PRINCIPLES OF MANAGEMENT

Principles of management 

Early management thoughts: In modern the thoughts of management was only developed after the industrial revolution. The current form of management that we see today is the result of gradual development. However it is believed that the system of management is started right from the very beginning of human civilization. Modern management theories have been developed through the research conducted by various researcher, psychologists and scholars. As time passed by development of new technologies, principles and experiments brought total changes in the ancient system of management. Scholars like James Watt, Abraham Maslow, Charles Dupin, Henry Fayol etc have made a lot of contributions in developing modern management theories. Some of the major management theories are:

a. Classical theory of management
b. System theory of management
c. Management theory of management
d. Decision theory of management
e. Theory X and Theory Y
f. Contingency theory of management….etc.

Classical theory of management: 

The classical theory of management was developed during the 19th century. According to this theory human beings are economical creatures. So they work for economic benefit only. This theory is known to be first insightful theory in the field of management. The classical theory includes the following:

Scientific management theory: Scientific management theory was developed by Fedrict Winslow Taylor. In the beginning of 19th century, there was lack of labour supply and managers tried different methods to improve the productivity of their organization. In this process F.W. Taylor, Frank Gigerbth and Henry Ganbt developed a theory called Scientific management theory. However it was F.W. Taylor who contributed the most to develop this theory. So he is also known as the father of scientific management. 

F.W. Taylor initially worked as a foreman in “Midvole Steel Company” where later he was promoted as the chief engineer. F.W. Taylor was given as honorary degree of science by the University of Pennsyiavnia on October 19, 1906. Similarly he also worked as professor in Tuck school of business at Dartmouth College.

F.W. Taylor developed Scientific management theory in order to find out the answer of two simple questions i.e.

a.) how to improve the productivity of an average worker?
b.) how to improve the productivity of management?

Taylor in his theory clearly stated that division of labour to bring work specialization is the best way to improve employees productivity. Therefore Scientific management theory gives maximum importance to the use of scientific tools, techniques and methods. For improving the productivity it is essential to select employees scientifically on the basis of their merit and they should be provided with appropriate training before placing onto their respective jobs. Similarly employees should be kept under strict supervision to find out whether their performance has been improved or not.

Employees are monitored to find out how much time do they require to complete a particular task likewise their behavior during their work also should be closely monitored. In addition to this they should be provided rest so that they are able to regain their energy which they have lost during the work. This study is called “Time, Motion and Fatigue study”.

Taylor also introduced the system of wage on the basis of work to create motivation on part of the employees. Under this system those employees who perform better are provided with higher rate of wage than other average workers. This creates self motivation as employees now started working properly with an aim of earning more. When all these steps were implemented, Taylor notice that the productivity started to Increase and thus based on his findings he developed a theory named as Scientific management theory which received global recognition and popularity.

Features OR Contributions of Scientific management theory

Scientific management theory has developed various methods to improve employee’s productivity which can be taken as the contribution of Taylor in the field of management. Those contributions are:

1.) Scientific selection and training: Scientific management theory focuses on the scientific selection of employees i.e. on the basis of their skills and abilities. Such selection ensures that the selected employee is capable enough to perform the given task. Similarly before job placement they should be provided with appropriate training in order to further strengthen their working skills.

2.) Specialization at work: Scientific management theory developed the principle of division of labour to create work specialization. Under this system the total work is first divided into small parts and then only a part of work is given to perform it regularly and continuously. This helps to create work specialization.

3.) Time, Motion and Fatigue: Taylor conducted time, motion and fatigue study in order to calculate employees efficiency at work. Time study analyzes the time taken by a worker to complete a particular task. Motion study examines the physical movement of employees and their behavior while working. Similarly fatigue study is concerned with the examination of the provision of rest that should be given to the employees to reenergize them. This time, motion and fatigue study is the heart and soul of Scientific management theory.

4.) Differential payment system: The system of wage on the basis of work was introduced by Scientific management theory. This system is also called as price rate system of wage payment. Here wage is paid on the basis of the output produced. Those workers who produce more output is paid with high rate of wage than others.

5.) Harmony between labours and management: Scientific management theory states that there should be harmony between the labours and the management in the organization. There shouldn’t be any kind of conflict and misunderstanding between them. They should cooperate and coordinate with each other. For this both management and labours must work for mutual interest.

6.) Re-organizing supervision: Taylor gave the concept of separation of planning and functioning foremanship. This means the work of planning should be done by the supervisors and workers should work accordingly to the plans made by their supervisors. This helps in building harmonious relationship in between them.

Principles of Scientific management theory OR Taylors principles of management

F.W. Taylor in his scientific management theory has propounded or developed various principles of management which are as follows:

a.) One best method: Taylor’s scientific management replaces the traditional working procedure based on the rule of thumb. This principles state that there can only be one best method of doing work for a particular job. Time, motion and fatigue study should be used in order to find out the best method of doing work. Therefore all types of decisions in the organization should be taken on the basis of reliable date and information not on the basis of guess.

b.) Division of labour:  Scientific management theory developed the principle of division of labour to create work specialization. Under this system the total work is first divided into small parts and then only a part of work is given to perform it regularly and continuously. This helps to create work specialization.

c.) Cooperation or mental revolution: Mutual cooperation between the labours and the management is the foundation and basis of scientific management theory. This theory states that employees should think organizational interest first than their personal interest and the organization should also try to fulfill the interest of its employees. This transformation in the way of thinking as stated by Taylor is called “mental revolution”. This helps to minimize tussle between them and create an environment of trust and cooperation. The mutual interest for them is rise in productivity and profit.

d.) Development of Employees: Scientific management theory is based on scientific selection of employees on the basis of their individual merit and ability. As machine require repair and maintenance for smooth functioning Employees requires training. Training helps them to acquire knowledge about the technical aspect of work and thus they become capable to work the job given to them. Similarly time to time training is essential to upgrade their working skills in order to make them capable to face challenges and handles situation.

e.) Maximum output: Maximum output and productivity is the ultimate concerned of scientific management theory. The main objective of employees as well as the management should be to maximize the level of output. For maximizing output there must be proper utilization of all available resources which only becomes possible if employees are capable enough to perform their work. To fulfill utilization of resources the highest level of output can be produced by the management and better wages can be earned by the employees.

Limitation of scientific management theory :

Although Scientific management theory is one of the most popular theory of management. However it also has some dark aspects which is its limitations. Some of those limitations are as follows:

1. Taylor in his theory has given maximum importance to the economic aspects i.e. money to improve productivity and has ignored other psychological factors.

2. This theory has only focused on the internal factors associated with the productivity and has not given any importance to external factors.

3. Taylors Scientific management theory is mechanistic in nature which means it treats human being as machine i.e. only as a factor of production.

4. Scientific management theory has unnecessarily focused on the technical aspect of work only and has not given much importance to the human aspect which is also equally important.

5. Different trade unions have strongly opposed this theory because their presence and influence also has not been included in it.

Administrative Theory of Management 

 Administrative management theory was developed by a French industrialist Henry Fayol who was born in 1841 in Istanbul, turkey. He brought forward this theory in the year 1961 by publishing his famous book named “General and Industrial Management”. This book initially was published in French language and later on in the year 1920 it was republished in English language. Fayol started his career as a engineer in a mining company which he owned later.

Scientific management theory has only given importance to individual performance but this theory studies the overall aspect of the organization which is connected with its productivity. According to this theory “Management can be done as a process by performing several activities systematically one after another. Thus this theory classifies organizational activities into the following four categories i.e. managerial skills, functions of management, principles of management, business activities.

Managerial skills are those skills that managerial personals require in order to carry out the work of management. These skills include conceptual, human and technical skills depending upon the nature of work they have to perform. Likewise functions of management are various activities that a manager performs in order to achieve the goals. These skills are utilized to perform the various functions of management. During the course of performing work managers might require certain guidelines which are provided through the various principles of management. All these activities ultimately is done in order to perform business operations or activities. Fayol has classified business activities into the following six types:

a.) Technical Activities: Activities related with the production of goods and services.
b.) Commercial Activities: Activities related with the purchase of raw materials and scale of finished goods.
c.) Financial Activities: Activities related with identification, collection and utilization of financial resources.
d.) Security Activities: Activities related with the security of physical aspects and employees.
e.) Accounting Activities: Activities related with recording financial transactions in the various books of account like journal, ledger, trial balance, income statement, balance sheet etc.
f.) Managerial Activities: Activities concerned with performing managerial function like planning, organizing, leadership and controlling.

Principles of Administrative management theory 

Henry Fayol has developed 14 principles of management which are most popular and widely used principles of management. These principles of management are as follows:

1.) Division of labour:  Scientific management theory developed the principle of division of labour to create work specialization. Under this system the total work is first divided into small parts and then only a part of work is given to perform it regularly and continuously. This helps to create work specialization.

2.) Authority and Responsibility: Authority is the power that is needed to perform work or to assign work whereas responsibility is the obligation to perform the assigned duty. According to this principles along with the authority necessary responsibility also should be given thus they cannot be separated from each other. However authority can be delegated whereas responsibility can never be delegated. So a manager is always held responsible for all the acts done by his subordinate.

3.) Discipline : Every organization has certain rules and regulations which is to be followed by all employees across different levels of management. Employees in order to be discipline must follow the order and instructions given by their superiors. Any violation of discipline is taken as indiscipline which is followed by disciplinary actions.

4.) Unity of command: The principle of unity of command states that there should be only one superior for a particular subordinate. That subordinate is only responsible for his particular superior from whom only he or she receives instructions. Lack of unity of command in the organization creates confusion and contradiction among the employees working in the organization.

5.) Unity of direction: Each group of organizational activities that have the same objective should be directed by one manager. There should be one head and one plan for a group of activities which has same objectives.

6.) Subordination of individual interest into organizational interest: According to this principle organization comes first thus its interest must be given top priority than the interest of individual employee. One must be able to transform or change the individual interest into the organizational interest. Achievement of organizational interest automatically helps to achieve the individual interest of the employee.

7.) Remuneration: Every employee works for earning their living. Therefore these principles states that employees should be paid with fair salary and wage in order to create better satisfaction. Satisfied employees have less chances of turnover and thus stability of employees can be achieved. Remuneration should be paid on the basis of employees’ performance in order to create better satisfaction.

8.) Centralization: The principle of centralization states that only that much authority which is needed in order to perform work should be delegated to the employee. Major decisions making authority should not be delegated. It should be kept strictly centralized. This helps to maintain discipline among the employees. Thus centralization principle is related with maintaining the balance between centralization and decentralization of authority.

9.) Scalar chain: It is the line of authority from top level management to low level employees. The communication should follow this chain.

10.) Order: Fayol says that everything and everyone should be placed in their appropriate place and order. To follow this there is the need of scientific selection of person and correct assignment of duties and responsibilities.

11.) Equity: Equal kind of treatments should be given by the managers to the employees. Equity is the combination of kindness and justice

12.) Stability of tenure: of person Tenure refers to the span of time that employee spend in an organization. Fayol suggest that it should be stable. There should also be job security for the employees. High employees’ turnover is always inefficient.

13.) Initiative: According to Fayol “initiatives are one of the keenest satisfaction for an intelligent nab to experience. It is a power of thinking out plans and ensuring its implementation. "

14.) Espirit de corps: Espirit de corps is a French term which means spirit of cooperation. According to this principle all the employees working in the organization must unite together and work for achieving the organizational goal. Unity among employees increases their strength and their by the goal of the organization can be achieved easily.

Bureaucracy Theory 

 Max Weber a German sociologist was the person to develop the bureaucracy theory. He was born in 21st April 1864. Weber is famous for his thesis in economic sociology which he described in his famous book entitled “The Protestant Ethics and The Spirit of Capitalism”.

According to this theory good organizational structure is the basis for efficient management. Structure refers to the position of the manager and employees along with their authority and responsibility. Clear rules and regulations are formed by the management and implemented by the employees for the effective conduct of management. According to Weber his theory can be applied in all types of organization and in all situations. The bureaucracy theory has five major features. i.e.:

1.) There should be clear division of labour and specialist should be placed in each and every position.
2.) In order to bring uniformity in performance management should clearly define its rule and regulations.
3.) There should be clearly hierarchy of position from top to bottom in the organization.
4.) Recruitment, selection, appointment and promotion of employees should be done on the basis of their technical qualification.
5.) Managers should operate their organization in a impersonal way and should maintain sufficient distance with their employees.

Clear rules and regulations made for decision making makes the task of management easier and by focusing on the technical aspect of employees, work specialization can be created. However inability to adjust with the changing environment, autocratic rules and regulations, lack of communication and inability to change old rules and regulations are the major drawbacks of this theory.

Principles of Bureaucracy 

Theory Max Weber during the course of developing the bureaucracy theory os propounded the various principles of management which are as follows:

1.) Formal hierarchical structure:  organization operates through its employees and every employees are kept or placed according to the hierarchical structure. They must clearly know what is their duty, responsibility and level of authority. According to this principle every level controls the level below it and is itself controlled by the level above it.

2.) Management by rules: Bureaucracy theory has given much importance to the formulation of rules and regulations and its strict implementation. There should not be any arbitrary judgment done by the manager instead all decisions should be taken by following the established rules. Following the rules also helps in achieving uniformity in performance among the employees.

3.) Employment on technical qualification: Bureaucracy theory states that employees should be selected on the basis their technical qualification. Technical qualification helps in creating work specialization on part of the worker. This means they should have specialized knowledge about the work they are going to perform. Thus bureaucracy theory rules out the concept of generalization at work.

4.) An “infocused” and “upfocused” mission:  Max Weber focuses on achieving infocused and upfocused mission. When a mission is described as infocused, it means satisfying the internal objective which can be profit maximization, expansion of market share etc. on the other hand upfocused mission means satisfying the stakeholders like investors, customers, employees etc.

5.) Purposely impersonal:  According to this principle all employees should be treated equally and fairly and the decision of the manager should not be influenced by his likes and dislikes. Weber has started that employees should be treated fairly without being influenced by his prejudice. Similarly a manager should maintain sufficient gap with his subordinate in order to maintain discipline and control over them.

6.) Organization by functional specialization: Bureaucracy theory highlights on the need to utilize specialization at work. For doing so Weber has focused on the placement of specialist persons on each and every position. This means persons having expertise knowledge in their respective fields should be placed on every position in order to perform the functions in at specialized manner. Function specialization helps to improve the productivity through the maximum utilization of one’s ability to perform work.