Business Studies · Ch 2 — Principles of Management
Summary
Summary
- Nature of principles: Universal guidelines derived from observation and experimentation; they are flexible, not rigid rules, and apply to all types of organisations.
- Significance: Provide managers with insight, help in optimum resource use, scientific decision-making, and adapting to change; they form the foundation of management training.
- Fayol’s 14 Principles (administrative management):
- Division of Work: Specialisation increases efficiency.
- Authority & Responsibility: Authority to give orders must match responsibility for outcomes.
- Discipline: Obedience and respect for agreements.
- Unity of Command: Each employee receives orders from one superior only.
- Unity of Direction: One head and one plan for a group of activities with the same objective.
- Subordination of Individual Interest: Organisational interest prevails over personal interest.
- Remuneration: Fair pay for work done.
- Centralisation & Decentralisation: Balance of power concentration; optimal degree varies.
- Scalar Chain: Clear line of authority from top to bottom; gang plank allows direct communication in emergencies.
- Order: Right person in the right place; right thing in the right place.
- Equity: Kindness and justice in dealing with employees.
- Stability of Tenure: Employees need time to learn and perform; avoid high turnover.
- Initiative: Freedom to think and execute plans.
- Esprit de Corps: Team spirit and harmony build organisational strength.
- Taylor’s Scientific Management:
- Science, Not Rule of Thumb: Replace guesswork with systematic study of each task.
- Harmony, Not Discord: Management and workers must cooperate; interests are mutual.
- Cooperation, Not Individualism: Teamwork replaces individual effort.
- Maximum Output, Not Restricted Output: Both workers and management should aim to maximise output rather than deliberately restrict it, enlarging the surplus for mutual benefit.
- Development of Each Worker: Train and develop each person to their greatest efficiency and prosperity.
- Techniques of Scientific Management:
- Functional Foremanship: Eight specialists (four planning, four production) supervise workers.
- Standardisation & Simplification: Setting benchmarks for tools, methods, and time; eliminating unnecessary variety. …