Management is essential to any organization that wishes to be efficient and achieve its aims. Without someone in a position of authority there would be organizational anarchy with no structure and very little, if any focus. It has been said that management has four basic functions – planning, organizing, leading and controlling. Common sense dictates that without these principles of management being in place an organization would have trouble achieving its aims, or even coming up with aims in the first place! A classic theory on the principles of management was written by Henri Fayol. It seeks to divide management into 14 principles. We’ll take a look at these basic principles of management and explain them in easy to understand terminology.
A managerial principle is a broad and general guideline for decision-making and behavior. For example while deciding about promotion of an employee one manager may consider seniority, whereas the other may follow the principle of merit. One may distinguish principles of management from those of pure science. Management principles are not as rigid as principles of pure science. They deal with human behavior and, thus, are to be applied creatively given the demands of the situation. Human behavior is never static and so also technology, which affects business. Hence all the principles have to keep pace with these changes. For example, in the absence of Information and Communications Technology (ICT), a manager could oversee only a small work force that too within a narrow geographical space.
The advent of ICT has expanded the capability of the managers to preside over large business empires spread across the globe. Infosys headquarters in Bangalore boast of the Asia’s largest flat screen in their conference room from where their managers can interact with their employees and customers in all parts of the world. In developing an understanding of the meaning of principles of management, it is also useful to know what these are not. The principles of management should be distinguished from techniques of management.
Techniques are procedures or methods, which involve a series of steps to be taken to accomplish desired goals. Principles are guidelines to take decisions or actions while practicing techniques. Likewise, principles should also be understood as being distinct from values. Values are something, which are acceptable or desirable. They have moral connotations. Principles are basic truths or guidelines for behavior.
Values are general rules for behavior of individuals in society formed through common practice whereas principles of management are formed after research in work situations, which are technical in nature. However, while practicing principles of management values cannot be neglected, as businesses have to fulfil social and ethical responsibilities towards society.
The principles of managements derive their significance from their utility. They provide useful insights into managerial behavior and influence managerial practices. Managers may apply these principles to fulfill their tasks and responsibilities. Principles guide managers in making and implementing decisions. The significance of principles of management can be discussed in terms of the following points:
The principles of management provide the managers with useful insights into real-world situations. Management principles cooperate a key role in providing insights to assist in competent decision making. Adherence to these principles will add to their knowledge, ability, and understanding of managerial situations and circumstances. This principle adds to their knowledge and capability to deal with various situations and also helps in handling recurring contemplated problems. Thus it plays a role in increasing administrative effectiveness.
For example, a manager can leave routine decision-making to his subordinates and deal with exceptional situations which require her/his expertise by following the principles of delegation
Resources both human and material available with the company are limited. A management principle helps in ensuring optimal usage by laying down broad frameworks on how to use these resources and how not to. They have to be put to optimum use. This, when applied in appropriate situations, can make for proficient resource decisions.
By optimum use, we mean that the resources should be put to use in such a manner that they should give maximum benefit with minimum cost. These principles are also appropriate to resource assortment or organization, so as to avert improvident accretion of scarce resources.
Decisions must be based on facts, thoughtful and justifiable in terms of the intended purposes. It is scientific in the sense that it is made with due regard to judgment, cause, and facts and it is rational. They must be timely, realistic and subject to measurement and evaluation. Management principles help in thoughtful decision-making. Rational decisions always ensure competence within a business and help in its accomplishment.
Different management principles are contemplated in dissimilar situations. Although the principles are in the nature of general guidelines they are modified and as such help managers to meet changing requirements of the environment. So when a circumstances change, a diverse management principle suitable to the new condition thereby allows adapting to changes. For example, management principles emphasize the division of work and specialization.
The increased awareness of the public forces businesses especially limited companies to fulfill their social responsibilities. Businesses being social entities have social responsibilities for the benefits they obtain from society. Management theory and management principles have also evolved in response to these demands. Management principles such as ensuring optimal resources etc make confident that the business does not bring destruction to society and also that it benefits society.
Principles of management are at the core of management theory. As such these are used as a basis for management training, education and research. All the knowledge imparted to the students of management is derived from management principles. You must be aware that entrance to management institutes is preceded by management aptitude tests.
Administration of a business is a part and parcel of management. Principles of Management cooperate an enter role in administering the business by helping in the instruction of the human resources among each other and also by prescribing norms of relations. For example, decentralization as a principle helps in management by giving sufficient control to many units transversely the business to make sure observance and effectiveness.
In conclusion, it can be said that understanding the meaning, nature, and significance of principles of management will help us to appreciate their applicability in real-life situations.
The principles of management are universal in nature that means they can be applied to all types of organizations irrespective of their size and nature. Their results may vary and application may be modified but these are suitable for all kinds of organizations.
For example, the principle of division of labour can be applied to all the organizations and results in specialization although the degree of specialization may vary depending upon the nature and size of the organisation.
Management principles are not static or absolute statements. These cannot be applied blindly in all the situations. The applicability of management principles depends on conditions and nature of organisation.
The manager must apply these principles according to the size and nature of organisation keeping in mind the requirements of the organisations.
A management principle gives guidelines to solve the problems these principles do not provide readymade solution for all the problems.
For example, the principle of fair remuneration insists on fair or adequate salary to employee but what amount of salary is fair depends upon the nature, size and financial capacity of the company.
The management principles are developed only after deep and thorough research work. They are not developed overnight or they are not the personal feelings of any person. Proper observations and experiments are conducted before developing them. These are the expressions of deep experiences of the leaders of management thoughts. Therefore they are evolutionary in nature.
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. These are not set of rigid statements. These can be modified by the managers who are using them.
For example, the principle of centralisation insists on concentration of power and authority at top level but the extent and degree of centralisation may vary according to nature of organisation and centralisation does not mean total centralisation, there can be use of decentralisation at lower level if organisation demands it.
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 organisation. They also establish relations between human and material resources.
For example, principle of Discipline improves commitment of employees towards the organisation and principle of Esprit de Corps mould the behavior of employees towards team spirit.
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. Although these principles cannot state perfectly absolute result because these are applied on human being but it helps in knowing some idea about the effect. When principles are applied in similar situation in different organisations then their effects can be known with more perfection.
Management Principles are contingent or dependent upon the situations prevailing in organisation. Their application and effect depend upon the nature of organisation. The application of principle has to be changed according to the nature, size and type of organisation.
Taylor was a mechanical engineer who was primarily interested in the type of work done in factories and mechanical shops. He observed that the owners and managers of the factories knew little about what actually took place in the workshops. Taylor believed that the system could be improved, and he looked around for an incentive. He settled on money. He believed a worker should get “a fair day’s pay for a fair day’s work”—no more, no less. If the worker couldn’t work to the target, then the person shouldn’t be working at all. Taylor also believed that management and labor should cooperate and work together to meet goals. He was the first to suggest that the primary functions of managers should be planning and training.
A significant part of Taylorism was time studies. Taylor was concerned with reducing process time and worked with factory managers on scientific time studies. At its most basic level, time studies involve breaking down each job into component parts, timing each element, and rearranging the parts into the most efficient method of working. By counting and calculating, Taylor sought to transform management into a set of calculated and written techniques.
Taylor proposed a “neat, understandable world in the factory, an organization of men whose acts would be planned, coordinated, and controlled under continuous expert direction. ” Factory production was to become a matter of efficient and scientific management—the planning and administration of workers and machines alike as components of one big machine.
1909, Taylor published The Principles of Scientific Management. In this book, he suggested that productivity would increase if jobs were optimized and simplified. He also proposed matching a worker to a particular job that suited the person’s skill level and then training the worker to do that job in a specific way. Taylor first developed the idea of breaking down each job into component parts and timing each part to determine the most efficient method of working.
The basic principle of scientific management is the adoption of a scientific approach to managerial decision making; and a complete discard of all unscientific approaches, hitherto practiced by managements.
Harmony refers to the unity of action; while discord refers to differences in approach.
Co-operation refers to working, on the part of people, towards the attainment of group objectives; while regarding their individual objectives-as subordinate to the general interest.
Management must endeavor to develop people to the greatest of their capabilities to ensure maximum prosperity for both-employees and employers.
While scientific management principles improved productivity and had a substantial impact on industry, they also increased the monotony of work. The core job dimensions of skill variety, task identity, task significance, autonomy, and feedback all were missing from the picture of scientific management.
While in many cases the new ways of working were accepted by the workers, in some cases they were not. The use of stopwatches often was a protested issue and led to a strike at one factory where "Taylorism" was being tested. Complaints that Taylorism was dehumanizing led to an investigation by the United States Congress. Despite its controversy, scientific management changed the way that work was done, and forms of it continue to be used today.
Henry Fayol also is known as ‘father of modern management theory’ gave a new perception of the concept of management. He introduced a general theory that can be applied to all levels of management and every department. The Fayol theory is practiced by the managers to organize and regulate the internal activities of an organization. He concentrated on accomplishing managerial efficiency.
Henri believed that segregating work in the workforce amongst the worker will enhance the quality of the product. Similarly, he also concluded that the division of work improves the productivity, efficiency, accuracy, and speed of the workers. This principle is appropriate for both the managerial as well as a technical work level.
These are the two key aspects of management. Authority facilitates the management to work efficiently and responsibility makes them responsible for the work done under their guidance or leadership.
Without discipline, nothing can be accomplished. It is the core value for any project or any management. Good performance and sensible interrelation make the management job easy and comprehensive. Employees good behavior also helps them smoothly build and progress in their professional careers.
This means an employee should have only one boss and follow his command. If an employee has to follow more than one boss, there begins a conflict of interest and can create confusion.
Whoever is engaged in the same activity should have a unified goal. This means all the person working in a company should have one goal and motive which will make the work easier and achieve the set goal easily.
This indicates a company should work unitedly towards the interest of a company rather than personal interest. Be subordinate to the purposes of an organization. This refers to the whole chain of command in a company.
This plays an important role in motivating the workers of a company. Remuneration can be monetary or non-monetary, however, it should be according to an individual’s efforts they have made.
In any company, the management or any authority responsible for the decision-making process should be neutral. However, this depends on the size of an organization. Henri Fayol stressed on the point that there should be a balance between the hierarchy and division of power.
Fayaol one the principles highlights that the hierarchy steps should be from top to the lowest. This is necessary so that every employee knows there immediate senior also they should be able to contact any if needed.
A company should maintain a well-defined work order to have a favorable work culture. The positive atmosphere in the workplace will boost more positive productivity
All the employees should be treated equally and respectfully. It’s the responsibility of a manager that no employees face discrimination.
An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their employees.
The management should support and encourage the employees to take initiatives in an organization. It will help them to increase their interest and make then worth.
It is the responsibility of the management to regularly motivate their employees and be supportive of each other. Developing trust and mutual understanding will lead to a positive outcome and work environment.
This 14 principles of management are used to manage an organization and are beneficial for prediction, planning, decision-making, organization and process management, control, and coordination.
One of the keys of the Henri Fayol 14 principles of management is the organizational structure. Fayol talked about a hierarchical structure in which the top levels of management act as forceful leaders. While this was standard procedure in his mining company, the hierarchical structure is still the model for many small businesses today. Although more companies are adopting a flat structure, the top-down model as described by Fayol remains popular as a means of ensuring that decisions are implemented from senior level to the rank-and-file.
Although there are advantages and disadvantages of administrative management, one of Fayol’s lasting theories were the idea that employees should subordinate their private interest to the general interest of the company. This is a foundational theory of the team concept that has become so prevalent in many small businesses. Rather than having employees work individually on projects, many companies group workers with diverse skills and talents into a team. This helps shore up any weaknesses because employees with opposing talents work together to make up for each other’s deficits.
For example, a modern team could include an employee with an outgoing personality, an employee that is introverted and analytic, and an employee that can generate dozens of great ideas. Fayol also valued team spirit, which he called “esprit de corps.” He believed that business leaders who cultivated a sense of common goals among their employees would find that their workers were more willing to share their knowledge with colleagues.
While the Fayolism advantages and disadvantages are still debated, one theory that continues to prove true is the idea that business leaders must compensate employees in a manner that motivates them to perform above standard. Salaries and wages are always a delicate subject, especially as it relates to gender pay equality. Fayol, however, went further than just talking about money, believing that non-monetary compensation was equally important. Today, it’s easy to see examples of that kind of compensation, such as awards handed out to outstanding employees, and company retreats in which management and employees interact as human beings without worrying about their status at the office.
When considering the application of this system, it’s important to evaluate all the Fayolism advantages and disadvantages before proceeding. One of the disadvantages is that Fayol’s theory was developed based solely on his own managerial experiences, which means he didn’t undertake any further research. As a result, he wasn’t able to fully develop a full understanding of Fayolism advantages and disadvantages, believing strongly that his system only produced benefits.
Another thing to remember when considering the advantages and disadvantages of administrative management is that some theories are prisoners of the era in which they were developed. For example, in Fayol’s day, authority and control over employees was the norm. That isn’t the case in modern society, which means you have to revise some of Fayol’s theories to make them more applicable to current standards.