BBA College Course
BBA College Course
BBA College Course
Division of Work.
Balancing Authority and Responsibility.
Discipline.
Unity of Command.
Unity of Direction.
Subordination of Individual Interests to the General Interest.
Remuneration.
Centralization.
Scalar Chain.
Order.
Equity.
Stability of Tenure of Personnel.
Initiative.
Esprit De Corps.
Henri Fayol, a French industrialist, is now recognized as the Father of Modern
Management. In the year 1916 Fayol wrote a book entitled “Industrial and General
Administration”. In this book, he gave the 14 Principles of Management.
1.The full work of the organization among individuals and creating departments is
called the division of work.
= Division of work leads to specialization, and specialization helps to increases
efficiency and efficiency which results in improvements in the productivity and
profitability of the organization.
2. Balancing Authority and Responsibility
= Authority must be equal to responsibility. According to Henri Fayol, there
should be a balance between Authority (power) and responsibilities (duties). The
right to give orders should not be considered without reference to responsibility. If
the authority is more than responsibility then chances are that a manager may
misuse it. If responsibility is more than authority then he may feel frustrated.
3. Discipline
= Outward mark of respect in accordance with formal or informal agreements
between a firm and its employees.
4. Unity of Command
= According to this principle, a subordinate (employee) must have and receive
orders from only one superior (boss or manager).To put it another way, a
subordinate must report to only one superior. It helps in preventing dual
subordination. This decreases the possibilities of “Dual subordination” which
creates a problem is a function of managers.
5. Unity of Direction
= One head and one plan for a group of activities with the same objective. All
activities which have the same objective must be directed by one manager, and he
must use one plan. This is called the Unity of Direction. For example, all
marketing activities such as advertising, sales promotion, pricing policy, etc., must
be directed by only one manager. He must use only one plan for all the marketing
activities. Unity of direction means, activities aimed at the same objective should
be organized. So that there are one plan and one person in change.
10. Order
A place for everything and everything in its place’ the right man in the right place.
There should be an Order for material/things and people in the organization. Order
for things is called Material Order and order for people is called ‘Social Order’.
Material Order refers to “a place for everything and everything in its place.” Social
Order refers to the selection of the “right man in the right place”. There must be an
orderly placement of the resources such as Men and Women, Money, Materials,
etc. Human and material resources must be in the right place at the right time.
Misplacement will lead to misuse and disorder.
11. Equity
While dealing with the employees a manager should use kindliness and justice
towards employees equally. Equity is a combination of kindness and justice. It
creates loyalty and devotion in the employees toward the organization. The equity
principle suggests that the managers must be kind as well as equally fair to the
subordinates.
12. Stability of Tenure of Personnel
Although it could take a lot of time, Employees need to be given fair enough time
to settle into their jobs. An employee needs time to learn his job and to become
efficient. The employees should have job security because instability leads to
inefficiency. Successful firms usually had a stable group of employees.
13. Initiative
Without limits of authority and discipline, all levels of staff should be encouraged
to show initiative. Management should encourage initiative. That is, they should
encourage the employees to make their own plans and to execute these plans. This
is because an initiative gives satisfaction to the employees and brings success to
the organization. It allows the subordinates to think out a plan and do what it takes
to make it happen.
14. Esprit De Corps
Esprit de Corps means “Team Spirit”. Therefore, the management should create
unity, co-operation, and team-spirit among the employees.
They should avoid dividing and rule policy. Harmony, cohesion among personnel.
It’s a great source of strength in the organization. It is a quality in every successful
business.
These principles are guidelines for every management function. The manager must
act according to the 14 principles of management; in order to reach the goal and
create a surplus.
These 14 management principles of Henri Fayol are universally accepted. They
work as a guideline for managers to do their job according to their responsibility.
BUSINESS ECONOMICS
Business economics is a field in applied economics which uses economic theory
and quantitative methods to analyze business enterprises and the factors
contributing to the diversity of organizational structures and the relationships of
firms with labor, capital and product markets.
Business economists are the persons who perform job in context to identify various
problems that are uplifting a company, find out various reasons behind these
problems, analyze their effects on the functioning of the company and finally
suggest rational alternative and corrective measures to be taken by the
management. Various companies face many problems such as labour problems,
pricing problems, and other problems related to Government controls and
restrictions. The business economics with his vast experience has to provide a
quantitative base for decision making, policy making & forward planning in a
business.
In order to make the business more viable and profitable the business economist
should have a detailed knowledge and information about the environment of a
company. Business Economist always remains in touch with all the latest
economic developments and environmental changes for informing the
management. He has an efficient role in earning reasonable profits on invested
capital as it supplies all relevant information which helps in making proper plans
and strategies.
Business economist has three important roles in every business organization:
Demand analysis and forecasting, capital management and profit management.
Demand Analysis and Forecasting
It is a technique for estimation of probable demand for a product or services in the
future. It is based on the analysis of past demand for that product or service in the
present market condition.