The Concept

A managerial principle is a broad and general guideline for decision-making and behaviour.

Principles of Management-

Management principles are not as rigid as principles of pure science. They deal with human behaviour and, thus, are to be applied creatively given the demands of the situation.

Nature of Principles of Management-

Derivation of these principles may be said to be a matter of science and their creative application may be regarded as an art. These principles lend credibility of a learnable and teachable discipline to the practice of management. As such, ascent to managerial position may not be a matter of birth, but a matter of requisite qualifications. Clearly, management principles have gained importance with increasing professionalization of management.

Significance of Principles of Management-

Scientific management refers to an important stream of one of the earlier schools of thought of management referred to as the ‘Classical’ school. The other two streams belonging to the classical school are Fayol’s Administrative Theory and Max Weber’s Bureaucracy.

Fredrick Winslow Taylor (March 20,1856 – March 21, 1915) was an American mechanical engineer

who sought to improve industrial efficiency. In 1874, he became an apprentice mechanist, learning factory conditions at the grass roots level. He earned a degree in mechanical engineering. He was one of the intellectual leaders of the efficiency movement and was highly influential in reshaping the factory system of production. You must appreciate that he belonged to the era of the industrial revolution characterised by mass production.

These principles are guidelines to action.

The following points summarise the nature of principles of management. 

(i) Universal applicability:

The principles of management are intended to apply to all types of organisations, business as well as non-business, small as well large, public sector as well as private sector, manufacturing as well as the services sectors. However, the extent of their applicability would vary with the nature of the organisation, business activity, scale of operations and the like.

(ii) General guidelines:

The principles are guidelines to action but do not provide readymade, straitjacket solutions to all managerial problems. This is so because real business situations are very complex and dynamic and are a result of many factors. However, the importance of principles cannot be underestimated because even a small guideline helps to solve a given problem.

(iii) Formed by practice and experimentation:

The principles of management are formed by experience and collective wisdom of managers as well as experimentation.

(iv) Flexibile:

The principles of management are not rigid prescriptions, which have to be followed absolutely. They are flexible and can be modified by the manager when the situation so demands. They give the manager enough discretion to do so.

(v) Mainly behavioural:

Management principles aim at influencing behaviour of human beings. Therefore, principles of management are mainly behavioural in nature. It is not that these principles do  not pertain to things and phenomenon at all, it is just a matter of emphasis. Moreover, principles enable a better understanding of the relationship between human and material resources in accomplishing organisational purposes.

(vi)  Cause and effect relationships:

The principles of management are intended to establish relationship between cause and effect so that they can be used in similar situations in a large number of cases. As such, they tell us if a particular principle was applied in a particular situation, what would be its likely effect. The principles of management are less than perfect since they mainly apply to human behavior.

 (vii) Contingent:

The application of principles of management is contingent or dependent upon the prevailing situation at a particular point of time. The application of principles has to be changed as per requirements

GENERAL PRINCIPLES OF MANAGEMENT

Taylor’s Principles The fundamental principles that Taylor saw underlying the scientific approach to management may be summarised as follows:

• Replacing rules of thumb with science (organised knowledge); SCIENCE NOT THE RULE OF THUMB

Taylor believed that there was only one best method to maximise efficiency. This method can be developed through study and analysis. The method so developed should substitute ‘Rule of Thumb’ throughout the organisation. Scientific method involved investigation of traditional methods through work-study, unifying the best practices and developing a standard method, which would be followed throughout the organisation

• Obtaining harmony in group action, rather than discord; HARMONY NOT DISCORD

Taylor called for complete mental revolution on the part of both management and workers. It means that management and workers should transform their thinking. In such a situation even trade unions will not think of going on strike etc. According to Taylor, ‘Scientific management has for its foundation the firm conviction that the true interests of the two are one and the same; that prosperity for the employer cannot exist for a long time unless it is accompanied by prosperity for the employees and vice versa’.   Japanese work culture is a classic example of such a  situation. In Japanese companies, paternalistic style of management is in practice. There is complete openness between the management and workers. If at all workers go to strike they wear a black badge but work more than normal working hours to gain the sympathy of the management

• Achieving cooperation of human beings, rather than chaotic individualism; COOPERATION NOT INDIVIDUALISM

This principle is an extension of principle of ‘Harmony not discord’. Competition should be replaced by cooperation. Both should realise that they need each other. In fact when there will be open communication system and goodwill there will be no need for even a trade union. Paternalistic style of management, whereby the employer takes care of the needs of employees, would prevail as in the case of Japanese companies.   According to Taylor, there should be an almost equal division of work and responsibility between workers and management. All the day long the management should work almost side by side with the workers helping, encouraging and smoothing the way for them.

• Developing all workers to the fullest extent possible for their own and their company’s highest prosperity. DEVELOPMENT OF EACH & EVERY INDIVIDUAL TO HIS/HER GREATEST EFFICIENCY AND PROSPERITY

Each person should be scientifically selected. Then work assigned should suit her/his physical, mental and intellectual capabilities. To increase efficiency, they should be given the required training.

• Working for maximum output, rather than restricted output; and

Techniques of Scientific Management –

Taylor's contribution to the development of scientific management was recorded in his papers. Of these early ones are A Piece -Rate System, Shop Management, and The Art of Cutting Metals.

Functional Foremanship

Foreman is the lowest ranking manager and the highest ranking worker. He is the pivot around whom revolves the entire production planning, implementation and control. Thus, Taylor concentrated on improving the performance of this role in the factory set-up. In fact, he identified a list of qualities of a good foreman/supervisor and found that no single person could fit them all. This prompted him to suggest functional foremanship through eight persons. Taylor advocated separation of planning and execution functions.

Taylor advocated separation of planning and execution functions. This concept was extended to the lowest level of the shop floor. It was known as functional foremanship. Under the factory manager there was a planning incharge and a production incharge. Under planning incharge four personnel namely instruction card clerk, route clerk, time and cost clerk and a disciplinarian worked. These four personnel would draft instructions for the workers, specify the route of production, prepare time and cost sheet and ensure discipline respectively. Under Production incharge, personnel who would work were speed boss, gang boss, repair boss, and inspector. These respectively were responsible for timely and accurate completion of job, keeping machines and tools etc., ready for operation by workers, ensure proper working condition of machines and tools and check the quality of work. Functional foremanship is an extension of the principle of division of work and specialisation to the shop floor.

Standardization and simplification of Work

Standardisation refers to the process of setting standards for every business activity; it can be standardisation of process, raw material, time, product, machinery, methods or working conditions. These standards are the benchmarks, which must be adhered to during production. The 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 superfluous varieties, sizes and dimensions while standardisation implies devising new varieties instead of the existing ones. Simplification aims at eliminating unnecessary diversity of products. It results in savings of cost of labour, machines and tools.

Method Study

The objective of method study is to find out one best way of doing the job. There are various methods of doing the job. To determine the best way there are several parameters. Right from procurement of raw materials till the final product is delivered to the customer every activity is part of method study. Taylor devised the concept of assembly line by using method study.

Fatigue Study

A person is bound to feel tired physically and mentally if she/he does not rest while working. The rest intervals will help one to regain stamina and work again with the same capacity. This will result in increased productivity. Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task.

Motion study

 Motion study refers to the study of movements like lifting, putting objects, sitting and changing positions etc., which are undertaken while doing a typical job.

On close examination of body motions, for example, it is possible to find out: (i) Motions which are productive

 (ii) Motions which are incidental (e.g., going to stores)

 (iii) Motions which are unproductive. Taylor used stopwatches and various

 symbols and colours to identify different motions.

Time study

The objective of time study is to determine the number of workers to be employed; frame suitable incentive schemes and determine labour costs.

Differential piece wage system

Taylor was a strong advocate of piece wage system. He wanted to differentiate between efficient and inefficient workers. The standard time and other parameters should be determined on the basis of the work study discussed above.

For example, it is determined that standard output per worker per day is 10 units and those who made standard or more than standard will get Rs. 50 per unit and those below will get Rs. 40 per unit. Now an efficient worker making 11 units will get 11x50= Rs. 550 per day whereas a worker who makes 9 units will get 9×40 = Rs. 360 per day.

 Clearly the sum and substance of Taylor’s ideas lies not in the disjointed description of principles and techniques of scientific management, but in the change of the mindset, which he referred to as mental revolution. Mental revolution involves a change in the attitude of workers and management towards one another from competition to cooperation. Both should realise that they require one another. Both should aim to increase the size of surplus.

Henri Fayol-

Henri Fayol (1841-1925) was a  French management theorist whose theories concerning scientific organisation of labour were widely influential in the beginning of twentieth century. He graduated from the mining academy of St. Etienne in 1860 in mining engineering. The 19 year old engineer started at

 the mining company ‘Compagnie de commentary-FourchambeanDecazeville, ultimately acting as its managing director from  1888 to 1918.

For his contribution he is also known as the ‘Father of General Management’

Fayol’s Principles Noting that the principles of management are flexible, not obsolete and must be usable regardless of changing and special conditions, Fayol listed fourteen principles based on his experience. They are summarised below:

• Division of work:

 Specialisation allows workers and managers to acquire an ability, sureness, and accuracy which will increase output. More and better work will be produced with the same effort.

• Authority & Responsibility:

The right to give orders and the power to exact obedience are the essence of authority. Its roots are in the person and the position. It cannot be conceived of apart from responsibility.

• Discipline:

 Discipline is composed of obedience, application, energy, behaviour and outward marks of respect between employers and employees. It is essential to any business. Without it no enterprise can prosper. It is what leaders make it.

 • Unity of command:

For any action whatsoever, an employee should receive orders from one superior only. One person, one boss. In no case is there adaptation of a social organism to a duality of command.

• Unity of direction:

One head and one plan should lead a group of activities. It is necessary that all sing the same objective and that is one head, one plan.

Difference betweeen Unity of Command and Unity of Direction Basis Unity of Command 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	It prevents dual subordination.	It prevents overlapping of activities.
3. Implications	It affects an individual employee.	It affects the entire organisation

• Subordination of individual interest to general interest:

The interest of one person or group in a business should not prevail over that of the organisation.

 • Remuneration of personnel:

 The price of services rendered should be fair and should be satisfactory to both employees and employer. A level of pay depends on an employee’s value to the organisation and on factors independent of an employee’s worth - such as cost of living, availability of personnel and general business conditions.

• Centralisation:

 Everything that serves to reduce the importance of an individual subordinate’s role is centralisation. Everything that increases the subordinate’s importance is decentralisation. All situations call for a balance between these two positions.

• Scalar chain:

The chain formed by managers from the highest to the lowest is called a scalar chain or chain of command. Managers are the links in the chain. They should, communicate to and through the links. Links may be skipped or circumvented only when superiors approve and a real need exists to do so.

The formal lines of authority from highest to lowest ranks are known as scalar chain.   According to Fayol, “Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates.”

• Order:

 This principle is the simple advocacy of a place for everyone, and everyone in her/his place; a place for everything, and everything in its place. The objective of order is to avoid loss and waste.

 • Equity:

Kindliness and justice should be practised by persons in authority to extract the best that their subordinates have to give.

• Stability of tenure of personnel:

Reducing the turnover of personnel will result in more efficiency and fewer expenses.

 • Initiative:

People should be allowed the freedom to propose and to execute ideas at all levels of an enterprise. A manager who is able to permit the exercise of initiative on the part of subordinates is far superior to one who is unable to do so.

 • Esprit De Corps:

 In unity there is strength. Managers have the duty to promote harmony and to discourage and avoid those things that disturb harmony.