Business Studies · Ch 2 — Principles of Management
Key Terms
Key Terms
- Principles of Management: Fundamental truths of general validity that guide managerial action and decision-making.
- Division of Work: Specialisation increases efficiency by assigning each worker a specific task.
- Authority and Responsibility: Authority is the right to give orders; responsibility is the obligation to perform; they must be balanced.
- Discipline: Obedience, respect for authority, and adherence to rules and agreements within the organisation.
- Unity of Command: Each employee should receive orders from only one superior to avoid confusion.
- Unity of Direction: All activities with the same objective must be directed by one manager using one plan.
- Subordination of Individual Interest to General Interest: The organisation’s interest must prevail over personal interests.
- Remuneration of Personnel: Fair and equitable pay for work done, satisfying both employee and employer.
- Centralisation and Decentralisation: Centralisation concentrates authority at the top; decentralisation disperses it; the optimal degree depends on the situation.
- Scalar Chain: The clear line of authority from top to bottom; communication should follow this chain, but a gang plank allows direct contact in emergencies.
- Gang Plank: A shortcut across the scalar chain that lets two employees at the same level communicate directly in an emergency, avoiding the delay of sending a message all the way up and down the chain of authority.
- Order: A place for everything and everyone, and everything and everyone in its place — both material and social order.
- Equity: Kindness and justice in dealing with subordinates to ensure loyalty and devotion.
- Stability of Tenure of Personnel: Employees need time to learn and perform; high turnover is inefficient.
- Initiative: Encouraging employees to think and execute plans freely, within limits.
- Esprit de Corps: Promoting a team spirit of unity and harmony among employees; Fayol advised a manager to replace ‘I’ with ‘We’ in conversations with workers, building mutual trust and belongingness and minimising the need for penalties.
- Scientific Management: A systematic approach by F.W. Taylor to improve efficiency through science, not rule of thumb.
- Time Study: Determining the standard time required to perform a specific task.
- Motion Study: Analysing body movements to eliminate wasteful actions and find the best method.
- Fatigue Study: Identifying and reducing physical or mental fatigue to maintain worker efficiency.
- Method Study: Finding the one best way of doing a job by examining every activity, from the procurement of raw materials to the delivery of the final product to the customer.
- Differential Piece Wage System: Paying higher wages per piece to workers who meet or exceed the standard output, and lower wages to those who do not.
- Functional Foremanship: Dividing the work of a foreman into eight specialised roles (four planning, four execution) under Taylor’s system. …