INTRODUCTION
A managerial principle is a broad and general guideline for decision making and behavior.
A body of principles of management has been developed by HENRI FAYOL , the father of modern management.
Life Time:1841 to 1925
Occupation: French Management Theorist.
Fayol explained what amounts to managers work and what principles should be followed in doing this work. If workers efficiency mattered in the factory system , so does the managerial efficiency.
Fayol was the first to identify four functions-Planning , Organizing ,Directing and Controlling.
The 14 principles of management propounded by him were discussed in detail in his book published in 1917 , ‘Administration industrielle et generale’.
Intended to apply to all types of organizations , business & non business , small & large , public & private sector , manufacturing & service sectors.
The principles are guidelines to action but not the ready-made
solutions to all managerial problems as real business situations are
complex and dynamic.
2.To find the remedy of problem of fatigue of workers in the factory , an experiment may be conducted to see the effect of improvement of physical conditions to reduce stress.
Example – While planning the layout of a factory , orderliness would require that workflows are matched by flow of materials and movement of men.
NATURE OF PRINCIPLES OF MANAGEMENT
1.UNIVERSAL APPLICABILITY –
Intended to apply to all types of organizations , business & non business , small & large , public & private sector , manufacturing & service sectors.
2. GENERAL GUIDELINES –
The principles are guidelines to action but not the ready-made
complex and dynamic.
Example- In dealing with a situation of conflict between 2 departments , a manager may emphasize the primacy of the overall goals of the organization.
3. FORMED BY PRACTICE AND EXPERIMENTATION –
The principles are formed by experience and collective wisdom of managers.
Example –
1 .It is a matter of common experience that discipline is indispensable for accomplishing any purpose.
2.To find the remedy of problem of fatigue of workers in the factory , an experiment may be conducted to see the effect of improvement of physical conditions to reduce stress.
4.FLEXIBLE –
Principles are not rigid prescriptions. It can be modified by the manager when the situation demands.
Example – The degree of concentration of authority will depend upon the situations and circumstances of each enterprise.
5. MAINLY BEHAVIOURAL –
Principles aims at influencing behaviour of human beings. Enable a better understanding of the relationship between human and material resources.
Example – While planning the layout of a factory , orderliness would require that workflows are matched by flow of materials and movement of men.
6. CAUSE AND EFFECT RELATIONSHIP –
These principles tell us if a particular guideline was applied in a
particular situation , what would be its likely effect. Situations are
not identical , therefore it is desirable that someone takes charge
and others just follow. So these principle can be applied in similar
situations.
particular situation , what would be its likely effect. Situations are
not identical , therefore it is desirable that someone takes charge
and others just follow. So these principle can be applied in similar
situations.
1.DIVISION OF WORK
It states that work is divided into small tasks/jobs. A trained specialist who is competent is required to perform each job.
Thus it leads to SPECIALISATION.
ØAccording to Fayol , “ The intent of division of work is to produce more and better work for same effort. Specialisation is the most efficient way to use human effort.”
ØThus there are different departments for Finance , Productions , Marketing , Human Resources etc in an organization.
ØFayol applies this principle to all kinds of work-technical and managerial.
2. AUTHORITY AND RESPONSIBILITY :
According to Fayol , " Authority is the right to give orders and obtain obedience , and responsibility is the corollary of authority.
2. AUTHORITY AND RESPONSIBILITY :
According to Fayol , " Authority is the right to give orders and obtain obedience , and responsibility is the corollary of authority.
The types of authority are
- Official :It is the authority to command.
- Personal Authority: The authority of the individual manager.
- Formal and informal.
There should be balance between authority and responsibility.
Example -
A sales manager have to negotiate a deal with a buyer . If they find that if they can offer a credit period of 60 days they are likely to get the deal which is supposed to fetch the company a good net margin. Now the company gives the power to the manager to offer a credit period only of 40 days.
This shows an imbalance of authority and responsibility.
Example -
A sales manager have to negotiate a deal with a buyer . If they find that if they can offer a credit period of 60 days they are likely to get the deal which is supposed to fetch the company a good net margin. Now the company gives the power to the manager to offer a credit period only of 40 days.
This shows an imbalance of authority and responsibility.
A manager should have the right to punish a subordinate for not obeying their orders.
3. DISCIPLINE :
It is the obedience to the organizational rules and employment agreement which are necessary for working of the organization.
According to Fayol , discipline requires good superiors at all levels , clear and fair agreements and judicious application of penalties.
Example-
Suppose management and labour union have entered into an agreement whereby workers have agreed to put in extra hours without any additional payment to revive the company out of loss. In return the management has promised to increase wages when the mission is accomplished . Here discipline applied would mean that the workers and management both honour their commitments without any prejudice towards one another.
4. UNITY OF COMMAND :
According to Fayol there should be one and only one boss for every individual employee.
If the employee gets orders from two superiors at the same time the principle of unity of command is violated and--
Authority is undermined , discipline is in jepoardy , order disturbed and stability threatened.
Dual subordination should be avoided to prevent confusion regarding tasks to be done.
Example-
Suppose a sales person is asked to clinch a deal with buyer and is allowed to give 10 % discount by the marketing manager. But finance department tells not to offer more than 5 % discount.
There is no unity of command .
5. UNITY OF DIRECTION :
It states that all the units of an organization should be moving towards the same objectives through coordinated and focused efforts .
Each group of activities having the same objective must have one head and one plan .
Example-
If a company is manufacturing garments as well as shoes then it should have two separate divisions for both of them . Each division should have its own in-charge , plans and resources .
DIFFERENCE BETWEEN UNITY OF COMMAND AND UNITY OF DIRECTION :
6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST :
DIFFERENCE BETWEEN UNITY OF COMMAND AND UNITY OF DIRECTION :
| BASIS | UNITY OF COMMAND | UNITY OF DIRECTION |
|---|---|---|
| 1. MEANING | One subordinate should receive orders from and should be responsible to only one superior . | Each group of activities having same objective must have one head and one plan . |
| 2. AIM | To prevent dual subordination . | To prevent overlapping of activities . |
| 3. IMPLICATIONS | It affects an individual employee . | It affects the entire organization . |
6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST :
It states that the interests of an organization should take priority over the interests of any one individual employee .
This is because larger interests of the workers and stakeholders are more important than the interest of any one person .
This is because larger interests of the workers and stakeholders are more important than the interest of any one person .
Every worker has some individual interest for working in a company. The company has its own objectives.
Example -
The company would want to get maximum output from its employees at a competitive cost . On the other hand , an employee may want to get maximum salary while working the least .
7. REMUNERATION OF EMPLOYEES :
The overall pay and compensation should be fair to both employees and the organization.
The employees should be paid fair wages , which should give them at-least a reasonable standard of living. At the same time it should be within the paying capacity of the company .
THE REMUNERATION SHOULD BE " JUST AND EQUITABLE."
This will ensure good atmosphere and relations at the company .
8. CENTRALISATION AND DECENTRALISATION :
The concentration of decision making authority is called centralization .
Dispersal among more than one person is known as decentralization .
According to Fayol " There is a need to balance subordinate involvement through decentralization with managers " and
Retention of authority through centralization .
The degree of centralization will depend upon the circumstances in which the company is working .
Large organizations---More decentralization .
9. SCALAR CHAIN:
An organization consist of superiors and subordinates .
The formal lines of authority from highest to lowest ranks are known as scalar chain .
According to Fayol " Organizations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and subordinates ."
GANG PLANK- The shorter route of communication provided so that communication is not delayed. "
If A is the head having 2 lines of authority :
B-C-D-E-F and L-M-N-O-P
If A has to communicate to O who is at the same authority level he/she will have to traverse the route E-D-C-B-A-L-M-N-O .
This is because of SCALAR CHAIN .
But Gang plank --direct communication can be adopted in emergency situations .
10. ORDER :
According to Fayol " People and material must be in suitable places at appropriate time for maximum efficiency."
This principle states that " A place for everything (everyone) must be there. "
If there is a fixed place for everything there will be no hindrance and confusion .
11. EQUITY :
According to Fayol " Good sense and experience needed to ensure fairness to all employees , which should be treated as fairly as possible. "
The principle emphasise kindliness and justice in the behaviour of managers towards workers to ensure loyalty and devotion .
There should be no discrimination on any basis towards anyone .
12. STABILITY OF PERSONNEL :
According to Fayol "Employee turnover should be minimized to maintain organizational efficiency. "
Personnel should be selected and appointed after due and rigorous procedure. Once selected they should be kept at their post / position for a minimum fixed tenure .They should be given reasonable tome to show results.
Any instability creates insecurity among employees and they tend to leave the organization .
13. INITIATIVE :
Workers should be encouraged to develop and carry out their plans for improvements .
Initiative means taking the first step with the self motivation. It is thinking and executing the plan . It is one of the traits of an intelligent person.
It can be done by allowing suggestions and ideas from all managers and staff in the company.
14. ESPIRIT DE CORPS :
Management should promote a team spirit of unity and harmony among employees .
A manager should replace "I" with "WE" in all the conversations .
Example -
The company would want to get maximum output from its employees at a competitive cost . On the other hand , an employee may want to get maximum salary while working the least .
7. REMUNERATION OF EMPLOYEES :
The overall pay and compensation should be fair to both employees and the organization.
The employees should be paid fair wages , which should give them at-least a reasonable standard of living. At the same time it should be within the paying capacity of the company .
THE REMUNERATION SHOULD BE " JUST AND EQUITABLE."
This will ensure good atmosphere and relations at the company .
8. CENTRALISATION AND DECENTRALISATION :
The concentration of decision making authority is called centralization .
Dispersal among more than one person is known as decentralization .
According to Fayol " There is a need to balance subordinate involvement through decentralization with managers " and
Retention of authority through centralization .
The degree of centralization will depend upon the circumstances in which the company is working .
Large organizations---More decentralization .
9. SCALAR CHAIN:
An organization consist of superiors and subordinates .
The formal lines of authority from highest to lowest ranks are known as scalar chain .
According to Fayol " Organizations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and subordinates ."
GANG PLANK- The shorter route of communication provided so that communication is not delayed. "
If A is the head having 2 lines of authority :
B-C-D-E-F and L-M-N-O-P
If A has to communicate to O who is at the same authority level he/she will have to traverse the route E-D-C-B-A-L-M-N-O .
This is because of SCALAR CHAIN .
But Gang plank --direct communication can be adopted in emergency situations .
10. ORDER :
According to Fayol " People and material must be in suitable places at appropriate time for maximum efficiency."
This principle states that " A place for everything (everyone) must be there. "
If there is a fixed place for everything there will be no hindrance and confusion .
11. EQUITY :
According to Fayol " Good sense and experience needed to ensure fairness to all employees , which should be treated as fairly as possible. "
The principle emphasise kindliness and justice in the behaviour of managers towards workers to ensure loyalty and devotion .
There should be no discrimination on any basis towards anyone .
12. STABILITY OF PERSONNEL :
According to Fayol "Employee turnover should be minimized to maintain organizational efficiency. "
Personnel should be selected and appointed after due and rigorous procedure. Once selected they should be kept at their post / position for a minimum fixed tenure .They should be given reasonable tome to show results.
Any instability creates insecurity among employees and they tend to leave the organization .
13. INITIATIVE :
Workers should be encouraged to develop and carry out their plans for improvements .
Initiative means taking the first step with the self motivation. It is thinking and executing the plan . It is one of the traits of an intelligent person.
It can be done by allowing suggestions and ideas from all managers and staff in the company.
14. ESPIRIT DE CORPS :
Management should promote a team spirit of unity and harmony among employees .
A manager should replace "I" with "WE" in all the conversations .
