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Chapter
02
Principles
of Management
Multiple Choice:
Ans1: (c) Principles of management are not absolute.
They are just the
guidelines for the decision making in the course of management. That is,
principles of management are not applied as it is in the real business
situations rather they need to be modified by the manager as per the situation
and the requirement.
Ans2: (b) Principles of management were developed over
years by experiences and observations of the managers.
Every manager faces
varying situations in real business organisations. Based on these experiences,
they draw general conclusions and inferences that guide them in their action
and decision making in similar situations. That is, the experiences of the
managers form the basis of the principles of management.
Ans3:
(c) Optimum utilisation of resources entails
employing the limited resources (such as capital and labour) to their
best possible usage so that maximum benefit can be derived with minimum
possible cost.
Principles of
management help in predicting the cause and effect relationship of the
decisions of the managers. Thus, the wastages of resources that may be
associated with the hit and trail method can be avoided. Thus, principles of
management are significant because of optimum utilisation of resources.
Increase in efficiency, initiative and adaptation to changing technology
arrives at later stages, ones the resources are fully utilised.
Ans4: (b) Henry Fayol (1841-1925) was a French mining
engineer
He started his work
in the mining industry at the age of nineteen. Based on his own experience, he
developed the theory of business administration. He gave the concept of
'Administrative Principles'.
Ans5: (a) According to the principle of 'Division of Work',
the work should be divided into small jobs.
This is because of
the fact that any complex task can be performed efficiently if it is divided
into smaller units and performed by specialists.
Ans6: (c) The work of Gang Boss is being described in the
given sentence.
Gang boss is
assigned the task of keeping the machines and tools ready for operations. That
is, he has to take care of the materials which are to be used by the working
people. On the other hand, repair boss ensures that these machines are in proper
working condition. Route clerk is there to watch over the route of production
and instruction card clerk assigns the duties of the workers.
Ans7: (b) Among the options given above, Functional
Foremanship is not a principle of management.
Because it is a
technique of scientific management as given by Taylor. It comprises of the
methods or steps to be taken to achieve a desired goal. On the other hand, the
other three are principles of management that acts as guidelines for decision
making in the actual practice of the techniques.
Ans8: (d) The technique that is being described in the
given sentence is 'Method Study'. According to the 'Method Study' there
is always a 'one best way' to complete any task. Every task can be performed
via best method to gain efficiency. The basic purpose of this study is to
reduce the costs to its minimal and increase the productivity to its maximum.
Time study, Motion study and Fatigue study aims at standardising the time
limits, eliminating the unwanted actions and deciding the break limits,
respectively.
Ans9:
(a) 'Mental Revolution', a term given by Taylor
implied that the management and workers should change their attitude and
thinking towards harmony. Management should take care of the needs and
suggestions given by the workers and workers on the other hand, should work to
their best capability. This will build a harmonious working environment in the
organisation.
Ans10:
(b) The false statement is 'Fayol's principles are
applicable in specialised situations whereas Taylor's principles have
universal application'.
The correct statement in place of this is, '
Fayol's principles are universally applicable whereas Taylor's principles are
applicable only in specialised situation.'
Short Answer Type:
Ans1:
The principle of 'Unity of Command' states that
any person should be answerable to just one boss. If an individual
receives command from two or more people then, this principle is violated.
According to Fayol, this principle plays an important role in management. If
this principle is violated then, it leads to confusion in the mind of the
employee which leads to instability and disturbance. For example, suppose A
(sales manager) gives B a task that has to be completed in 5 days. On the other
hand, C (finance manager) asks B to complete the same task in 3 days. This will
lead to confusion in terms of targets.
Ans2:
The term 'Scientific management' was developed by
Frederick Taylor (1856-1915) in 1911. It refers to the classical outlook
of management which focussed on devising the best ways of doing the work and
thereby increasing the effectiveness and efficiency of work. Scientific
management implies working according to standardised techniques and tools and
with the help of specialised personnel so as to improve the quantity as well as
the quality of the product and the same time reducing the costs. Scientific
management is also known as Taylorism.
The Following are
three principles of scientific management.
i. Harmony, Not Discord: According to this principle, the managers and
the workers should maintain a harmonious work environment. They should
realise that they are dependent on each other. Only if they work in amity, will
they be able to perform better. Taylor emphasised on complete mental
revolution. That is, the workers should change their attitude and each one should
realise others importance. Management should take care of
the needs of the workers and workers on the other
hand should work to their best efficiency. Both should work in harmony towards
the common goals of the organisation.
ii. Science, Not Rule of Thumb: According to Taylor, instead of rule of thumb
scientific management practices should be followed. Under the rule of
thumb, each manger handles a situation as and when they arise. They used the
trial and error method to find solutions to a problem. Taylor proposed that
instead of this management practices should be scientific. He suggested that a
study of various traditional methods should be done and the best
method/solution among them should be adopted and followed by all the managers
in the organisation. Such a scientific management greatly reduces the costs and
improves efficiency.
iii. Personnel Development: Overall efficiency of the organisation depends
on the individual competencies of the employees. Scientific management
aimed at improving the working capabilities of the employees to their maximum
level. It focussed on the training and development of the labourers to raise
their productivity.
Ans3: In the stated
situation, the Principle of Order is violated. As per the Principle of Order,
there should be right arrangement of things. Everything and everyone should
be at their respective places, in short 'right people at right place and at
right time'. This helps in carrying out the tasks smoothly. If this principle
is violated, then it leads to chaos and delay in work. For instance, if the
files are not kept in a certain order, then it will lead to difficulty in
locating a file when required. This will further lead to delay in the work.
Ans4:
Principles of management play an important role
in managerial practices. They guide the managers in taking actions and decisions.
The following points highlight the significance of Principles of Management
(a) Insights to Reality: Principles of Management are based on years of
experimentation and experience. Thus, these principles guide the
managers, when they face the real world problems. Managers can use them in
different situations to solve the recurring problems.
(b) Logistic Decisions: Decisions regarding management should be taken
carefully. They should be based on reasons and proofs rather than
beliefs and ignorance. As principles of management were developed from real
life problems so, they stand the test of logic and reasoning. Thus, principles
of management help the managers in taking logical decisions that are free from
personal bias.
(c) Basic Education of Management: These principles form the basic roots of
management education. Without them management as a discipline could not
have been developed. That is, they form an important part of management curriculum.
In addition, they also form the basis of further research on management
techniques and methods.
(d) Optimal use of Resources: Principles of management help in the optimum
utilisation of the available resources. With principles of management
the exact cause and effect relationship of the decisions of the managers can be
predicted. Thereby, the wastages
of resources that may be
associated with the hit and trail method can be avoided. Thus, by following the
principles of management, best possible usage of resources becomes possible
such that maximum benefit can be derived with minimum possible cost.
Ans5:
Scalar Chain refers to a pre-defined, formal path
of authority and communication in the order of highest to the lowest.
For example- if A is the CEO of an organisation and he has two paths of
authorities under him. One, A-B-C and the other A-D-E. Everybody in the
organisation follows this chain of authority for communication. For example, If
C wants
to contact with E
then he will have to follow this formal path, as C → B → A → D → E. That is, C
has to first contact the higher authorities (C → B → A) over him who then
transverse the communication to E (A → D → E).
However, in case of
emergency C may directly contact E through 'Gang Plank'. Gang plank is a
shorter emergency route through which the workers lower in the authority chain
can directly contact the persons of higher authority or those working in other
scalar chains.
Long Answer Type:
Ans1:
Scientific management implies knowing exactly
what is to be done and devising the best ways of doing it. This term was
given by Frederick Taylor (1856-1915) in 1911. It suggests that work should be
done according to standardised techniques and tools and with the help of
specialised personnel so as to improve the quantity as well as the quality of
the product and the same time reducing the costs. That is, scientific
management improves the effectiveness and efficiency of work.
The following are
the principles of scientific management.
(a) Science, not a rule of thumb: Before Taylor developed the Principles of
Management, Rule of Thumb was a widely used concept. Under rule of
thumb, each manger handled a situation or problem as and when they arose using
the trial and error method. It was an easily applicable process but was a very
vague and inaccurate technique of determining solutions to the problems. Taylor
fostered the introduction Scientific methods. He believed that for every work
there is only one best method of doing it. He wanted managers to take decisions
on the basis of logic and science rather than rule of thumb. He proposed that
various traditional methods used by the managers should be studied and the best
method/solution among them should be adopted and followed by all the managers
in the organisation. With such scientific management he was able to increase
efficiency to a large extent.
(b) Harmony, not Discord: Taylor emphasised that the managers and the
workers should maintain a harmonious work environment. They should
realise their interdependence and work in amity. He was well acquainted with
the fact that friendly working environment will help in developing the
relations between them. He introduced this principle to maintain a peaceful
kinship between people. Often it is found that if the workers are deprived of
their wishes or demands they generally go on strike. This affects the
productivity and the working environment. To dismiss such a situation Taylor
was ardent about a mental revolution. It implies a change in the thinking of
both the workers and managers. For example, if a worker is having problem with
the working hours, he should talk to the manager about it, instead of letting
it effect the production (by going on a strike). Similarly, the managers should
listen to the worker's suggestions and demands rather than ignoring them.
(c) Cooperation, not Individualism: This principle emphasised cooperation among the
managers and workers over individualism. This principle was an elongation
of the
principle
of 'Harmony, not discord'. According to it, the workers and the manager should
work with mutual understanding of each other. The manager should take care of
the labourers. He should share the company gains with the workers; awarding
them with sufficient incentives to work. Similarly, the labourers should
willingly work, giving their best contribution to the company. This will build
up mutual trust and belongingness within both of them. Work and responsibility
should be equally divided and a sense of cooperation and coordination should be
established.
(d) Personnel Development: Any organisation should focus on the
development of its workers along with the company's growth. This is
because if the workers will have higher proficiency, then they will be able to
increase their contribution to the organisation's development. They should introduce
ways and incentives to build up their competitiveness. Efforts towards
increasing the efficiency should begin at the very first step i.e. while hiring
the workers. Employees should be recruited in a scientific manner. They should
be assigned works according to their mental/physical qualities. For increasing
the efficiency, the workers should be given a proper training.
Ans2:
(a) Unity of Direction: According to this principle, each unit of the
organisation should work towards a common objective. According to it,
units having same goals should have a single head and plan. This principle
helps in eliminating the overlapping of work. For example, if an organisation
is engaged in the manufacturing of two products, then each should have its own
separate department and divisions with their respective heads and plans.
(b) Equity: This
principle focuses on treating each employee fairly equally. That is, it states
that each employee should be equal in the eyes of the manager. Although
this principle calls for kindliness in the behaviour of the manager, however
sometimes force can also be used to set an example for other employees. In
addition, the workers should be regarded as equal grounds of religion,
language, caste, etc. This helps in building an amiable environment. For
example- if workers from different religions or nationalities are working in
the same organisation then no discrimination should be done against any.
(c) Espirit de Corps: This principle recommends that employees should
work in unity with each other. They should work as a team. In other
words, team spirit should be promoted by the manager. Each employee should have
a sense of belongingness. This proves useful especially in large organisations
where without team work, achievement of objectives would become difficult. Team
sprit increases coordination and mutual understanding among the employees and
thereby improves efficiency.
(d) Order: Orderliness
principle focuses on right arrangement of things. Everything and everyone
should be at their respective places, in short 'right people at right place and
at right time'. This helps in carrying out the tasks smoothly. For example, if
files are kept in a certain order then this will help in locating the file
easily when required. Violation of this principle leads to chaos and delay in
work.
(e) Centralisation and Decentralisation: Centralisation refers to the consolidation of power
and authority to one or only few hands. Here, the decision making power gets
reserved to the centre point of an organisation. On the other hand,
decentralisation refers to the delegation of authority to more than one level.
According to Fayol, the involvement of the employees with the higher authority
should be balanced by decentralising the authority to the managers. For example,
if the CEO of a company is responsible for decision making for the entire
organisation then, this is centralisation
of power. On the other hand, if the decision
making power is delegated to managers at the middle and lower level then, this
will be called decentralisation.
(f)
Initiative- According to this principle, workers
should be given enough motivation and incentive to work. They should be
inspired to come up with suggestions for regarding the work. Although
initiatives should be encouraged, but they should be in line with the practices
and rules of the organisation. For example, the managers can ask the workers
for their inputs over how to increase efficiency. Also, good suggestions can be
rewarded.
Ans3:
Functional Foremanship: A foreman
refers to a person who is in charge of the operational level workers.
Taylor suggested that to increase the efficiency, performance of the foreman
should be improved. That is, Taylor focused on the importance of the foreman in
an organisation. Taylor observed and identified few qualities, such as
intelligence, tact, judgement, etc., that a foreman should have. He found that
no single person can have all the required qualities. Thus, he suggested that
instead of a single person, there should be eight persons through which the
functions of a foreman should be accomplished. This technique was given the
name Functional Foremanship. According to this, the planning and the production
functions should be separated. That is, under the manager, there would be one
planning incharge and one production incharge. Each incharge would have four
personnel under him/her.
The following are
the four persons that worked under the planning incharge.
i. Instruction Card Clerk- To give instructions to
the workers.
ii. Route Clerk- To show the route of production.
iii. Time and Cost Clerk- To take care about the time
and costs.
iv.
Disciplinarian- To ensure that
discipline is being maintained.
The
following are the four persons that worked under the production incharge.
i.
Speed Boss- To ensure timely
completion of tasks
ii. Gang Boss- To keep the machines and tools ready
for the workers.
iii.
Repair Boss- To ensure proper
working of the machines.
iv. Inspector- To control the quality of work done.
Mental Revolution: Mental Revolution implies changing the attitude
of the workers and the managers. Mental revolution aimed at improving
the thinking of both, to create a better working environment. The workers and
the manager should change their attitude and each one should realise others
importance. Both should work towards the common goals of the organisation.
Management should take care of the needs of the workers and share the benefits
with them. On the other hand, workers should put in their best efforts. Thus,
the concept of Mental Revolution enunciated on cooperation and mutual trust
between the workers and the managers.
Ans4:
(a) Time Study-
In this technique Taylor emphasised on setting a standard time limit for completing
any particular job. With the help of time measuring tools, considerable
readings were taken for the time taken to complete a task. On the basis of this
a standard time limit is set for each task. This helped in deciding the number
of workers to be employed for the task, determining their wages, etc. 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.
(b) Motion Study-
As the name suggests, motion study refers to the study of motion (movements)
involved while undertaking a task. This technique aims at removing the
unwanted
actions/motions so that the work can be completed in a lesser time. Taylor
along with his associate Frank Gailberth observed the motions of a worker and
categorised them as productive, incidental and unproductive. They demonstrated
that by eliminating the unproductive movements productivity can be increased.
For example, in brick layering they demonstrated that productivity increased by
nearly 4 times by reducing the motions from 18 to 5.
(c) Fatigue Study-
This technique is regarding requirement of rest or break during the work.
If a worker works continuously physical and mental fatigue sets. This reduces
his/her efficiency. Thus, the worker requires rest or break. Fatigue study
identifies the intervals required while completing a task. It suggests that
standard break timings should be decided for improving the working performance
of workers.
(d) Method Study-
This study aims at finding out the best method of completing any work. It
takes into account each and every activity involved in the task. It helps in
reducing the costs and maximising the satisfaction of the customers. Assembly line
production, used by Ford Motors is a popular example of method study.
(e) Simplification and Standardization of Work- Taylor holds up standardization as the very
basis of techniques of scientific management. Standardization as the word
suggests implies setting of milestones or benchmarks for any work or activity.
Various other techniques by Taylor, such as method study, fatigue study and
time study are also based on the concept of standardization.
Simplification on
the other hand means eliminating any unnecessary diversifications in the
product. It aims at fuller utilisation of the resources, reducing inventories
and increasing the turnover. It helps in reducing the costs of labour and
machines. This technique helps in optimum utilisation of resources and removes
the unnecessary costs related to work.
Ans5:
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Basis of Difference
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Taylor’s Contributions
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Fayol’s Contributions
|
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Contribution
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Scientific
Management or
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General
Theory of
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'Taylorism' Theory was
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Administration or
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given by Taylor in 1911.
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'Fayolism' was given by
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Fayol in 1916
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Personality
|
Taylor was
a mechanical
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Fayol was
a mining
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|
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engineer/scientist.
|
engineer/practitioner.
|
|
Principles and
|
Taylor
introduced
|
Fayol
introduced 14
|
|
Techniques
|
Principles
of Scientific
|
Principles
of Management
|
|
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Management and
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such as Order, Equity,
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Functional Foremanship
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Espirit de Corps, etc.
|
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along with the techniques
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|
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such as
method study,
|
|
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motion study, etc.
|
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Application of
|
Principles
are applicable
|
Principles
are accepted
|
|
Principles
|
to specialized situations.
|
everywhere and are
|
|
|
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universal
in nature.
|
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Perspective
|
Taylor's
principles are
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Fayol's
principles are
|
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based on improving the
|
based on the functions of
|
|
|
conditions
of floor level
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the higher level managers.
|
|
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workers first.
|
|
Ans6: The
principles of Taylor and Fayol play an important role in contemporary business
environment. Taylor's scientific management principles and Fayol's
administrative principles provide guidelines to the managers in taking actions
and decisions. They help in explaining and predicting the business situations
and thereby, guides the managerial behaviour. Although they cannot be used as
it is but they prove as important guidelines in complex real business
situations. Managers can use them in different situations to solve the
recurring problems. Decisions taken on the basis of these principles are based
on facts and logic and are thereby, more appropriate. They are developed over
time by a continuous process of observations and experimentation. Thus, they
provide useful insight into the real business situations. These principles have
universal applicability and are used by all organisations irrespective of the
size, nature, region. Moreover, as these principles are based on the human
behaviour so, they help in establishing a relationship between human and
material resources in an organisation. The applicability of these principles
helps in overall development of the organisation. These principles aim at
increasing the overall efficiency in the organisation along with optimum
utilisation of resources. They also highlighted the importance of cooperation
among the employees and the managers while maintaining a harmonious work
environment.
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