Principle and Practices of MANAGEMENT

2. It applies to Managers at all organisational level.

3. The aim of all Managers is the same: To Create Surplus.

4. Managing is concerned with productivity

5. Productivity implies effectiveness and efficiency.

6. Effectiveness is the achievement of objectives

8. Manager’s contribution to the organisation is indirect.

10. Plan

11. Organize

12. Command

13. Coordinate

16. -Machines

17. -Materials

19. Figurehead: - Manager performs duties of a ceremonial nature like talking to an important customer.

20. Leader: - Motivates his employees and reconciles their needs and aspirations with organisational goals.

21. Liaison: - Cultivates contact outside vertical chain of command to collect information relevant to the organisation.

22. Informational roles -

23. Monitor: - This is continuous scanning of environment for information. This can be through personal contact or through subordinates or may be unsolicited information.

24. Disseminator: - Passing of information to subordinates in order to achieve goal of the organization.

25. Spokesman: - Relevant information is passed to various groups and people who influences the organization, they are – shareholders, government or any other organization including press.

26. Decisional role:-

27. Entrepreneur: - Look out for new ideas improves organization continually by adapting it to changing external environment.

28. Disturbance handler: - He is a fire fighter, finds solution for unanticipated problems. (i.e. strike, bankruptcy of major customer etc.).

29. Resource allocator: - Delegation of authority and allocation of resources.

32. Operational Management Theory

33. Behavioral Science

34. Sociological Approach

36. His famous work published in 1911 “Principles of Scientific Management”.

37. His primary concern:

38. Increase productivity through greater efficiency

39. Increased pay for workers through scientific method

40. As chief engineer of Midvale steel co. in Philadelphia he applied

41. Time and motion studies to determine fair day’s work and best way of doing a given job.

42. Pay plans based on output in an attempt to increase productivity.

43. Pay the workers according to productivity.

44. Performance incentives

45. He also believed that worker should be carefully selected and trained, right man should be for the right job. Also believed in harmony between worker, manager and the owner.

47. Obtaining harmony in work group rather than discord.

48. Achieving cooperation of individual, rather than chaotic individualism.

49. Working for maximum output, rather than restricted output.

51. These principles provide modern-day managers with general guidelines on how a supervisor should organize his department and manage his staff.

53. Financial

54. Security

55. Accounting

56. Managerial

58. Division of work and specialization produces more and better work with the same effort.

59. Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby he can be more productive.

60. Fayol applies the principle to all kinds of work, managerial as well as technical.

61. Authority and Responsibility

62. Authority is the right to give orders and the power to exact obedience. A manager has official authority because of her position, as well as personal authority based on individual personality, intelligence, and experience. Authority creates responsibility.

63. It is the right to issue commands, along with which must go the balanced responsibility for its function.

64. Discipline

65. Obedience and respect within an organization are absolutely essential. Good discipline requires managers to apply sanctions whenever violations become apparent.

66. Employees must obey, but this is two-sided: employees will only obey orders if management plays their part by providing good leadership.

67. Unity of Command

68. An employee should receive orders from only one superior.

69. Each worker should have only one boss with no other conflicting lines of command

70. Unity of Direction

71. Organizational activities must have one central authority and one plan of action.

72. People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise. Unity of command does not exist without unity of direction but does not necessarily flows from it.

73. Fayol did not in any sense mean that all decisions should be made at the top.

74. Subordination of Individual Interest to General Interest

75. The interests of one employee or group of employees are subordinate to the interests and goals of the organization.

76. Management must see that the goals of the firms are always paramount.

77. This is self explanatory; when two are found to differ management must reconcile them.

78. Remuneration of Personnel

79. Salaries - the price of services rendered by employees - should be fair and provide satisfaction both to the employee and employer.

80. Payment is an important motivator although by analyzing a number of possibilities, Fayol points out that there is no such thing as a perfect system.

81. Centralization

82. The objective of centralization is the best utilization of personnel. The degree of centralization varies according to the dynamics of each organization.

83. In this Fayol refers to the extent to which authority is concentrated or dispersed.

84. Scalar Chain

85. A chain of authority exists from the highest organizational authority to the lowest ranks.

86. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organization.

87. Fayol thinks of this as a “chain of superiors” from the highest to the lowest ranks, which while not to be departed from needlessly, should be short-circuited when to follow it scrupulously would be detrimental.

88. Order

89. Organizational order for materials and personnel is essential. The right materials and the right employees are necessary for each organizational function and activity.

90. Fayol follows the simple adage of “a place for everything [everyone], and everything [everyone] in its [his or her] place.” this is essentially a principle of organisation in the arrangement of things and people.

91. Equity

92. In organizations, equity is a combination of kindliness and justice. Both equity and equality of treatment should be considered when dealing with employees.

93. Loyalty and devotion should be elicited from personnel by a combination of kindliness and justice on the part of managers when dealing with subordinates.

94. . Stability of Tenure of Personnel

95. To attain the maximum productivity of personnel, a stable work force is needed.

96. Employees work better if job security and career progress are assured to them. An insecure tenure and a high rate of employee turnover will affect the organization adversely.

97. Finding unnecessary turnover to be both the cause and effect of the bad management, Fayol points out its dangers and costs.

98. Initiative

99. Thinking out a plan and ensuring its success is an extremely strong motivator. Zeal, energy, and initiative are desired at all levels of the organizational ladder.

100. Allowing all personnel to show their initiative in some way is a source of strength for the organization.

101. It may well involve a sacrifice of ‘personal vanity’ on the part of many managers.

102. Esprit de Corps

103. Teamwork is fundamentally important to an organization. Work teams and extensive face-to-face verbal communication encourages teamwork.

104. Management must foster the morale of its employees. He further suggests that: “real talent is needed to coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s merit without arousing possible jealousies and disturbing harmonious relations.”

106. Emile Durkheim

108. Strategy is way of doing something.

109. Originated from Greek term Strategia – means art or science of being a general

110. Effective generals had to plan and act. And therefore strategy is plan of action.

112. Systems

113. Style

114. Staff

115. Skills

116. Strategy

118. Top manager to determine what he/she perceives to be purpose, mission and goal of enterprise.

119. These goals need to be set for any period – a quarter, a year or 5 years or whatever is felt appropriate.

120. Objectives are desired to be coincided with the annual budget.

121. Certain goals to be set for shorter period and others for much longer period.

122. These goal are preliminary and based on analysis and judgment.

123. Goals set are in accordance with company’s strength and weaknesses in light of available opportunities and threats.

124. These goals are tentative and subject to modification while the entire chain of verifiable objectives are worked out by subordinates.

125. Objectives are not to be forced on subordinates as it may not give rise to sense of commitment.

126. Clarifying organisational roles

127. There should be maintenance of relationship between expected results and responsibility for attaining them.

128. Each goal and sub goal should be one particular person’s clear responsibility.

129. Specific parts of each coordinating manager’s contribution to the program should be clearly identified.

130. Setting subordinate’s objective

131. Inform subordinate managers pertinent general objectives, strategies and plan.

132. Superior now proceeds to work with subordinates in setting their objectives.

133. Superior asks what goal the subordinates believe they can accomplish and in what period, with what resources.

134. Preliminary thoughts and discussions about the feasibility goals are done.

135. Superiors must be a patient counselors and help subordinate develop consistent and supportive objectives and being careful not to set goals that are not attainable as this may weaken the entire program of MBO.

136. Superior must listen to and work with their subordinates, and also take responsibility for approving subordinates goals.

137. All managers at all level need capital, material and human resources in order to accomplish their goals. Careful setting up a network of verifiable goal shall help in allocating these resources economically.

138. Recycling objectives

139. Objectives cannot be set by setting at the top and dividing them among subordinates. It also cannot be started from the bottom. And therefore a degree of recycling is required.

140. Setting objectives thus should be interactive one and a joint process.

142. Individual/group cannot expect to perform effectively and efficiently without clear aim.

144. It should cover main feature of the job.

145. Objective must be verifiable

146. Quality desired and the projected cost should be indicated.

147. Objective should present a challenge.

148. Objective should indicate priorities.

150. Clarification of organisation – it clarifies organisational role and structures. It helps in identifying deficiencies in the organisation.

151. Encouragement of personal commitment – it encourages people to commit themselves to their goals. People become enthusiastic when they control their own fate.

153. Failure to give guidelines to goal setters – if corporate goals are vague unreal or inconsistent, it will be virtually impossible for managers to tune in with them.

154. Difficulty of setting goals – truly verifiable is difficult to set. Excessive concern for economic results puts pressure on individual that may encourage questionable behavior.

155. Emphasis on short run goals – there is a danger of emphasizing short run goals at the expense of the long range, all short run plans must be designed to serve longer range goals.

156. Danger of inflexibility – hesitation to change objectives when the objective is obsolete by revised corporate objectives or modified policies.

158. Its primacy among the manager’s tasks

159. Its Pervasiveness

161. A plan may enhance the attainment of objectives, but at an unnecessarily high cost.

163. Objective Or Goals

164. Strategies

165. Policies

166. Procedures

167. Rules

168. Programs

170. Establishing Objectives

171. Developing Premises

172. Determining Alternative Courses

173. Evaluating Alternative Courses

174. Selecting a Course

175. Formulating Derivative Plans

177. Points out need for future change

178. Answers “WHAT IF” question

179. Provides a basic control

180. Encourage achievement

181. Compels visualization of entirety

183. Planning costs too much

184. Planning has psychological barriers

185. Planning stifles initiative

186. Planning delays action

188. Identifying alternatives

189. Evaluating alternatives

191. The decision maker must have the clear understanding of alternative courses by which a goal can be reached under existing circumstances and limitations.

192. They must have information and ability to analyse and evaluate alternatives in the light of the goal sought.

194. A limiting factor is something that stands in the way of accomplishing a desired objective. Recognizing the limiting factors in a given situation makes it possible to narrow the search for alternatives to those that will overcome the limiting factors.

195. Principle of the limiting factor –

197. Quantitative factors that can be measured in numerical terms, such as time or operating cost.

198. Qualitative or intangible factors that are difficult to measure numerically such as political situation, labour problems etc.

199. Marginal analysis

200. It compares additional revenues arising from additional costs. It can be used for comparing factors other than revenues – best output of a machine.

201. Cost effective analysis

203. Experimentation – an obvious way to decide among alternatives is to try one of them and see what happens.

205. The grouping of activities necessary to attain the objectives

206. The assignment of each grouping to a manager with a responsibility to supervise it

208. Its value goals and tasks are predominantly oriented towards productivity, efficiency, growth and so on

209. It is well defined in shape. Majority of formal organizations are pyramid shaped. Ranks of individuals are made clear by the use of titles. Communication is simple. One can easily chart all relationships

210. There is a prescribed, mostly written system of rewards or punishment.

212. Its values, goals and tasks predominantly center on individual and group satisfaction, esteem, affiliation etc.

213. It is shapeless. There are number of multidirectional, intricate relationships which cannot be easily charted

214. There is an unwritten system of reward and punishment

216. Close control

218. Many levels of management

219. High cost due to many levels

221. Clear policies must be made

223. Danger of superior’s loss of control

225. Good for process require a continuing cycle

226. Extensive use of machinery

228. Fatigue factor prevails

229. Difficulty in coordination and control

230. Payment of overtime may increase cost

232. Maintains power and prestige of major functions

233. Follows principles of occupational specialization

234. Simplifies training

236. Overspecialises narrows viewpoints of key personnel

237. Reduces coordination between functions

238. Responsibility for profits at top only

239. Slow adaptation to changes in environment

241. Place emphasis on local market and problems

242. Improve coordination in a region

243. Takes advantage of economies of local operations

244. Better face to face communication with local interests

246. Tends to make maintenance of economical central services and may require service such as HR or purchase at the regional level

248. Gives customer feeling that they have an understanding supplier

250. Requires managers and staff experts in customers’ problems

252. Uses specialised technology

253. Utilises special skills

255. Responsibility for profit is at top

257. Facilitates use of specialised capital, facilities, skills, and knowledge

258. Permits growth and diversity of the products and services

259. Improves coordination of functional activities

260. Place responsibility for profits at divisional level

262. Tends to make maintenance of economical central services difficult

264. Continuous training activity in which subordinates are instructed to carry out the particular assignment in the existing situation.

265. Motivation of subordinates to try to meet the expectations of the manager.

267. Direction as a managerial function is the interpersonal aspect of management processes by which organisational members are led to understand and contribute effectively and efficiently to accomplish organisational objectives.

268. Direction is an important function of management. A good plan must have been chalked out, a sound organisation may have been evolved and a sound team of personnel may have been employed, but all these will be ineffective unless there is proper direction of the people in the use of planning and organizing.

269. Continuous activity

270. Direction is a continuous activity. It does not stop as long as the execution of plan is in process. A manager who issues an order and thinks his function is complete is committing a very serious error. He is supposed to continuously supervise the execution of his orders or instruments. He also has to lead and motivate his subordinates.

271. Pervasive function

272. Like all other functions of management, direction, is also performed by the managers, at all levels in the organisation.

273. Communication

274. Acceptance of order is essential if it is carried out effectively. Managers may elicit two types of behaviors from his subordinates when they issue orders.

275. Linear Behavior: It is obtained when there is a one way transmission of orders from superior to subordinates.

277. It is the directing function which involves determining the course, giving orders and instructions providing the dynamic leadership.

278. Initiation of action

279. Direction actuates action, an organisation may make good plans but nothing moves unless directed into operation.

280. Helps in achieving objectives

281. By directing a manager can utilize skills of the people and their time and energy to achieve the objectives of the organisation.

282. Helps to execute decision

283. Policies and procedures of an organisation are executed through the direction of the management.

284. Irreplaceable task

285. Direction in business is similar to strategy in war, despite presence of computers; robots etc. guidance to the people cannot be eliminated.

286. Helps utilize capabilities

287. Direction helps to explore talents of individuals and get maximum out of them.

288. Crucial to success of organisation

290. It facilitates change in the organisation

291. It ensures stability and balance in the organisation

292. It is helpful in securing employee’s cooperation

294. Principle of harmony objective: Effective direction should facilitate integration of individual and organisational goals.

295. Principle of effective leadership: It requires that manager should adopt an appropriate style of leadership.

296. Principle of effective communication: Ensure effective communications.

297. Principle of unity of command: Subordinate get order from one boss.

298. Principle of individual contribution: Direction should be such that enable the subordinates to contribute their best.

299. Principle of human relations: Manager’s success in directing depends upon healthy human relations climate.

300. Principles of participation: Managers should invite ideas and suggestions from their subordinates.

301. Principle of direct supervision: direction supervision improves loyalty and morale of employees.

303. Standards, by definition are criteria of performance. They are the selected points in an entire planning programme at which measures of performance are made so that managers can receive information about how things are going and thus do not have to watch every step in the execution of plan.

304. Measuring performance against standard and ascertain the difference

305. Measurement is the determination of the quantity or capacity of a well-defined entity. Means of measuring performance and obtaining data are given below:

306. Personal observation

307. Oral reports

308. Written reports

309. Correcting variations from standards and plans

311. External coordination

312. Vertical coordination

314. Hard Boiled Autocrat

315. Benevolent Autocrat

316. Manipulative Autocrat

317. Participative

318. Laissez-faire or Free rein

319. Paternalistic

320. Bureaucratic style