Chapter 4 - Administrative Theory of Management/Principles of
Management
* Administrative theory of Management
* Principles of Management
* Nature of Management Principles
* Characteristics of Management Principles
Q.1. Describe in brief the administrative theory of Management?
OR
Briefly explain the Fayol's general principles of Management.
OR
To arrange is to forecast and plan, to organize, to command, to
coordinate and to control, Discuss
OR
Discuss the contribution of Fayol to the science of Management.
Henri Fayol - Father of Mangement
Fayol was a French mining engineer in his early thirties, but after that
he switched over to general management ans was Managing Director from
1888 to 1918. He wrote his book General and Industrial Management in
1916 in French, which was translated in English in 1949, only when
American Management writers came to know about his ideas.
Fayol is known as the father of management or the founder of the
classical management. Not because he was first to investigate
managerial behaviour, but because he was the first to systematize it.
He was contemporary to Taylor. Taylor was basically concerned with
organizational fucntions, whereas Fayol was interested in the total
organization. It may be noted that Taylor is known as the father of
scientific management, i.e. supervisory or lower management, while Fayol
is recognized as the father of management, i.e. the higher management
or the general management.
Division of Business Activities
According to Fayol, business activities in any organization consist of six
interdependent operations as follows:
1. Technical - activities concerning production.
2. Commercial - activities concerning buying, selling and exchange.
3. Financial - activities concerning optimum use of capital.
4. Security - activities concerning protection of property.
5. Accounting - activities concerning final accounts, costs and statistics.
And
6. Managerial - activities concerning planning, organizing, commanding,
coordinating and controlling.
According to him, the first five activities were well known and as such
to devoted his attention to the description and explanation of the
managerial activities. Also he analyzed the nature of such activities and
skill requirements, which were so far given little scattered attention by
thinkers.
Universality of Management: (Elements of Management)
Fayol considered the process of management to be of universal
application and distinguished between five elements of the process. He
regarded these elements of management as the function of management,
which were being performed by all managers universally and at all the
levels of organization. He divided management functions into five parts
as follows:

Forecasting and planning

Organizing

Command

Coordination

Control
Thus, according to Fayol, management means to forecast and plan, to
organize, to command, to co-ordinate and to control. The management
was defined as the process of performing these functions. It may be
noted that the present pattern of management functions follows broadly
the lines set by Fayol.
Fayol emphasized that management involved the application of certain
skills, which could be acquired by persons on the basis of systematic
instructions and training. Once acquired the skills could be applied to all
kinds of institutions including church, schools, political as well as
industrial organization.
Q.2. Describe the basic principles of management?
Principles of Management
Fayol made a distinction between "elements of management" and "general
principles of management". Besides a systematic analysis of the
management process and management functions, Fayol formulated a set
of fourteen principles as guidelines for implementing the process of
management.
These principles may be listed as follows:
1. Division of Work
In any organized situation, work should be divided into compact jobs to
be assigned to individuals. This applies to managerial work and nonmanagerial work. Division of labour facilities specialization and improves
efficiency, if it is done within reasonable limits.
2. Authorities and Responsibility
The authority is the official right to a manager to manage people and
things. Authority of a manager goes hand in hand with the responsibility
for effective results. In other words, there should be parity or balance
between authority and responsibiliy vested in a managerial position.
3. Discipline
Discipline is defined as observance of diligence and respect for seniors
and rules and regulations. Managers as leaders of their work groups
should enforce discipline throughout the organization. Fayol declares
that discipline requires good superiors at all levels. He emphasized the
need of discipline among the personnel for the smooth running of
organization. He advocated penalties to prevent in violation.
4. Unity of Command
It means that a subordinate in an organization should be under direct
supervision of a single from whom he should get instructions and to whom
be should be accountable. In other words, every employee should have
only one boss. If a subordinate has more than one boss, to that case
conflict and condition in authority and instructions of general bosses
would result.
5. Unity of Direction
Fayol advocates one head, one plan for a group of activities having same
objective. In other words, a set of activities having the same objective
should be under the direction of a single manager. Similarly, there
should be one plan of action for such a set of activities because the
objective is the same. This principle promotes smooth coordination of
activities, efforts and resources.
6. Subordination of Individual Interest to Group Interest
The collective good and common interest of the organization should
prevail over the narrow, sectional and self-interest of its members of
an organization for the welfare of both the organization and the
members.
7. Remuneration of Personnel
Remuneration as well the methods of payment in an organization should
be fair so as to afford maximum satisfaction both to the organization
and its employees.
8. Centralization
According to Fayol, every thing which reduces the importance of
subordinates role is centralization and that which increases it, is
decentralization. In his opinion, the question of centralization and
optimum degree in particular case. There should be a proper combination
and decentralization in an organization based on a consideration of
several internal and external factors.
9. Scalar Chain
Fayol defines the scalar chain as the chain of superiors ranging from the
ultimate authority (i.e. top authority) to the lowest ranks. It is also
known as hierarchy of management. Every communication should follow
the prescribed route, i.e. the proper channel. Authority relationships
are said to be scalar when subordinates report to their immediate
superiors and when their superiors, in turn, directly report as
subordinates, to their superiors.
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10. Order
Order relates to both persons and things. It means a systematic
arrangement of materials and systematic placement of people in the
organization. In material order, everything should be in its proper place
and there should be a place for everthing. For social order there should
be a place assigned to each employee, and each employee should be in
the place assigned. The right man in the right place is the ideal here.
11. Equity
Equity means combination of fairness, kindliness and justice. Equity
motivates the workers to perform their duties. Besides, it promotes a
friendly atmosphere between superiors and subordinates.
12. Stability of Tenure of Personnel
Management should strive to minimize employee turnover (i.e. changes in
staff). In other words efforts should be made to achieve relative
stability and continuity of tenure of the personnel. This could be
achieved by attractive remuneration and honourable treatment of
personnel. Stability and continuity of personnel promote teamwork,
loyalty and economy.
13. Initiative
It refers to the freedom to propose a plan and execute it. Management
should encourage subordinates to take desirable initiative in thinking out
plans and executing them. Entending opportunities and freedom to
contribute their best could do this.
14. Esprit de corps
Esprit de corps means the spirit of loyalty and devotion, which unites
the members of a group or society. It is a sense of respect and
belongingness to one's organisation. This principle stresses the need for
team spirit, cordial relations, and co-operations among the personnel.
It is to be noted that Fayol made is clear that he had no intention to
close the list of principles or make them inflexible.
Critical Evaluation
Fayol's administrative or process or functional theory of management
may be evaluated as follows:
(A) Contribution of Fayol's Work
Fayol's major contribution was to identify management as a separate set
of skill or functions performed by managers in the organizations. The
skills and abilities required for effective management were stated to be
dependent on the manager's positions at different levels of organization.
Fayol pointed out that administrative or managerial skills were more
essential for higher-level manager, whereas technical skills and abilities
were required more of the lower levels.
Fayol was the first thinker who emphasized, for the first time the
necessity of formal education and training in management. He was the
person who provided a set of means (i.e. planning, organizing,
commanding, coordinating and controlling) for understanding the
management process. He also provided principles for implementing this
process.
He provided conceptual framework for analyzing the management process
and emphasized that management was a separate, distinct activity.
Management as a body of knowledge gained immediately from Fayol's
analysis of management skills of universal relevance and the analysis of
the principles of general management.
(B) Limitations or Weaknesses
Fayol's administrative theory of management is criticized on the
following grounds.
1. It is too formal as Fayol divides "business activities" into six
categories, and their management into five functions and the
implementation of these functions with the help of fourteen principles.
2. Some critics call this theory as inconsistent, vague and inadequate.
3. It does not pay adequate attention to workers. It has promanagement bias.
4. Jernert Simon calls Fayol's principles as proverbs, comparable to
folklore and folk wisdom.
Conclusion
Inspite of several criticisms of Fayol's work, his theory of managerial
functions still exerts considerable influence on the practice of
management as well as the teaching of this subject world over.
It may be also noted that when combined together the scientific
management approach and the functional approach are called classical
school or classical theory of management or classical approach to
management.
Q.3. What are Management Principles? Explain the nature of
Management Principles.
OR
Why Management Principles are needed? What are their limitations?
Meaning of Management Principles
Management principles may be defined as fundamental truths of general
validity. They are helpful in predicting and understanding the results of
managerial actions. The principles have been derived from the
experience of managers in different fields of activity. Primarily
members of the classical management school have developed them.
Management principles are intended to improve the practice of
management by providing guidelines for managerial actions in the
management process. They become the basis of scientific process of
management.
Flexibility of Management Principles (Nature)
As indicated above, management principles are not rigid, absolute truths
like rules and laws. In fact, they are flexible guides to managerial
actions. Hence, while applying these principles, due attention must be
given to varied and changing, circumstances because human beings who
are subject of such principles are different and changeable and
moreover other concerned factors are also not stable. At times it has
been found in practice that the same principles is seldom applied twice in
exactly the same way.
Like other social sciences, management science is also not very exact
and rigid. Certain kind of flexibility is always necessary to accommodate
new thinking, new demands and newly emerging circumstance. Hence the
management principles are flexible and can should be adopted to meet
the speciality of every situation. However as a precaution management
principles should be guarded against unnecessary frequent modifications
and alterations based on pure whims and frezies of individual user so
that they are not distorted unwarrantedly.
In sum, it may be said that the nature of the principles of management
suggests that they should be applied with fair judgement and
interpretation of the available facts in a given situation.
Q.4. Describe the characteristics of management principles also explain
it needs & importance?
Characteristics of Management Principles
The characteristics of management principles may be examined as
follows:
1. Management principles are derived from analysis of management
functions and processes.
2. There are two types of principles:
Descriptive which attempt to explain and predict the behaviour of
organizational members and managerial decisions and their relationships.
Normative which attempts to prescribe and evaluate the bahaviour of
organizational members including the managers. They prescribed what
ought to be, what is good, right and desireable.
3. The principles known today have their origin in the works of classical
writers and thinkers like Taylor, Fayol and Mooney and Reiley.
4. They are universal in the sense that they are valid for most
organizational under most circumstances.
5. They are flexible in nature and change with the changes in the
environment in which an organization exists. It is to be noted that
nothing is permanent is the landslide of management, because of the
complex and unpredictable nature of human behaviour.
Need and Importance of Management Principles
Proper use of management principles will probably improve organizational
performance. According to George R. Terry, Principles of management
are to a manager as a table of strengths of materials is to a civil
engineer. The value of the principles lies in the foundation they provide
for efficient conduct of management practice. By means of principles, a
manager can avoid fundamental mistakes in his job and foretell the
results of his actions with confidence.
Principles help in several ways - increasing the managerial efficiency,
increasing the productivity of workers, enhancing managerial knowledge
and thinking, improving research in management, serving as aid to
training enhancing social welfare by helping in improving the quality of
life of people and community resources to best advantage of
organizational members, etc.
The main purpose of management principles is to make available useful
elements of a systematic theory of management, so as to improve the
management practice. They provide a means of organizing knowledge and
experience in management.
The above discussion clearly brings out that it is due to all the above
facts that management principles have become a permanent need in
today's management world.
Various Management Principles
A number of management thinkers have formulated various management
principles. Taylor and Fayol has enunciated the most important
principles.