PADMA - General Principles of Management

8/13/2019 PADMA - General Principles of Management

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K. PADMAVATHI

MBAI year

OAA-MAVMM School OfManagement

K. PADMAVATHI


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Introduction:

14 principles as the general principles of

management was suggested by Henry Fayol

He was born in 1841 in Istanbul, is often

known as the person who developed a general

theory of business administration. He was a

mining engineer who worked as the managing

director of a big French mining company named

as Compagnie de Commentry-Fourchambeau-

Decazeville for the last 30 years of his working life

(18881918). He died in Paris in 1925.K. PADMAVATHI


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This principle is basically the same with

Adam Smiths Division of Labour whichmeans specialization. According to Fayol,

the object of division of work is to produce

more and better work with the same effort.

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Authority is the right to give orders and the power to exactobedience. Distinction must be made between a managersofficial authority deriving from office and personal authority.

(Note: Later in 1959, social psychologists John French and

Bertam Raven, defined five sources of power as: coercive power,reward power, legitimate power, referent power and expertpower).

According to Fayol, authority is not to be conceived ofapart from responsibility, that is apart from sanctionrewardor penaltywhich goes with the exercise of power.

Responsibil i ty is a corol lary of authority, it is its natural

consequence and essential counterpart, and wheresoever authority

is exercised responsibi l i ty arises.

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Discipline, being the outcome of differentvarying agreements, naturally appears underthe most diverse forms; obligations ofobedience, application, energy, behaviour,

vary, in effect from one firm to another, fromone group of employees to another, from onetime to another. Nevertheless, general opinionis deeply convinced that discipline is absolutely

essential for the smooth running of businessand that without discipline no enterprise couldprosper.

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This principles emphasizes that an

employee should receive orders from one

superior only. Fayol says that if it is

violated, authority is undermined, discipline

is in jeopardy, order distributed and

stability threatened.

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One head and one plan for a group of

activities having the same objective.

(Note: Organizations write and

announce vision and mission statements,

objectives and strategies so that the

organizations align and go in the samedirection).

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This principle calls to mind the fact that

in a business the interest of one employee or

group of employees should not prevail over

that of the concern, that the interest of the

home should come before that of its

members and that interest of the state

should have pride of place over that of one

citizen or group of citizens.

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Remuneration of personnel is the price ofthe services rendered. It should be fair and, asfar as is possible, afford satisfaction both topersonnel and firm (employee and employer).

Three modes of payment in use for workersare :

Time rates

Job rates and

Piece rates.

Fayol also mentioned about bonuses andprofit-sharing and non-financial incentives.

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Everything which goes to increase the importance of thesubordinates role is decentralization, everything which goes toreduce it is centralization. The question of centralization ordecentralization is a simple question of proportion, it is a matterof finding the optimum degree for the particular concern.

The degree of centralization must vary according todifferent cases: If the moral worth of the manager, his strength, intelligence,

experience and swiftness of thought allow him to have a widespan of activities he will be able to carry centralization.

If conversely, he prefers to have greater recourse to theexperience of his colleagues whilst reserving himself theprivilege of giving central directives, he can effect considerabledecentralization.

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The scalar chain is the chain of superiors

from the ultimate authority to the lowest

ranks.

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Fayol defines the formula for order as a placefor everyone and everyone in his place. Heclassifies two types of order as material order, whichmeans everything must be in its appointed place and

social order, which presupposes the most successfulexecution of the two most difficult managerialactivities:

Good organization and good selection. Socialorder demands precise knowledge of the human

requirements and resources of the concern and aconstant balance between these requirements andresources.

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Desire for equity and equality of treatmentare aspirations to be taken into account indealing with employees.

(Note: In motivation theories oforganizational behaviour equity is important.

John Stacey Adams, (behavioralpsychologist) asserted that employees seek tomaintain equity between the inputs that they

bring to a job and the outcomes that theyreceive from it against the perceived inputs andoutcomes of others in 1963).

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Time is required for an employee to get used to newwork and succeed in doing it well, always assuming thathe possesses the requisite abilities. If when he has gotused to it, or before then, he is removed, he will not have

had time to render worthwhile service. If this berepeated indefinitely the work will never by properlydone.

Generally the managerial personnel of prosperousconcerns is stable, that of unsuccessful ones is unstable.

Instability of tenure is at one and the same time causeand effect of bad running. In common with all the otherprinciples, therefore, stability of tenure and personnel isalso a question of proportion.

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Much tact and some integrity are

required to inspire and maintain everyones

initiative, within the limits imposed, byrespect for authority and for discipline. The

manager must be able to sacrifice some

personal vanity in order to grant this sort ofsatisfaction to subordinates.

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Esprit de corps means Union is strength. Harmony,union among the personnel of a concern, is great strength in thatconcern. The principle to be observed is unity of command; thedangers to be avoided are

(a) a misguided interpretation of the motto divide and

rule(b) the abuse of written communications.

(a) Personnel must not be split up.Dividing enemy forces toweaken them is clever, but dividing ones own team is a gravesin against the business.

(b) Abuse of wr i tten communications.Wherever possible,contacts should be verbal; there is gain in speed, clarity andharmony.

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K. PADMAVATHI

PADMA - General Principles of Management

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