14 Principles of Management

Group Members
Ayush Dixit Disha Bhuptani Mansee Prabhuajgaonkar Reeta Nadar Shubhangi Ahire Snehal Dolas Steffi Fernandes

Flow of presentation

Introduction to Management Definitions Features of Management Significance of management Management as art, Science and profession Levels of Management About Henri Fayol Origin of Principles of management 14 Principles of management
Division of Work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual interest Remuneration Centralization Scalar Chain Order Equity Stability of Tenure Initiative Espirit De corps

Importance of Principles Of management Case Study Conclusion Bibliography

INTRODUCTION
THE SURVIVAL AND SUCCESS OF AN

ORGANISATION LARGELY DEPENDS UPON THE QUALITY OF MANAGEMENT.

THEREFORE,IT IS VITAL FOR EVERY ORGANISATION TO HAVE DYNAMIC AND DEDICATED MANAGERS.

DEFINITIONS
MARY PARKER FOLLET STATED

MANAGEMENT IS THE ART OF GETTING THINGS DONE THROUGH PEOPLE.

HENRY FAYOL DEFINESTO MANAGE IS TO FORECAST AND TO PLAN,TO ORGANISE,TO COMMAND,TO COORDINATE AND TO

CONTROL.

NATURE AND FEATURES OF MANAGEMENT

a. b. c. d. e. f. g. h. i. j. k. l. m. n. o.

Management is goal oriented Management integrates human, Physical anf financial resources Management is continuous Management is all pervasive Management is a group activity Organised Activities Existence of objectives Decision making Relationship among resources Working with and through people Multidisciplinary Management is dynamic Relative not absolute principles Management as profession Management is universal

SIGNIFICANCE/PURPOSE/NEED/ IMPORTANCE OF MANAGEMENT

INNOVATION CORPORATE IMAGE TEAM WORK OPTIMUM USE OF RESOURCES e) MOTIVATION f) CUSTOMER SATISFACTION g) REDUCTION IN ABSENTEEISM
a) b) c) d) h) REDUCTION IN

LABOUR TURNOVER i) REDUCTION IN WASTAGES j) HIGHER EFFICIENCY k) BETTER RELATIONS l) ENCOURAGES INITIATIVE m) FACILITATES GROWTH AND EXPANSION n) HELPS TO FACE COMPETITION

MANAGEMENT AS AN ART MANAGEMENT AS A SCIENCE MANAGEMENT AS A PROFESSION

LEVELS OF MANAGEMENT

Mr. Henri Fayol (1841 -1925)

One of the most influential contributors to modern concepts of management, having proposed that there are five primary functions of management: Planning, Organizing, Commanding, Coordinating, and Controlling The nineteen year old engineer started at the mining company ultimately acting as its managing director. Described as the father of modern operational management theory Based largely on his own management experience,Fayol developed his concept of administration

Origin of principles of management

Management principles are statements of fundamental truth. Guidelines for decisions and actions of managers. Derived on the basis of: On the basis of observation and analysis i.e. practical experience of managers. By conducting experimental studies

14 Principles of Management
Division of Work Authority and responsibility Discipline Unity of command Unity of direction Subordination of individual interest Remuneration

14 Principles of Management
Centralization Scalar Chain Order Equity Stability of Tenure Initiative Espirit De corps

Principle # 1

Division of labour

Deviding a task or an activity into smaller parts and assigning specific elements to specefic workers. Helps in performing work more efficiently and more productively This approach is opposed to generalisation
NOW
Downsizing staff Performing multiple functions Work is too complex to devide THEN

Principle # 2

Authority and Responsibility

Giving orders so that task is accomplished. Managers must be able to give orders. Authority gives them this right.Note that responsibility arises wherever authority is exercised.
NOW
Today there is no absulute authority of boss Self managed teams with decisional authority Manager is more a coordinator than a controller. THEN

DISCIPLINE

Discipline
According to Fayol, Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise.

Discipline can be enforced if - There are good superiors at all levels. - There are clear & fair agreements with workers.

UNITY OF COMMAND

Unity of Command
1. A sub-ordinate should receive orders and be accountable to one and only one boss at a time. 2. In other words, a sub-ordinate should not receive instructions from more than one person because

It undermines authority - Weakens discipline - Divides loyalty - Creates confusion - Delays and chaos - Escaping responsibilities - Duplication of work - Overlapping of efforts

UNITY OF DIRECTION

Unity of Direction

1.

Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives. Related activities should be grouped together.
There should be one plan of action for them and they should be under the charge of a particular manager. According to this principle, efforts of all the members of the organization should be directed towards common goal. Without unity of direction, unity of action cannot be achieved. In fact, unity of command is not possible without unity of direction.

2.

3.

4.

Basis Meaning

Unity of command

Unity of direction

It implies that a sub-ordinate should receive orders & instructions from only one boss.

It means one head, one plan for a group of activities having similar objectives. It is related to the functioning of departments, or organization as a whole.

Nature

It is related to the functioning of personnels.

Necessity

It is necessary for fixing responsibility of each subordinates.

It is necessary for sound organization.

Advantage

It avoids conflicts, confusion & chaos.

It avoids duplication of efforts and wastage of resources.

Result

It leads to better superior subordinate relationship.

It leads to smooth running of the enterprise.

Principle # 6

An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances.

Then:

Imprortance was given to the goal of organisation.

Now:

Employess are treated as valuable resources

Principle # 7

The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts.

Then:

Do not underpay or Overpay the employess Compensation for work should be resonable

Now:

More attention is paid to reward based on performance

Principle # 8

Centralization means concentration of authority at the top level. Decentralization means disposal of decision making authority to all the levels of the organization.

Then:

Balance between centralisation and decentralisation

Now:

Concentrates on centralisation.

Principle # 9

Chain of superiors ranging from the ultimate authority to the lowest. A Gang Plank facilitate easy and quick communication. D can communicate directly with G, without the help of others.

Scalar Chain

Scalar Chain

Then Now

Communication should be basically vertical Facilitate Formal Organizational control

Normative Integration Socialization of Managers Organizational structure should posses fewer managerial layers

Principle # 10

Proper & systematic arrangement of things and people. It deals with specificity. Material Order Arrangement of things Social Order Selection, appointment and placement of people.

ORDER

Order

Then

Place for everything and everything in its place Formal organizational control

Now

Changes in control over internal activities Still this principle is followed

Equity

Equity means combination of fairness, kindness

& justice. Managers should be fair and impartial Create and maintain cordial relations At times force and harshness might become necessary for the sake of equity.

Then

Organizations require employee commitment. Everyone should be treated equally with respect.

Now

Consider interest of the employees. Developing a sense of ownership among employees.

Principle # 12

Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed.

As a result, the time, effort and money spent on training the worker will go waste.

STABILITY OF TENURE
Then
Training new employees takes time and it is expensive. A high rate of employee turnover would thus be inefficient and should be avoided.

Stability of personnel tenure does not seem to be important to many organizations. Some industries actually rely on high employee turnover because employee with tenure demand higher wages then new employees.

Now

Principle # 13

Initaitive

Workers should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. To suggest improvement in formulation & implementation of place. They can be encouraged with the help of monetary & non-monetary incentives.

Initiative
Then
Organizations require managers who posses the ability to conceive new ideas as well as the ability to implement them

Today, organizations rely less on hierarchical elements and more on employees who think independently and take initiative than in the past.

Now

Principle # 14

It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. Spirit De Corps inspires workers to work harder. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run.

Espirit De Corps
Then The maintenance of high morale and unity among employees is imperative.

Today, maintaining high morale among all employees in US organizations is not as much of an imperative as it was in the past.

Now

Importance of Principles of management

Improves Understanding Direction for Training of Managers Role of Management Guide to Research in Management

Bharat Engineering Works Limited is a major company in industrial machineries besides other engineering products. It has enjoyed market preference for its machineries because of limited competition in the field. Usually there have been more orders than what the company could supply. However, the scenario changed quickly because of the entry of two new competitors in the field with foreign technological collaboration. For the first time, the company faced problem in marketing its products with usual profit margin. Sensing the likely problem, the chief executive appointed Mr Arvind Kumar as general manager to direct the operations of industrial machinery division. Mr Kumar had similar assignment abroad before coming back to India. Mr Kumar had a discussion with the chief executive about the nature of the problem being faced by the company so that he could fix up his priority.

CASE STUDY

The chief executive advised him to consult various heads of department to have first hand information. However, he emphasised that the company lacked an integrated planning system while members of the Board of Directors insisted on introducing this in several meetings both formally and informally. After joining as General Manager, Mr Kumar got briefings from the heads of all departments. He asked all heads to identify major problems and issues concerning them. The marketing manager indicated that in order to achieve higher sales, he needed more sales support. Sales people had no central organisation to provide sales support nor was there a generous budget for demonstration teams which could be sent to customers to win business. The production manager complained about the old machines and equipments used in manufacturing.

Therefore, cost of production was high but without corresponding quality. While competitors had better equipments and machinery, Bharat Engineering had neither replaced its age-old plant nor reconditioned it. Therefore to reduced the cost, it was essential to automate production lines by installing new Director of research and development did not have specific problem and therefore, did not indicate for any change. However, a principal scientist in R&D indicated on one day that the director of R&D, though very nice in his approach, did not emphasize on shortterm research projects, which could easily increase production efficiency by at least 20 percent within a very short period without any major capital outlay.

QUESTION
How can Fayols principle be used by Mr Kumar to overcome these problems?

BIBLIOGRAPHY
www.wikipedia.org www.google.com www.yahoo.com www.managementguide.com www.gurukpo.com www.emerald-library.com/ft Book on Principles of management Ravichandran