Management Principles, Theories, Concepts

Management theories are concepts related to sound management strategies, including any tools and frameworks that can be implemented in modern organizations.

Contribution of F.W. Taylor towards management.

Frederick Taylor’s theory of scientific management developed techniques for improving the efficiency of the work process.

Based on a systematic study of people, tasks and work behavior, Taylor’s theory broke the work process down into the smallest possible units, or sub-tasks, in an effort to determine the most efficient method possible for completing a particular job.

Taylor’s theory brought numerous improvements to organizational management during a period when an autocratic management style was the norm.

Here are some developments that resulted from the Taylor theory of management:

• Significantly improved productivity
• Increased employee incentive
• Widespread improvements in quality control
• Better personnel practices
• Greater cooperation between management and workers with a consistent application of Taylor’s theory of management.

Principles of management by Henri Fayol with examples

Principles of management are guidelines for managers to take thoughtful decisions at the work place under certain situations.

Principles of management by Henri Fayol: Theory, examples, projects.

Henry Fayol (1841-1925) was a key figure in Classical Management School and the father of Administrative Management Theory. Henry Fayol’s contributions to modern management concept has been significant and many researchers followed his pattern. Fayol contributed most widely to the theory and practice of organizational management. Henry Fayol claimed that, by focusing on managerial practices misunderstandings could be minimised and efficiency in organizations could be increased.

Henri Fayol was one of the most influential contributors to modern concepts of management, having proposed that there are five primary functions of management (planning, organizing, commanding, coordinating and controlling).

Fayol developed 14 principles of general management which provides guidelines for managerial decision-making and action.

Fayol’s 14 Principles of Management

1. Specialisation of labour. Specialising encourages continuous improvement in skills and the development of improvements in methods.

2. Authority. The right to give orders and the power to exact obedience.

3. Discipline. No slacking, bending of rules. The workers should be obedient and respectful of the organization.

4. Unity of command. Each employee has one and only one boss.

5. Unity of direction. A single mind generates a single plan and all play their part in that plan.

6. Subordination of Individual Interests. When at work, only work things should be pursued or thought about.

7. Remuneration. Employees receive fair payment for services, not what the company can get away with.

8. Centralisation. Consolidation of management functions. Decisions are made from the top.

9. Chain of Superiors (line of authority). Formal chain of command running from top to bottom of the organization, like military.

10. Order. All materials and personnel have a prescribed place, and they must remain there.

11. Equity. Equality of treatment (but not necessarily identical treatment).

12. Personnel Tenure. Limited turnover of personnel. Lifetime employment for good workers.

13. Initiative. Thinking out a plan and do what it takes to make it happen.

14. Esprit de corps. Harmony, cohesion among personnel. It’s a great source of strength in the organisation. Fayol stated that for promoting esprit de corps, the principle of unity of command should be observed and the dangers of divide and rule and the abuse of written communication should be avoided.

Scientific Management

Scientific management involves analyzing workflows to improve economic efficiency, especially labor productivity.

The term scientific management is the combination of two words i.e. scientific and management. The word “Scientific” means systematic analytical and objective approach while “management” means getting things done through others. In simple words Scientific management means application of principles and methods of science in the field of management.

According to Fredrick Winslow Taylor, “Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way.

The main characteristics or features of scientific management are as follows:

• Approach: It is a systematic, analytical and objective approach to solve industrial problems.
• Economy: The basis of scientific management is economy. For implementing economy, all the unnecessary elements of production are eliminated and a sincere effort is made to achieve optimum production at the minimum cost.
• A Definite plan: The main characteristic of scientific management is that before starting and work there must be a definite plan before as and the work is to be done strictly according to that plan.
• Discards old methods: It discards the age old methods of rule of thumb and hit or miss approach.
• Emphasis: It lays emphasis on all factors of production, men, material and technology.
• Techniques: It implies scientific techniques in methods of work, recruitment, selection and training of workers.
• Attempts: It attempts to develop each man to his greatest efficiency and prosperities.
• Method: It attempts to discover the best method of doing a work at the cheapest cost.

Levels of management

Top Level Management

Top level management consists of Chairman, Board of Directors, Managing Director, General Manager. President, Vice President. Chief Executive Officer (C.E.O.), Chief Financial Officer (C.F.O.) and Chief Operating Officer etc. It includes group of crucial persons essential for leading and directing the efforts of other people. The managers working at this level have maximum authority.

Middle Level Management

This level of management consists of departmental heads such as purchase department head. sales department head, finance manager, marketing manager. executive officer, plant superintendent, etc. People of this group are responsible for executing the plans and policies made by top level.

Supervisory Level/low Level

This level consists of supervisors, superintendent. foreman, sub-department executives; clerk, etc. Managers of this group actually carry on the work or perform the activities according to the plans of top and middle level management.

Management Planning

In organizations, planning is a management process, concerned with defining goals for company’s future direction and determining the missions and resources to achieve those targets.

To meet the goals, managers may develop plans such as a business plan or a marketing plan.

Planning is goal-oriented

• Planning is made to achieve the desired objective of the business.
• The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected.
• Planning identifies the action that would lead to desired goals quickly & economically.
• It provides a sense of direction to various activities. E.g. Maruti Udhyog trying to capture Indian Car Market by launching diesel models.

 

Planning is looking ahead

• Planning is done for future.
• It requires peeping in future, analyzing it and predicting it.
• Thus planning Is based on forecasting.
• A plan Is a synthesis of forecast.
• It is a mental predisposition for things to happen in future.

 

Planning is an intellectual process

• Planning is a mental exercise involving creative thinking, sound judgment and imagination.
• It is not mere guesswork but rotational thinking.
• A manager can prepare sound plans only if he has sound judgment, foresight and Imagination.
• Planning is always based on goals, facts and considered estimates.

 

Planning involves choice & decision making

• Planning essentially involves a choice among various alternatives.
• Therefore, if there is only one possible course of action, there is no need for planning because there is no choice.
• Thus, decision making is an integral part of planning.
• A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

 

Planning is the primary function of management

• Planning lays foundation for other functions of management.
• It serves as a guide for organizing, staffing, directing and controlling.
• All the functions of management are performed within the framework of plans laid out.
• Therefore planning is the basic or fundamental function of management.

 

Planning is a Continuous Process

• Planning is a never-ending function due to the dynamic business environment.
• Plans are also prepared for a specific period of time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions.

 

Basic Steps in Management Planning Process

• Establish Goals: The first step of the management planning process is to identify specific company goals.

• Identify Resources: Each goal should have financial and human resources projections associated with its completion.

• Establish Goal-Related Tasks: Each goal should have tasks or projects associated with its achievement.

• Prioritize Goals and Tasks: Prioritizing goals and tasks is about ordering objectives in terms of their importance.

• Create Assignments and Timelines: As the company prioritizes projects, it must establish timelines for completing associated tasks and assign individuals to complete them.

• Establish Evaluation Methods: A management planning process should include a strategy for evaluating the progress toward goal completion throughout an established time period.

 

Projects and Questions on Management Principles / Theories

Q. Tanishq Jewellers want to set up MIS in their organization in order to manage the information better across the organization. Can you guide them about the same along with the characteristics, components, advantages and limitations?

Q. Premier Automobiles plans to set up a base in various countries across Europe. Can you please explain that how can they analyze the culture using Hofstede’s five dimensions of culture before setting up a base in those countries?

Q. A two-year-old start-up company dealing in 3D Printing is undergoing a major overhaul due to COVID 19 and require your help
a. They are facing a lot of resistance to the changes being implemented and want to understand the reasons for this resistance?
b. Can you help them manage these resistances to change?

Question: Can you do a SWOT Analysis of any 1 Indian company of your choice dealing in FMCG?

Question: MG Motors have been having a tough time from the time of their launch in India. They feel that there have been a lot of pilferages and wastage in their production and they need to sort it out as soon as possible. Also, the time taken to manufacturer one unit of their cars is extremely high as compared to global benchmarks. They have hired you as a consultant for the same? Can you explain the concepts of JIT and Lean Production to them and help them apply the same in order to reduce their troubles?

Question: Lemon Tree, a premium chain of hotels across the country has suffered tremendous losses during this pandemic and have hired you as a consultant in order to analyze the same

• a. Can you explain Political, Economic and Social forces which have had an impact on the business?
• b. Can you also help them apply the contingency approach of Modern approach in order to face the pandemic effectively?

Q. Define Management. What are the various functions of Management (Planning, Organizing, Staffing, Directing and Controlling).
Management is the art and science of getting the objective of the organization accomplished through and with people.

Q. Mention the role of Managers. Interpersonal and informational roles.

Q. Define MBO in planning. How does effectiveness differ from efficiency?

Q. What is sole trading? Write any two demerits of sole trading (Limited resources, Short life).

Q. What is partnership? Define Joint Stock Company.

Q. Explain Henri Fayol’s 14 principles of management.

Q. Explain the various functions of management.

Q. Define planning. What are the objectives of planning? State limitations of planning.