Sunday 20 May 2012

Chapter 2

PRINCIPLES OF MANAGEMENT



NATURE /FEATURES OF MANAGEMENT PRINCIPLES
a.Universal application: Management principles can be applied to all types of organisation irrespective of their size and nature.

b.General guidelines: Management principles give the guidelines to solve the problems and managers must consider the size and nature of the organisation before applying management principles.

c.Formed by practice and experiments: Management principles are developed through the past experience and research work .They are not developed overnight and they are not the personal feelings of any person.

d.Flexibility: They are flexible i.e. it can be modified according to the changing environment.

e.Behavioural in nature: Management principles are formed to guide and influence the behaviour of employees. They insist on improving the relationship between superior and subordinates.

f.Based on cause and effect relationship: Management principles are based on cause and effect relationship that means these principles tell us what might be the effect if a particular principle is applied in a situation.

SIGNIFICANCE/IMPORTANCE OF MANAGEMENT PRINCIPLES

1.Optimum utilisation of resources: Management principles are designed to get maximum benefits   from the human efforts and other resources.

2.Scientific decision: Management principles enable the managers to approach various problems systematically and scientifically.

3.Meeting the changing environment: These principles helps the managers in implementing the changes in the right direction and at the right level in the organisation.

4.Effective administration: They act as guidelines and base to form various policies and the make administration more effective by discouraging personal biases.

5.Fulfilling social responsibility: Management principles not only act as guidelines for achieving organisational goal but also guides the managers to perform social responsibilities.


PRINCIPLES OF MANAGEMENT DEVELPOED BY HENRY FAYOL 


1.Principle of Division of work :According to this Principle the entire work must be divided into small unit according to the eligibility and knowledge which will bring efficiency and effectiveness                       

2.Principle of Authority and Responsibility: According to this principle there must be proper balance between authority and responsibility in an organization .If not then it will lead to negative result.

3.Principle of Discipline    : There must be some rules and regulations in the organization and the employee must follow those rules and regulations .This will result in systematic working environment.

4.Principle of unity of Command  : According to this an employee should receive order from one boss because if he receiving orders from more than one boss then he will get confused and not be able to understand that whose orders must be executed first.   

5.Unity of Direction      : According to this efforts of all the members should be directed towards one direction that is this achievement of organisational goal.

6.Subordination of individual interest to general interest: According to this principle the interest of the group must supersede that of individual .This can be achieved when managers set an example through their exemplary behavior.

7.Principle of remuneration of person  : According to this principle employees should get fair  remuneration for their performance .Apart from general remuneration they should be given monetary and non-monetary incentives which will motivate the employees to give their maximum efforts.

8.Principle of Centralisation and  Decentralisation :According to this an organization should follow the combination of both i.e. centralization and decentralization

9.Principle of Scalar Chain  : According to this an organization should follow a proper line of authority and Fayol insist that this line or chain must be followed.

10.Principle of Order : This principle indicates that there should be a proper arrangement of men material in a fixed place for everyone in the organization.
11.Principle of Equity: According to this principle all the members should be given equal importance. The policy of individualism should not be followed in an organization.

12.Stability of tenure of employees :According  to this principle management must provide the feeling of job security among the employees because with the feeling of insecurity of job ,the employees cannot contribute their maximum.

13.Principle of initiative :According to this principle employees must be given an opportunity to take some initiative in making and executing a plan . It gives immense satisfaction to employees.

14.Principle of Esprit de Crops :




TECHNIQUES OF SCIENTIFIC MANAGEMENT DEVELOPED BY F.W.TAYLOR
1.Motion study : This technique is applied to determine the unnecessary movements involved in doing a work. With the help of movie camera this technique is done.

2.Time study : It is applied to determine the standard time required to do a job, no of worker required to perform a job . And with the help of stopwatch this technique is conducted .

3.Method study : This technique is conducted to identify the best method of doing a particular work without effecting quality.

4.Fatigue study : It is applied to determine the frequency and duration of rest while an employee doing a work.

5.Mental revaluation : It is conducted to change the attitude of  management and employees towards each other.

6.Differential piece wage system :   This technique emphasizes  on paying different rate of wage for efficient and non efficient workers.


DISSIMILARITIES OF H.FAYOL AND F.W.TAYLOR’S PRINCIPLES


POINT OF DIFFERENCE
TAYLOR
FAYOL
Concern
Taylor's technique and principles are concerned with workers efficiency
Fayol’s principles concerned with management efficiency.
Level
Taylor started his studies from lower level
Fayol started his studies from top level.
Emphasis
Taylor emphasis on standardization of work.
Fayol emphasis on functions of managers
Focus
Taylor laid focuses on eliminating wasteful movements.
Fayol laid focuses on development of principles for better management.
Contribution
Main contribution was development of scientific technique and scientific principles.
Main contribution was development of fourteen principles of general management
Applicability
Applied to specialized situation
Applied universally.




SIMILARITIES OF TAYLOR AND FAYOL’S PRINCIPLES
1.Their main aim is  maximising the efficiency
2.Both insist on co-operation between employees and employers.
3.Both suggested on division of work
4.Both give more importance to organisational interest over individual interest. 


IMPORTANT QUESTIONS AND ANSWERS
Q.1. State the two methods through which management principles have been derived.
Ans: a) Observation method b) Experimental method

Q.2. What is the objective of fatigue study?
Ans: To find out the number of rest intervals and the frequency of rest intervals.

Q.3. “The Principles of management are different from those used in pure science “. Comment.
Ans: The Principles of Management differ from those used in pure science as they are not rigid like principles of pure science since, they deal with human behavior which is Unpredictable.
Q.4. Who Suggested the concept of functional foremanship?
Ans: F.W.Taylor.

Q.5. Rohit keeps machines ,materials, tools etc, ready for operations by concerned workers’. Whose work is described by this sentence under functional foremanship?
Ans: Gang Boss
Q.6. What is meant by flexibility of principles of management?
Ans: The principles of management are not rigid. They can be modified by the
manager when the situation so demands.

Q.7. What is the latest development in scientific management?
Ans: Lean Manufacturing.

Q.8. Which principle of management ensures fairness to all employees by treating them as fairly as possible?
Ans: Principle of equity.

Q.9. What is mental revolution?
Ans: Change in attitude of management & workers towards each other.

Q.10 A subordinate receives order from more than one loss’ . Which principle in violated?
Ans: Unity of command.

Q.11. Name the founder of gender theory of management?
Ans: Henry Fayol.

Q.12. According to Taylor “ even a small production activity like loading pigs of iron into boxcars can be scientifically planned and managed “ which principle of his is emphasized here?
Ans: Science not rule of thumb

Q.13. “The true intentions of management and workers are one and the same
and the prosperity of the one cannot exist without the prosperity of the other” which principle of Taylor is being talked about.
Ans: Harmony not discord.

Q.14. What type of organizational objective is satisfied if an organization
provides salary to the workers commensurate with their job?
Ans: Personal objective

Q.15. the production manager of a company is trying to produce good with minimum cost. Name the concept which is being focused by management.
Ans: Efficiency

Q.16 Hina & Hitesh are typists in a company having the same educational qualification. Hina is getting Rs3000 per month ,Hitesh is getting Rs 4000 per month as salary for the same work hours .Which principle of management is violated in this case? Name the principle $ explain it.
Ans In this case the ‘Principle of Equity’ is violated .As both are having same
qualification working at same authority level but getting different salaries

Q.17. Explain giving reasons under which situations technique of Taylor are not applicable .
Ans- Some technique of Taylor are not universally applicable under some
situations. These are:-
(a)Functional Foremanship- This technique is not applicable in the organizations adopting principle of unity of command.
b) Differential piece rate system: This technique is not possible in organization following principle of equity.
c) Simplification: This technique is not suitable for organizations having objective of diversification and expansion of line of products and varieties develop a differential piece rate plan for a shirt manufacturing company

Q.18. Mohan a manager does not distribute the work among his subordinates either according to the capability or proportionately which principal of management is overlooked . what can be the consequences?
Ans The principal overlooked is the principal of division of work
Following can be the consequences
1. lack of efficiency and effectiveness
2. lack of specialization



NATURE AND SIGNIFICANCE OF MANAGEMENT




Unit -1
NATURE AND SIGNIFICANCE OF MANAGEMENT
Meaning of Management : Management is an art of getting things done through others.
FEATURES OF MANAGEMENT :
     1.Management is goal oriented : Management is goal oriented i.e. it helps in achieving organizational goal and different functions of management helps the managers in achieving the goal.
           
           2.Management is Pervasive : Management is pervasive i.e. it is applicable to all types of Organization whether profit making or non-profit making organization

3.Management is Continuous process : All the functions of management i.e. planning,organizing,staffing,directing and controlling are performed all the times.

4.Management is Dynamic function :Management is dynamic i.e. It tend to change according to the changes taking place in the environment

5.Intangible : Management is intangible i.e. it can’t be seen but it can be felt.

6.Balancing effectiveness and efficiency : Management always try to balance effectiveness and efficiency so that the work can be done successfully .

OBJECTIVES OF MANAGEMENT :




1.Management helps in achieving group goal : Through planning ,organizing ,staffing ,directing and controlling management directs the efforts of all individual who are working in the organization towards the achievement of organizational goal.
2.Management improves efficiency : Through the different functions management try to reduce the cost and improves the productivity with minimum wastage of resources.
3.Management creates dynamic organization: Management helps the organization to face the changes that are taking place in the environment.
4.Management brings harmony in work : By giving directions managers bring uniformity and harmony in the actions of employees.


Management Is an Art Or Science :
            Management is both art as well as Science. It is art because it requires skill, creativity and practice to do the work and it is Science because it has systematic and well organized body of knowledge.


LEVELS OF MANAGEMENT :


FUNCTIONS OF TOP LEVEL MANAGEMENT.
            1.They determine the objectives i.e. what is to be done.
            2.They frame the plans and policies to achieve the goal.
            3.They remain in contact with Govt. competitors, suppliers, media etc.
         4.They arrange all the finance required to carry on day to day operations. They buys the fixed assets.

FUNCTIONS OF MIDDLE LEVEL MANAGEMENT:
1.Interpretation of policy framed by top level management: They communicates the plans and policies framed by the top level to the lower level management.
2.Organising all the resources: They organize all the resources and the activities of their department.
3.Motivating the employees: Through the incentives they motivates the employees so that they can perform their level best.
4.Controlling and monitoring the performance of employees: They controls the activities of lower level and they prepares their performance appraisal report.

FUNCTIONS OF LOWER LEVEL MANAGEMENT:
1.Representing the problems: They present the problems to the middle level as middle level management linked with top level management.
2.Looking to the safety of workers: They provide safe and secure work environment for workers.
3.Helping the middle level in recruiting the workers: They guide and help the lower level management when they select and appoint employees.
4.Boosting the Morale: They are responsible for boosting the morale of workers and developing team spirit.


FUNCTIONS OF MANAGEMENT
1.Planning: Planning is a process of thinking in advance what is to be done, where it is to be done and how it is to be done.

2.Organising: After determining the next function is grouping of different resources and bringing together for the achievement of the organizational goal.

3.Staffing: The next function is the identification and selection of eligible employees for the accomplishment of organizational goal.

4.Directing: Directing function of management is concerned with instructing, guiding and inspiring and motivating the employees so that their efforts result in achievement of organisatioal goal.
5.Controlling : Controlling is a process which involves comparison  of actual performance with the standard.




IMPORTANT QUESTIONS AND ANSWERS
Q.1. The Activties involved in managing an enterprise are common to all
organizations whether economic, social or political. Which characteristics of management is highlighted by this statement?
Ans: Management is pervasive

Q.2. Policy formation is the function of which level of management?
Ans: Top Level

Q.3. In order to be successful an organization must change its goals according
to the need of the environment. Which characteristic of management in highlighted in the statement?
Ans: Management is dynamic function.

Q.4. To meet the objectives of the firm the management of Angora Ltd. Offer
employment to physically challenged persons. Identity the organizational objective it is trying to achieve.
Ans: Social objective

Q.5. Management of any organization strives to attain different objectives Enumerate any two such objectives?
Ans: a) Profit b) Survival.

Q.6. Who are considered as Operative managers?
Ans: Supervisors and Foremen.

Q.7. “Management is considered to be a three-tier machinery”. Why?
Ans: Because of three levels in the management hierarchy-Top, Middle &
Lower.

Q.8. Name the process by which a manager synchronizes the activities of different departments.
Ans: Coordination.

Q.9. How is entry to a profession restricted?
Ans: The entry to a profession is restricted through an examination or through acquiring an educational degree.

Q.10. State any two points which prove that management is multi - dimensional?
Ans: a) Management of work b) Management of people.

Q.11. An achievement of which organisational objectives results in “an increase in sales volume, increase in number of employees, no of products, and increase in capital investment’
Ans: objective of growth



Q.12 management is based on personalized application of knowledge and varies from person to person” which nature of management is signified
by it?           

Ans: management is an art

Q.13 the authority responsibility relationship that binds individuals as superiors and subordinates in an organization, gives rise to what?
Ans: levels of management.

Q.14 If an organization derives more benefits even after using less resource it’s a result of what?
Ans: efficiency

Q.15. A company target production is 5000 units in a year, to achieve this target the manager has to operate in double shifts due to power failure. The manager is able to meet the target but at a higher production cost. Is the manager efficient or effective?
Ans He is effective but not efficient

Q.16 “Managers in India do the same work as managers in USA or JAPAN or
Germany” which characteristic of management is highlighted by it?
Ans: Management is all pervasive
Q.17 “A collection of diverse individuals with different needs but working
towards fulfilling the common organizational goals” this statement highlights which characteristic of management?
Ans: management is a group activity

Q.18 Discrepancies between actual and realized activities are taken care at which stage?
Ans: Controlling

Q.19 ABC ltd. is facing a lot of problem these days. The company’s profit margin is declining day-by-day. The production manager is blaming marketing management whereas marketing is blaming production department for not maintaining the quality. Finance department is blaming both. What quality of management do you think is lacking.
Explain it briefly.
Ans: The quality which is lacking in the above case is “co-ordination”. The manager is able to execute all the function but he is unable to co-ordinate these function of manager. Coordination is the essence of management.


Q.20. Rajat’s father was working as a foreman in a textile factory at what level of management is he working explain in brief his functions?
Ans: he is working at operational level of management his functions are:
1. To prepare plans regarding their work and make distribution of work.
2. Representing the worker grievance before the management.
3. Ensuring adequate lighting, ventilation, odorless in the working area.
4. Looking after safety of workers.
5. Helping the management in selection, training, placement & promotion of workers.
6. Welcoming suggestion forms workers for better working practices.


Q.21 Without effective management the resources will remain as resources
cannot be converted into productive utilities. “do you agree”? give
reason.
Or
“success of an organization largely depends upon its management.” Explain
any five reasons to justify the above statement.
Ans: success of an organization largely depends upon its management because
of the following reasons:-
(a) helps in achieving group goals
(b) increase efficiency
(c) creates a dynamic organization
(d) help in achieving personal objective of organization
(e) helps in development of society.