Karnataka 2nd PUC Business Studies Notes Chapter 2 Principles of Management
→ Principles are some truth about some phenomenon, that provide guidelines for decision making & action.
→ Meaning of Principles of Management: These are the guiding rules of laws for management action.
→ Features: Universal application. General guidelines, formed by practice and experimentation, Flexible, Behavioral nature, cause & effect relationship, contingents.
→ Fayol’s 14 principles of management:
- Division of work
- Authority & Responsibility
- Unity of command
- Unity of Direction
- Subordination of individual interest to general interest
- Remuneration of Employees
- Centralization & Decentralization
- Scalar principle
- Stability of Personnel
- Esprit de corps.
→ Division of work: Divide any work into small jobs and should be performed by specialist so that the quality of production will improve.
→ Authority & Responsibility: There should be a balance between the two. Excess of authority may lead to misuse of power. Responsibility without authority may lead to slaveries.
→ Discipline: One should be obedience towards the rules and regulation of the organization
→ Unity of command: There should be one boss for every, individual employee to avoid dual subordination & confusion.
→ Unity of Direction: Each group should be lead by one leader only. It ensures unity of action and coordination.
→ Subordination of individual interest to general interest: Individual interest of the worker should not disturb the organization’s interest. Priority is given to group interest.
→ Remuneration of Employees: Remuneration should be good and equitable. Good remuneration ensures good relationship between workers and management.
→ Centralization & Decentralization: Centralization means making the power in the hands of one or few. Decision making powers among more persons are called decentralization.
→ Scalar principle: Formal line of authority from highest to the lowest ranks are known as scalar chain.
→ Gang Plank: The scalar principle should be followed by all managers as well as subordinates. This scalar chain can be violated only in case of emergency to facilitate rapid and easy communication without delay. This is called Gang plank.
→ Order: People and materials must be in the suitable place at appropriate time for maximum efficiency.
→ Equity: Kindness and Justice in the behavior of manager towards the employees or workers.
→ Stability of Personnel: Employee turnover should be minimized to maintain organizational efficiency.
→ Initiative: It refers to the steps taken by the employees towards their self motivation.
→ Esprit de corps: It is nothing but the spirit of cooperation. Worker should work in team and develop a sense of oneness and should have mutual confidence and understanding.
→ Scientific Management: Refers to the use of scientific and standardized tools, methods and trained workers in all organizational activities to achieve the organizational goal with minimum cost and wastage.
→ Principles of Scientific Management: It is a science, but not rule of thumb, It is a Harmony not discord, Runs on cooperation not on individualism, Development of efficiency and prosperity, Optimum production.