Principles of Management Class 12 Notes

A principle of management is a general statement that holds good for all the organisations and for all the situations, and it is the base on which the practice of the management is built, so that the management is a science rather than a collection of the habits of the individual managers.

• The principles of management are the general guidelines, the fundamental rules and the general statements of the management, and they are formed by a systematic observation and a repeated experience, so that they do not apply to one particular situation but to all the situations of a similar kind.
• They are the general and not the particular, which is why they can be applied to any organisation, whether it is a small shop or a bank, and why they hold good for a long time without being changed by the fashion.
• The significance is that they give the managers a ready framework, so that a manager who is new to the job is not left to discover the rules by trial and error, and they make the management a science, because a science is the organised body of the knowledge and the principles are that organised body.
• The significance is also that the principles are the basis of the management training, because a trainee is taught the principles first and the practices afterwards, and it is on the principles that the discipline of the business is built.
• The principles are the mark of the difference between the professional management and the rule of thumb, and a firm that follows them is able to grow without losing its shape, and a firm that does not is at the mercy of the individual manager.
• Two cautions should be kept in mind. The principles are flexible and not rigid, for they are the aids to the judgement and not the substitute for it, and they are not the aims of the management but the means, so a manager who follows them in the letter may still reach the wrong end.

Henry Fayol was a French mining engineer who became the chief executive of a large industrial enterprise, and he wrote down the principles from his own experience of running it, and the first six of the fourteen deal with the division of the work, with the flow of the orders and with the balance between the individual and the organisation.

• The division of work, the first principle, says that the work of each person should be limited to a single clear responsibility, and it raises the efficiency because the person becomes expert in one task and the training of the worker becomes easier.
• The authority, the second principle, is the right of the manager to give the orders and to take the decisions, and it is of two kinds, the authority of the office that comes with the position and the authority of the person that comes from the personal qualities.
• The responsibility is the counterpart of the authority and not a separate principle, and it is the duty of the employee to carry out the work assigned to him, and the two must coincide, so an authority without a responsibility is an autocracy and a responsibility without an authority is a sinecure.
• The discipline, the third principle, is obedience to the senior in rank, application to the work, energy, the outward marks of respect and the punctuality, and it is the obedience to the lawfully accepted authority that is in the good agreement, and Fayol blames the manager for the insubordination of the worker, since the discipline that he does not get is the fault of the manager.
• The unity of command, the fourth principle, says that an employee should receive the orders of only one superior, so that there is no conflict of the instructions and no divided authority, and it is the same idea as the unity of the staff, which is the unity of the staff, not the unity of the staff as a separate principle.
• The unity of direction, the fifth principle, says that those who work at the same activity and at the same level of the hierarchy should have the same objective, and the difference is that the unity of command concerns the person and the unity of direction concerns the activity, so the one is about the orders received and the other is about the aims pursued.

The sixth principle is the bridge between the first five, which are concerned with the structure, and the last eight, which are concerned with the pay, the authority and the treatment of the individual, and it is the one that Fayol singled out because it is the one that is most often broken in practice.

• The subordination of the individual interest to the general interest says that the remuneration, the bonus, the promotion and the conditions of the work must be arranged in such a way that the employee is led to identify his own interest with the interest of the organisation.
• The principle rests on a plain fact, that the organisation can do nothing without the effort of its members, and so the cooperation of the members is not a favour that the firm grants to them but the condition on which the firm itself depends.
• The violation of the principle is easiest to see in a firm that is doing badly, because the employee who is paid a low wage, is given a poor working condition and is not promoted, comes to believe that the firm will gain nothing by his effort, and he is then tempted to work less carefully, to take the work home to his own benefit, or to leave the firm for a competitor.
• The remedy is the arrangement of the reward, so that the pay, the bonus, the promotion and the recognition of the employee rise with the performance of the firm, and so that the employee shares in the gain that his effort has brought to the enterprise.
• The ninth principle, the initiative, is the mirror of the sixth, because the subordination asks the member to serve the organisation and the initiative asks the organisation to let the member act, and Fayol is careful to say that the initiative must be given not only to the subordinates but also to the superiors, since a superior who does not listen to the suggestions of those under him has lost the benefit of them.
• The last eight principles, the remuneration, the centralisation, the scalar chain, the order, the equity, the regularity of the activity, the esprit de corps and the initiative, are taken in the two sections that follow, and they complete the fourteen.

The middle four of the principles deal with the pay of the worker, the concentration of the authority, the line of command and the layout of the organisation, and these four carry most of the application in the Indian examination papers.

• The remuneration of the personnel, the seventh principle, says that the pay should be at least sufficient to fulfil the obligations of the worker, and it should also provide the incentive to work harder, so the rate should follow the performance, the work, the responsibility and the size of the organisation.
• The centralisation and the decentralisation, the eighth principle, is about the degree to which the authority is concentrated or dispersed, and Fayol states it in the centralised form, that the authority should be concentrated at the higher levels, while the decentralisation is the alternative by which the authority is pushed down to the lower levels, and the choice depends on the size of the firm and on the competence of its managers.
• The advantages of the centralisation are the uniformity of the working, the strengthening of the discipline, the reduction in the cost and the development of the competence of the higher staff, and the disadvantages are the delay in the decision, the demotivation of the lower staff, the unsuitability to the changing conditions and the overlapping of the work and the jurisdiction of the higher staff.
• The scalar chain, the ninth principle, is the unbroken line of authority from the top to the bottom, and it runs from the board of directors through the chief executive officer, the heads of the departments and the supervisors down to the workers, and every order passes down it and every report comes up it, and the only exception is a communication between two levels for the sake of saving time.
• The order, the tenth principle, says that the elements of the organisation should be arranged for the greatest possible advantage, so that there is a place for everything and everything is in its place, and it covers the order of the place and the order of the work.

The last four principles deal with the treatment of the individual, the rhythm of the work, the spirit of the team and the freedom of the subordinate, and the last of them is the one that the older books left out.

• The equity, the eleventh principle, is the same treatment for the employees of the same category without discrimination or favouritism, and the difference of the reward that is based on the merit and the work is not a violation of the equity.
• The regularity of the activity, the twelfth principle, says that an enterprise in which the work is regular needs less management time, so the rhythmic work lets the manager give the attention to the unforeseen, and an irregular production consumes a great deal of his time.
• The esprit de corps, the thirteenth principle, is the spirit of the team, and the division of the work tends to create divisions between the departments, so the remedy is the regular meetings of the heads of the departments and the contribution of every member to the welfare of the enterprise.
• The unity of the staff that the older books also name is not a separate principle, for it is another name for the esprit de corps, and adding it makes the count fifteen, which is wrong.
• The initiative, the fourteenth and the last principle, says that every individual should be given the freedom to make the suggestions and to act, not only the subordinates but the superiors as well, and the manager should not be fearful of the suggestions from below because they often improve the work.

Frederick Winslow Taylor was an American mechanical engineer, and unlike Fayol who looked at the manager and the organisation, he looked at the work of a single worker and tried to measure it, and his system is called the scientific management.

• The principles of the scientific management are six, and the first is the science and not the rule of the thumb, which means that the method of the work is to be investigated and the one best way is to be discovered instead of being guessed at by each worker.
• The second is the harmony and not the discord, which means that the management and the worker should work together as a team and not against each other, and the greatest output per unit of input is the goal of both.
• The third is the one man and one task, which means that the responsibility of the worker should be limited to a single task, and he should be a specialist in that task.
• The fourth is the maximum output per unit of input, which means that the output of a worker is to be increased by using the scientific method rather than by speeding him up, and Taylor is against any artificial pace that is not supported by the study.
• The fifth is the development of the man, which means that as much care is to be taken to develop the worker as to develop the work, because a scientific selection and a scientific training will produce a better worker, and it is this principle that made Taylor a pioneer of the human relations.
• The sixth is the principle of exception, which means that the manager should not spend his own time on the work that a worker can do better, but should concentrate on the work that only he can do, so he must be free from the routine and should spend the time on the work that is the exception.
• The techniques that Taylor used to apply the principles are the functional foremanship, the time study and the motion study, the differential piece rate system, and the mental revolution of the workers. The functional foremanship means that the work of the supervision is divided among the eight specialists, the time and the motion study means that the time of each task is measured with the stopwatch and the each movement of the worker is studied, the differential piece rate means that a worker who does more than the standard is paid a higher rate, and the mental revolution means that the worker must be convinced that he will gain by following the new method.

The two men worked in the same century on the same problem and in opposite directions, and the comparison between them is a standing question, because Fayol is taken as the father of the administrative management and Taylor as the father of the scientific management.

• The contribution of Fayol is the principles and the functions, and the contribution of Taylor is the techniques and the time study, so the main contribution of Fayol is the general theory of the management and that of Taylor is the specific method of the work.
• The concern of Fayol is the structure and the organisation, that is the manager, the department and the policy, while the concern of Taylor is the shop floor and the single worker, so Fayol is the theory of the management and Taylor is the practice of the management.
• Fayol was a chief executive of an enterprise and his contribution comes from the top of the organisation, and Taylor was an engineer and his contribution comes from the operation itself, so the two are complementary and not rivals, since the principles of Fayol tell the manager what to achieve and the techniques of Taylor tell the worker how to achieve it.
• The period is the other point, and Fayol wrote his principles in the early years of the twentieth century and Taylor published his scientific management in 1911, so both belong to the same period, and the difference in their views is that Fayol believed in the general principles that apply to all, while Taylor believed in the measurement of every specific task.
• The nature of the contributions is the last pair, and the contribution of Fayol is the general and the prescriptive, that is the general principles to be followed, and the contribution of Taylor is the specific and the experimental, that is the measured standard time for one task of one worker.
• The result of Taylor's system is that it raised the output of the worker and it made the management a science in the practical sense, since the standard time is known, and the result of Fayol's system is that it gave the organisation a vocabulary, so that the manager could describe what the work of the administration is in the words of the principles.