PRINCIPLES OF MANAGEMENT
The principles of management are statements of fundamental truth which can be used by managers as guidelines for decision making and action under different situation. They are not rules or rigid laws. It can be modified by the managers to suit the situation. These principles are the outcomes of various problems faced by the managers. These principles are derived under two methods:
a) On the basis of observation: The principles of “division of work” was stated when it was observed by some managers that dividing the work in a proper manner leads to better performance.
b) On the basis of experimental studies: Under this experimental study is conducted for example the performance of two group of people in which one is headed by a single boss and the other is headed by two bosses is compared. When it was found that the performance of the first group is higher the “principle of unity of command” is derived.
NATURE OF PRINCIPLES OF MANAGEMENT:
1 Universal applicability: Universality means the truth which is equally applicable in all spheres
(both business and non-business)The principle are universal in nature. All organizations wheather business educational institutions, clubs, government offices , playground, army etc in order to achieve their objectives have to apply more or less the same principles.
2. General guidelines: The principles of management are not definite like the principle of physics and chemistry. They are very clear and definite and their outcome can be predicted accurately. The outcomes of the principles of management cannot be predicted. They are only a guidelines.
3. Formed by practice and experimentation: They are the result of various problems faced by the professional people. Whenever the problems occurred a careful research is conducted and solutions are derived at. Thus the principles are result of practice and experimentation.
4. Flexibility: They are not the final truth. Whenever there is a change in the political, economic or social sector, new kinds of problem arise. Old principles are altered and new ones found out. Thus they are dynamic in nature. They can be modified by the manager according to the changing demand.
5. Contingent: The principles of management are not static or fixed. They are affected by situation or circumstances .They cannot be applied blindly in all situations. For example the principle of unity of command is effective in the lower levels and in the t op level,
6) Establish cause and effect relationship: They tell the managers that if a particular principle is applied in a particular situation what maybe its likely outcome. For ex. the principles of division of labour leads to specialization and increase in efficiency. So division of labour is the cause and efficiency is the effect.
7. Behavioral: The principle of management are meant for regulating human behavior and getting high performance from them. They guide them how to respond under different situations. It helps in

a better understanding of relationship between the human and material resources in accomplishing the goals. However because of the complex nature of human behavior, management principles might have limited application.
SIGNIFICANCE OF PRINCIPLES OF MANAGEMENT:
1.
Providing useful insight to managers: The principles of management make the manager aware about the manner in which he should act in various situations so that he does not repeat the mistake of the previous managers. Thus timely guidance reduces the wastage of resources and the objectives can be achieved in a less expensive manner.
2.
Optimum utilization of resources: Principles of management help in optimum utilization of resources by equipping managers to foresee the cause and effect relationship and thus reduce the wastage arising due to trial and error method. The principles of discipline, unity of direction, centralization order etc facilitates better utilization of human efforts and physical resources. They help in saving time and money and enhance productivity.
3.
Effective administration: Proper understanding of principles of management helps the managers in formulation of effective plans and policies. For eg: the principle of remuneration helps the manager to make policy of equal pay for equal work and principle of equity paves the way for equal treatment to all workers. The end result of all these is better administration.
4.
Scientific decisions: The managers can give away with the traditional trial and error method and can rely on the established management principles. The scientific decision will facilitate better functioning of the organization. The need for guess work is reduced and they can approach various problems systematically. Here the emphasis is on logic and not on blind faith.
5.
Meeting environmental challenges: Every business works in a dynamic environment. Changes in economic, social, political technological and legal environment create challenges for the business. The managers can use these principles suitably to deal with different kinds of situation.
6.
Fulfilling social responsibilities: Management itself is a part of the society and it takes inputs from the society and supplies output to the society. If the management is efficient the resources of the society will be better utilized. Better products for lower prices will be made available. This will improve the quality of life of the people. The principle of fair remuneration and equity emphasize on the social equity.
7.
Management training education and research: The advantage of principle of management encourage the researches to bring in more improvement in them. The attitude of the managers has moulded in such a manner that they are doing consciously or unconsciously something new. The principles of management are enriching the manager’s theoretical and practical knowledge. Professional courses like MBA,BBA helps the aspiring candidates by

teaching these principles in their beginners level apart from OR (Operations Research)cost accounting, PERT, CPM etc.
SCIENTIFIC MANAGEMENT:
“Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.” F.W.TAYLOR
It refers to that management which thinks that by scientifically analyzing work it would be possible to find one best way to do it.
PRINCIPLES OF SCIENTIFIC MANAGEMENT:
1.
Science, not rule of thumb: This principle says that we should not get stuck in a set routine with the old techniques of doing work rather we should be constantly experimenting to develop new techniques which make the work mush simpler easier and quicker. Scientific methods involve scientific enquiry, observation and investigations, and determination of standard time, fair day’s work, best way of doing the things, etc. This will reduce the time and wastage of resources.
2.
Harmony , not discord : As per this principle such an atmosphere must be created in the organization that labour (the major factor of production)and management consider each other indispensible. Taylor referred this situation as “mental revolution”, and this will end all conflicts between the employer and the employee. Management should share the gains of the company with the workers and workers must exhibit hard work, discipline and loyalty. “Prosperity of the employer cannot exist for a long time unless it is accompanied by prosperity for employees.”
3.
Co-operation and not individualism: There should be a complete cooperation between employees and management instead of individualism or competition. It is an extension of the principle of harmony not discord. Taylor has suggested that the management and the workers must jointly set the standards and they should give ears to the constructive suggestion by employees. If the suggestions results in reduction of the costs then the employees must be rewarded as well.
4.
Development of each and every person to his/her greatest efficiency.: According to this principle the efficiency of each and every person should be taken care of right from his selection. They should be given required training to learn the best method to do a job. It should also be taken care that each employee should be allotted work according to his ability and interest.
5.
Maximum, not restricted output: Both the management and the workers should try to achieve maximum output instead of restricted output. This will be beneficial to both the parties. Maximum output will result in higher in higher wages for the workers and greater profits to the management. Increased productivity is also in the interest of the consumers and society at large.

TECHNIQUES OF SCIENTIFIC MANAGEMENT:
1.
Functional foremanship: It is an extension of the principle of “division of labour”. Under this the planning department is separated from production department. Taylor suggested four specialists under planning department viz. Route clerk, instruction card clerk, time and cost clerk, and shop disciplinarian. The four foremen under the production department are gang boss, speed boss, repair boss and inspector.Thus each worker is controlled by eight specialists. Thus this technique is against the principle of “unity of command” by Fayol.
Name of the foreman
Functions.
ROUTE CLERK Determining the routes through which the raw material will pass. For this a route sheet is prepared. He decides the job to be done in a day and where it has to be done.
INSTRUCTION
CARD CLERK
He prepares the instructions card for the workers and hands them over to the gang boss which contains information about the nature of work, procedure of doing it, material to be used, and details about machinery.
TIME AND COST
CLERK
Setting the time table for doing different jobs as per determined route and time schedule, specifying the material and labour cost in respect of each operation.
DISCIPLINIRIAN Maintaining proper discipline in the factory so that production targets may be achieved. Offering immediate solution to clashes and punishing the erring employees.
GANG BOSS He is the group leader of each group of workers. He is expected to ensure that both the workers and the machines are fit enough for production and that the material required for their use has been made available to them.
SPEED BOSS
REPAIR BOSS
The main function of the speed boss is to ensure that all the workers are performing their job at the required and the expected speed.
Maintenance of the machines and the equipments. Making proper arrangements for their oiling greasing cleaning and repair. He must prevent the misuse of the machines
INSPECTOR Seeing that the work conforms to the standards of quality laid down by the planning department.

2.
Standardization of work: It refers to setting standards for various business activities. (both for worker and the work)
Objectives:
 To reduce a given line or product to fixed types, sizes and features.
 To establish standards of perfoemance for men and machines.
 To establish standards of excellence and quality in material.
 To establish interchangeability of manufactured parts and products.
3.
Simplification of work: It refers to put an end to unnecessary types qualities, sizes, weights, etc. of products. For eg; it is alright for a shoe manufacturing company to manufacture shoes of 0,1,2,3,4,5 sizes but if it starts manufacturing shoes of 0,0.5,1,1.25,1.5,1.75,2,etc it will end up in wastage of time and money.
Objectives:
 Effecting economy in the use of machines
 Bringing down the labour cost with the help of specialization.
 It results in savings of cost of labour, machines and tools.
4.
Fatigue study: It seeks to determine the extent (duration) and frequency of rest intervals required for the workers during the whole shift. Workers are bound to feel tired if they are made to work for long period of time. There may be so many causes for fatigue like long working hours, unsuitable work, bad working conditions, poor relation with the supervisor etc.
5.
Method study: This study is conducted to know the best method of doing a job. The main objective of this study is to minimize the cost of production and maximize the quality and level of customer satisfaction.
6.
Motion study: It refers to conduct the study of motions being performed by the workers and machines while doing a job. The objective is to eliminate unnecessary motions. Taylor used movie cameras connected with micro chronometer (a kind if clock) to conduct this study. Foe eg: during an experiment he found that for laying a brick a mason was conducting 18 different activities, but after eliminating the unnecessary activities he could reduce it to 5. By reducing

unnecessary movements, the efficiency of the workers can be increased because of the reduced fatigue and manual labour.
8.
7.
Time study: It is a technique of observing and recording the time required by a worker of reasonable skill and ability to perform each element of the tasks in a job. Through time study the precise time required for each element of work is determined. A stop watch is used for conducting this study. The objectives of this study are : to fix a fair day’s work, to determine the number of workers to be employed, frame suitable incentive scheme, determining the standard time required for a job, to set standards for the workers, etc.
Differential piece wage system: This method is to attract highly efficient workers. Under this plan there are two wage rates 1)for those attaining the standard units and more 2)for those who are not able to attain the standard output. For eg; standard output is 20 units.
High wage rate is Rs. 10/- and low wage rate is Rs.9/-. Worker a produces 19 units and his wages will be Rs.171/- (19 x 9) whereas worker B produces 20 units and gets 200/- (20 x
10). The difference in units produced is one 1 but the difference in the wages is 29/-
According to Taylor this loss will act as the strongest motivator for worker A for his next performance. Worker A will be called as a “inefficient” worker whereas B will be called
“efficient”. (Trade unions reject this system and they insist on straight piece rate system.
1.
Division of work:
According to this principle, work should be divided into small tasks; each performed by a specialist or trained employee. When a particular individual performs the same job repeatedly many times, he will be expert in doing that specialized job thereby the company can enjoy the benefits of specialization. For example if one person is skilled in computer programming and that person continues to do it over a period of time, this continuity of computerized work specializes him in that job and consequently improves his performance.
Positive effects:
Specialization.
Efficient and effective output.
Makes tasks simpler.
Effects of violation:
Lack of specialization.
Efficiency will suffer.
Waste of time and effort.
2.
Parity of authority and responsibility:
According to this principle authority and responsibility should go hand in hand. It means that when a particular individual is given a particular work and he is made responsible for its results, this can be possible only when he is given sufficient authority to discharge his responsibility. For example: The CEO of a company has doubled the sales target of the sales manager for the coming year. To achieve this target, authority for appointing necessary sales representatives, advertising, shall have to be allowed If the authority is not given the sales manager cannot be held liable for not achieving the target. Too much of authority and too little authority is undesirable.

Positive effects Effects of violation
No misuse of authority-
Performs duties without delay
Less authority- subordinate will not be able to perform the duties
Excess authority-misuse of it
3.
Discipline:
According to Fayol discipline means obedience, respect of authority and observance of established rules. This can be possible with good supervision at all levels and implementing a system of reward and punishment. A manager can present a good example to his subordinates by disciplining himself. For example if the employees break the promise of working up to the full capacity, it will amount to violation of obedience. A sales manager has the authority to business on credit, but he allow. This facility only to his friends and relatives, then he not respecting his authority
Positive effects
Smooth and systematic functioning.
Improves efficiency.
Effects of violation.
Disobedience of rules of firm
Unsuccessful performance.
Unhealth relation between management and employees.
4.
Unity of command:
According to this principle, an individual employee should receive orders from only one superior at a time and that employee should be answerable only to that superior. If there are many superior to give order to the same employee he will not be able to decide as to which order is to be given priority. They will be confused and affects its efficiency. Whereas when there are many superiors everyone would like his orders to be given priority which leads to an ego clash between them and their efficiency will be effected. For example if a sales person is asked to make a deal with a buyer and is allowed to give 10% discount by the marketing manager but the finance manager tells him -to offer not more than 5%. There is no unity of command.
Positive effects:
• Avoids confusion
• The efficiency of subordinates and superiors increases
• It is easy to fix responsibility
• Avoids dual subordination hence cordial atmosphere within organization
Effects of violation:
• Leads to confusion
• Reduces the efficiency of superiors and subordinates
• Conflicts due 1 o injured ego of superiors
• Difficult to fix accountability
5.
Unity of direction:
This principle implies that there should be 'ONE HEAD AND ONE PLAN" for a group of activities having the same objective All the units of the firm should be moving towards the same objective

through co-ordinated and focused efforts. For example an automobile manufacturer of two products namely scooters and cars and has two divisions. As each product has its own markets and problems therefore each division must have its own targets, incharges, plans and resources .
The working of each department should not overlap on any account.
Positive effects:
 Advantage of specialization
 Increase in the efficiency of the organization
 Helps in coordination due to the unity in activities
Effects of violation:
• No specialization
• Decrease in efficiency
• Difficulty in achieving objectives
• Lack of co-ordination
6.
Subordination of individual interest to general interest:
According to this principle the general interest or the interest of the organization is everything.
For example If a manage takes a decision which harms him personally but results in great profits to the company, he should definitely give priority to that decisions which goes with the interest of the company. If a purchase manager of a company has to purchase 100 tonnes of raw material.
His son happens to be a supplier along with other suppliers in the market. The manager purchases the raw material from the firm of his son at a higher rate than the market price. This will profit the manager but will result in a loss for the company. This situation is undesirable
Positive effects:
• Achieve organization goals
• Everybody profits in the profit of the organization.
• Co-ordination between the individual and oigamzational objectives.
Violating effects-
• Humanity violated
• Increase in jealousy
• Hindrance in achieving organisational goals
• Lack of coordination between organizational and individual interest.
7.
Remuneration to employees:-
According to Fayol, employees should get a fair remuneration so that they are satisfied with their work lf they are not paid properly the employees will not work to their perfect dedication, honesty and capacity Proper remuneration depends on factors like cost of living, demand of labour and their ability. According to Fayol, to motivate the employees, apart from remuneration they should be given some monetary and non-monetary incentives. For example: If the things are

getting costly it is the duty of the management to increase the remuneration without the employees asking for it. If it is not done they will leave the company at the first opportunity.
Positive effects:
• Increase in encouragement and satisfaction of the employees
• Development of the spirit of dedication among the employees
• Decline in the labour turnover ratio
Violating effects:
• Decline in the encouragement and satisfaction of employees
• Encouragement to dishonesty
• Increase in labour turnover rate
8.
Centralisation and decentralization:
According to this principle, the superiors should adopt effective centralization. The superiors should keep the authority of taking important decisions in their own hands while the authority to take the routine decisions must be delegated to the subordinates. It is advantages to have more centralization in small units and more decentralization in the larger units. For example the decisions in respect of determining the objectives and policies, expansion of business etc. should remain in the hands of the superiors. On the other hand authority for the purchase of raw material, granting leave to the employees etc. should be delegated to the subordinates
Positive effects:
• Decrease in the work load of the superiors
• Better and quick decisions
• Increase in the encouragement to the subordinates
Violation effects:



Unecessary increase in the work load of superiors in case of centralization and vice versa
Impatient and wrong decisions by the superiors in case of centralization and weak decisions by subordinates in case of complete decentralization.
Decline in encouragement to subordinates in case of complete centralization
9.
Scalar chain:

According to this principle there is a scalar chain of authority and communication which move in a straight line from the superior most authority to the lowest subordinate. The communication has to take the scalar chain (according to the established route. All the steps should be followed. This will result in delay in communication and decision making. Fayol has suggested that in case of emergency managers of the same level can communicate with each level, provided prior permission of the immediate bosses is obtained. This arrangement is called GANG PLANK.
Positive effects:
• Flow of orderly information.
• Better relations because of absolute respect for authority
• Quick solutions of problems
Violating effects:
• Disorderly flow of information
• Communication gap in the organization
• Poor relations because of the ignorance of close superiors
10.
Order:
Order means place for everything (everyone) and everything (everyone) in its place. Fayol insists that people and materials must be in suitable places at appropriate time for maximum efficiency. Arrangement of things is called "material order" whereas placement of people is called "social order". For example. If a worker is in need of a tool, he should know in which box or tool room it will be found. Likewise if an employee needs any guidance from the superior, he must know where he is sitting.
Positive effects
• Increased productivity and efficiency.
• Ensure effective utilization of physical and human resources.
• No wastage of time in search of men or material
• Smooth and systematic functioning of organization
Violating effects:
• Wasteful movements
• Height of disorder.
11.
Equity:
According to this principle similar treatment is assured to employees in similar positions.
Managers should be fair and impartial while dealing with their subordinates and there should be no discrimination on the basis of sex, religion, caste, creed and colour. For example:
Workers performing similar jobs should be given the same wage rate.

Positive efforts:
• Ensure loyalty and devotion of the employees
• Cordial relations
• Employees are satisfied (increases motivation)
Violating effects:
• Employees will not be satisfied and no loyalty.
• Unhealthy relations between employees and employers
12.
Stability of tenure of personnel:
According to this principle the employees should not be removed from their positions frequently. The period of service in a position should be fixed. There should be given reasonable time to show results. Employee turnover should be minimized to maintain organizational efficiency. There should not be frequent terminations and transfers
Positive effects:
• Feeling of job security
• Efficiency increases due to satisfaction of employees
• No wastage of time and resources Violating effects:
• Cost of unnecessary labour turnover (Recruitment, selection, and training)
• The efficiency will be affected.
Violating effect:
 Insecurity of job results in increased labour turnover
 Recruitment training will increase the cost.
13.
Initiative:
It means taking the first step with self motivation. According to Fayol, employees should be encouraged to develop and carry out their plans for improvement. For example: a salesman suggests to his sales manager to implement a new advertisement technique. The sails manager sends him away by telling him that it is not possible and ignores the suggestions altogether. In such situation the salesman who gave suggestion will feel embarrassed and belittled and he will never venture to give any suggestion in future. His imitativeness is suppressed.
Positive effects:
• Increase in the thinking power of employees
• Cooperation's of the employees in implementing decisions
• Increase in loyalty
Violating effects:
• Decline in the thinking power of employees
• Atmosphere of non-cooperation

• Decline in employee's attachment to the company.
14.
Esprit de corps:
It means 'union is strength". Fayolemphasizes the need of team work sprit of unity and harmony, among the employees. A manager should replace "I" with "We" in all conversations with subordinates to foster team spirit. For example .suppose the production manager gave a task of 200 units to a group of 10 employees. The members divided the task in such a way that each one will produce 20 units. They should concentrate not on the individual target but the group target in esprit de corps. Thus even if 2 are on leave the remaining 8 will produce 20 units.
Positive effects:
• Develops an atmosphere of mutual trust and belongingness
• Minimizes the need of imposing penalties for defaulting persons
• Achievement of group goals.
Violating effects:
• Difficulty in realizing the objective
• Loss of coordination.
• Bitterness in relationships