Presentation on Chapter 2 i.e. Principles of Management

1. PRINCIPLES OF
MANAGEMENT
Prepared by
Samar Singh, Class XII

2. MEANING OF PRINCIPLES OF
MANAGEMENT
• A Principle refers to a statement which reflects the fundamental truth
about some phenomenon based on cause and effect relationship.
• Management principles are broad and general guidelines for decision
making and behavior of managers.

3. NATURE/FEATURES/CHARACTERISTICS OF
MANAGEMENTS PRINCIPLES
1. Universal application ( pervasive): The principles of management are
universal in nature that means they can be applied to all types of
organisations irrespective of their size and nature.
2. General guidelines: Management principles are guidelines to actions but
these principles do not provide readymade solution for any problem.
3. Formed by practice and experiments: The managements principles are
developed only after deep and thorough research work. They are not
developed overnight.
4. Flexible: Management principles can be applied differently under different
conditions. Some changes can be made in application of principles according
to the requirement of the company.

4. 5. Mainly behavioral: Management principles are formed to guide and
influence the behavior of employees. These principles insist on improving
relationship between superior, subordinates and all the members of
organization.
6. Cause and effect relationship: Management principles are based on cause
and effect that means these principles tell us if a particular principle is
applied in a situation, what might be the effect.
7. Contingent: Management principles are contingents or dependent upon
the situations prevailing in organization.

5. FEATURES OF MANAGEMENT PRINCIPLES
1. Universal application
2. General guidelines
3. Formed by practice and experiments
4. Flexible
5. Mainly behavioral
6. Cause and effect relationship
7. Contingent

6. SIGNIFICANCE/ IMPORTANCE OF
MANAGEMENT PRINCIPLES
1. Providing managers with useful insight into reality: Management
principles act as guidelines for the managers. These principles improve
knowledge, ability and understanding of managers under various
managerial situations.
2. Optimum utilization of resources: The managements principles insist on
planned activities and systematic organization of men and materials in
the organization.
3. Scientific decision: Managers have to take number of decisions every day.
The management principles enable the managers to approach various
problems systematically and scientifically.

7. 4. Meeting changing environment requirement: Every businessman has to
make change in the organization according to changes taking place in the
business environment.
5. Efficient administration: The management principles act as guidelines and
base to form various administrative policies to have systematic working in
the organization.
6. Fulfilling socials responsibilities: Managements principles not only act as
guidelines for achieving organizational objectives but these principles also
guide the managers to perform social responsibilities.
7. Managements training, education and research: These principles provide
organized body of knowledge to perform research work and generate more
and more knowledge they have provided new ideas, imagination and base for
base for research and development.

8. IMPORTANCE OF MANAGEMENT
PRINCIPLES
1. Providing managers with useful insight into reality
2. Optimum utilization of resources
3. Scientific decisions
4. Meeting changing environment requirement
5. Effective administration
6. Fulfilling social responsibilities
7. Management training, education and research

9. SCIENTIFIC PRINCIPLE OF MANAGEMENT
BY F.W. TAYLOR
1. Science, not rule of thumb: According to this principle Taylor insists that
each job performed in the organization should be based on scientific
enquiry and not on hit and trial method.
Taylor believed that there is only one best method to maximize
efficiency
this method can be developed through work, study and analysis.

10. 2. Harmony, not discord: According to this principle worker and management
must work in harmony that is with mutual give and take and proper
understanding.
Taylor insists that there is need for both the group to change their attitude
for each other. He insists on Mental revolution which means complete change
of attitude and outlook for each other.

11. 3. Cooperation, not individualism: According to this principle work must be
carried on in cooperation with each other with mutual understanding and
confidence for each other.
To have cooperation, management should welcome good suggestion of
employee and they should be rewarded for their suggestions. At the same
time workers should not go on strike and make unreasonable demands.

12. 4. Development of workers to their greatest efficiency and prosperity:
Taylor insisted that due care should be taken while selecting the employees
and after selecting they must be given job according to their qualification.
Employee must be sent for training from time to time to update their
knowledge.

13. SCIENTIFIC PRINCIPLE MANAGEMENT
BY F.W. TAYLOR
1. SCIENCE, NOT RULE OF THUMB
2. HARMONY, NOT DISCORD
3. COOPERATION, NOT INDIVIDUALISM
4. DEVELOPMENT OF WORKERS TO THEIR GREATEST EFFICIENCY
AND PROSPERITY

14. TECHNIQUES OF SCIENTIFIC
MANAGEMENT
BE F.W. TAYLOR
1. Functional foremanship: Taylor advocated separation of planning and executors function.
Under the factory managers there was a planning in-charge and a production in-charge.
Under planning in-charge four personnel namely-
1. instruction card clerk: this foreman is responsible for giving general instructions necessary to carry
on the job in a specified manner.
2. route clerk: this foreman is responsible to fix up the sequence of steps for performing mechanical or
manual job.
3. time and cost clerk: this foreman is responsible to fix up the time for starting and completing of job.
He also prepare the cost sheet for every job.
4. disciplinarian worker: this foreman is responsible for performance of job in orderly and systematic
way.

15. UNDER PRODUCTION IN-CHARGE FOUR PERSONNEL NAMELY-
1. Gang boss: he arranges all the machines, tools and other resources
required for performance of the job so that there is no delay.
2. Speed boss: the foreman assures timely completion of job.
3. Repair boss: this boss ensures that machines and tools are kept in
working conditions.
4. Inspector: this boss keeps a check on quality control of the output.
Foreman should have intelligence, education, special knowledge and energy,
honesty and good health. Since all these qualities could not be found in a
single person.

16. 2. STANDARDIZATION AND SIMPLIFICATION OF WORK
• Standardization refers to the process of setting standard for every business,
it can be standardization of process of raw material, time, product,
machinery, method or working condition.
• Simplification aims at eliminating superfluous varieties, size and grades of
the product manufactured by the organization.

17. 3. METHOD STUDY
• The objective of method study is to find out one best way of doing the job.
The objectives of the whole exercise is to minimize the cost of production
and maximize the qualities and satisfaction of the customers.
4. MOTION STUDY
. Motion study refers to the study of movements like lifting, putting object,
sitting and changing position etc. unnecessary movement are sought to be
eliminated.
5. TIME STUDY
. It determines the standard time taken to perform a well-defined job.

18. 6. FATIGUE STUDY
• Fatigue study seeks to determine the its amount and frequency of intervals
in completing of task.
7. DIFFERENTIAL PIECE WAGE SYSTEM
. Piece wage system differentiates between efficient and inefficient worker.
Taylor introduced different rate of wages payment for those who perform
above standard and those who perform below standard.

19. HENRY FAYOL’S PRINCIPLES OF GENERAL
MANAGEMENT
1. DIVISION OF WORK
As per this principle, the work of an organization is divided into smaller jobs or tasks.
Each job is assigned to different individuals as per their ability and experience.
Positive effect
1. Specialization : whenever work is divided according to qualification then
automatically it leads to specialization.
2. Improve efficiency : when employee is performing only one part of job then he becomes
expert in that and results in less wastage of resources.
Negative effect
1. Lack of efficiency
2. There will be no specialization
3. Chances of duplication of work

20. 2. AUTHORITY AND RESPONSIBILITY
Authority means power to take decisions.
Responsibility means obligation to perform the assigned task.
According to this principle, there should be balanced between authority and
responsibility.
Positive effect
1. No misuse of authority
2. Help in meeting responsibility on time without any delay
Negative effect
1. Delay in work or in completion of work due to less authority
2. Misuse of authority due to excess of authority
3. Overburden with work with excess responsibility

21. 3. DISCIPLINE
Discipline means respect the rules and regulation of an organization.
Positive effects
1. Systematic working in the organization
2. Improves efficiency
Negative effects
1. Disorder, confusion and chaos
2. Wastage of resources in absence of discipline
3. Delay in work due to absence of rules and regulation

22. 4. UNITY OF COMMAND
As per this principle, a subordinate should not receive order from more than one
boss at a time.
Positive effects
1. No confusion in the mind of subordinate
2. No ego clashes
3. Improves effectiveness in working
Negative effects
1. Confusion in the mind of employee
2. Subordinate will get chance to escape from responsibilities by giving excuses
3. Ego clashes among the different superiors
4. Difficulty in maintaining discipline in the organization

23. 5. UNITY OF DIRECTION
According to this principle, each group of similar activities having the same
objectives must have one head and one plan.
Positive effects
1. Achievement of organizational goal.
2. Efforts of all employees get unified towards one direction only.
Negative effects
1. Lack of coordination.
2. Wastage of efforts and resources by working in different directions.
3. Difficulty in achieving organizational goal.

24. 6. SUBORDINATION OF INDIVIDUALS INTEREST TO
GENERAL INTEREST.
As per this principle, in situation of conflict the interest of organization
should be given priority over an individuals interests.
Positive effects
1. Achievement of organizational goals.
2. Coordination between individual and organizational goal.
Negative effects
1. No achievement of organizational goals.
2. Even employee will also suffer in long run.

25. 7. REMUNERATION OF EMPLOYEES
This principle states that remuneration payable to employee should be just
and fair.
Remuneration paid to employees should provide them reasonable standard of
living.
And it should be within the paying capacity of the organization.
Positive effects
1. Employees get motivated
2. Devotion and commitment of employee improves
Negative effects
1. Increase in turnover of employee
2. Dissatisfaction and demotivation of employee.

26. 8. CENTRALISATION AND DISCENTRALISATION
Centralization refers to concentration of power in few hands.
Decentralization refers to distribution of power at all levels of managements.
Principle of centralization and decentralization states that there should be
effective centralization instead of complete centralization or decentralization.
Positive effects
1. Benefits of centralization and decentralization.
2. Fast decision at operational level and strict control by the top level
Negative effects
1. Complete centralization will results in delay in decision.
2. Complete decentralization will results in misuse of authority.

27. 9. SCALAR CHAIN
Scalar chain refers to chain of communication from highest to lowest authority.
The principle states that this formal chain of communication should be followed
in the organization.
Exception to the principle of scalar chain
Gang plank : In case of emergency employees working at the same levels but
at different department can communicate with each other.
Positive effects
1. Systematic follow of information.
2. No communication gap in the organization
Negative effects
1. There may be communication gap.
2. No clarity in authority responsibility relationship.

28. 10. ORDER
This principle states that there should be proper arrangement of things and
people in an organization.
Fayol has suggested two types order in an organization:
1. Social order : it refers to fixed place for everyone and everyone in his/her
place.
2. Material order : it refers to a fixed place for everything and everything in
place.
Positive effects
1. No wastage of time in search of men or material.
2. Smooth and systematic working of organization.
Negative effects
1. Wastage of time and energy in search of men and material.
2. No able to contact the people at the right time.

29. 11. EQUITY
This principle states that a manager should treat all the employee in just and
fair manner.
There should be no discrimination between employee on any ground.
Positive effects
1. Employee get satisfied.
2. Motivate the employee and boost up the morale of the employee.
Negative effects
1. Dissatisfaction in employee.
2. Increase in turnover.
3. Unhealthy relation between superior and subordinates.

30. 12. STABILITY OF PERSONNEL
As per this principle, employee should be kept at their post for a minimum
fixed period of time.
Positive effects
1. Improves efficiency level of employee.
2. No wastage of time and resources.
Negative effects
1. Wastage of resources in learning the new job.
2. Frustration and dissatisfaction among employee.

31. 13. INITIATIVE
According to this principle, worker should be encourage to give his/her
suggestion.
Company should also reward employee for good suggestion
Positive effects
1. Develops feeling of belongingness in employee
2. Employees achieve the target on time if they are set up with their
consultation.
Negative effects
1. Employee will not work to the best of their ability.
2. Demotivation among employees.

32. 14. ESPIRIT DE CORPS
This principle states that management should promote team spirit in an
organization.
“I” should be replaced with “WE”.
Positive effects
1. Develops team spirit.
2. Achievement of group goals.
Negative effects
1. Team goals may not be achieved.
2. No team spirit and more stress on individuals.

33. FAYOL’S PRINCIPLES OF MANAGEMENT
1. DIVISION OF WORK
2. AUTHORITY AND RESPONSIBILITY
3. DISCIPLINE
4. UNITY OF COMMAND
5. UNITY OF DIRECTION
6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST
7. REMUNERATION OF EMPLOYEE
8. CENTRALIZATION AND DECENTRALIZATION
9. SCALAR CHAIN
10. ORDER
11. EQUITY
12. STABILITY OF PERSONNEL
13. INITIATIVE
14. ESPIRIT DE CORPS