Principles of Management & Communication – KCA 103

Unit 1 – Management
Exercise 1

1. Explain meaning and Definition of Management.

2. Expound need of Management.
3. Explicate scope of Management.
4. How to write scope of management statement?
5. Write various tips required for effective management.
6. Enumerate importance of Management.
7. Explain process / functions of management.
8. Explain controlling function of management in detail.
9. Explain various principles of Management by Henry Fayol.

Q.1. Explain meaning and Definition of Management.

Meaning:
Management means process of dealing with or controlling things or people. E.g. "The
management of economy".

Definition:
Traditional Definitions:

• “Management is an art of knowing what is to be done and ensuring that it is done in the
best possible manner.” – F.W. Taylor.

• Management can be defined as a process of getting the work or task done that is required
for achieving the goals of an organization in an efficient and effective manner.

• “Management is the art of getting things done through people.”- Mary Parker Follett

• “Management is the process of getting things done through others. A manager is one who
accomplishes organisational objectives by directing the efforts of others.” - C.S.George

Modern Definitions of Management:

• “Management is the creation and maintenance of an internal environment in an enterprise
where individuals, working in groups, can perform efficiently and effectively towards the
attainment of group goals.”---Harold Koontz and Weirich

• Management is the process of getting things done with the aim of achieving organisational
objectives effectively and efficiently.

Basic Elements of Definition:

1) Process
2) Effectiveness
3) Efficiency
 4) Organizational Objectives

1) Process:
The term process in the definition means the primary functions or activities that management
performs to get things done. These functions are planning, organising, staffing, directing and
controlling.

2) Effectiveness:
Being effective or doing work effectively means finishing the given task. It is concerned with
the end results.

3) Efficiency:
It means optimum utilisation of resources in performing the given task. It signifies the
relationship between inputs and outputs.

4) Organisational Objectives:
The modern concept of management insists that all the activities of managers must be
directed towards the achievement of organisational goals which are common for all
employees.

Q.2. Expound need of Management.

Need of Management:

According to Edwin Flippo, "No organization has a choice of whether to develop employees or
not, the only choice is that of method." The need for management development is well
accepted in the present business, which is fast changing due to technological and social
developments.

1. Shortage of Trained Managers

2. Complexity of management jobs
3. Technological and social changes
4. It helps in Achieving Group Goals
5. Optimum Utilization of Resources
6. Reduces Costs
7. Establishes Sound Organization
8. Establishes Equilibrium
9. Essential for Prosperity of Society
10. Encourages Initiative
11. Encourages Innovation
12. Facilitates Growth
13. Improves life of the workers
14. Improves company’s image
15. Motivate’s Employees
16. Optimum utilization of resources
17. Reduces Wastage
18. Improves relations
19. Encourages Team work

1. Shortage of trained managers:

Talented and matured managers are not easily available. It is not possible to appoint managers
from outside for the key managerial posts. The better alternative is to select talented persons
as trainee managers and develop their qualities through special training and wider exposures.
In this way, the organization can create its own team of talented managers to lead the whole
organization.

2. Complexity of management jobs:

The jobs of managers are now complicated and more challenging. They need varied skills for
dealing with the complex organizational problems. For this, talented persons should be
selected and proper training should be given to them.

3. Technological and social changes:

Rapid technological and social changes are taking place in the business world. In India, such
developments are fast taking place along with the liberalization and globalization of business.
Managers should be given proper training and exposure in computer applications and
information technology.

4. It helps in Achieving Group Goals:

It arranges the factors of production, assembles and organizes the resources, integrates the
resources in effective manner to achieve goals. It directs group efforts towards achievement of
pre‐determined goals. By defining objective of organization clearly there would be no wastage
of time, money and effort. Management converts disorganized resources of men, machines,
money etc. into useful enterprise. These resources are coordinated, directed and controlled in
such a manner that enterprise work towards attainment of goals.

5. Optimum Utilization of Resources:

Management utilizes all the physical & human resources productively. This leads to efficacy in
management. Management provides maximum utilization of scarce resources by selecting its
best possible alternate use in industry from out of various uses. It makes use of experts,
professional and these services leads to use of their skills, knowledge, and proper utilization
and avoids wastage. If employees and machines are producing its maximum there is no under
employment of any resources.

6. Reduces Costs:
It gets maximum results through minimum input by proper planning and by using minimum
input & getting maximum output. Management uses physical, human and financial resources
in such a manner which results in best combination. This helps in cost reduction.

7. Establishes Sound Organization:

No overlapping of efforts (smooth and coordinated functions).To establish sound
organizational structure is one of the objective of management which is in tune with objective
of organization and for fulfillment of this, it establishes effective authority & responsibility
relationship i.e. who is accountable to whom, who can give instructions to whom, who are
superiors & who are subordinates. Management fills up various positions with right persons,
having right skills, training and qualification. All jobs should be cleared to everyone.

8. Establishes Equilibrium:
It enables the organization to survive in changing environment. It keeps in touch with the
changing environment. With the change in external environment, the initial co‐ ordination of
organization must be changed. So it adapts organization to changing demand of market in
changing needs of societies. It is responsible for growth and survival of organization.

9. Essential for Prosperity of Society:

Efficient management lead to better economical production which helps in turn to increase the
welfare of people. Good management makes a difficult task easier by avoiding wastage of
scarce resource. It improves standard of living. It increases the profit which is beneficial to
business and society will get maximum output at minimum cost by creating employment
opportunities which generate income in hands. Organization comes with new products and
researches beneficial for society.

10. Encourages Initiative:

Initiative means to do the right thing at the right time without influenced by the superior. The
employees should be encouraged to make their own plans and implement these plans.
Initiative gives satisfaction to the employees and success to organization.

11. Encourages Innovation:

Management encourages innovation in the organization. Innovation brings new ideas new
technology and new techniques. It makes organization more competitive and efficient.

12. Facilitates Growth:

Management makes optimum utilization of resources. It reduces wastage and increase
efficiency. So through management, organization grows and progress.

13. Improves life of the workers:

Management shares profit with the workers. It provides good environment. It gives incentives
to the workers and thus improves quality of life of the workers.

14. Improves company’s image:

Good management produces quality products and provides good services. This will improve
the company’s image.
15. Motivates Employees:
Management motivates employees by providing them incentives. This helps in boosting
productivity of the organization.
16. Optimum utilization of resources:
Management makes optimum use of available resources and achieves result of the
organization with greater output. Optimum use of resources makes organization more
productive.
17. Reduces Wastage:
Management reduces wastage of human, material and financial resources. Wastage is reduced
by proper planning and control.
18. Improves relations:
Management improves relations between individuals, groups, departments and between
levels of management. Better relations lead to better teamwork.
19. Encourages Team work:
Management encourages teamwork and coordination. So, it brings success to the organization.

Q.3. Explicate scope of Management.

Scope of management:
The definition of the scope of management comes from the business ideas, theories, principles
and responsibilities that a business uses for managing its various functions. The scope of
management can cover:

1. Financial Management
2. Marketing Management
3. Personnel Management
4. Production Management
5. Office Management

1. Financial Management:
Financial management is a top priority for companies as the effective and proper managing of
finances enables them to stay in business and remain competitive. It is necessary for
companies to plan, organize, direct and control their financial activities to increase profit and
reduce wastage of resources. By applying management principles to their financial resources,
companies can keep track of how they procure revenues and how they utilize them.

They can make informed decisions for making investments, estimating capital requirements,
financing projects and deciding on share dividend policies. Additionally, they can prepare and
examine financial statements, expand the business and negotiate with external stakeholders.
Financial management also allows businesses to remain compliant with regulations, maintain
records and plan ahead.

2. Marketing Management:
Marketing management usually covers the different marketing activities undertaken by the
company's marketing department. These may include identifying consumer trends and
creating appropriate business solutions to respond to them. Implementing marketing plans,
directing their implementation and controlling the work activities are also usually part of
marketing management. The different functions of marketing management typically include
market research, financing, risk-taking, campaign planning, customer outreach, loyalty
programmes, lead generation and customer relationship management.

Aside from traditional, offline marketing, marketers may undertake digital marketing, content
marketing, video marketing, social media marketing, search engine marketing, inbound
marketing and outbound marketing. To succeed in their marketing efforts, it may be necessary
for marketing managers to be aware of the features of the goods and services they are selling.
It can also help understand how to utilise available resources to achieve desired outcomes
effectively. Additionally, it is essential to know how to capture and retain the target group's
attention and convert them to customers.

3. Personnel Management:
Personnel management is about managing the personnel or staff in an organisation and
maintaining a positive and productive business environment. It includes establishing effective
communication with the organisation's personnel, publishing company policies, implementing
health and safety practices, responding to grievances and taking disciplinary action when
necessary. Personnel management also involves determining the compensation and benefits
packages that the employees can receive from the organisation. The three main types of
personnel management are strategic management, tactical management and operational
management.

Strategic personnel management includes recruiting qualified personnel to meet the

organization’s staffing needs, training new recruits, assigning departments and work, providing
work tools and resources and determining compensation. Tactical personnel management
involves shifting personnel to different departments when necessary, determining work
schedules and monitoring work performances. In operational personnel management, the
focus is usually on ensuring employee welfare and salary payments.

4. Production Management:
Production management is the application of management principles to the different
production activities in a company's production department. It usually involves handling the
entire manufacturing process and planning, organising, overseeing and monitoring the
production of goods and services. In production management, the production manager is
responsible for procuring raw materials, hiring and assigning labour for different work
activities, maintaining equipment and creating production budgets. They also supervise work
performance, oversee research and development, ensure quality control and monitor delivery
and storage of finished products.

The main types of production management are job production, batch production and mass
production. Job production involves making a single product in the manufacturing process. It
may be as per customer order and involves gathering the necessary raw materials,
components, tools and equipment and qualified personnel to make the products and fulfil the
commission. The company plans to produce a set quantity of products in batch production and
divides the production operation into different and repetitive work batches. It completes one
operation before proceeding to the next. Mass production involves large-scale production to
ensure a continuous supply.

5. Office Management:

Office management concerns the planning, coordinating and controlling the different work
activities in an office environment. The aim of office management is to ensure the smooth and
efficient functioning of all office departments to get the necessary work done and achieve the
organization’s work targets and business goals. The primary functions of office management
are planning projects, hiring qualified employees, organising and assigning work tasks,
directing and guiding project work and monitoring and controlling the work processes.
When planning projects, the office manager considers the organisation's goals and objectives
and creates plans to meet these. This can include determining which projects to undertake,
their completion time frames and the expected work standards. It also usually covers creating
project budgets, listing the necessary materials and resources and adjusting the project plans
to suit business requirements. The organising stage covers selecting the right employees for
the project, delegating work responsibilities, creating work schedules and procuring materials.
The office manager is also typically responsible for leading the projects, reviewing work
performances and ensuring quality control.

Q.4. How to write scope of management statement?

Writing Scope of Management Statement

Scope of management can be written in below three steps:

1. Write the purpose of the project

2. Mention the project deliverables
3. Outline the project schedule

1. Write the purpose of the project

You can begin the scope of the management statement with an introduction that states the
objective of the project. This can help your team understand your expectations from them. By
being clear about the project objectives, you can make it easier to create and enforce plans to
achieve those objectives.

2. Mention the project deliverables

Project deliverables are the tangible and intangible goods or services that your company
intends to produce in a specific time frame. By mentioning the project deliverables in the
scope of the management statement, you define clearly what your company plans on
delivering. You can also list the materials and other requirements for producing these
deliverables. Additionally, you can state the production phases of the deliverables. You can
also mention if the deliverables are for internal use or to fulfil client commissions and their
specific use.

3. Outline the project schedule

The scope of the management statement can include an outline of how the project is likely to
progress and a time frame for project completion. Outlining the project schedule can help you
determine the project's milestones and keep track of the work schedule. You can find out if the
work is progressing according to plan and, if unexpected problems arise, you can make
necessary adjustments to the project plan to complete the project on schedule. You can also
include any essential constraints or exclusions in the project outline.
Q.5. Write various tips required for effective management.

Tips for effective management:

The following tips can help you to become more effective in management:
1) Improve Communication Skills
2) Carry out regular assessments
3) Assign responsibilities
4) Set specific goals
5) Try to maintain a positive outlook

1) Improve Communication Skills:

By improving your communication skills, you can make your work expectations clearly
understood by your team and make it easier for them to follow work instructions and meet the
desired project targets.

2) Carry out regular assessments:

Effective management is a continuous process and involves regularly assessing, updating and
improving work processes and skills to increase productivity.

3) Assign responsibilities:
To complete projects on schedule, you can delegate different project tasks to various team
members, provide them with guidance when necessary and hold them accountable for
ensuring work quality and meeting set deadlines.

4) Set specific goals:

Since the principal purpose of management is to achieve the organisation's business goals, it is
necessary to focus on measurable goals and make strategic development plans, track work
progress and achieve set milestones.

5) Try to maintain a positive outlook:

It is crucial to stay positive and develop a habit of finding solutions since management can be
challenging work, and, even after careful planning, you may encounter unexpected setbacks
and obstructions.
Q.6. Enumerate importance of Management.

Importance of Management:
Effective and efficient management is essential for successful operation of any organization,
which can be explained in below steps:

1. It helps in Achieving Group Goals

2. Optimum Utilization of Resources
3. Reduces Costs
4. Establishes Sound Organization
5. Establishes Equilibrium
6. Essential for Prosperity of Society

1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It
directs group efforts towards achievement of pre-determined goals.
By defining objective of organization clearly there would be no wastage of time, money and
effort. Management converts disorganized resources of men, machines, money etc. into useful
enterprise. These resources are coordinated, directed and controlled in such a manner that
enterprise work towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management.
Management provides maximum utilization of scarce resources by selecting its best possible
alternate use in industry from out of various uses.
It makes use of experts, professional and these services leads to use of their skills, knowledge,
and proper utilization and avoids wastage. If employees and machines are producing its
maximum there is no under employment of any resources.
3. Reduces Costs - It gets maximum results through minimum input by proper planning and by
using minimum input & getting maximum output.
Management uses physical, human and financial resources in such a manner which results in
best combination. This helps in cost reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfilment of this, it establishes effective
authority & responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors and who are subordinates.
Management fills up various positions with right persons, having right skills, training and
qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing environment. It
keeps in touch with the changing environment.
With the change is external environment, the initial co-ordination of organization must be
changed. So it adapts organization to changing demand of market/changing needs of societies.
It is responsible for growth and survival of organization.
6. Essential for Prosperity of Society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource.
It improves standard of living. It increases the profit which is beneficial to business and society
will get maximum output at minimum cost by creating employment opportunities which
generate income in hands. Organization comes with new products and researches beneficial
for society.

Q.7. Explain Process / Functions of Management.

Process / Functions of Management:

Management has been described as a social process involving responsibility for economical
and effective planning and regulation of operation of an enterprise in the fulfilment of given
purposes.
It is a dynamic process consisting of various elements and activities. These activities are
different from operative functions like marketing, finance, purchase etc. Rather these activities
are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management.

According to George & Jerry, “There are four fundamental functions of management i.e.
planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”.

Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for
Organizing, S for Staffing, D for Directing, CO for Co-ordination, R for Reporting & B for
Budgeting.

But the most widely accepted are the functions of management given by KOONTZ and
O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other and each affects the performance of others.
1. Planning
It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-determined
goals.

According to KOONTZ,

“Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap
between where we are and where we want to be”.

A plan is a future course of actions. It is an exercise in problem solving & decision making.
Planning is determination of course of actions to achieve desired goals. Thus, planning is a
systematic thinking about ways and means for accomplishment of pre-determined goals.

Planning is necessary to ensure proper utilization of human and non-human resources. It is

omnipresent, it is an intellectual activity and it also helps in avoiding confusion, uncertainties,
risks, wastages etc.

2. Organizing
It is the process of bringing together Physical, Financial and Human resources and developing
productive relationship amongst them for achievement of organizational goals.

According to Henry Fayol, “To organize a business is to provide it with everything useful for
its functioning i.e. raw material, tools, capital and personnel”.

To organize a business involves determining & providing human and non-human resources to
the organizational structure. Organizing as a process involves:
 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing
It is the function of manning the organizational structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase
in size of business, complexity of human behavior etc.

The main purpose of staffing is to put right man/woman on right job i.e. square pegs in
square holes and round pegs in round holes.

According to Koontz & O’Donell, “Managerial function of Staffing involves manning the
organization structure through proper and effective selection, appraisal & development of
personnel to fill the roles designed in the structure”.

Staffing involves:
 Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.

4. Directing – SMLC
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes.
It is considered life-spark of the enterprise which sets it in motion and action of people,
because planning, organizing and staffing are the mere preparations for doing the work.
Direction is that inter-personnel aspect of management which deals directly with influencing,
guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.

Direction has following elements:

 S - Supervision
 M - Motivation
 L - Leadership
 C - Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of deviation if
any to ensure achievement of organizational goals.

The purpose of controlling is to ensure that everything occurs in conformities with the
standards. An efficient system of control helps to predict deviations before they actually occur.

According to Theo Haimann, “Controlling is the process of checking whether or not proper
progress is being made towards the objectives and goals and acting if necessary, to correct any
deviation”.

According to Koontz & O’Donell “Controlling is the measurement & correction of performance
activities of subordinates in order to make sure that the enterprise objectives and plans
desired to obtain them are being accomplished”.

Therefore controlling has following steps:

a) Establishment of standard performance.

b) Measurement of actual performance.
c) Comparison of actual performance with the standards and finding out deviation if any.
d) Corrective action.

Q.8. Explain controlling function of management in detail.

Controlling Function of Management

What is controlling?
Controlling consists of verifying whether everything occurs in conformities with the plans
adopted, instructions issued and principles established.

Controlling ensures that there is effective and efficient utilization of organizational resources so
as to achieve the planned goals.

Controlling measures the deviation of actual performance from the standard performance,
discovers the causes of such deviations and helps in taking corrective actions.

According to Brech, “Controlling is a systematic exercise which is called as a process of

checking actual performance against the standards or plans with a view to ensure adequate
progress and also recording such experience as is gained as a contribution to possible future
needs.”

According to Donnell, “Just as a navigator continually takes reading to ensure whether he is

relative to a planned action, so should a business manager continually take reading to assure
himself that his enterprise is on right course.”
Controlling has got two basic purposes:
1. It facilitates co-ordination
2. It helps in planning

Features of Controlling Function

Following are the characteristics of controlling function of management-
1. Controlling is an end function- A function which comes once the performances are made in
conformities with plans.
2. Controlling is a pervasive function- which means it is performed by managers at all levels
and in all type of concerns.
3. Controlling is forward looking- because effective control is not possible without past being
controlled. Controlling always look to future so that follow-up can be made whenever
required.
4. Controlling is a dynamic process- since controlling requires taking reviewal methods,
changes have to be made wherever possible.
5. Controlling is related with planning- Planning and Controlling are two inseparable functions
of management. Without planning, controlling is a meaningless exercise and without
controlling, planning is useless. Planning presupposes controlling and controlling succeeds
planning.

Process of Controlling
Controlling as a management function involves following steps:
1. Establishment of standards- Standards are the plans or the targets which have to be
achieved in the course of business function. They can also be called as the criterions for
judging the performance. Standards generally are classified into two-
a. Measurable or tangible - Those standards which can be measured and expressed are called
as measurable standards. They can be in form of cost, output, expenditure, time, profit, etc.
b. Non-measurable or intangible- There are standards which cannot be measured monetarily.
For example- performance of a manager, deviation of workers, their attitudes towards a
concern. These are called as intangible standards.
Controlling becomes easy through establishment of these standards because controlling is
exercised on the basis of these standards.
2. Measurement of performance- The second major step in controlling is to measure the
performance. Finding out deviations becomes easy through measuring the actual performance.
Performance levels are sometimes easy to measure and sometimes difficult. Measurement of
tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative
measurement becomes difficult when performance of manager has to be measured.
Performance of a manager cannot be measured in quantities. It can be measured only by-
a. Attitude of the workers,
b. Their morale to work,
c. The development in the attitudes regarding the physical environment, and
d. Their communication with the superiors.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly
reports.

3. Comparison of actual and standard performance- Comparison of actual performance with

the planned targets is very important. Deviation can be defined as the gap between actual
performance and the planned targets. The manager has to find out two things here - extent of
deviation and cause of deviation.
Extent of deviation means that the manager has to find out whether the deviation is positive
or negative or whether the actual performance is in conformity with the planned performance.
The managers have to exercise control by exception. He has to find out those deviations which
are critical and important for business.
Minor deviations have to be ignored. Major deviations like replacement of machinery,
appointment of workers, quality of raw material, rate of profits, etc. should be looked upon
consciously. Therefore it is said, “ If a manager controls everything, he ends up controlling
nothing.”
For example, if stationery charges increase by a minor 5 to 10%, it can be called as a minor
deviation. On the other hand, if monthly production decreases continuously, it is called as
major deviation.
Once the deviation is identified, a manager has to think about various cause which has led to
deviation. The causes can be-
a. Erroneous planning,
b. Co-ordination loosens,
c. Implementation of plans is defective, and
d. Supervision and communication is ineffective, etc.

4. Taking remedial actions- Once the causes and extent of deviations are known, the manager
has to detect those errors and take remedial measures for it. There are two alternatives here-
a. Taking corrective measures for deviations which have occurred; and
b. After taking the corrective measures, if the actual performance is not in conformity with
plans, the manager can revise the targets. It is here the controlling process comes to an end.
Follow up is an important step because it is only through taking corrective measures, a
manager can exercise controlling.

Q. 10. Explain various principles of Management by Henri Fayol.

Principles of Management by Henri Fayol:

A French mining engineer, Henri Fayol is well-renowned as the 'Father of Modern

Management Theory'.

Fayol worked at the French mining company Commentry-Fourchambault and Decazeville,

where he started as an engineer but worked his way up to become the General Manager and
then the organization's Director from 1888 to 1918. When Fayol took on the managerial role
at the mining company, he chose to rely not on his technical skills but on his ability as an
organizer and his skills at handling people.

Widely influential in the early 20th century, Henri Fayol wrote the book on management
theories and work organization, "Administration Industrielle et Générale." Henri Fayol
introduced theories that could be applied to all levels of management and for any
department. Organizations and managers still practice Fayol's principles of management to
ensure an efficient and successful business.

Henri Fayol developed the 14 principles of management towards the tail end of the industrial
revolution. It was the perfect timing too, the world had been subjected to massive changes,
and new and improved working styles were the need of the moment. Therefore, Fayol's
Principles of Management influence the present management theory quite significantly.

Henry Fayol’s 14 Principles of Management

1. Division of Work (Assigning specific task to each employee)

2. Authority & Responsibility (Balance between authority and responsibility)
3. Discipline
4. Unity of Command (All orders issued by one Boss only)
5. Unity of Direction (Execution of all activities under one Boss for better coordination)
6. Collective Interest over Individual Interest
7. Remuneration
8. Centralization & De-centralization (Balancing act is needed)
9. Scalar Chain (Chain of command/hierarchy)
10. Order
11. Equity (Kindness & Justice)
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit de Corps (Team Spirit)

1. Division of Work (Assigning specific task to each employee)

The first Henry Fayol principle of management is based on the theory that if an employee is
given a specific task to do, they will become more efficient and skilled in it. This is opposed to
a multi-tasking culture where an employee is given so many tasks to do at once. In order to
implement this principle effectively, look at the current skill sets of each employee and assign
them a task that they can become proficient at. This will help them to become more
productive, skilled, and efficient in the long run.
Example: At a school, every department has a different responsibility, like academics, sports,
administration, sanitation, food, beverages, etc. These responsibilities are taken care of by
employees specializing in that particular department, increasing efficiency and productivity
and making them specialists in their field.

• Henri Fayol has stressed on the specialization of jobs.

• He recommended that work of all kinds must be divided & subdivided and allotted to
various persons according to their expertise in a particular area.
• Subdivision of work makes it simpler and results in efficiency.
• It also helps the individual in acquiring speed, accuracy in his performance.
• Specialization leads to efficiency & economy in spheres of business.
2. Authority & Responsibility
This principle of Henry Fayol states that a manager needs to have the necessary authority in
order to ensure that his instructions are carried out by the employees. If managers did not
have any authority, then they would lack the ability to get any work done. However, this
authority should come along with responsibility. According to Henri Fayol, there should be a
balance between authority and responsibility. If there is more authority than responsibility,
the employees will get frustrated. If there is more responsibility than authority, the manager
will feel frustrated.
Example: If an employee has been responsible for managing the decor department while
planning an event but has no authority to make design decisions or contact the vendors to
get the work done, no efficiency or productivity will be achieved.

• Authority & responsibility are co-existing.

• If authority is given to a person, he should also be made responsible.
• In a same way, if anyone is made responsible for any job, he should also have
concerned authority.
• Authority refers to the right of superiors to get exactness from their sub-ordinates
whereas responsibility means obligation for the performance of the job assigned.
• There should be a balance between the two i.e. they must go hand in hand.
• Authority without responsibility leads to irresponsible behaviour whereas
responsibility without authority makes the person ineffective.

3. Discipline
This principle states that discipline is required for any organization to run effectively. In order
to have disciplined employees, managers need to build a culture of mutual respect. There
should be a set of organizational rules, philosophies, and structures in place that should be
met by everyone. Bending rules or slacking should not be allowed in any organization. In
order to achieve this, there is a need for good supervision and impartial judgment.
Example: Every employee must follow certain rules and regulations and keep a disciplined
attitude in the workplace for smooth working and efficient results.

• According to Fayol, “Discipline means sincerity, obedience, respect of authority &

observance of rules and regulations of the enterprise”.
• This principle applies that subordinate should respect their superiors and obey their
order.
• It is an important requisite for smooth running of the enterprise.
• Discipline is not only required on path of subordinates but also on the part of
management.
• Discipline can be enforced if -

- There are good superiors at all levels.

- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.
4. Unity of Command
This principle states that that should be a clear chain of command in the organization. The
employees should be clear on whose instructions to follow. According to Fayol, an employee
should receive orders from only one manager. If an employee works under two or more
managers, then authority, discipline, and stability are threatened. Moreover, this will cause a
breakdown in management structure and cause employees to burn out.
Example: If in a company, an employee has been given a task to finish within 3 to 4 hours as
ordered by their immediate superior. But the head of the department asks them to deliver
the task within 1 hour. In this case, no unity of command can create confusion and pressure
in the workplace.

• A sub-ordinate should receive orders and be accountable to one and only one boss at a
time.
• In other words, a sub-ordinate should not receive instructions from more than one
person because -

- It undermines authority
- Weakens discipline
- Divides loyalty
- Creates confusion
- Delays and chaos
- Escaping responsibilities
- Duplication of work
- Overlapping of efforts

• Therefore, dual sub-ordination should be avoided unless and until it is absolutely

essential.
• Unity of command provides the enterprise a disciplined, stable & orderly existence.
• It creates harmonious relationship between superiors and sub-ordinates.

5. Unity of Direction
This Henry Fayol principle of management states that the work to be done should be
organized in such a way that employees work in harmony towards the same objective, using
one plan, under the direction of one manager. For example, if you have a range of marketing
activities such as advertising, budgeting, sales promotion, etc., there should be one manager
using one plan for all the marketing activities. The different activities can be broken down for
different sub-managers, but they should all work towards a common goal under the direction
of one main person in charge of the whole thing.
Example: Different sets of activities within a department should be managed by different
managers to avoid confusion and lesser efficiency within the workflow.

• Fayol advocates one head one plan which means that there should be one plan for a
group of activities having similar objectives.
• Related activities should be grouped together. There should be one plan of action for
them and they should be under the charge of a particular manager.
• According to this principle, efforts of all the members of the organization should be
directed towards common goal.
 • Without unity of direction, unity of action cannot be achieved.
• In fact, unity of command is not possible without unity of direction.

Basis Unity of command Unity of direction

Meaning It implies that a sub-ordinate should receive It means one head, one plan for a group of
orders & instructions from only one boss. activities having similar objectives.

Nature It is related to the functioning of personnel’s. It is related to the functioning of

departments, or organization as a whole.

Necessity It is necessary for fixing responsibility of each It is necessary for sound organization.
subordinates.

Advantage It avoids conflicts, confusion & chaos. It avoids duplication of efforts and wastage
of resources.

Result It leads to better superior sub-ordinate It leads to smooth running of the

relationship. enterprise.

Therefore it is obvious that they are different from each other but they are dependent on
each other i.e. unity of direction is a pre-requisite for unity of command. But it does not
automatically comes from the unity of direction.

6. Collective Interest over Individual Interest

This principle states that the overall interest of the team should take precedence over
personal ones. The interest of the organization should not be sabotaged by the interest of an
individual. If anyone goes rogue, the organization will collapse.
Example: While planning a team outing, the employee making the travel and stay decisions
must make arrangements according to comfort and affordability, not just as per their liking.

• An organization is much bigger than the individual it constitutes therefore interest of

the undertaking should prevail in all circumstances.
• As far as possible, reconciliation should be achieved between individual and group
interests.
• But in case of conflict, individual must sacrifice for bigger interests.
• In order to achieve this attitude, it is essential that -

- Employees should be honest & sincere.

- Proper & regular supervision of work.
- Reconciliation of mutual differences and clashes by mutual agreement. For
example, for change of location of plant, for change of profit sharing ratio, etc.
7. Remuneration
This henry fayol principle of management states that employees should be paid fair wages for
the work that they carry out. Any organization that underpays its workers will struggle to
motivate and keep quality workers. This remuneration should include both financial and non-
financial incentives. Also, there should be a structure in place to reward good performance to
motivate employees.
Example: Any organization must be fair regarding their remuneration policies where all the
employees must receive a salary worth their efforts irrespective of their gender, tenure, and
other factors.

• The quantum and method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory & rewarding of the efforts.
• As far as possible it should accord satisfaction to both employer and the employees.
• Wages should be determined on the basis of cost of living, work assigned, financial
position of the business, wage rate prevailing etc.
• Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
• Fayol also recommended provision of other benefits such as free education, medical &
residential facilities to workers.

8. Centralization & De-Centralization

Centralization refers to the concentration of power in the hands of the authority and
following a top-bottom approach to management. In decentralization, this authority is
distributed to all levels of management. In a modern context, no organization can be
completely centralized or decentralized. Complete centralization means that people at the
bottom have no authority over their responsibilities. Similarly, complete decentralization
means that there will be no superior authority to control the organization. To use this
effectively today, there should be a balance of centralization and decentralization. The
degree to which this balance is achieved will differ from organization to organization.
Example: Centralization is mostly common in small and medium-sized firms where the
delegation of work is minimal, and the owners make most of the decisions.

• Centralization means concentration of authority at the top level.

• In other words, centralization is a situation in which top management retains most of
the decision making authority.
• Decentralization means disposal of decision making authority to all the levels of the
organization.
• In other words, sharing authority downwards is decentralization.
• According to Fayol, “Degree of centralization or decentralization depends on no. of
factors like size of business, experience of superiors, dependability & ability of
subordinates etc.
• Anything which increases the role of subordinate is decentralization & anything which
decreases it is centralization.
 • Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.

9. Scalar Chain
A scalar chain refers to a clear chain of communication between employees and their
superiors. Employees should know where they stand in the hierarchy of the organization and
whom to go to in a chain of command. To implement this in the workplace, Fayol suggests
that there should be an organizational chart drawn out for employees to see this structure
clearly.
Example: Every organization has a specific chain of authority from the highest level of
superiors, like the founder or CEO, to the lowest level of subordinates following a hierarchy
for maximum productivity.

• Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate
authority to the lowest”.
• All orders, instructions, messages, requests, explanation etc. have to pass through
Scalar chain.
• But, for the sake of convenience & urgency, this path can be cut shirt and this short cut
is known as Gang Plank.
• A Gang Plank is a temporary arrangement between two different points to facilitate
quick & easy communication as explained below:

• In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the help
of E and F to G which will take quite some time and by that time, it may not be worth
therefore a gang plank has been developed between the two.
• Gang Plank clarifies that management principles are not rigid rather they are very
flexible. They can be moulded and modified as per the requirements of situations.
• Gang Plank refers to an arrangement in which two managers working at the same level
can communicate with each other directly for quick communication.
10. Order
This principle states that there should be an orderly placement of resources (manpower,
money, materials, etc.) in the right place at the right time. This ensures the proper use of
resources in a structured fashion. Misplacement of any of these resources will lead to misuse
and disorder in the organization.
Example: Employees should be given a designated space and the right tools or equipment to
complete their work efficiently.

• This principle is concerned with proper & systematic arrangement of things and
people.
• Arrangement of things is called material order and placement of people is called social
order.
• Material order- There should be safe, appropriate and specific place for every article
and every place to be effectively used for specific activity and commodity.
• Social order- Selection and appointment of most suitable person on the suitable job.
There should be a specific place for every one and everyone should have a specific
place so that they can easily be contacted whenever need arises.

11. Equity
Equity is a combination of kindness and justice. This principle states that managers should use
kindliness and justice towards everyone they manage. This creates loyalty and devotion
among the employees towards the organization they work for.
Example: All employees, irrespective of gender, religion, race, and sexuality, must feel safe,
seen, and heard and be given equal opportunities to grow and flourish in their careers within
the organization.

• Equity means combination of fairness, kindness & justice.

• The employees should be treated with kindness & equity if devotion is expected of
them.
• It implies that managers should be fair and impartial while dealing with the
subordinates.
• They should give similar treatment to people of similar position.
• They should not discriminate with respect to age, caste, sex, religion, relation etc.
• Equity is essential to create and maintain cordial relations between the managers and
sub-ordinate.
• But equity does not mean total absence of harshness.
• Fayol was of opinion that, “at times force and harshness might become necessary for
the sake of equity”.

12. Stability of Tenure of Personnel

This principle states that an organization should work to minimize staff turnover and
maximize efficiency. Any new employee cannot be expected to get used to the culture of an
organization right away. They need to be given enough time to settle into their jobs to
become efficient. Both old and new employees should also be ensured job security because
instability can lead to inefficiency. There should also be a clear and effective method to
handle vacancies when they arise because it takes time and expense to train new ones.
Example: Every new employee must be given a proper induction of both the technical aspect
of the company as well as the work culture and office environment for them to mingle well.
Old employees should be given alum awards for completing certain tenures to boost morale.

• Fayol emphasized that employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be fixed.
• Therefore employees should be appointed after keeping in view principles of
recruitment & selection but once they are appointed their services should be served.
• According to Fayol. “Time is required for an employee to get used to a new work &
succeed to doing it well but if he is removed before that he will not be able to render
worthwhile services”.
• As a result, the time, effort and money spent on training the worker will go waste.
• Stability of job creates team spirit and a sense of belongingness among workers which
ultimately increase the quality as well as quantity of work.

13. Initiative
This principle states that all employees should be encouraged to show initiative. When
employees have a say as to how best they can do their job, they feel motivated and
respected. Organizations should listen to the concerns of their employees and encourage
them to develop and carry out plans for improvement.
Example: Taking suggestions from employees regarding their specific department can make
them feel seen in an authoritative position and can give them a sense of achieving something
for the team.

• Workers should be encouraged to take initiative in the work assigned to them.

• It means eagerness to initiate actions without being asked to do so.
• Fayol advised that management should provide opportunity to its employees to
suggest ideas, experiences& new method of work.
• It helps in developing an atmosphere of trust and understanding.
• People then enjoy working in the organization because it adds to their zeal and energy.
• To suggest improvement in formulation & implementation of place.
• They can be encouraged with the help of monetary & non-monetary incentives.

14. Esprit de Corps

Esprit de Corps means “Team Spirit”. This Henri Fayol principle of management states that
the management should strive to create unity, morale, and co-operation among the
employees. Team spirit is a great source of strength in the organization. Happy and motivated
employees are more likely to be productive and efficient.
Example: While discussing the new plan of action for achieving the next month's targets,
using the word 'We' instead of 'I' brings a teamwork spirit to the group.
That was all about principles of management.

• It refers to team spirit i.e. harmony in the work groups and mutual understanding
among the members.
• Spirit De’ Corps inspires workers to work harder.
• Fayol cautioned the managers against dividing the employees into competing groups
because it might damage the moral of the workers and interest of the undertaking in
the long run.
• To inculcate Espirit De’ Corps following steps should be undertaken -

‐ There should be proper co-ordination of work at all levels

‐ Subordinates should be encouraged to develop informal relations among
themselves.
‐ Efforts should be made to create enthusiasm and keenness among subordinates
so that they can work to the maximum ability.
‐ Efficient employees should be rewarded and those who are not up to the mark
should be given a chance to improve their performance.
‐ Subordinates should be made conscious of that whatever they are doing is of
great importance to the business & society.

• He also cautioned against the more use of Britain communication to the subordinates
i.e. face to face communication should be developed. The managers should infuse
team spirit & belongingness. There should be no place for misunderstanding. People
then enjoy working in the organization & offer their best towards the organization.