CHAPTER -2

PRINCIPLES OF
MANAGEMENT
MEANING OF MANAGEMENT PRINCIPLE

A management principle is a broad and

general guideline for decision making and
behaviour of employees towards
organization. Principles are guidelines to
take decisions or actions.

Definition:
“ Management principles are fundamental
truth of general validity”
-Koontz and O’ Donnell
NATURE OF PRINCIPLES
OF MANAGEMENT:
(CHARACTERISTICS)
 NATURE OF PRINCIPLES OF
MANAGEMENT:(CHARACTERISTICS)
1. Universal applicability:
Management principles are applicable to
any type of organisations like business
organizations, police force, sports clubs in
any part of the world.
 2.General Guidelines:
The principles are guidelines to action.
Management principles are derived from
experience and analysis and they are in the
form of mere statements.

Example:
General Guidelines to
prevent Covid 19
3.Formed by practice and
experimentation:
The principles of management are
formed by experience and collective
wisdom of managers as well as
experimentation
 4.Flexible:
They are flexible and can be
modified by the manager when the
situation so demands. They give the
manager enough discretion to do
so.
 5.Mainly behavioural:
Management principles aim at influencing
behaviour of human beings. Therefore,
principles of management are mainly
behavioural in nature
 6.Cause and effect relationship:

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.
 7.Contingent (Relativity):

The application of principles of

management is contingent or dependent
upon the prevailing situation at a
particular point of time.
NATURE OF PRINCIPLES OF MANAGEMENT:
(CHARACTERISTICS)

1. Universal applicability
2.General Guidelines
3.Formed by practice and experimentation
4.Flexible
5.Mainly behavioural
6.Cause and effect relationship
7.Contingent (Relativity)
SIGNIFICANCE/IMPORTANCE OF
MANAGEMENT PRINCIPLES:
Managers may apply these principles to
fulfil their tasks and responsibilities.
Principles guide managers in taking and
implementing decisions.

The following points highlight the importance of

managerial management principles-
1.Providing Managers with useful
insights into reality:
The principles of management provide the
managers with useful insights into real world
situations.
When a manager follows sound managerial
principles, decisions based on them will be
perfect and accurate.
2.Optimum utilization of resources
and effective administration:
Management principles help managers in
taking proper decisions in proper time. It
points out how time, money, materials and
human efforts can be used economically to
improve productivity.
3.Scientific decisions:
With the help of Management
Principles, managers can take
appropriate decisions in right time.
Management decisions taken on the
basis of principles are free from bias.
 4.Meeting changing environment
requirements:
Management principles are highly
flexible and therefore can be modified to
meet changing requirements of
environment.
 5.Fulfilling social responsibility:
A business enterprise is an integral part
of society. Proper understanding of
management principles would enable the
managers take realistic view of
organizational situations and their social
relevance.
6.Base for management training,
education and research:
Principles of management are at the
core of management theory. As such these
are used as a basis for management
training, education and research.
 EVOLUTION OF
MANAGEMENT PRINCIPLES
 Schools of thought may be
divided into 6 distinctive
phases:
1.Early Perspectives:
The first known management ideas were
recorded in 3000-4000 B.C. One Pyramid
built by Egyptian ruler Cheops required work
to be done by 100,000 men for over twenty
years in 2900 B.C.
2.Classical management theory:
The classical management theory was
introduced during the Industrial
Revolution as a way to improve
productivity. The classical theory
developed in three streams- Bureaucracy
(Weber), Administrative Theory (Fayol),
and Scientific Management (Taylor).
3.Neo classical theory — human relations
approach:
Neo-Classical theory gave greater
emphasis to man behind the
machine.Neo-Classical approach may be
analysed in three parts, namely — 1.
Hawthorne Experiment 2. Human
Relation Movement 3. Behavioural
Approach.
4.Behavioural science approach —
organisational humanism:
The underlying philosophy of
organisational humanism is that
integration of knowledge from other
disciplines like psychology, sociology and
anthropology.
McGregor, Abraham Maslow and
Fredrick Herzberg.
5.Management science/operational
research:
It emphasises research on
operations and use of quantitative
techniques to aid managers to take
decisions.
6.Modern management:
It sees modern organisations
as complex systems and use of
modern techniques to solve
organisational and human
problems.
HENRI FAYOL’S 14
PRINCIPLES OF
MANAGEMENT:
 Henri Fayol is popularly known as
the Father of Modern general
management.
He was born in 1841. He started his
career as a coal mine engineer in a
French Coal mining company and
later become the managing director
of the company.
 Based largely on his own management
experience, he developed his concept of
administration.
In 1916 he published these experience
in the book “Administration Industrielle
et Générale”
It was translated in English
as ‘General and Industrial
Management’ in 1949 and is
widely considered a
foundational work in classical
management theory.
■
Fayol was the first to identify functions of
management-Plan,Organise,Command, Coordinate
and Control.
■
Fayol classified Management activities into
six .Technical;Commercial;Financial,Security;Acco
unting and Managerial.
■
Fayol also explained qualities of a Manger.
(Physical,Moral,Education etc)
■
Fayol concentrated on Top level Management-(Top -
Down Approach)
 14 PRINCIPLES OF
MANAGEMENT
DEVELOPED BY HENRY
FAYOL
1. Division of W ork
Thi s principle st at es t h a t a com pl ex w ork
shoul d be divided into sm al l tasks, and each
t ask shoul d b e assigned t o a particular
em pl oyee. .
Division o f w o r k prom otes specialization
a n d avoid w aste o f tim e and ef f ort . This
principle i s appl i ed t o t echn i ca l a s w el l a s
m anagerial duties.
EXAMPLE

ENGLISH TEACHER BUSINESS STUDIES

TEACHER – NISHITHA
ANUSH SIR
MADAM

MALAYALAM TEACHER ECONOMICS TEACHER

DEEKSHA MADAM ROBITH SIR
 2. Authority and Responsibility:
Authority is the right to give orders to the
subordinates and responsibility is the duty in which
the subordinates are expected to perform. This
principle states that authority and responsibility are
co-existing.
If the authority is granted to a person he should
also be made responsible. Similarly if anybody is
made responsible for a task , he should be given
sufficient authority to perform it.
SUPERIOR SUB-ORDINATE
 3.Discipline:

Discipline is the obedience to organisational

rules respect of Authority and employment
agreement which are necessary for the
working of the organisation. It ensures the
smooth running of the organization and
applicable for workers and management.
 SUPERVISOR
CHECK
ATTENDANCE
THOSE WHO VIOLATE COMPANY RULES
WILL BE PUNISHED
 4. Unity of Com m and:
This principle states that each employee
should receive orders from one superior only.
Dual subordination should be avoided. In the
absence of unity of command, responsibility
cannot be fixed, duplication of work ,
overlapping orders and instruction may
happen.
 Control
The worker

Mr: Adithyan
Supervisor
5. Unity of Direction:
This principle states that for a group
activities having the same objective, there
should be one head and one plan.
There are different departments in an
organization for different activities,Each
group of activities having the same objective
must have one head and one plan.
 Mr:PAVIN KUMAR
Finance Manager
Control finance dept

FINANCE DEPARTMENT
6. Subordination of Individual Interest
to G eneral Interest:
An organization is superior to individuals. Each
individual working in an organization has some
individual interest. The organization has its own
objectives.
According to Fayol the primary focus is on the
organizational objectives and not on those of the
individual.
7.R em u n er a t i on of E m p loyees:
The overall pay and compensation should
be fair to both employees and the
organisation.
The remuneration should be sufficient to
keep employees motivated and productive. At
the same time it should be within the paying
capacity of the company.
8. C en t r a lisa t i on a n d D ec e n t r a l isa t i on :

Centralisation means concentration of

authority in few hands at the top level.
Decentralisation means delegation or
distribution of authority throughout all the
levels of the organization.
There should be a balance between
centralization and decentralization based
on the nature of the job.
9.Scalar chain:
Scalar chain refers to
‘the chain of superiors
ranking from the
ultimate authority to the
lowest level in an
organisation. Scalar
chain is the formal line
of authority (Chain of
command) which moves
from highest to lowest
rank.
Drawbacks of Scalar
chain:
a) Huge time is required
for the communication to
reach the destination.
b) There is possibility of
information distortion.
Gang Plank (Direct Communication):
According to this concept, in case of
emergency, two executives of the organization of
different departments at the same level can
communicate directly,
10. O rder:

This principle is based on the general

saying, “Have a place for everything and keep
everything in its place”.
All materials are to be kept in proper place
(Material Order) and the right man is to be
assigned the right job (Social Order).
Material Order Social Order
11. Equity:
This principle says that superiors should be
impartial while dealing with their
subordinates.
Equity refers to kind,fair and equal
treatment for all employees. Favouritism and
nepotism should be avoided.
 AVOID DISCRIMINATION
Salary 50000

Salary 15000
Salary 35000

3 MANAGERS HOLDING SAME POSITION

12. Stabili ty of tenure of personnel :

According to Fayol a worker should not be

moved from one job to another frequently. Time is
necessary for employee to adapt his work and
perform it effectively..
Frequent changes of personnel increases cost of
selection and training .
 MUBASHIR ALI GOT A JOB IN ABC TRADERS

IN JANUARY IN FEBRUARY IN MARCH

HE WORKS HE WORKS HE WORKS
IN CUSTOMER IN MARKETING IN ACCOUNTING
CARE DEPT DEPT DEPT

ACCORDING TO FAYOL THIS IS NOT ALLOWED

13. Initiative:

According to this principle , subordinates

should be given an opportunity to take
initiative in making and executing the plans.
Initiative means taking the first step with
self-motivation.
14. Espirit D e Corps (Union is strength):
This principle implies that there
should be coordination and team
work among the members of an
organization.
Management must take steps to
develop a sense of belongingness
among the members of the work
group.
A manager should replace ‘I’ with
‘We’ in all his conversations with
workers to foster team spirit.
From the foregoing discussion it is clear that Fayol’s 14 principles of
management are widely applicable to managerial problems and have
cast a profound impact on management thinking today.
 F.W.TAYLOR’S
SCIENTIFIC MANAGEMENT
F.W.TAYLOR’S SCIENTIFIC MANAGEMENT:

Frederick Winslow Taylor,was born

in 1856, Philadelphia,U.S. was an
American engineer who is known as
the father of scientific management.
 He started his career as an
Engineer in Midvale Steel
Works,Later he became the
chief engineer.
Taylor thought that by
scientifically analysing work, it
would be possible to find ‘one
best way’ to do it.
His famous book “principles
and methods of scientific
management‘ was published in
1911.
 SCIENTIFIC
MANAGEMENT-
MEANING AND DEFINITION
SCIENTIFIC MANAGEMENT- MEANING
Scientific management refers to the
application of science to management
practices.
It involves the replacement of rule of
thumb or trial and error method by
scientific and systematic approach in
decision making.
SCIENTIFIC MANAGEMENT- DEFINITION

“Scientific management means

knowing exactly what you want men
to do and seeing that they do it in the
best and cheapest way.”-
Fredrick Winslow Taylor (F.W.Taylor)
OBJECTIVES OF
SCIENTIFIC
MANAGEMENT
Objectives of Scientific management:

1) Increasing production – by the use of

standardized tools, methods
2) Increasing quality – by using quality control
and research.
3) Reducing cost – by using scientific techniques
of production.
4) Reducing wastage – by proper handling of
resources
PRINCIPLES OF
SCIENTIFIC
MANAGEMENT
PRINCIPLES OF SCIENTIFIC MANAGEMENT:
1. Science, not rule of thumb :
Rule of thumb means application of
traditional methods or the methods decided
by the managers based on their past
experience.
All these methods are often untested and
unscientific; they do not guarantee success.
Through scientific analysis and investigation,
the best method of doing a work can be
developed.
REPLACE OLD
2.Harmony, not discord (conflict):
This principle states that there should be
complete harmony between management
and the workers.
This can be achieved through a change in
the attitude of workers and the
management. Taylor calls it as “Mental
Revolution”.
Harmony
3.Co-operation, not individualism :
This principle is an extension of
“Harmony, not discord”.
This principle states that there should be
complete cooperation between management
and workers instead of individualism.
Competition should be replaced by
cooperation. For all important decisions taken
by the management, workers should be taken
into confidence.
4.Development of each and every person to his or
her greatest efficiency and prosperity:
Industrial efficiency depends to a large extent on
personnel competencies. Under scientific
management right men are selected for right jobs.
The procedure for selection of workers should be
designed scientifically.
The management and the workers should try to
achieve maximum output in the place of restricted
output.
 MENTAL REVOLUTION
The basic idea behind the principles of
scientific management is to change the mental
attitudes of the workers and the management
towards each other. Taylor called it “mental
revolution”,ie,
● Increase in production,

● Spirit of mutual trust &

● Develop a scientific attitude for solving

problems
TECHNIQUES OF
SCIENTIFIC
MANAGEMENT
TECHNIQUES OF SCIENTIFIC MANAGEMENT:

To bring scientific management

into practice, Taylor suggested the
following 7 techniques.
1.Functional foremanship:
In this technique Taylor suggested the division of
factory into two departments-Planning Department
and Production Department.
F.W.Taylor suggested that specialization should
be introduced in the factory. He advocated
‘Functional foremanship for this purpose.
Functional foremanship is a form of organization
which involves supervision of a worker by eight
specialist foremen. Each worker will have to take
orders from these eight foremen in the related
process or function of production.
Functional foremanship is an extension of the
principle of division of work and specialisation to
the shop floor.
2. Standardization and simplification of work:
Standardisation involves setting up of standards in
every phases of business operation. It includes uses of
standard tools and equipment., methods or lines of
product, working conditions etc. for maximization of
output.
The objectives of standardization are -
a) To establish standards of performance of men and
machines.
b) To maintain quality standards.
c) To reduce a given line or product to fixed types,
sizes and characteristics.
3.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.
It helps a lot in handling, transporting and
storage of raw materials and goods.
Taylor devised the concept of assembly line
by using method study.
Assembly line:
It is a production process
that breaks the
manufacture of a good
into steps that are
completed in a pre-
defined sequence.
 FIND OUT
BEST METHOD
4.Motion study:
Motion study involves close observation of
movements of the workers and machines to
perform a particular job.
It helps to eliminate wasteful movements
and to select the best method of doing a job.
Taylor used stopwatches and various
symbols and colours to identify different
motions.
TRY TO AVOID UNNECESSARY
MOVEMENT OF WORKERS
5.Time Study:
It is the determination of time required to
complete a particular study. ie. Fixing
standard time for each job.
Time measuring devices are used for each
element of work.
The objective of time study is to determine
the number of workers to be employed, frame
suitable incentive schemes and determine of
labour costs.
6.Fatigue study:
Continuous work causes physical or mental
fatigue.
Fatigue study tries to identify the amount and
frequency of rest required in completing the work.
Rest pauses and intervals should be scientifically
determined.

WORK STUDY = METHOD STUDY + MOTION STUDY + TIME STUDY + FATIGUE STUDY
7.Differential Piece Rate System:
Differential piece rate system is a system of
wages’ payment in which efficient and
inefficient workers are paid at different rates.
Taylor has suggested two types of wages for
similar work. Higher wages for efficient
workers & lower wages for inefficient
workers.
 STANDARD WAGE RATE
FOR ONE PRODUCT Rs.: 10

RAJU SANJAY
MAKES 20 UNITS A DAY MAKES 32 UNITS A DAY
&
&
GETS RS. 200 GETS RS. 320
FAYOL VERSUS TAYLOR COMPARISON
BASIS HENRI FAYOL F W TAYLOR
Emphasis Top level management Lower level
management

Concept General theory of Scientific

administration Management

Unity of Strictly followed Not considered as

command important.

Applicabil Universally applicable Applies to specialized

ity organizations only.