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: -

On the basis of observation and analysis i.e. practical experience of managers.
By conducting experimental studies.

There are 14 Principles of Management described by Henri Fayol.

Division of Labor

Henry 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.

Party of Authority & Responsibility

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 behavior whereas responsibility without authority makes the person ineffective.

Principle of One Boss

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.

Unity of Direction

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 orders & instructions from only one boss.	It means one head, one plan for a group 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 subordinates.	It is necessary for sound organization.
Advantage	It avoids conflicts, confusion & chaos.	It avoids duplication of efforts and wastage of resources.
Result	It leads to better superior sub-ordinate relationship.	It leads to smooth running of the 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.

Equity

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”.

Order

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.

Discipline

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.

Initiative

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.

Fair Remuneration

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.

Stability of Tenure

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.

Scalar Chain

Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority to the lowest”.
Every orders, instructions, messages, requests, explanation etc. has 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

Sub-Ordination of Individual Interest to General Interest

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.

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

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.

Centralization & De-Centralization

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.

Henri Fayol's Principles of Management

Early Management Theory

Fayol's "14 principles" were first published in 1914, but are still relevant to today's managers.

Today's managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago?
Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building the foundations of modern management theory.

Background

Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining company in France. He eventually became the director, at a time when the mining company employed more than 1,000 people.
Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Essentially, these explained how managers should organize and interact with staff.
In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in the book "Administration Industrielle et Generale." Fayol also created a list of the six primary functions of management, which go hand in hand with the Principles.
Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of the most comprehensive. He's considered to be among the most influential contributors to the modern concept of management, even though people don't refer to "The 14 Principles" often today.
The theory falls under the Administrative Management school of thought (as opposed to the Scientific Management school, led by Fredrick Taylor).

Fayol's 14 Principles of Management

Fayol's principles are listed below:

Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
Unity of Command – Employees should have only one direct supervisor.
Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
Esprit de Corps – Organizations should strive to promote team spirit and unity.

Fayol's Six Functions of Management

Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows:

Forecasting.
Planning.
Organizing.
Commanding.
Coordinating.
Controlling.

Key Points

Henri Fayol's "14 Principles of Management" have been a significant influence on modern management theory. His practical list of principles helped early 20th century managers learn how to organize and interact with their employees in a productive way.
Although the 14 Principles aren't widely used today, they can still offer guidance for today's managers. Many of the principles are now considered to be common sense, but at the time they were revolutionary concepts for organizational management.

Management Principles developed by Henri Fayol:

DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.
AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.
DISCIPLINE: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.
UNITY OF COMMAND: Workers should receive orders from only one manager.
UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a common direction.
SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person should not take priority over the interests of the organization as a whole.
REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.
CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.
SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.
ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.
EQUITY: All employees should be treated as equally as possible.
STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.
INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.
ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among employees.

MANAGEMENT INNOVATIONS

DEFINE MANAGEMENT & ITS FUNCTIONS Wednesday, Dec 3 2008

All sectors and Education and For Entrepreneurs and For Large Corporates and Government & Not for Profit and SME Sector and Uncategorized controlling, definition, influencing, MANAGEMENT, modern management, organizing, planning managementinnovations 3:45 pm

Management is the process of reaching organizational goals by working with and through people and other organizational resources.
Management has the following 3 characteristics:

It is a process or series of continuing and related activities.
It involves and concentrates on reaching organizational goals.
It reaches these goals by working with and through people and other organizational resources.

MANAGEMENT FUNCTIONS:
The 4 basic management functions that make up the management process are described in the following sections:

PLANNING
ORGANIZING
INFLUENCING
CONTROLLING.

PLANNING: Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed.
Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term.
ORGANIZING:
Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action.
People within the organization are given work assignments that contribute to the company’s goals. Tasks are organized so that the output of each individual contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization.
INFLUENCING:
Influencing is also referred to as motivating,leading or directing.Influencing can be defined as guiding the activities of organization members in he direction that helps the organization move towards the fulfillment of the goals.
The purpose of influencing is to increase productivity. Human-oriented work situations usually generate higher levels of production over the long term than do task oriented work situations because people find the latter type distasteful.
CONTROLLING:
Controlling is the following roles played by the manager:

Gather information that measures performance
Compare present performance to pre established performance norms.
Determine the next action plan and modifications for meeting the desired performance parameters.

Controlling is an ongoing process.

Meaning of Management

According to Theo Heimann, management has three different meanings, viz.,

Management as a Noun : refers to a Group of Managers.
Management as a Process : refers to the Functions of Management i.e. Planning, Organising, Directing, Controlling, etc.
Management as a Discipline : refers to the Subject of Management.

Management is an individual or a group of individuals that accept responsibilities to run an organisation. They Plan, Organise, Direct and Control all the essential activities of the organisation. Management does not do the work themselves. They motivate others to do the work and co-ordinate (i.e. bring together) all the work for achieving the objectives of the organisation.
Management brings together all Six Ms i.e. Men and Women, Money, Machines, Materials, Methods and Markets. They use these resources for achieving the objectives of the organisation such as high sales, maximum profits, business expansion, etc.

Features of Management

Following image depicts fourteen important features of management.

The nature, main characteristics or features of management:

Continuous and never ending process.
Getting things done through people.
Result oriented science and art.
Multidisciplinary in nature.
A group and not an individual activity.
Follows established principles or rules.
Aided but not replaced by computers.
Situational in nature.
Need not be an ownership.
Both an art and science.
Management is all pervasive.
Management is intangible.
Uses a professional approach in work.
Dynamic in nature.

Now let's briefly discuss each feature of management.

1. Continuous and never ending process

Management is a Process. It includes four main functions, viz., Planning, Organising, Directing and Controlling. The manager has to Plan and Organise all the activities. He had to give proper Directions to his subordinates. He also has to Control all the activities. The manager has to perform these functions continuously. Therefore, management is a continuous and never ending process.

2. Getting things done through people

The managers do not do the work themselves. They get the work done through the workers. The workers should not be treated like slaves. They should not be tricked, threatened or forced to do the work. A favourable work environment should be created and maintained.

3. Result oriented science and art

Management is result oriented because it gives a lot of importance to "Results". Examples of Results like, increase in market share, increase in profits, etc. Management always wants to get the best results at all times.

4. Multidisciplinary in nature

Management has to get the work done through people. It has to manage people. This is a very difficult job because different people have different emotions, feelings, aspirations, etc. Similarly, the same person may have different emotions at different times. So, management is a very complex job. Therefore, management uses knowledge from many different subjects such as Economics, Information Technology, Psychology, Sociology, etc. Therefore, it is multidisciplinary in nature.

5. A group and not an individual activity

Management is not an individual activity. It is a group activity. It uses group (employees) efforts to achieve group (owners) objectives. It tries to satisfy the needs and wants of a group (consumers). Nowadays, importance is given to the team (group) and not to individuals.

6. Follows established principles or rules

Management follows established principles, such as division of work, discipline, unity of command, etc. These principles help to prevent and solve the problems in the organisation.

7. Aided but not replaced by computers

Now-a-days, all managers use computers. Computers help the managers to take accurate decisions. However, computers can only help management. Computers cannot replace management. This is because management takes the final responsibility. Thus Management is aided (helped) but not replaced by computers.

8. Situational in nature

Management makes plans, policies and decisions according to the situation. It changes its style according to the situation. It uses different plans, policies, decisions and styles for different situations.
The manager first studies the full present situation. Then he draws conclusions about the situation. Then he makes plans, decisions, etc., which are best for the present situation. This is called Situational Management.

9. Need not be an ownership

In small organisations, management and ownership are one and the same. However, in large organisations, management is separate from ownership. The managers are highly qualified professionals who are hired from outside. The owners are the shareholders of the company.

10. Both an art and science

Management is result-oriented. Therefore, it is an Art. Management conducts continuous research. Thus, it is also a Science.

11. Management is all pervasive

Management is necessary for running a business. It is also essential for running business, educational, charitable and religious institutions. Management is a must for all activities, and therefore, it is all pervasive.

12. Management is intangible

Management is intangible, i.e. it cannot be seen and touched, but it can be felt and realised by its results. The success or failure of management can be judged only by its results. If there is good discipline, good productivity, good profits, etc., then the management is successful and vice-versa.

13. Uses a professional approach in work

Managers use a professional approach for getting the work done from their subordinates. They delegate (i.e. give) authority to their subordinates. They ask their subordinates to give suggestions for improving their work. They also encourage subordinates to take the initiative. Initiative means to do the right thing at the right time without being guided or helped by the superior.

14. Dynamic in nature

Management is dynamic in nature. That is, management is creative and innovative. An organisation will survive and succeed only if it is dynamic. It must continuously bring in new and creative ideas, new products, new product features, new ads, new marketing techniques, etc.
what is management?

What is management? Management is like investment: its goal is to get the most out of resources, add the most value or get the best return. Management can be defined as: achieving goals in a way that makes the best use of all resources.
This definition covers self-management as well as managing people, being a manager. Whenever you prioritize, you are managing your time. You manage yourself and all other resources at your disposal in order to do a good job.
Leadership, by contrast, is about influencing people to change direction. When senior executives decide to change direction, this is seen as leadership. But because it is a decision, it is a management act - not leadership. Decisions flow from authority, leadership is an act of influence. Leadership is an attempt to influence followers. It's never a decision of any sort. All decisions made by executives are managerial actions.
This is not the conventional view of leadership and management but, if leadership is an influence process, one implication is that there can be no such thing as autocratic leadership. Decisions can be made autocratically, but deciding for people is not a type of influence so it shouldn't be classed as leadership.

The Meaning of Management

We need to understand the meaning of management in order to know what management skills to develop. Think of what is means to be an investor - someone with money to invest and wanting the best return. Such a person shifts his or her money around regularly to improve return.
Similarly, managers have resources at their disposal to invest - people, material and a budget, in addition to their own time and energy. Smart managers think carefully on a regular basis about how to get the best return on these resources. When managing people, it is not just a matter of having the right employee in the right place at the right time, it is also about developing and improving that resource.
Effective managers are catalysts, brokers, facilitators, coaches and people developers. Because thinking is the most important work we do today, managers need to ask stimulating questions to draw new solutions out of people, to get mental work done through them. This makes managers faciltators more than decision makers as they were thought of in the old days.
Certainly they still make decisions, but ineffective managers do too much of their own thinking, hence not reaping the fullest possible return of all resources at their disposal. They are poor investors as a result.
Effective managers know that delegation is not enough in today's knowledge driven world to get work done through people. This is because most of the critical work we do today is to make decisions, solve problems and think creatively. This is mental work. Smart managers get this kind of work done through people by asking them the sorts of questions that stimulate people to think, to draw solutions out of people.
Ineffective managers may delegate a lot but this is so they can be free to do most of their own thinking and problem solving. They fail to work with and through people when it comes to this mental work. Skilled managers know how to get the best out of people by asking them the right questions - those that make them think differently, not simply fact-gathering questions.
Management needs to be upgraded for the 21st century. It needs to cast off its negative image as mechanistic, controlling and task oriented. We need a concept of management that makes it nurturing, supportive, coaching and developmental. This is essential to divide the load between leadership and management more equally.

What's the difference between managers and leaders?

This question, as asked, is a problem because it focuses on people in roles. This is normally how we think about them but there is a better way. We need to recognize that all employees can both lead and manage. For example, whenever you set priorities, you are managing your time.
Whenever you set an example by working harder or smarter and others follow your example, you have shown leadership. Similarly, when you convince your boss to think differently, you show leadership bottom-up. Thus management and leadership are functions, which are like tools because anyone can use them.
Writing, analyzing, knitting, cooking are also process tools that everyone can use. Managers use the same management tools and processes used by front-line employees; they just have more resources to manage.
Leadership works through influence, while management works through decisions and facilitation. Leadership must be restricted to selling the tickets to the journey. It can't take followers to the destination. Why? Because this is the only way to account for a number of otherwise odd kinds of leadership such as leading by example, green leadership and bottom-up leadership.
Take green leadership for instance. If a green leader promotes green policies in Norway and is followed by an organization in India, then leadership is not a two-way relationship between leader and follower and leadership stops once the target audience buys the proposal. This is important if we want to explain how leadership can be shown bottom-up.
All the old clichés about management are wrong, on this view. Our negative attitude toward management arose following the success of Japanese business in the West. This led to a great hue and cry to replace managers with leaders. Management has had a bad name ever since, totally undeserved.

Management's bad name

Everyone has wanted to be a leader, not a manager, ever since the early 1980's. Japanese business success at that time drove Western managers and gurus to proclaim an end to management. They wanted to banish managers and replace them with leaders. This was an emotional overreaction. Instead, we should have upgraded management. The views expressed on this website, Leadersdirect, are not in line with conventional thinking which has little that is very positive to say about the role of manager. It is because of this historical baggage that you hear people say that managers are only interested in the present, preserving the status quo, keeping things ticking over and that they are controlling or bureaucratic.
This is really nonsense. If we define management simply as the aim to get the best return out of all resources, then any style that works is compatible with this definition. Enlightened managers can be people-oriented and good at fostering innovation. They can SHOW leadership by promoting better ways of working and by setting an inspiring example.

What is management today?

We can't live without good management. Nothing would get done without it. On a personal level, how could you make best use of your time and your life if you didn't set priorities and invest your time wisely?
Similarly, the world is so complex that nothing is possible without the coordination of large numbers of people. This takes good management. Management today, is about facilitation, enabling others to act, being a catalyst and coach.

Wednesday, September 11, 2013

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