PRINCIPLES OF

MANAGEMENT

INTRODUCTION
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.
These principles are derived: -

On the basis of observation and analysis

By conducting experimental studies

Learning How to Manage

Many disciplines have contributed to the study of management, such as social

scientists, psychologists, sociologists and others. Consider management a social

phenomenon and the manager to be an important social resource to scientifically
understand and study. Other professions like mathematics, accounting,
philosophy and numerous others have contributed applications to the practice of
management.
In the end contemporary management knowledge is the product of 3 basic

approaches:

The Classical Approach

The Behavioral Approach

The management Science Approach

The Classical Approach

The serious study of management began in the late 19th

century with the need to increase the efficiency and

productivity of the workforce.
The classical approach to management can be understood

by looking at 2 perspectives:
1. Scientific management concentrated on the problems
of lower level managers
2. Classical organizational theory focused on problems
of top-level managers.

SCIENTIFIC MANAGEMENT
It is defined as the use of the scientific method to

determine the one best way for a job to be done. The

most important contributor in this field was Frederick
W. Taylor who is known as the father of scientific
management. Using his principles of scientific
management, Taylor was able to define the one best
way for doing each job.
In simple words it is just an application of science to

management.
The systematic study of the relationships between

people and tasks for the purpose of redesigning the

The Classical Approach

Frederick W. Taylor made an important contribution to

scientific management. He observed workers producing far

less than capacity in steel firms. He recognized their were no
studies to determine expected daily output per worker in the
form of work standards and the relationship between these
standards and wages. Then he tried to find the one best
way to do a job, determining the optimum work pace, the
training of people to do the job properly and successful
rewards for performance but using an incentive pay system.

Early Management Principles

Henri Fayol: Fayols14 Principles (Father of
modern

management)

Frederick

Taylor:

(Father

Scientific
of

Management
scientific

management)
: Taylorism
Frank and Lillian Gilbreth: Motion Studies

The Contributors to Classical

Organizational Theory: Weber
and Fayol
Henri Fayol and Max Weber were the two most prominent proponents
of the general administrative approach. Fayol focused on activities
common to all managers. He described the practice of management as
distinct from other typical business functions.
He stated 14 principles of management which are as follows:

1.
2.
3.
4.
5.
6.
7.

Division of Labor

Party of Authority & Responsibility

Principle of One Boss/Unity of Command
Unity of Direction
Equity
Order
Discipline

14 PRINCIPLES OF MANAGEMENT
DESCRIBED BY HENRI FAYOL
8. Initiative
9. Fair Remuneration
10. Stability of Tenure
11. Scalar Chain
12. Sub-Ordination of Individual Interest to General Interest
13. Espirit De Corps
14. Centralization & De-Centralization

1. DIVISION OF LABOUR

The

responsibility

of

workers

and

management should be properly divided

& communicated so that they can
perform them in an effective way and
should be reward for the same.

2. Party of Authority &

Responsibility
co-existing
Authority is given to a person, he should also be

made

responsible.
He should also have concerned authority, if anyone is made
responsible.
Authority refers to the right of superiors. responsibility means
obligation for the performance of the job assigned.
The right to issue commands, along with which
must go the balanced responsibility for its
function

3. Principle of One
Boss/Unity of Command

A sub-ordinate should receive orders and be accountable to only boss at a time.

a sub-ordinate should not receive instructions from more than one person
Dual sub-ordination should be avoided
The enterprise a disciplined, stable & orderly existence
Harmonious relationship between superiors and sub-ordinates
Employees must obey, but this is two-sided: employees will

only obey orders if management play their part by providing

good leadership.

4. UNITY OF DIRECTION
A single plan of action to guide the organization.
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.
All workers should be committed to the same plan of action.

5. Equity

In running a business a combination of

kindliness

and

justice

is

needed.

Treating employees well is important to

achieve equity.

Workers are expected to perform at high

levels and to be treated with respect and
justice.

Loyalty and devotion should be elicited from

personnel by a combination of kindliness
and justice on the part of managers when

6. Order

Concerned with proper & systematic arrangement of

things and people.
Arrangement of things is called material order.
Placement of people is called social order.
Material order-should be safe, appropriate and specific place
for every article

Both material order and social order are necessary. The former
minimizes lost time and useless handling of materials. The
latter is achieved through organization and selection.

7. Discipline
Sincerity, Obedience, Respect of Authority & Observance of Rules

and Regulations of the Enterprise.

subordinate should respect their superiors and obey their order.
smooth running of the enterprise
subordinates but also on the part of management.
Discipline can be enforced if -

- Good superiors
- Clear & fair agreements with workers
- Sanctions are judiciously applied

8. INITIATIVE
Managers must encourage workers to act on their own to

benefit the organization.

Initiate actions without being asked to do
Management should provide opportunity to its employees
Helps in developing an atmosphere of trust
Enjoy working in the organization because it adds to their zeal

and energy
Allowing all personnel to show their initiative in some way is a

source of strength for the organization. Even though it may

well involve a sacrifice of personal vanity on the part of
many managers.

9. Fair Remuneration
Managers should use reward systems, profit sharing and bonuses

to acknowledge high performance.

Paid to the workers should be fair of the efforts
Satisfaction to both employer and the employees
Determined on the basis of cost of living, work assigned etc,
Provision of other benefits such as free education, medical &

residential facilities to workers

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

10. Stability of Tenure

Employees should not be moved frequently from

one job position to another

Once they are appointed their services should be
served
Time is required for an employee to get used to a
new work fayol
Money spent on training the worker will go waste
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.
Long term employment helps employees develop
the skills to make significant contributions.

11. Scalar Chain

The chain of superiors ranging from the ultimate

authority to the lowest

Every orders, instructions etc. has to pass
through Scalar chain.
For the sake of convenience & urgency, this path
can be cut this short cut -Gang Plank
Temporary arrangement between two different
points to facilitate quick & easy communication
Modified as per the requirements of situations.

12. Sub-Ordination of Individual

Interest to General Interest
An organization is much bigger than the

individual
As far as possible, reconciliation should be
achieved between individual and group
interests.
Case of conflict, individual must sacrifice for
bigger interests
Management must see that the goals of the
firms are always paramount.

13. Espirit De Corps

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

This is principle that in union there is strength as

well as an

extension of the principle of unity of

command, emphasizing the need for teamwork and

the importance of communication in obtaining it.

14. Centralization &

De-Centralization
Managers must decide how much authority to centralize at the top

and how much to give to workers.

De-centralization-disposal of decision making authority to all the

levels of the organization

Increases the role of subordinate is decentralization & Decreases the

role of subordinate is centralization

This is a matter of degree depending on the condition of the business

and the quality of its personnel.

Taylors contribution to
management
Frederick Winslow Taylor (20 March 1856-21 March 1915),

widely known as F. W. Taylor, was an American mechanical

engineer who sought to improve industrial efficiency.
He is regarded as the father of scientific management, and

was one of the first management consultants.

Scientific management was concerned essentially with

improving the operational efficiency at the shop floor level

The Classical Approach

Taylors work lead to the following 4 principles:
Principle 1. Study the way workers perform their tasks, gather all the
informal knowledge that workers possess, and experiment with ways to
improves the performance of tasks.
Principle 2. Codify the new methods of performing tasks into written
rules and standard operating procedures (sops).
Principle 3. Carefully select workers so that they possess skills and
abilities that match the needs of the task and train them to perform
according to rules and procedures.
Principle 4. Establish a fair or acceptable level of performance for a task
and then develop a pay system that awards acceptable performance.

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