Veer Narmad South Gujarat University

Chapter 1 FYBBA SEM - 1

PRINCIPLES OF MANAGEMENT
NATURE AND SCOPE
By:
OF
Mr Krishna Doctor
MANAGEMENT Assistant Professor
Prof. Suresh R. Lalwani 1-1 1
HDCS, CA (P.E. II), PGDBM (Finance)
SDJIC, Vesu, Surat
Who Are Managers?

Manager

◦ Someone who works with and through other

people by coordinating their work activities in
order to accomplish organizational goals
◦ Changing nature of organizations and work has
blurred the clear lines of distinction between
managers and non-managerial employees
What Is Management?
Management

◦ The process of coordinating work activities so that

they are completed efficiently and effectively with
and through other people
◦ Elements of definition
 Process - represents ongoing functions or
primary activities engaged in by managers
 Coordinating - distinguishes a managerial
position from a non-managerial one
What is Management? (cont.)
Management (cont.)
◦ Elements of definition
 Efficiency - getting the most output from the
least amount of inputs
 “doing things right”
 Concerned with least COST
 Effectiveness - completing activities so that
organizational goals are attained
 “doing the right things”
 Concerned with completing task on TIME.
Efficiency and Effectiveness in Mngt.
Efficiency (Cost) Effectiveness (Time)

Resource Goal
Usage Attainment

Low Waste High Attainment

Management Strives For:

Low resource waste (high efficiency)
High goal attainment (high effectiveness)
Characteristics/Features of Management
Management has Objectives.
Management is working with & through the people.
Management involves decision making.
In Management, there are organized activities.
Management includes interrelationship among
resources.
Management is a Dynamic Process.
Management is Multi-Disciplinary.
Management is Science as well as an Art too.
Management is Universal.
Management is Profession.
Management: Science, Art or Both
Highly debatable issue
Based on the fact that earlier managers used to
manage their organizations very brilliantly even if
they were not professionals.(Our mother /
Grandmother).
By using intuitions, commonsense and their prior
experience and they proved to be best managers.
E.g. Mr. Dhirubhai Ambani had not taken the formal
knowledge of management and still they managed his
organization in the most effective and efficient way.
Management as a Science
“Science is a systematized body of knowledge
accumulated and accepted with reference to the
understanding of general truths concerning a particular
phenomenon, subject or object of the study.”
Management is said to be a branch of social sciences
and the process of developing scientific theory and
process of developing management theory is different.
It is not regarded as a pure or perfect science like
natural or physical science but as a Pseudo Science
(Inexact Science).
Arguments which say that Management is NOT a Pure / Perfect Science

1. Management lacks (missing) internal consistency in

rules, laws, theories and hypotheses as compared to
Science(every action has a equal and opposite reaction)
◦ Internal consistency means they are consistent
throughout the world but this is not so with
management.
◦ Management also includes various rules, regulations,
laws and principles & hypotheses but all these lack
internal consistency. That means they don’t remain
constant / same at every time and at every place.
Arguments which say that Management is NOT a Pure / Perfect Science

2. Ambiguity (Confusion) in various terms of

Management .
E.g. Gravity, Calculus, H2O, Hydrogen are such
words which have same meaning throughout the
world.
E.g. Management has been defined by various
authors from different perspective; Perception in
marketing and perception in behavioral science have
different meanings.
Arguments which say that Management is NOT a Pure / Perfect Science

3. Management principles gives different results at

different places and after repetition too
E.g. Law of Gravity is applied in same way at USA and
at India. Likewise H2O gives pure water at India as well
as at USA too even after any number of repetitions.
E.g. Japanese Management practice differs than that of
the American Management Practice. Likewise,
motivational style to be applied for American workers
and motivational style for Indian Workers tend to differ.
From the above arguments we can say that Management
is not perfect science.
Arguments which say that Management is partly a Science / Pseudo Science

1. Science gives rules, facts, figures, laws, theories,

hypotheses, principles and models to explain
various contents which are there in science. As a
same way management also uses all such things to
explain its various concepts and methodology.
2. Cause & Effect Relationship:
E.g. giving bonus and incentive increases the
motivational level of an employee. So here
increased motivational level is effect of the cause of
extra incentives.
Arguments which say that Management is partly a Science / Pseudo Science

3. More and more use of Mathematics and

Statistics
Eg: Sales Forecasting can be done with the help of
regression and time series analysis.
So, from this we can say that Management is half /
imperfect / pseudo science.
Management as an Art

Art: Bringing desired results through application of

skills or knowledge.
To manage effectively one must have the
knowledge (Science) of management as well as the
skills and art to manage it well.
Science comes through knowledge and art comes
through practice.
Science deals with ‘what’ and ‘why’ of a
phenomenon whereas Art deals with ‘how’ of a
phenomenon.
Relationship of Management with Art

Knowing the science (Rules, Laws, Principles,

Hypotheses) of management is very much necessary
but the one who applies this knowledge differently
or skillfully ultimately wins. (treasure hunt)
Eg:
Sachin Tendulkar, Lata Mangeshkar, swimming,
 So management is more of art than science.
Relationship of Management with Art
Management as an Art can be seen from the following
facts:
The process of management involves the use of know-
how and skills like any other art such as music, painting,
singing etc.
Management demands creativity like any other art.
Management is based upon the fact that “there is no one
best way of managing the things”. Every person has his
own art of managing the things. (MS Dhoni)
Management involves getting the desired result /
objectives like any other art.
Conclusion (Applied Knowledge is
Power)
Science and Art both are complementary in nature.
Without science, one can not apply anything and
without art, just by having the knowledge, it is of no
use.
Same is the case with management.
Just having the knowledge of management is not
enough but along with that one must know the art of
managing.
Management as a Profession
/Characteristics of Management as a
Profession
Profession is an occupation for which specialized
knowledge, skills and training is required and the
use of these skills is not meant for self satisfaction
but for serving to the larger portion of the society
than just earning money alone.
Management as a Profession
/Characteristics of Management as a
Profession
1. Existence of Specialized Knowledge :
For considering any discipline as a profession
there
must be an existence of specialized knowledge.
For management there exists a large amount of
specialized knowledge / distinct body of knowledge.
This specialized knowledge has emerged from the
need of managing highly diversified and complex
organizations.
Management as a Profession
/Characteristics of Management as a
Profession
2. Acquiring the Knowledge :
To practice a profession, one must acquire the
knowledge of that particular field.
E.g. Only LLB student can become lawyer,
To practice management or to become a manager, it is
not necessary that one must acquire formal knowledge
of management or and must have MBA degree to
become a manager.
In this regard, management cannot be considered to be a
profession.
Cont..
3. Professional Association:
Any occupation, which claims to be a profession, must have a
professional association with it.
 An association regulates and controls the behavior of
professionals, takes disciplinary actions.
E.g. A CA students must be a member of ICAI, Medical
student IMA, Law student Bar Council of India.
In Management also there is an association called All India
Management Association (AIMA) in India
But it is not mandatory to be associated with AIMA to
practice management.
In this regards Management cannot be considered to be a
profession.
Cont..
4. Service Motive :
Professionals should keep social interest in their mind
while charging fees for their professional services.
The success of any profession is measured not in terms of
money it earns but by the amount of social service it
provides.
This important contribution of management can’t be
measured in terms of money alone because without
integrating effort of management, resources worth
millions of rupees may be useless.
And in management also there is service motive, so in that
regard management can be considered as a profession.
Cont..
5. Ethical Codes:
Every professional have to follow some ethical
standards.
In absence of ethical codes practitioners may use
their power for their own benefit at the cost of the
society.
Conclusion: Management is an emerging
Profession
Management possesses certain characteristics of
profession while others are missing.
Universality of Management / “Theories
& Fundamentals of Management are
Universal but its Techniques & Practices
are not”
“Is the knowledge of Management Universal?”

“Are the principles of management universal?”

Any knowledge can be made universal through

transfer of that particular knowledge.
Transfer of the Knowledge of
Management
By managers of an industrially developed country
(like USA), who work in developing country (like
India)
By people / By students from a developing country
(like India), coming to study and work in Industrially
developed country (like USA) and they return back to
their own country
By Training and Development by the managers of
Industrially developed countries for Industrially
developing country.
ARGUMENTS FOR UNIVERSALITY
1. Management as a Process:
Management as a process can be found in all organized
activities whatever the country, culture or size it may be.
Management as a process includes steps like
POSDCORB are universally applicable in all
organizations and as a manager one must possess the
knowledge of all these function.
However, intensity of a particular function differs
company to company.
ARGUMENTS FOR UNIVERSALITY
2. Difference between Management fundamentals and
Techniques
Management fundamentals - the basic principles & theories
Management techniques - the tools for performing
management functions.
Management fundamentals and theories will remain same
they do not change from country to country.
But techniques of managing an organisation do not remain
same in all the countries and they change country to country.
So, management fundamentals are universal but techniques
are not.
ARGUMENTS FOR UNIVERSALITY
3. Difference between Management Fundamentals
and Practices :
Management fundamentals remain same universally but
practices differ, reason being management is both
science and art.
Eg: Koontz & O’Donnell has exemplified this
phenomenon as automobile to be used in desert area
and automobile to be used in super highways are
obviously not going to be the same even if physical
science of automobile engineering tends to be the
same.
ARGUMENTS AGAINST
UNIVERSALITY
1. Cultural Characteristics
The applicability of management principles throughout
the world is based on the culture of different countries.
“Culture is a set of beliefs, attitudes and values that are
shared commonly by the members of the society.”
Culture affects people’s behavior very significantly and
management being a people oriented process is highly
affected by the culture.
Different countries have different culture, so as the
people’s behaviour, as a result management is not going
to be same through out the world.
ARGUMENTS AGAINST
UNIVERSALITY
2. Management Philosophy:
Philosophy of founders or philosophy of top managers of the
organizations.
Every organization has its own philosophy (way of thinking)
of managing an organisation like an individual.
E.g Some organisations believe in profit maximization, while
some may believe in service to society. So when philosophy
changes, management practices will also change.
E.g. Family Based Organizations’ Philosophy will totally
differ from that of the professionally Managed
Organisations.
ARGUMENTS AGAINST
UNIVERSALITY
3. Organisational Objectives:
The type of management will depend the organizational
objectives.
For different types of objectives the approach of managing
an organisation shall differ.
E.g. If Stability is the objective of organisation,
management will be different and if the Growth is the
objective, then management will totally differ from earlier.
E.g. Profit oriented organisations manage very differently
as compared to those which are Service Oriented / NPOs
(Non-Profit Organisations) organisations.
 CONCLUSION
Theories & Fundamentals of Management are
Universal but its Techniques & Practices are
not.
Various Approaches to Study
Management
SOCIAL SYSTEMS
APPROACH

DECISION THEORY
APPROACH

HUMAN BEHAVIOUR
APPROACH
SOCIAL SYSTEMS APPROACH
Itwas introduced by Vilfredo Pareto, a
sociologist.
But further development to his approach was
made by Chester Bernard.
As per this approach, an organisation is a
cultural system made up of people who work in
cooperation. To achieve organizational objectives,
a cooperative system can be developed by
understanding the behaviour of people in the
groups.
SOCIAL SYSTEMS APPROACH
System approach considers the organisation as a dynamic
and inter-related set of parts.
Each part represents a department or a sub-system. Each
department has its sub-system.
Continuous and effective interaction of sub-systems helps
to attain goals of the larger system.
It synthesizes knowledge of different fields of study such as
sociology, psychology, information systems, economics etc.
As business organisation deals with different components of
society, it makes best use of different fields of study to
improve interaction with its counterparts.
Features of Social Systems Approach:
Organisation is a social system, a system of
cultural relationships.
Relationship exists among the external as well as
internal environment of the organisation.
Cooperation among group members is necessary
for the achievement of organizational objectives.
For effective management, efforts should be made
for establishing harmony between the goals of the
organisation and the various groups therein.
Advantages:
Its an important contribution in field of
management.
All the groups are considered while
taking decision as organization is a social
system.
Management can form formal and
informal groups and motivate them.
Disadvantages:
Emphasis only on social relations and
ignores physical aspect.
Focuses on only one aspect i.e study of
group behaviour & management involves
much more than just group behaviour.
DECISION THEORY APPROACH
Major contributions given by Herbert Simon.
It deals with the basic problem of management that
is decision making.
Decision making involves selection of a suitable
course of action out of the available alternatives.
It mainly emphasises that decision making is the job
of every manager.
The manager is a decision maker and organisation
is a decision making unit. Therefore, the basic
problem in managing is to make rational decision.
DECISION THEORY APPROACH
From this point of view, decision theory approach has
following features:
Decision making is essential element in
Management.
The members of the organisation are decision
makers and problem solvers.
Quality of decision affects the organisational
effectiveness.
All factors affecting decision making are the
subject-matter of management.
CONTRIBUTION OF HERBERT SIMON IN
DECISION THEORY APPROACH
Concept of organisation:
Organization is a complex network of decisional
process.
Allocation of decision making function.
Decision Making:

Series of steps: 1. Intelligent activity. 2. Design

Activity. 3. Choice activity.
Bounded (limited) Rationality:

A man cannot be completely rational, as he criticises

theories which are based on assumptions
CONTRIBUTION OF HERBERT SIMON IN
DECISION THEORY APPROACH
Administrative Man:
Based on following assumptions
1. Administrative man adopts satisfying approach.
2. He takes decision with simple rule of thumb or
tricks of trade or general habits.
3. He makes decision without determining all the
possibilities and assumes that these are in fact all
the alternative
Managerial Communication :
CONTRIBUTION OF HERBERT SIMON IN
DECISION THEORY APPROACH
Managerial Communication :
3 stages of communication process:
◦ Initiation of information.
◦ Transmission of information1
◦ Receipt of information
Human Behavior Approach
Management means getting things done by people,
so the study of management must revolve around
human behaviour.
This approach is also known as ‘Leadership’,
‘Behavioural Science’ or ‘Human Resource’
approach.
Human behaviour approach puts emphasis on
Human Resources more as compared to Physical or
Financial Resources. It studies Individual Behaviour
as well as Group Behaviour.
Characteristics
Revolves around human & its behaviour.
As objectives are achieved through human, its
important to study human behaviour.
Motivation, leadership, group behaviour, etc. are
used by managers
Study of psychology, sociology, etc.
Good human relations are necessary to increase
employee’s productivity.
Advantages
Employees are invaluable asset and their
importance has been accepted in this approach.
Good human relations helps to achieve objectives.
Makes people more effective.
Study of human behavior and human interactions
has contributed in development of management.
Attracted concentration towards increasing
employees job satisfaction.
Disadvantages
Difficultto forecast human behaviour.
Theoretically seems to be logical but its usefulness
seems to be doubtful.
Factors other than human relations are ignored.
Implications of human behaviour are derived from
occasional experiments, hence it cant be applied
universally.
Code of Conduct suggested by All India
Management Association
AIMA is a professional body for development of
management profession and regulation of management
profession.
A professional manager can be a member of AIMA and
can be in touch with latest happenings in management
field. AIMA is currently situated at New Delhi.
AIMA has suggested some code of conducts for
managers same way like other professional associations
(like ICAI, ICSI, Indian Medical Association etc.) have
given.
Code of Conduct suggested by All India
Management Association
These code of conducts act as a guiding principle for
managers.
Code of conducts given by AIMA can be broadly divided
into 2 parts:
o The Basic Code
o Guide to Good Management Practice
THE BASIC CODE
A member of AIMA shall……..
Try his best to organize the resources available to him with
a view to optimize their use to achieve objectives of the
organisation.
Comply (Follow) with the Indian laws relating to the
management of his organisation and do his best to operate
within the spirit of these laws.
Try to maintain and enhance the reputation of professional
management.
Follow the guide to good management practice suggested
by AIMA time-to-time.
GUIDE TO GOOD MANAGEMENT
PRACTICE
A Manager is responsible to fulfil the expectations of his
Stakeholders:
Shareho
lders

Employ
Society
ees

Stakeho
lders
Govern Custom
ment ers

Supplier
s
GUIDE TO GOOD MANAGEMENT
PRACTICE- Stakeholders
1. Shareholders
Dividend should is fairly divided amongst all investors of
the organisation.
Full and correct information should be given regarding
financial performance of the organisation.
2. Employees
Properly pay, basic safety and well being of the personnel .
 A manager should set an example for his subordinate
through his own work capability and performance.
Proper training so as to become qualified for higher duties.
GUIDE TO GOOD MANAGEMENT
PRACTICE- Stakeholders
3. Customers
Customers should get good products and services at fair
prices.
A manager is responsible for satisfaction or dissatisfaction
of his customers.
4. Suppliers
All the terms and conditions of contract with suppliers are
written clearly and unambiguously.
Ensure timely payment to suppliers and healthy relations
with the suppliers.
GUIDE TO GOOD MANAGEMENT
PRACTICE- Stakeholders
5. Government
Comply(follow) with all the rules set by to the government
& pay taxes.
A manager should conform to the national interest as
expressed in government policy.
6. Society
Make the most effective use of all natural resources.
Ready to help the society.
Ensure that the working of an organisation should be such
which doesn’t harm the society .
MANAGEMENT PROCESS
MANAGERIAL ROLES BY HENRY
MINTZBERG
Managers perform many different roles every day.
Leading your team, resolving a conflict, negotiating
new contracts, representing your department at a
board meeting, or approving a request for a new
computer system.
A manager is constantly switching roles as tasks,
situations, and expectations change.
Management expert and professor Henry Mintzberg
recognized that there are ten primary roles or
behaviors that can be used to categorize a manager's
different functions.
Category Roles
Interpersonal Figurehead Leader Liaison

Informational Monitor Disseminator

Spokesperson

Decisional Entrepreneur Disturbance

Handler Resource Allocator
Negotiator
Interpersonal Roles
It relates to establishing relationship by a manager
with other persons & parties on formal authority and
status.
According to study by mintzberg, manager spend,
◦ About 45% of their contact time with peer,
◦ About 45% with people outside organization &
◦ Only 10% with superior
1. Figurehead(unit head)
– As a manager, you have social and legal
responsibilities. You're expected to be a source of
inspiration. People look up to you as a person with
authority, and as a figurehead.
Interpersonal Roles
2. Leader – This is where you provide leadership for
your team, your department or perhaps your entire
organization; and it's where you manage the
performance and responsibilities of everyone in the
group.
3. Liaison(to communicate) – Managers must
communicate with internal and external contacts. You
need to be able to network effectively on behalf of your
organization.
Informational Roles
Concerned with managing information, in coming as
well as outgoing, effectively.
Manager develops a system wherein he is able to
receive all relevant pieces of information from others
and share the same with other persons as per the need
of situation.
4. Monitor(eagles eye) – In this role, you regularly seek out
information related to your organization and industry,
looking for relevant changes in the environment. You also
monitor your team, in terms of both their productivity, and
their well-being.
Informational Roles
5. Disseminator – This is where you communicate
potentially useful information to your colleagues and your
team.
6. Spokesperson(representative) – Managers represent
and speak for their organization. In this role, you're
responsible for transmitting information about your
organization and its goals to the people outside it.
Decisional Roles
A manager has to continuously make decision in
different situations.
7. Entrepreneur – As a manager, you create and
control change within the organization. This means
solving problems, generating new ideas, and
implementing them.
8. Disturbance Handler – When an organization or
team hits an unexpected roadblock, it's the manager
who must take charge. You also need to help mediate
disputes within it. Eg strike, fire, break-down of
machines, etc.
Decisional Roles
9. Resource Allocator – You'll also need to determine
where organizational resources are best applied. This
involves allocating funding, as well as assigning staff
and other organizational resources.
10. Negotiator – You may be needed to take part in,
and direct, important negotiations within your team,
department, or organization. Discuss about the
burning issue on the behalf of the organization with
the concerned parties.
EXHIBIT 1.4: MINTZBERG’S MANAGERIAL ROLES

Prof. Suresh R. Lalwani 1-64

HDCS, CA (P.E. II), PGDBM (Finance)
ADMINISTRATIVE MANAGEMENT
BY HENRY FAYOL
Administrative management is the process of
managing information through people.
This usually involves performing the storage and
distribution of information to those within an
organization.
Represent top level management pertaining thinking
and planning functions.
It performs the function of formulating of vision,
mission and strategies.
14 Principles of Management of Henri
Fayol
These are statements that are based on a
fundamental truth.
These principles of management serve as a
guideline for decision-making and management
actions.
They are drawn up by means of observations and
analyses of events that managers encounter in
practice.
Henri Fayol was able to synthesize 14 principles of
management after years of study.
1-#
1. Division of Work
Work should be divided among individuals and
groups.
When employees are specialized, output can
increase because they become increasingly skilled
and efficient.
It produces more and better work with the same
effort.
Fayol said that work specialization is the best way
to use the human resources of the organisation.
2. Authority and Responsibility
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.
Managers must have the authority to give orders,
but they must also keep in mind that with authority
comes responsibility.
Responsibility is closely related to authority and it
arises wherever authority is exercised.
3. Discipline
Discipline means obedience to authority,
observance of the rules and norms of
performance, respect for agreements, sincere
efforts for completing the given job, respect for the
superiors and the organization, etc.
The best means of maintaining discipline are good
supervisors at all levels, clear and fair
agreements between the employees and the
employer, and judicious application of penalties.
4. Unity of Command
Each employee should receive instructions about a
particular work from one superior only.
If there were to be more than one superiors, the
employee would be confused due to conflict in
instructions.
5. Unity of Direction
Teams with the same objective should be working
under the direction of one manager, using one
plan.
Fayol advocates "One head and one plan" which
means that group efforts on a particular plan be led
and directed by a single person.
This enables effective co-ordination of individual
efforts and energy.
6. Subordination of Individual Interest to
General Interest
First priority to general interest.
An individual is always interested in maximizing
his own satisfaction through more money,
recognition, status, etc.
It is very often against the general interest of the
organisation.
The interests of one employee should not be
allowed to become more important than those of the
group.
7. Fair Remuneration to employees
According to Fayol wage-rates and method of
their payment should be fair, proper and
satisfactory.
Fair remuneration increases workers’ efficiency
and boost their morale.
It also plays a vital role in making the relations of
the employees and the management better.
8. Centralization & Decentralization
Centralization implies the concentration of
decision making authority at the top
management (executive board).
Sharing of authorities for the decision-making
process with lower levels (middle and lower
management), is referred to as decentralization by
Henri Fayol.
According to Fayol should be proper and effective
adjustment between centralization and
decentralization inorder to achieve maximum
objectives of the business.
9. Scalar Chain
Scalar chain is the formal line of authority which
moves from highest to lowest rank in a straight
line.
This chain specifies the route through which the
information is to be communicated to the desired
location/person.
Fayol emphasized that every information in the
organization must flow according to this chain to
facilitate clear communication of orders of the
superiors and feelings of the subordinates.
It consumes a lot of time to pass information.
10. Order
“right place for everything and right man at right
place”
There should be proper, systematic and orderly
arrangement of physical and social factors, such
as land, raw materials, tools and equipment's and
employees respectively.
There should be an orderliness in work through
suitable organization of men and materials.
11. EQUITY
Management should treat all its employees as
equally as possible.
Managers should be free from all prejudices,
personal likes or dislikes.
It ensures healthy industrial relations between
management and labour.
This will create loyalty and devotion among the
employees.
12. Stability of Tenure of Personnel
Workers should be assured of the security of job
by the management.
This is important to motivate them and extract
better work from them.
If they fear for job security, their morale will be low
and they cannot give efficient work.
Also, they will not have any sense of attachment
to the organization and they will always be on the
lookout for a job elsewhere.
13. INITIATIVE
Under this principle, the successful management
provides an opportunity to its employees to
suggest their new ideas.
Experiences and more convenient methods of work.
Employees should be given the necessary level of
freedom to create and carry out plans.
Employees should be encouraged to make all kinds
of suggestions to conceive and carry out their plans.
14. ESPRIT DE CORPS.
This term means team spirit.
Harmony and unity among the employees is a
great source of strength to the organization.
To achieve this, the motto of divide and rule should
be avoided.
And, verbal communication should be used for
removing misunderstandings.
SCIENTIFIC MANAGEMENT BY
FREDRICK TAYLOR
Historical Perspective:
He started the Scientific Management movement, and he
and his associates were the first people to study the work
process scientifically.
They studied how work was performed, and they looked at
how this affected worker productivity.
"The Principles of Scientific Management." In this, he
proposed that by optimizing and simplifying jobs,
productivity would increase.
he found that by calculating the time needed for the various
elements of a task, he could develop the "best" way to
complete that task.
Four Principles of Scientific
Management
1. Replace working by "rule of thumb," or simple
habit and common sense, and instead use the
scientific method to study work and determine the
most efficient way to perform specific tasks.
2. Rather than simply assign workers to just any job,
match workers to their jobs based on capability
and motivation, and train them to work at
maximum efficiency.
Four Principles of Scientific
Management
3. Monitor worker performance, and provide
instructions and supervision to ensure that they're
using the most efficient ways of working.
4. Allocate the work between managers and
workers so that the managers spend their time
planning and training, allowing the workers to
perform their tasks efficiently.
Characteristics / Features of Scientific
Management
1. Separation of Planning and Doing:
Workers used to plan their work and worked under
supervisors.
Planning and also doing by workers themselves,
though under the supervision created problems in
productivity.
Taylor advocated separation of planning from
doing.
Planning should be the task of supervisor and
workers should only perform the work.
Cont..
2. Functional Foremanship:
He introduced the concept of functional foremanship
which violated the principle of unity of command.
As planning was separated from doing, Taylor
advocated that activities of workers should be
supervised by two sets of supervisors based on
specialisation of functions as one supervisor cannot
supervise all aspects of the work (functional
foremanship).
I. Supervisors concerned with planning of work in the
factory office (Planning In-charge):
Cont..
(ii) Instruction card clerk:
(iii) Time and cost clerk:
(iv) Disciplinarian
II. Supervisors concerned with execution of work at the
shop floor (Production In-charge):
(i) Gang boss:
(ii) Speed boss:
(iii) Repair boss:
(iv) Inspector:
Cont..
C. Work Study :
It deals with breaking activities into small parts and finf out
how it could be done effectively, in less time and with
increased productivity.
It involves analyzing the job on the basis of following
parameters:
(i) Time study:
(ii) Motion study:
(iii) Fatigue study:
(iv) Method study:
Cont..
(i) Time study:
It analyses the job by breaking it into different elements and
determines the time taken to complete each element of the
job.
In order to increase productivity, optimum time to perform
each operation is determined.
It helps in determining the ‘fair day’s work’ that each
worker can perform in a specific time period.
For example, if, on the basis of observations it is
determined that one person can finish making 1 shirt in two
hours then, in a working day of 8 hours, each worker should
make 4 shirts.
Cont..
(ii) Motion study:
It analyses the job by breaking it into various
movements, identifies the essential movements and
eliminates the unnecessary or wasteful movements.
The purpose of motion study is
◦ to find and eliminate wasteful motions among the workers, and
◦ to design the best methods of doing various operations.
It leads to increase the efficiency of workers by reducing
fatigue and manual labour.
It results in higher production and productivity.
It helps to find out the best way of doing the work.
Cont..
(iii) Fatigue study:
In order to increase the capacity to work to their maximum
potential, workers require rest between the work activities.
The amount of rest and the frequency of rest intervals helps
in removing the fatigue and enhances their work potential.
Fatigue is generally caused by long working hours without
rest pauses, repetitive operations, excessive specialisation,
and poor working conditions.
The purpose of fatigue study is to maintain the operational
efficiency of the workers.
Cont..
(iv) Method study:
Method study determines the best method of doing the
work through optimum utilisation of human and non-
human resources.
It determines the specifications and technological
feasibility of the products and designs an operation
system that is optimum in terms of product design, job
and process design, capital equipment selection, location
of facilities, layout of facilities etc.
It results in optimum utilisation of production facilities,
reduces the materials, reduces transportation, storage costs
and handling costs and results in low cost per unit of output.
D. Standardization of Work:
Standard is “a unit of measurement established to serve as a
criterion or level of reference for performance.”
Standardisation is the process of setting standards for
products, tools, equipment’s, work methods etc.
Standards are set after scientifically observing and
analysing the present performance, assessing the past
performance and judging the capacity of employees to
achieve those standards.
In order to ensure uniformity in work operations, work
should be standardized.
It ensures that everyone works according to same standards
framed in respect of time, cost, amount of work, working
conditions, quality of work etc.
E. Financial Incentives:
Workers have dominant financial needs and put in hard
efforts if they are rewarded with financial incentives.
Taylor advocated that reward system should be related to
individual performance and not position of a person at the
job.
Thus, incentives can be provided by relating remuneration
with productivity.
F. Differential Rate System:
Taylor introduced ‘differential rate system’ where higher
wage rate was paid to workers who finished the work in less
than standard time (standard time was determined on the
basis of time study)
i.e., higher wage to productive workers and lower rate to
those who produced less than the standard output.
E.g. Workers are paid Rs. 10 per unit if they produce less
than or equal to the standard output (100 units) and Rs. 11 if
they produce more than the standard output, wages of A
(who produced 100 units) and B (who produced 120 units)
would be as follows:
A: 100 x Rs.10 = Rs.1,000
B: 120 x Rs.11 =Rs.1,320
G. Scientific Selection and Training:
Scientific selection involves selecting the right person for
the right job.
Workers should be selected on the basis of knowledge,
ability and experience and placed at the most appropriate
job for which they are suited.
Training enhances their skills to make them more effective
and productive on the job.
H. Mental revolution
Mental Revolution is a change in thinking both on the part
of management and workers.
Success of implementation of scientific management
depends on the mental revolution of management and
workers both as it is their duty to cooperate with each other
Taylor argued that both management and workers should try
to understand each other instead of quarrelling for profits
and benefits which would increase production, profit and
benefits.