class12 Principles of Management Notes
PRINCIPLES OF MANAGEMENT
Meaning: Principles refers to a statement which reflects the fundamental truth about some
phenomenon. Management principles are derived on the basis of observation and analysis of
events which managers have to face in actual practice.
Definition
“Principles of management are the guiding rules or laws for managerial action” – H.G. Hicks.
Nature of Management Principles:
1. Universal Applicability - Management principles have universal application in all types
of organizations and in all places like business organizations, police force, sports clubs,
family etc.
2. General Guidelines – Management principles are derived from experience and
analysis and they are in the form of mere statements. These statements are guidelines
for action but not provide solution to all managerial problems.
3. Formed by practice and experimentation
4. Flexible - Management principles never remain static; they are applied in given
situations.
5. Mainly behavioural - Human behavior is unpredictable and it is often situational. This
complex human behavior needs a sense of direction and guidance. Management
Principles attempt to provide such guidance in human action. For instance Team work
as a principle is good for attainment of organization goals, but it is a personalized
intellectual task like painting a picture, individual contribution is more valid than team
work.
6. Cause and effect relationship – Cause and effect relationship is indicated by
management principles. For example, the principle “Unity of Command” states that
presence of a single boss avoids confusion. Here the presence of Unity of Command is
the cause and avoidance of confusion is the effect.
7. Contingent - Management Principles are to be applied in accordance with the situation
and organizational requirements, then only it will be successful.
Significance of Principles of Management
1. Providing Managers with useful insights into reality: Adherence to the principles of
management will add to their knowledge, ability and understanding of managerial
situations.
2. Optimum Utilization of Resources: Principles of Management point out how time,
money, materials and human efforts can be used economically to improve productivity.
This fact can be seen in the principles of division of work, delegation of authority etc.
3. Scientific Decisions: With the help of Management Principles, managers can take
appropriate decisions in right time.
4. Meeting changing environment requirements – Management principles are highly
flexible and therefore can be modified to meet changing requirements of environment.
5. Fulfilling social responsibility – Good quality products to the customers, care for
environment, opportunities for employment, education for the children of employees etc.
are some of the examples for social responsibilities.
6. Management training, education and research – A well organized and systematic
body of knowledge (management principles) is essential for imparting training and
education to managers for functioning efficiently.
Fayol’s Principles of Management
Henry Fayol (1841-1925) – French Engineer in a mining company – became the Managing
Director of the company – author of “General and Industrial Management” – his
management thoughts are acceptable even today – father of Modern Management. A brief
description of Fayol’s fourteen principles of management is given below:- 1. Division of Work – This principle states that a complex work should be divided into
small tasks, and each task should be assigned to a particular employee. This makes
each task simpler and easier to perform and results in efficiency because by doing a small part of work repeatedly, the employee acquires speed and perfection. This
principle is applicable to both technical and managerial activities.
2. Authority and Responsibility – Authority is the right to give orders to the
subordinates. Responsibility means obligation to perform the work in the manner
desired and directed by authority. If authority is given to a person, he should also be made responsible.
3. Discipline – It means obedience, respect for authority and observation of established
rules. It ensures the smooth running of the organization and applicable for workers and management.
4. Unity of Command – This principle states that each employee should receive orders
from one superior only. More than one superior at a time leads to confusion.
5. Unity of Direction – This principle states that the activities, which have a common
objective must be grouped together and under one head. In other words, all the
operations and departments in the organization should be directed towards the common
goal.
Differences between Unity of Command and Unity of Direction
6. Subordination of Individual Interest to General Interest – The business enterprise issuperior to individuals. The interest of the business must prevail over personal interests
of the individuals.
7. Remuneration of Employees- The remuneration for work done must be fair and reasonable. It must inspire the employees to work hard so that the organization earns more profi
8. Centralization and Decentralization - Centralization refers to concentration of
authority at one place or one level in the organization i.e., top management.
Decentralization means dispersal of authority to lower levels. There should be a
balance between centralization and decentralization based on the nature of the job.
Anyhow utmost centralization or decentralization is not good.
moving towards the lowest rank. It is a must that
communication should pass through this chain of
command. But in case of urgency the established chains
can be violated and Gang Plank (direct contact) between
two concerned authorities may be established.
Short-circuiting the chain of command where emergency
decisions are to be taken is known as Gang Plank.
10.Order – This principle is based on the general saying, “Have a place for everything and
keep everything in its place”. All materials are to be kept in proper place (Material
Order) and the right man is to be assigned the right job (Social Order).
11.Equity – (Equality) This principle says that superiors should be impartial while dealing
with their subordinates.
12.Stability of Personnel – Fayol says that managers and workers should not be shifted
from their positions frequently. A person needs time to adjust himself to new work
environment.
13.Initiative – It implies the creativity in an individual which must be utilized for the
development of the organization.
14.Esprit de Corps (Union is Strength) – The contribution of a team is more significant
than that of an individual. Team spirit helps in developing an atmosphere of mutual trust and understanding.
Taylor’s Scientific Management
F.W. Taylor (1856 – 1915) – father of Scientific Management – American Mechanical Engineer
in Midvale Steel Company – keen analyst and critical of management for poor performance of
their organization – conducted a series of experiments for more than two decades and finally
launched the movement in 1910 which is known as “Scientific Management”.
WRITINGS: ‘The Principles of Scientific Management’ series of articles published in ‘The
American Magazine’ during march-may 1911, later published in book form.
Meaning and Definition – Scientific Management refers to the application of science in
management practices. He advocated a detailed scientific study of each job to determine the
best way of doing it.
Definition – “Scientific Management means knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way” - F.W.Taylor.
Aims and objectives
1. Increasing production – by the use of standardized tools, methods and devices.
2. Improved quality – by using quality control and research.
3. Reducing cost – by using scientific techniques of production.
4. Selection of right person for right work – by scientific selection and training to workers.
5. Reduction of wastages – by proper handling of resources.
6. Provision of incentive wages – by applying differential piece wage system.
Principles of Scientific Management
1. Science, not rule of thumb – Rule of thumb means application of traditional methods
or the methods decided by the managers based on their past experience. All these
methods are often untested and unscientific; they do not guarantee success. In other
words, the rule of thumb can be seen as ‘the dictatorship of the manager’ which should
be avoided. Taylor suggested ‘thinking before doing’, i.e “Trial and Error Method’ should
be avoided and a scientific study must be done before solving any problem or doing a
work.
2. Harmony, not discord (conflict) – This principle states that there should be complete
harmony between management and the workers. This can be achieved through a
change in the attitude of workers and the management. Taylor calls it as “Mental
Revolution”. Management should share the gains with workers and the workers should
work hard and accept changes for achievement of goals.
3. Co-operation, not individualism – This principle is an extension of “Harmony, not
discord”. This principle states that there should be complete cooperation between
management and workers instead of individualism. Management should take workers
into confidence and give them participation in decision making. Workers should not
indulge in unnecessary strikes and raise unreasonable demands. Taylor suggested that
there should be equal division of work and responsibility between the workers and the
management.
4. Development of each and every person to their greatest efficiency and prosperity
– This principle states that the efficiency of all workers is a must for which they have to
be provided with maximum prosperity. For this, Taylor advocated scientific methods for
selection, training and development of workers. If workers put in their best effors, it
ensures maximum prosperity not only to workers but also to the organization.
Techniques of Scientific Management
1. Standardization and simplification of work – It refers to the process of setting
standards for every business activity. 2. Method Study – It is conducted to know the best method of doing a job.
3. Motion Study – It helps to eliminate unnecessary movements of men and material
while doing a job.
4. Time Study – Through time study, the minimum time required for each element of work
is determined. It helps in fixing a standard time for the job which will save cost, time
and effort.
5. Fatigue Study – It seeks to determine the amount and frequency of rest intervals in
doing a job. Intervals should be scientifically determined. This would help to recoup the
6. Differential piece wage system – It refers to a wage system in which dual wage rates are fixed to differentiate between efficient and inefficient workers. E.g., Standard output per day 30 units, two wage rates are Rs.10 and Rs.8 per unit. Worker Ajith produces 30 units a day and gets Rs.300. Worker Mohan produces only 28 units and he earns Rs. 224 only. Here Mr. Mohan loses Rs.76 just for a shortfall of 2 units. Taylor recommended that this system will be enough to motivate the inefficient worker to
7. Functional Foremanship – Taylor said that, specialization
must be introduced in the
organization. Functional
foremanship is a form of
organization which involves
supervision of a worker by
several specialist foremen. a. Instruction Card Clerk – To lay down the exact method of doing a work, use of tools and
equipments etc.
b. Route Clerk - To lay down the sequence of operation and direct the workers to follow
the same.
c. Time and Cost Clerk – To lay down the time table for doing various jobs and maintain
the records of the cost of work.
d. Disciplinarian – To enforce rules and regulations and maintain discipline among
workers.
e. Speed Boss – Ensures that machines are run at their optimum speed.
f. Gang Boss – To assemble and set up various equipments and tools to enable the workers begin their work immediately after entering the shop.
g. Repair Boss – Ensures regular cleaning, servicing and repair of machines to keep
them in efficient working order.
h. Inspector – To ensure that the workers do their work to the desired quality and that the jobs are executed as per specifications.
Fayol versus Taylor – A Comparison
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