Features of Management

Management is an activity concerned with guiding human and physical resources such that organizational
goals can be achieved. Nature of management can be highlighted as: -

1. Management is Goal-Oriented: The success of any management activity is assessed by its

achievement of the predetermined goals or objective. Management is a purposeful activity. It is a
tool which helps use of human & physical resources to fulfill the pre-determined goals. For
example, the goal of an enterprise is maximum consumer satisfaction by producing quality goods
and at reasonable prices. This can be achieved by employing efficient persons and making better
use of scarce resources.
2. Management integrates Human, Physical and Financial Resources: In an organization,
human beings work with non-human resources like machines. Materials, financial assets,
buildings etc. Management integrates human efforts to those resources. It brings harmony among
the human, physical and financial resources.
3. Management is Continuous: Management is an ongoing process. It involves continuous
handling of problems and issues. It is concerned with identifying the problem and taking
appropriate steps to solve it. E.g. the target of a company is maximum production. For achieving
this target various policies have to be framed but this is not the end. Marketing and Advertising is
also to be done. For this policies have to be again framed. Hence this is an ongoing process.
4. Management is all Pervasive: Management is required in all types of organizations whether it is
political, social, cultural or business because it helps and directs various efforts towards a definite
purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require
management. When ever more than one person is engaged in working for a common goal,
management is necessary. Whether it is a small business firm which may be engaged in trading
or a large firm like Tata Iron & Steel, management is required everywhere irrespective of size or
type of activity.
5. Management is a Group Activity: Management is very much less concerned with individual’s
efforts. It is more concerned with groups. It involves the use of group effort to achieve
predetermined goal of management of ABC & Co. is good refers to a group of persons managing
the enterprise.

Levels of Management
The term “Levels of Management’ refers to a line of demarcation between various managerial positions
in an organization. The number of levels in management increases when the size of the business and
work force increases and vice versa. The level of management determines a chain of command, the
amount of authority & status enjoyed by any managerial position. The levels of management can be
classified in three broad categories:

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels is
discussed below:

1. Top Level of Management

 It consists of board of directors, chief executive or managing director. The top management is the
ultimate source of authority and it manages goals and policies for an enterprise. It devotes more
time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the performance
of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible
to the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of middle
level of management but in big enterprises, there may be senior and junior middle level
management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives
of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory
management refers to those executives whose work has to be largely with personal oversight and
direction of operative employees”. In other words, they are concerned with direction and
controlling function of management. Their activities include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
 e. They communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with the
workers.

Objectives of Management
The main objectives of management are:

1. Getting Maximum Results with Minimum Efforts - The main objective of management is to
secure maximum outputs with minimum efforts & resources. Management is basically concerned
with thinking & utilizing human, material & financial resources in such a manner that would result
in best combination. This combination results in reduction of various costs.
2. Increasing the Efficiency of factors of Production - Through proper utilization of various
factors of production, their efficiency can be increased to a great extent which can be obtained by
reducing spoilage, wastages and breakage of all kinds, this in turn leads to saving of time, effort
and money which is essential for the growth & prosperity of the enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures smooth and
coordinated functioning of the enterprise. This in turn helps in providing maximum benefits to the
employee in the shape of good working condition, suitable wage system, incentive plans on the
one hand and higher profits to the employer on the other hand.
4. Human betterment & Social Justice - Management serves as a tool for the upliftment as well as
betterment of the society. Through increased productivity & employment, management ensures
better standards of living for the society. It provides justice through its uniform policies.

Importance of Management
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 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.
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. Essentials 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.

Management and Administration

According to Theo Haimann, “Administration means overall determination of policies, setting of major
objectives, the identification of general purposes and laying down of broad programmes and projects”. It
refers to the activities of higher level. It lays down basic principles of the enterprise. According to
Newman, “Administration means guidance, leadership & control of the efforts of the groups towards some
common goals”.

Whereas, management involves conceiving, initiating and bringing together the various elements;
coordinating, actuating, integrating the diverse organizational components while sustaining the viability of
the organization towards some pre-determined goals. In other words, it is an art of getting things done
through & with the people in formally organized groups.

The difference between Management and Administration can be summarized under 2 categories: -

1. Functions
2. Usage / Applicability
3. On the Basis of Functions: -

Basis Management Administration

Meaning Management is an art of getting things done It is concerned with formulation of

through others by directing their efforts towards broad objectives, plans & policies.
achievement of pre-determined goals.

Nature Management is an executing function. Administration is a decision-making

function.

Process Management decides who should as it & how Administration decides what is to be
should he dot it. done & when it is to be done.

Function Management is a doing function because Administration is a thinking function

 managers get work done under their supervision. because plans & policies are
determined under it.

Skills Technical and Human skills Conceptual and Human skills

Level Middle & lower level function Top level function

4. On the Basis of Usage: -

Basis Management Administration

Applicability It is applicable to business concerns i.e. It is applicable to non-business concerns i.e.

profit-making organization. clubs, schools, hospitals etc.

Influence The management decisions are The administration is influenced by public

influenced by the values, opinions, beliefs opinion, govt. policies, religious
& decisions of the managers. organizations, customs etc.

Status Management constitutes the employees Administration represents owners of the

of the organization who are paid enterprise who earn return on their capital
remuneration (in the form of salaries & invested & profits in the form of dividend.
wages).

5. Practically, there is no difference between management & administration. Every manager is

concerned with both - administrative management function and operative management function
as shown in the figure. However, the managers who are higher up in the hierarchy denote more
time on administrative function & the lower level denote more time on directing and controlling
worker’s performance i.e. management.
Functions of Management
Management has been described as a social process involving responsibility for economical and effective
planning & regulation of operation of an enterprise in the fulfillment 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 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 & 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 from where we are & 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
courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways &
means for accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is all pervasive, 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 or its functioning i.e.
raw material, tools, capital and personnel’s”. 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 organization 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 o staffing is to put right
man on right job i.e. square pegs in square holes and round pegs in round holes. According to
Kootz & 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 un 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
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 the action of people because planning, organizing and staffing are the mere
preparations for doing the work. Direction is that inert-personnel aspect of management which
deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement
of organizational goals. Direction has following elements:

 Supervision
 Motivation
 Leadership
 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 as 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.
Definition of Coordination
Co-ordination is the unification, integration, synchronization of the efforts of group members so as to
provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other
functions of management. According to Mooney and Reelay, “Co-ordination is orderly arrangement of
group efforts to provide unity of action in the pursuit of common goals”. According to Charles Worth, “Co-
ordination is the integration of several parts into an orderly hole to achieve the purpose of understanding”.

Management seeks to achieve co-ordination through its basic functions of planning, organizing, staffing,
directing and controlling. That is why, co-ordination is not a separate function of management because
achieving of harmony between individuals efforts towards achievement of group goals is a key to success
of management. Co-ordination is the essence of management and is implicit and inherent in all functions
of management.

A manager can be compared to an orchestra conductor since both of them have to create rhythm and
unity in the activities of group members. Co-ordination is an integral element or ingredient of all the
managerial functions as discussed below: -

a. Co-ordination through Planning - Planning facilitates co-ordination by integrating the various

plans through mutual discussion, exchange of ideas. e.g. - co-ordination between finance budget
and purchases budget.
b. Co-ordination through Organizing - Mooney considers co-ordination as the very essence of
organizing. In fact when a manager groups and assigns various activities to subordinates, and
when he creates department’s co-ordination uppermost in his mind.
c. Co-ordination through Staffing - A manager should bear in mind that the right no. of personnel
in various positions with right type of education and skills are taken which will ensure right men on
the right job.
d. Co-ordination through Directing - The purpose of giving orders, instructions & guidance to the
subordinates is served only when there is a harmony between superiors & subordinates.
e. Co-ordination through Controlling - Manager ensures that there should be co-ordination
between actual performance & standard performance to achieve organizational goals.

From above discussion, we can very much affirm that co-ordination is the very much essence of
management. It is required in each & every function and at each & every stage & therefore it cannot be
separated.

Coordination and Cooperation

Co-ordination is an orderly arrangement of efforts to provide unity of action in the fulfillment of common
objective whereas co-operation denotes collective efforts of persons working in an enterprise voluntarily
for the achievement of a particular purpose. It is the willingness of individuals to help each other.

Co-ordination is an effort to integrate effectively energies of different groups whereas co-operation is sort
to achieve general objectives of business.

Though these two are synonymous but they are different as below:
Differences between Co-ordination and Co-operation

Basis Co-ordination Co-operation

Meaning It is an orderly arrangement of group It means mutual help willingly.

efforts in pursuit of common goals.

Scope It is broader than co-operation which It is termed as a part of co-ordination.

includes as well because it harmonizes
the group efforts.

Process The function of co-ordination is The functions of co-operation are prepared

performed by top management. by persons at any level.

Requirements Co-ordination is required by employees Co-operation is emotional in nature

and departments at work irrespective of because it depends on the willingness of
their work. people working together.

Relationship It establishes formal and informal It establishes informal relationship.

relationships.

Freedom It is planned and entrusted by the central It depends upon the sweet will of the
authority & it is essential. individuals and therefore it is not necessary.

Support It seeks wholehearted support from Co-operation without co-ordination is

various people working at various levels. fruitless & therefore it may lead to
unbalanced developments.

Therefore, existence of co-operation may prove to be effective condition or requisite for co-ordination. But
it does not mean that co-ordination originates automatically from the voluntary efforts of the group of
members. It has to be achieved through conscious & deliberate efforts of managers, therefore to conclude
we can say that co-operation without co-ordination has no fruit and co-ordination without co-operation has
no root.
Henri Fayols 14 Principles of
Management
A principle refers to a fundamental truth. It establishes cause and effect relationship between two or more
variables under given situation. They serve as a guide to thought & actions. Therefore, management
principles are the statements of fundamental truth based on logic which provides guidelines for
managerial decision making and actions. These principles are derived: -

a. On the basis of observation and analysis i.e. practical experience of managers.

b. By conducting experimental studies.

There are 14 Principles of Management described by Henri Fayol.

1. Division of Labor
a. Henri Fayol has stressed on the specialization of jobs.
b. He recommended that work of all kinds must be divided & subdivided and allotted to
various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.

1. Party of Authority & Responsibility

a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have concerned
authority.
d. 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.
e. There should be a balance between the two i.e. they must go hand in hand.
f. Authority without responsibility leads to irresponsible behavior whereas responsibility
without authority makes the person ineffective.
2. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one boss at a
time.
b. 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

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

essential.
d. Unity of command provides the enterprise a disciplined, stable & orderly existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
 3. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan for a
group of activities having similar objectives.
b. 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.
c. According to this principle, efforts of all the members of the organization should be
directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. 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
orders & instructions from only one boss. of 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.

5. Equity
a. Equity means combination of fairness, kindness & justice.
b. The employees should be treated with kindness & equity if devotion is expected of them.
c. It implies that managers should be fair and impartial while dealing with the subordinates.
d. They should give similar treatment to people of similar position.
e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
f. Equity is essential to create and maintain cordial relations between the managers and
sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, “at times force and harshness might become necessary for the
sake of equity”.
6. Order
a. This principle is concerned with proper & systematic arrangement of things and people.
b. Arrangement of things is called material order and placement of people is called social
order.
 c. 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.
d. 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.
7. Discipline
a. According to Fayol, “Discipline means sincerity, obedience, respect of authority &
observance of rules and regulations of the enterprise”.
b. This principle applies that subordinate should respect their superiors and obey their
order.
c. It is an important requisite for smooth running of the enterprise.
d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if -

- There are good superiors at all levels.

- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.

8. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
b. It means eagerness to initiate actions without being asked to do so.
c. Fayol advised that management should provide opportunity to its employees to suggest
ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the employees.
c. Wages should be determined on the basis of cost of living, work assigned, financial
position of the business, wage rate prevailing etc.
d. Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education, medical &
residential facilities to workers.
10. Stability of Tenure
a. 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.
b. Therefore employees should be appointed after keeping in view principles of recruitment
& selection but once they are appointed their services should be served.
c. 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”.
d. As a result, the time, effort and money spent on training the worker will go waste.
e. Stability of job creates team spirit and a sense of belongingness among workers which
ultimately increase the quality as well as quantity of work.
11. Scalar Chain
a. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority
to the lowest”.
 b. Every orders, instructions, messages, requests, explanation etc. has to pass through
Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is
known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to facilitate quick
& easy communication as explained below:

5.
a. 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.
b. 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

12 Sub-Ordination of Individual Interest to General Interest

c. An organization is much bigger than the individual it constitutes therefore interest of the
undertaking should prevail in all circumstances.
d. As far as possible, reconciliation should be achieved between individual and group
interests.
e. But in case of conflict, individual must sacrifice for bigger interests.
f. 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.

13 . Espirit De’ Corps (can be achieved through unity of command)

e. It refers to team spirit i.e. harmony in the work groups and mutual understanding among
the members.
f. Spirit De’ Corps inspires workers to work harder.
g. 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.
h. 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.
i. 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.

14., Centralization & De-Centralization

j. 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.
k. Decentralization means disposal of decision making authority to all the levels of the
organization. In other words, sharing authority downwards is decentralization.
l. 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.
m. Anything which increases the role of subordinate is decentralization & anything which
decreases it is centralization.
n. Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.

Features of Principles of Management

1. Principles of Management are Universal
a. Management principles are applicable to all kinds of organizations - business & non
business.
b. They are applicable to all levels of management.
c. Every organization must make best possible use by the use of management principles.
d. Therefore, they are universal or all pervasive.
2. Principles of Management are Flexible
a. Management principles are dynamic guidelines and not static rules.
b. There is sufficient room for managerial discretion i.e. they can be modified as per the
requirements of the situation.
c. Modification & improvement is a continuous phenomenon in case of principles of
management.
3. Principles of Management have a Cause & Effect Relationship
a. Principles of management indicate cause and effect relationship between related
variables.
b. They indicate what will be the consequence or result of certain actions. Therefore, if one
is known, the other can be traced.
4. Principles of Management - Aims at Influencing Human Behavior
a. Human behavior is complex and unpredictable.
b. Management principles are directed towards regulating human behavior so that people
can give their best to the organization.
c. Management is concerned with integrating efforts and harmonizing them towards a goal.
d. But in certain situations even these principles fail to understand human behavior.
 5. Principles of Management are of Equal Importance
a. All management principles are equally important.
b. No particular principle has greater importance than the other.
c. They are all required together for the achievement of organizational goals.

Importance of Management Principles

Following are the main importance of the Principles of Management.

1. Improves Understanding.
2. Direction for Training of Managers.
3. Role of Management.
4. Guide to Research in Management.

1. Improves Understanding - From the knowledge of principles managers get indication on how to
manage an organization. The principles enable managers to decide what should be done to
accomplish given tasks and to handle situations which may arise in management. These
principles make managers more efficient.
2. Direction for Training of Managers - Principles of management provide understanding of
management process what managers would do to accomplish what. Thus, these are helpful in
identifying the areas of management in which existing & future managers should be trained.
3. Role of Management - Management principles makes the role of managers concrete. Therefore
these principles act as ready reference to the managers to check whether their decisions are
appropriate. Besides these principles define managerial activities in practical terms. They tell
what a manager is expected to do in specific situation.
4. Guide to Research in Management - The body of management principles indicate lines along
which research should be undertaken to make management practical and more effective. The
principles guide managers in decision making and action. The researchers can examine whether
the guidelines are useful or not. Anything which makes management research more exact &
pointed will help improve management practice.

Scientific Management by Taylor

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of Scientific
Management’ started his career as an operator and rose to the position of chief engineer. He conducted
various experiments during this process which forms the basis of scientific management. It implies
application of scientific principles for studying & identifying management problems.

According to Taylor, “Scientific Management is an art of knowing exactly what you want your men to do
and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is analysed
scientifically it will be possible to find one best way to do it.

Hence scientific management is a thoughtful, organized, dual approach towards the job of management
against hit or miss or Rule of Thumb.

According to Drucker, “The cost of scientific management is the organized study of work, the analysis of
work into simplest element & systematic management of worker’s performance of each element”.

Principles of Scientific Management

1. Development of Science for each part of men’s job (replacement of rule of thumb)
 a. This principle suggests that work assigned to any employee should be observed,
analyzed with respect to each and every element and part and time involved in it.
b. This means replacement of odd rule of thumb by the use of method of enquiry,
investigation, data collection, analysis and framing of rules.
c. Under scientific management, decisions are made on the basis of facts and by the
application of scientific decisions.
2. Scientific Selection, Training & Development of Workers
a. There should be scientifically designed procedure for the selection of workers.
b. Physical, mental & other requirement should be specified for each and every job.
c. Workers should be selected & trained to make them fit for the job.
d. The management has to provide opportunities for development of workers having better
capabilities.
e. According to Taylor efforts should be made to develop each employee to his greatest
level and efficiency & prosperity.
3. Co-operation between Management & workers or Harmony not discord
a. Taylor believed in co-operation and not individualism.
b. It is only through co-operation that the goals of the enterprise can be achieved efficiently.
c. There should be no conflict between managers & workers.
d. Taylor believed that interest of employer & employees should be fully harmonized so as
to secure mutually understanding relations between them.
4. Division of Responsibility
a. This principle determines the concrete nature of roles to be played by different level of
managers & workers.
b. The management should assume the responsibility of planning the work whereas
workers should be concerned with execution of task.
c. Thus planning is to be separated from execution.
5. Mental Revolution
a. The workers and managers should have a complete change of outlook towards their
mutual relation and work effort.
b. It requires that management should create suitable working condition and solve all
problems scientifically.
c. Similarly workers should attend their jobs with utmost attention, devotion and carefulness.
They should not waste the resources of enterprise.
d. Handsome remuneration should be provided to workers to boost up their moral.
e. It will create a sense of belongingness among worker.
f. They will be disciplined, loyal and sincere in fulfilling the task assigned to them.
g. There will be more production and economical growth at a faster rate.
6. Maximum Prosperity for Employer & Employees
a. The aim of scientific management is to see maximum prosperity for employer and
employees.
b. It is important only when there is opportunity for each worker to attain his highest
efficiency.
c. Maximum output & optimum utilization of resources will bring higher profits for the
employer & better wages for the workers.
d. There should be maximum output in place of restricted output.
e. Both managers & workers should be paid handsomely.

Techniques of Scientific Management

a. It is a technique which enables the manager to ascertain standard time taken for performing a
specified job.
b. Every job or every part of it is studied in detail.
c. This technique is based on the study of an average worker having reasonable skill and ability.
d. Average worker is selected and assigned the job and then with the help of a stop watch, time is
ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determined through observations, experiment
and analysis by keeping in view an average worker.

Standard Time × Working Hours = Fair Day’s Work

f. Motion Study
a. In this study, movement of body and limbs required to perform a job are closely
observed.
b. In other words, it refers to the study of movement of an operator on machine involved in a
particular task.
c. The purpose of motion study is to eliminate useless motions and determine the bet way
of doing the job.
d. By undertaking motion study an attempt is made to know whether some elements of a job
can be eliminated combined or their sequence can be changed to achieve necessary
rhythm.
e. Motion study increases the efficiency and productivity of workers by cutting down all
wasteful motions.
g. Functional Foremanship

a. Taylor advocated functional foremanship for achieving ultimate specification.

b. This technique was developed to improve the quality of work as single supervisor may
not be an expert in all the aspects of the work.
c. Therefore workers are to be supervised by specialist foreman.
d. The scheme of functional foremanship is an extension of principle pf specialization at the
supervisory level.
e. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at
implementation level.
f. The names & function of these specialist foremen are: -
 Instruction card clerk concerned with tagging down of instructions according to
which workers are required to perform their job
 Time & cost clerk is concerned with setting a time table for doing a job &
specifying the material and labor cost involved in it.
 Route clerk determines the route through which raw materials has to be passed.
  Shop Disciplinarians are concerned with making rules and regulations to ensure
discipline in the organization.
 Gang boss makes the arrangement of workers, machines, tools, workers etc.
 Speed boss concerned with maintaining the speed and to remove delays in the
production process.
 Repair boss concerned with maintenance of machine, tools and equipments.
 Inspector is concerned with maintaining the quality of product.
h. Standardization
a. It implies the physical attitude of products should be such that it meets the requirements
& needs of customers.
b. Taylor advocated that tools & equipments as well as working conditions should be
standardized to achieve standard output from workers.
c. Standardization is a means of achieving economics of production.
d. It seems to ensure -
 The line of product is restricted to predetermined type, form, design, size, weight,
quality. Etc
 There is manufacture of identical parts and components.
 Quality & standards have been maintained.
 Standard of performance are established for workers at all levels.
i. Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker.
b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no. of pieces are paid
wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
d. This system is a source of incentive to workers who improving their efficiency in order to
get more wages.
e. It also encourages inefficient workers to improve their performance and achieve their
standards.
f. It leads to mass production which minimizes cost and maximizes profits.
j. Other Techniques
a. Various other techniques have been developed to create ordeal relationship between
management and workers and also to create better understanding on part of works.
b. Those includes use of instruction cards, strict rules & regulations, graphs, slides, charts
etc, so as to increase efficiency of workers.

Criticism of Scientific Management

Although it is accepted that the scientific management enables the management to put resources to its
best possible use and manner, yet it has not been spared of severe criticism.

Workers Viewpoint

1. Unemployment - Workers feel that management reduces employment opportunities from them
through replacement of men by machines and by increasing human productivity less workers are
needed to do work leading to chucking out from their jobs.
2. Exploitation - Workers feel they are exploited as they are not given due share in increasing
profits which is due to their increased productivity. Wages do not rise in proportion as rise in
production. Wage payment creates uncertainty & insecurity (beyond a standard output, there is
no increase in wage rate).
3. Monotony - Due to excessive specialization the workers are not able to take initiative on their
own. Their status is reduced to being mere cogs in wheel. Jobs become dull. Workers loose
interest in jobs and derive little pleasure from work.
 4. Weakening of Trade Union - To everything is fixed & predetermined by management. So it
leaves no room for trade unions to bargain as everything is standardized, standard output,
standard working conditions, standard time etc. This further weakens trade unions, creates a rift
between efficient & in efficient workers according to their wages.
5. Over speeding - the scientific management lays standard output, time so they have to rush up
and finish the work in time. These have adverse effect on health of workers. The workers speed
up to that standard output, so scientific management drives the workers to rush towards output
and finish work in standard time.

Employer’s Viewpoint

1. Expensive - Scientific management is a costly system and a huge investment is required in

establishment of planning dept., standardization, work study, training of workers. It may be
beyond reach of small firms. Heavy food investment leads to increase in overhead costs.
2. Time Consuming - Scientific management requires mental revision and complete reorganizing of
organization. A lot of time is required for work, study, standardization & specialization. During this
overhauling of organization, the work suffers.
3. Deterioration of Quality

Study of Fayol and Taylor

Both the persons have contributed to development of science of management. The contribution of these
two pioneers in the field of science of management has been reviewed as “The work of Taylor & Fayol
was, of course, especially complementary. They both realized that problem of personnel & its
management at all levels is the key to individual success. Both applied scientific method to this problem
that Taylor worked primarily from operative level, from bottom to upward, while Fayol concentrated on
managing director and work downwards, was merely a reflection of their very different careers”. They both
differ from each other in following aspects: -

1. Taylor looked at management from supervisory viewpoint & tried to improve efficiency at
operating level. He moved upwards while formulating theory. On the other hand, Fayol analyzed
management from level of top management downward. Thus, Fayol could afford a broader vision
than Taylor.
2. Taylor called his philosophy “Scientific Management” while Fayol described his approach as “A
general theory of administration”.
3. Main aim of Taylor - to improve labor productivity & to eliminate all type of waste through
standardization of work & tools. Fayol attempted to develop a universal theory of management
and stressed upon need for teaching the theory of management.
4. Taylor focused his attention on fact by management and his principles are applicable on shop
floor. But Fayol concentrated on function of managers and on general principles of management
wheel could be equally applied in all.

Similarity - Both emphasized mutual co-operation between employment and employees.

Spheres of Human Activity

Fayol’s theory is more widely applicable than that of Taylor, although Taylor’s philosophy has undergone
a big change Under influence of modern development, but Fayol’s principles of management have stood
the test of time and are still being accepted as the core of management theory.

Psychologists View Point

According to Psychologists, Taylor’s study had following drawbacks: -

 1. Ignores human factors - Considers them as machines. Ignores human requirements, want and
aspirations.
2. Separation of Planning and Doing.
3. Dissatisfaction - Comparing performance with others.
4. No best way - Scientific management does not give one best way for solving problems.

Basis Taylor Fayol

Human aspect Taylor disregards human elements Fayol pays due regards on human element.
and there is more stress on E.g. Principle of initiative, Espirit De’ Corps
improving men, materials and and Equity recognizes a need for human
methods relations

Status Father of scientific management Father of management principles

Efficiency & Stressed on efficiency Stressed on general administration

administration

Approach It has micro-approach because it is It has macro-approach and discuses general

restricted to factory only principles of management which are
applicable in every field of management.

Scope of These principles are restricted to These are applicable in all kinds of
principles production activities organization regarding their management
affairs

Achievement Scientific management Administrative management