Principles of Management

Cheatsheet Content

Introduction to Management Management is essential in all types of organizations (business, non-business, social life). It's the key to achieving goals and a crucial resource (like machines, materials, money). Management coordinates all organizational resources and functions (planning, organizing, staffing, coordinating, controlling). It sets strategic goals and determines how the organization operates. Meaning & Definition of Principles Definition: "Principle is defined as a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning." Management principles are universally accepted techniques that guide managers in organizational activities and decision-making. Nature of Management Principles Universal Application: Applicable to all types and sizes of organizations. General Guidelines: Provide guidance for handling situations, not rigid rules. (e.g., "fair remuneration" varies by organization). Formed by Practice & Experiments: Developed through research, systematic observations, and experiments. Flexibility: Can be changed or modified to suit situations and needs. Behavioral in Nature: Designed to influence human behavior and achieve group goals. Cause and Effect Relationship: Help determine the cause of a particular effect (e.g., good wages $\rightarrow$ increased output). All Principles are of Equal Importance: Must be practiced simultaneously for best results; focusing on one while neglecting others can harm the organization. Significance of Management Principles Provides Useful Insight to Managers: Helps managers understand situations, solve problems, and make decisions, reducing resource wastage. Helpful in Efficient Utilization of Resources: Balances physical (material, machines, money) and human resources for optimal use and minimal waste. Scientific Decisions: Trains managers to make systematic, balanced decisions, avoiding trial-and-error. Understanding Social Responsibility: Guides management to consider social responsibilities (e.g., quality products, fair competition, healthy workplace). Encourages Research & Development (R&D): Principles are dynamic, encouraging continuous improvement and scientific approaches to R&D. Helps to Coordinate and Control: Provides guidelines for better coordination and control among employees and departments. Develops Objective Approach: Helps managers identify business opportunities, root causes of problems, and provide solutions. Theories of Management General rules that guide managers in organizing and achieving business goals. Introduced by various thinkers (Fayol, Taylor, Mayo) and applicable to all organizations with modifications. These theories help address common organizational problems like centralization, stress, low motivation, and behavioral issues. Henry Fayol's Administrative Theory of Management (1841-1925) Known as the "Father of Modern Management." Proposed 14 principles of management as guidelines for decision-making and management actions. Fayol's 14 Principles of Management: Division of Work: Specialization of tasks improves efficiency and expertise. Authority and Responsibility: Right to give orders (authority) comes with accountability (responsibility). Discipline: Employees must obey rules; essential for achieving organizational goals. Unity of Command: Each employee should receive orders from only one superior to avoid confusion. Superior Subordinate Subordinate Right Approach Superior Subordinate Subordinate Wrong Approach Unity of Direction: One head and one plan for activities with the same objective. Subordination of Individual Interest to Organizational Interest: Organizational goals take precedence over individual goals. Centralization: Concentration of authority. Balance between centralization (small orgs) and decentralization (large orgs) is needed. Remuneration: Fair pay for employees to ensure satisfaction and retention; based on skill, cost of living, market trend. Scalar Chain: Hierarchy of authority for communication from top to bottom. "Gang Plank" allows direct communication in emergencies, with permission. A B E C F D G Scalar Chain and Gang Plank Order: "A place for everything and everything in its place"; proper placement of human and physical resources. Equity: Fair and friendly treatment of employees; no discrimination in work allocation, authority, or remuneration. Stability of Tenure: Job security for employees reduces turnover and improves efficiency. Initiative: Encourages employees to volunteer new ideas and innovative ways of working. Esprit de Corps (Teamwork): "Union is strength"; promotes teamwork, mutual trust, and understanding. Fredrick Winslow Taylor's Scientific Management Theory (1856-1915) Known as the "Father of Scientific Management." Theory based on scientific experiments and applying a scientific approach to decision-making. Definition: "Scientific Management consists of knowing what you (i.e. management) want men to do exactly; and seeing it that they do it in the best and the cheapest manner." Principles of Scientific Management: Science, Not Rule of Thumb: Use scientific analysis to find the best way to do work, replacing personal judgments. Harmony, Not Discord: Foster cooperation and minimize conflict between employees and management for a healthy work environment. Mental Revolution: Change in attitude of both employees and management to recognize mutual importance and cooperate for organizational goals. Cooperation, Not Individualism: Emphasize mutual cooperation, trust, and team spirit, treating employees as integral parts of the organization. Division of Responsibility: Clear division of responsibilities between management (planning) and employees (execution). Development of Employer and Employees for Greater Efficiency and Maximum Prosperity: Provide training and development to enhance skills and capabilities, leading to greater efficiency and profitability. Techniques of Scientific Management: Work Study: Systematic assessment of activities to improve efficiency. Time Study: Measures the time taken to complete a task; fixes standard time and measures efficiency. Method Study: Identifies the best method for a job to reduce waste and improve resource utility. Motion Study: Analyzes employee and machine movements to eliminate unnecessary motions and find the most efficient method. Fatigue Study: Examines causes of fatigue (long hours, stress) and methods to reduce it to maintain efficiency. Standardization of Tools and Equipment: Standardizes working environment and tools to reduce waste, cost, and improve quality. Scientific Task Setting: Fixes a fair day's work to prevent underperformance and ensure optimum workforce utilization. Scientific Selection and Training: Selects the right people for the right jobs using scientific procedures and provides proper training. Functional Organization: Separates planning from implementation; uses eight foremen (4 at planning level, 4 at implementation level) to supervise different aspects of production. Differential Piece-Rate Wage Plan: Offers higher wages for exceeding standard output and lower wages for below-standard performance to motivate employees. Key Thinker: C. K. Prahalad (1942-2010) Recipient of Lal Bahadur Shastri Award for contributions to Management. Known for contributions to the Core Competence Model and Co-creation . Famous quotes emphasize speed in competitive advantages, imagination over resources, importance of feedback, being a good corporate citizen, and honesty.