Principles of Management

BBA _ Semester I
2024
Unit I

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Unit I
Part C

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Discussion question (s)
• Explain why studying management history is important.

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Management History
• How the field of study called management has evolved.
• Today’s managers still use many elements of the historical approaches
to management.
• Effects of the past on present thought and action.
• Learning from past mistakes and successes.

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Early Management (3000 BC-1776)
• Indus Valley Civilization
• Employing tens of thousands of people
• Who told each worker what to do?
• Who ensured there would be enough bricks/stones at the site to keep
workers busy?
• Someone had to plan what was to be done, organize people and
materials to do it, make sure those workers got the work done, and
impose some controls to ensure that everything was done as planned.

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Industrial revolution
• Starting in the late eighteenth century when machine power was
substituted for human power
• These large, efficient factories needed “someone” to forecast demand,
ensure that enough material was on hand to make products, assign
tasks to people, direct daily activities, and so forth.
• That “someone” was a manager.

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Division of labor
• Job specialization
• The breakdown of jobs into narrow and repetitive tasks

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Classical approach (1911-1947)
• First studies of management
• Emphasized rationality and making organizations and workers as
efficient as possible.
• Two major theories compose the classical approach:
• Scientific management [Frederick W. Taylor, Frank and Lillian Gilbreth]
• General administrative theory [Henri Fayol and Max Weber].

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Scientific Management developed by F.W.Taylor
• F.W.Taylor became famous as a father of scientific management.
• He emphasized on adoption of scientific methods to the problems of
management.
• He was primarily concerned about the efficiency of workers and
optimum utilization of resources.
• Contributions:
• Shop Management
• Piece Rate System
• Principles of Scientific Management

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Scientific Management
• Year 1911
• Frederick Winslow Taylor’s Principles of Scientific Management was
published.
• Described the theory of scientific management
• Scientific Management: An approach that involves using the scientific
method to find the “one best way” for a job to be done.
• Modern management theory was born

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 Scientific Principles of Management
• Taylor formulated four principles of scientific management
• Science, not rule of thumb
• Harmony, not discord
• Cooperation not individualism
• Development of workers to their greatest efficiency and prosperity

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 Advantages of Scientific Management
• Improves efficiency of business through simplification and specialization.
• Helps in reducing cost of production by eliminating all types of wastages.
• Due to decrease in price, firm is enable to capture a bigger share in the
market.
• Mutual understanding and cooperation brings workers and management
closer.
• More training to improve the skill of workers.
• Enables the workers to earn more with the introduction of differential price
wage system

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Taylor’s Scientific Management Principles
• Develop a science for each element of an individual’s work to replace
the old rule-of-thumb method.
• Scientifically select and then train, teach, and develop the worker.
• Heartily cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.
• Divide work and responsibility almost equally between management
and workers. Management does all work for which it is better suited
than the workers.

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Gilbreths
• The Gilbreths invented a device called a microchronometer that
recorded a worker’s hand-and-body motions and the amount of time
spent doing each motion.
• The Gilbreths also devised a classification scheme to label 17 basic
hand motions (such as search, grasp, hold), which they called
therbligs.
• This scheme gave the Gilbreths a more precise way of analyzing a
worker’s exact hand movements.

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Discussion question (s)
• How today’s managers use scientific management

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General Administrative Theory
• General administrative theory focused more on what managers do and
what constituted good management practice.
• Principles of management
• Fundamental rules of management that could be applied in all
organizational situations and taught in schools.

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Principles of Management
• A principle refers to a statement which reflects the fundamental truth
about some phenomena based on cause and effect relationship.
• Management principles are broad and general guidelines for decision-
making and behavior of managers.
• Guidelines for managerial actions
• Formed by observation and experiments

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Importance of Management Principles
• Providing managers with useful insight into reality.
• Optimum utilization of resources.
• Scientific decisions
• Meeting changing environment requirement
• Effective administration
• Fulfilling social responsibilities
• Management training, education and research

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Fayol’s Principles of Management
• Henry Fayol-Father of Management Studies and Thoughts
• He made clear distinction between technical and managerial skills
• He identified the main steps in the process of management which are
considered the major functions of management-planning, organizing,
staffing, directing and controlling.
• He developed fourteen principles of management which act as
guidelines for managers to perform managerial activities.

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Fayol’s 14 Principles of Management
• Division of work. Specialization increases output by making
employees more efficient.
• Authority. Managers must be able to give orders, and authority gives
them this right.
• Discipline. Employees must obey and respect the rules that govern the
organization.

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Fayol’s 14 Principles of Management
• Unity of command: Every employee should receive orders from only
one superior.
• Unity of direction: The organization should have a single plan of
action to guide managers and workers.
• Subordination of individual interests to the general interest: The
interests of anyone employee or group of employees should not take
precedence over the interests of the organization as a whole.

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Fayol’s 14 Principles of Management
• Remuneration: Workers must be paid a fair wage for their services.
• Centralization: This term refers to the degree to which subordinates
are involved in decision making.
• Scalar chain: The line of authority from top management to the
lowest ranks is the scalar chain.

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Fayol’s 14 Principles of Management
• Remuneration: Workers must be paid a fair wage for their services.
• Centralization: This term refers to the degree to which subordinates
are involved in decision making.
• Scalar chain: The line of authority from top management to the
lowest ranks is the scalar chain.

Only for internal academic use

Fayol’s 14 Principles of Management
• Order: People and materials should be in the right place at the right
time.
• Equity: Managers should be kind and fair to their subordinates.
• Stability of tenure of personnel: Management should provide orderly
personnel planning and ensure that replacements are available to fill
vacancies.

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Fayol’s 14 Principles of Management
• Initiative: Employees allowed to originate and carry out plans will
exert high levels of effort.
• Esprit de corps: Promoting team spirit will build harmony and unity
within the organization.

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 Relevance of Taylor and Fayol’s Principles
• Both focus on maximizing the efficiency
• Both insist on cooperation between employees and employers
• Both give more importance to organizational interest over the
individual interest
• Both suggested division of work for specialization.
• Taylor and Fayol’s principles are complementary to each other.

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Max Weber
• Max Weber was a German sociologist who studied organizations.
• He developed a theory of authority structures and relations based on
an ideal type of organization he called a bureaucracy.
• Bureaucracy
• A form of organization characterized by division of labor, a clearly
defined hierarchy, detailed rules and regulations, and impersonal
relationships.
• His theory became the structural design for many of today’s large
organizations

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 Division of labor Jobs broken down into simple, routine, and well-defined tasks

Authority hierarchy Positions organized in a hierarchy with a clear chain of command

Formal selection People selected for jobs based on technical qualifications

Formal rules and regulation System of written rules and standard operating procedures

Impersonality Uniform application of rules and controls , not according to

personalities

Career orientation Managers are career professionals, not owners of units they manage

Characteristics of Weber’s Bureaucracy

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Discussion question (s)
• Do bureaucracies still exist today?
• How today’s managers use general administrative theory.

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Behavioral approach (Late 1700s – 1950s)
• Organizational Behavior (OB)
• The study of the actions of people at work
• Robert Owen, Hugo Munsterberg, Mary Parker Follett, and Chester
Barnard.
• Hawthorne Studies

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Quantitative approach
• Use of quantitative techniques to improve decision making.
• This approach also is known as management science.
• Applying statistics, optimization models, information models,
computer simulations, and other quantitative techniques to
management activities.
• Linear programming is a technique that managers use to improve
resource allocation decisions

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Total quality management, or TQM
• Total quality management, or TQM, is a management philosophy
devoted to continual improvement and responding to customer needs
and expectations.
• Quality of goods and services is continually improved
• Uses statistical techniques to measure every critical variable in the
organization’s operations. These are compared against standards to
identify problems, trace them to their roots, and eliminate their causes

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Contemporary approaches
• Two contemporary management perspectives— systems and
contingency—are part of this approach.
• Systems theory is a basic theory in the physical sciences.
• However, it wasn’t until the 1960s that management researchers began
to look more carefully at systems theory and how it related to
organizations.

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Contemporary approaches
• A system is a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole.
• An organization takes in inputs (resources) from the environment and
transforms or processes these resources into outputs that are
distributed into the environment.
• The organization is “open” to and interacts with its environment.

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Contemporary approaches
• The contingency approach (sometimes called the situational
approach) says that organizations are different, face different
situations (contingencies), and require different ways of managing.
• A good way to describe contingency is “if, then.” If this is the way my
situation is, then this is the best way for me to manage in this situation.

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