND THE WORKERS HAVE ENTERED INTO AN AGREEMENT THAT WORKER WILL DO OVER TIME TO COVER UP THE LOSSES OF THE COMPANY, IN RETURN THE MANAGER WILL INCREASE THE WAGES. BUT MANAGEMENT LATER REFUSED TO INCREASE THE WAGES.
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(3) Discipline:, Discipline is essential for any successful work performance. Fayol considers discipline to mean obedience, respect for authority, and observance of established rules., Discipline can be established by providing good supervision at all levels, clearly explaining the rules, and implementing a system of reward and punishment. A manager can present a good example to his subordinates by disciplining himself.
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ACTIVITY 4, VIPIN WORK AS A PLANT SUPERIOR IN A CAR MANUFACTURING COMPANY. DUE TO INCREASE IN DEMAND THE SALES MANAGER INSISTED THE WORKERS TO FASTER THE PRODUCTION, THE PRODUCTION MANAGER ASKED THE WORKER TO WORK OVER TIME INSTEAD OF INCREASING THE SPEED TO MAINTAIN THE QUALITY OF PRODUCTION. WHERE AS THE FINANCE MANGER IS STRICTLY AGAINST THIS PRACTICE OF OVER TIME, BECAUSE IT INCREASE THE COST OF PRODUCTION.
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(4) Unity of Command:, According to the principle of unity of command, an individual employee should receive orders from only one superior at a time and that employee should be answerable only to that superior. If there are many superiors giving orders to the same employee, he will not be able to decide as to which order is to be given priority. He thus finds himself in a confused situation., Such a situation adversely affects the efficiency of the subordinates. On the other hand, when there are many superiors, every superior would like his orders to be given priority. This ego problem creates a possibility of clash. Consequently, their own efficiency is likely to be affected.
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ACTIVITY 5, ASWIN WAS ENGAGED IN THE BUSINESS OF SHOE MANUFACTURING. SINCE COMPANY WAS MAKING HANDCRAFTED AND MACHINE MADE SHOES, THERE WERE LOT OF OVERLAPPING OF ACTIVITIES, SO THE PRODUCTION MANAGER ADVICED THERE SHOULD BE TWO SEPARATE DIVISION FOR BOTH OF THEM. WHEREIN EACH DIVISION SHOULD HAVE ITS ON INCHARGE, PLANS AND EXECUTION.
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(5) Unity of Direction:, Unity of direction means that there should be one head for one plan for a group of activities having the same objective. In other words, there should be one plan of action for a group of activities having the same objective and there should be one manager to control them.
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ACTIVITY 6, a purchase manager of a company has to purchase 100 tonnes of raw material. His son happens to be a supplier along with other suppliers in the market. The manager purchases the raw material from the firm of his son at a rate higher than the market rate. Is this situation beneficial to the company? What do you think?
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(6) Subordination of Individual Interest to General Interest:, This principle can be named ‘Priority to General Interest over Individual Interest.’ According to this principle, the general interest or the interest of the organization is above everything. If one is asked to place individual interest and the general interest in order of priority, definitely the general interest will be placed at the first place.
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Activity 7, MR. A STARTED A SMALL BUSINESS WITH LIMITED INVESTMENT, HE HIRED LABOUR AND OFFERED THEM VERY LESS WAGES, OVER THE TIME WITH BROAD VISION OF MR. A AND HARDWORK OF HIS EMPLOYEES, THE BUSINESS STARTED EARNING HIGH REVENUE. BUT WITH INCREASE IN EARNING CAPACICITY OF THE COMPANY MR.A DID NOT INCREASED THE WAGES AND SALARY OF HIS EMPLOYEES, THEY WERE NOT ABLE TO MAINTAIN A REASONABLE STANDARAD OF LIVING.
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(7) Remuneration to Employees:, Fayol is of the opinion that the employees should get a fair remuneration so that the employees and the owners find equal amount of satisfaction. It is the duty of the manager to ensure that employees are being paid remuneration according to their work. If, however, they are not paid properly for their work, they will not do their work with perfect dedication, honesty and capacity. As a result, the organization shall have to face failure. Proper remuneration depends on some factors like the cost of living, demand of labour and their ability. Fayol feels that in order to motivate the employees, apart from general remuneration, they should be given some monetary and non-monetary incentives.
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Activity 8, ABC LTD PERMITS THEIR SALESPERSON TO GIVE DISCOUNT UPTO 10% AS PER THEIR DISCRETION AND CREDIT TO THEIR REGULAR CUSTOMER. IF THE SALESMEN WANTS TO GIVE MORE THAN 10% DISCOUNT FOR SPECIAL ORDER, THEY HAVE TO TAKE PERMISSION FROM TOP LEVEL.
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(8) Centralisation and Decentralisation:, According to this principle, the superiors should adopt effective centralisation instead of complete centralisation and complete decentralisation. By effective centralisation, Fayol does not mean that authority should be completely centralised., He feels that the superiors should keep the authority of taking important decisions in their own hands, while the authority to take daily decisions and decisions of less importance should be delegated to the subordinates., The ratio of centralisation and decentralisation can differ in different situations. For example, it is advantageous to have more centralisation in a small business unit and more decentralisation in a big business unit.
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Activity 9
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(9) Scalar Chain:, It refers to a formal line of authority which moves from highest to the lowest ranks in a straight line,, This chain must be followed in a strict manner. It means each communication must move from top to bottom and vice versa in a straight line. The important condition here is that no step (post) should be overlooked during communication., Gang Plank: It is the exception of the principle of scalar chain. This concept was developed to establish a direct contact with the employee of equal rank in case of emergency to avoid delay in communication.
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Activity 10, IN A SCHOOL BOOKS ARE KEPT IN OFFICE, CHALKS IN THE LIBRARY, OFFICE RECORDS AND FILE IN STAFF ROOM.
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(10) Order:, According to the principle of order, a right person should be placed at the right job and a right thing should be placed at the right place. According to Fayol, every enterprise should have two different orders-Material Order for Physical Resources and Social Order for Human Resources., Keeping the physical resources in order means that ‘a proper place for everything and everything in its right place’. Similarly, keeping the human resources in order means ‘a place for everyone and everyone in his appointed place’., Maintaining these two orders properly will ensure that everybody knows his workplace, what he is to do and from where he would get his required material. Consequently, all the available resources in the organisation will be utilized properly.
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Activity 11, TINA AND RAJU COMPLETED THEIR MBA AND STARTED WORKING IN A MNC AT THE SAME LEVEL. RAJU HAS THE HABIT OF BACKBITING AND WRONG REPORTING ABOUT HIS COLLEAGUES TO IMPRESS THE BOSS. BUT AT THE TIME OF PERFORMANCE APPRAISAL TINA WAS RANKED FIRST IN PERFORMANCE. EVEN THEN THEIR BOSS DECIDED TO PROMOTE RAJU STATING THAT BEING A FEMALE, TINA WILL NOT BE ABLE TO HANDLE THE COMPLICATIONS OF HIGHER POST.
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(11) Equity:, This principle tells that the managers should treat their subordinates in a just and kind manner so that they develop a feeling of dedication and attachment for their work. All the employees should be treated equally and impartially., Fayol tells us in connection with this principle that there should not be any equality of treatment between a person whose work is really good and a person who is a shirker by nature., Rather, the latter should be treated sternly. Doing so would be equitable. It is because of this point of view that Taylor has presented his differential remuneration method.
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Activity 12, DC ltd is a company which take care of the fact that the confidence of the employees should always be at its peak. For this reason they give surety to their employees for employment for a minimum fixed tenure of time.
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(12) Stability of Personnel:, From the point of view of management it is absolutely harmful to change the employees frequently as it is a reflection of inefficient management. Therefore, according to this principle there should be stability of tenure of the employees so that the work continues efficiently., Fayol thinks that instability in the tenure of employees is a cause of poor management and results. High rate of labour turnover will result in increased expenses because of selecting them time and again, and giving them training afresh., It also lowers the prestige of the organisation and creates a feeling of insecurity among the employees which keeps them busy in finding out new avenues of work. Consequently, the sense of dedication cannot be created among them.
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Activity 13, ABC LTD IS MANUFACTURING FILES AND FOLDERS FROM OLD CLOTHES TO DISCOURAGE THE USE OF PLASTIC FILES AND FOLDERS. FOR THIS, THEY EMPLOYEE PEOPLE FROM NEAR BY VILLAGES WHERE VERY LESS JOB OPPURTUNITIES ARE AVAILABLE. AN EMPLOYEE, RAJU, DESIGNED A PLAN FOR COST REDUCTION BUT IT WAS NOT WELCOMED BY THE PRODUCTION MANAGER. ANOTHER EMPLOYEE GAVE SOME SUGGESTIONS FOR IMPROVEMENT IN DESIGN, BUT IT WAS ALSO NOT APPRECIATED BY THE PRODUCTION MANAGER.
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(13) Initiative:, Initiative means the capacity to work while expressing one’s thoughts. According to Fayol, it is the duty of the manager to encourage the feeling of initiative among his employees for doing some work or taking some decision but within the limits of authority and discipline., It will be possible only when the manager will welcome the thoughts of his/her subordinates. By doing so the subordinates will present new and useful ideas time and again and gradually they will become an integral part of the organisation. In order to make this process a success a manager will have to abandon his false sense of prestige.
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Activity 14, A floor manager of a mall is very capable as he utilizes all the functions of management. He lays stress on developing mutual trust and spirit of cooperation among the employees. Under his guidance the employees admit that they learn a lot and are capable to meet their targets. This has led to increase in their salaries.
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(14) Esprit de corps:, As per this principle, a manager should continuously make efforts to develop a team spirit among the subordinates. To do this, he/she should use the word ‘We’ instead of” during the conversation with subordinates.
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task, Match the following
