Chapter 2 management principles

Management principles are like the principles of

science and principles of law, it gives us the
general guidelines to take decisions regarding
desire goal. to what to do, what not to do? How
to do, etc.
 Nature of management principles:
1)Management principles are flexible :
management principles are flexible as when
the environment or requirement changes
the principles of management and their
applicability is also change. Application of
principles is depends upon the individuals

2) As like management ,Management

principles are also universal applicable:
management principles are applicable to all
organization in the world whether its
service sector , profitable organisation , non
profitable organisation , private sector ,
public sector , small enterprise, medium
enterprise, large enterprise etc.
3)Principles are formed by experiments : All
principles of management are formed by
practice and lots of experiments . but it can
be mordify according to requirement .

4)Depends on cause and effect: the

management principles have intended
relationship between cause and effect . it is
time saving thing that to apply same
principle on same situation( cause) it gives
same result.
5)Contingent : principles of management are
not assuring for the positive result it would
be give positive and negative result as well.
It will be seen that the application of
principles give positive effect( result) but
another time it would give negative effect as
well.

6)Principles gives general guidelines: the

management principles are not assuring to
achieve 100% result. It is only guide for us .
same principles applying on different
business gives different result.
 7)Based on human behaviour: all humans are
different from each other and the efficiency
of work is also different . the application of
principles are based on the human that what
will they choose for the situations.

 Significance of principle of management :

1} Optimum utilisation of resources and
effective administration : business have to
utilise all the available resources with their
optimum capacity.
By resources we meant human as well as
machinery or material resource .
Optimum utilisation of resources means to
use the available resource by their full
capacity / get maximum benefit in minimum
cost.
2} providing mangers with useful insights into
reality : managers had read mangemt theory
in their study but that principle of
management give that chance to apply that
principles in real world situation to find out
the problems and apply the suitable principle
on that .
3} management education, research, training:
management principles are majorly depends
on the managment theory . for getting the
accurate result from management principles
managers have to qualified in that particular
field and trained by practice . that
management qualification is provided by
various institute by BBA and MBA .
4} fulfilling social responsibility: All businesses
having a responsibility towards the society at
where they are doing business they to pay
back to their socity not only by giving job
opportunity but also by proving free
education , equity in employment , wages rate
system , taking care of environment, taking
steps in development of rural area. Etc.
5}scientific decision: decisions related to the
management is always based on some logic
without logic there are no mangement
principle ,
6} meeting changing environment
requirement : as we know mangemet is the
 dynamic process it will change by changing
environment . the principles of mangemt is
also change by the requiment or by
environment

 Henri fayol : Henri Fayol was born on 1841

and passed away on 1925 . he was graduated
from Mining academy of St.Etienne in 1860.

- He was the first person who identify four

functions of management which was
introduced as planning, organising,
command, coordination, control which
was now updated as planning, organisation
, staffing, directing, cotrolling.

- He is also known as the Father of General

management.
- Fayol gave 14 principles of management
in his book name “Administration
industrielle et generale” on 1917. It was
translated into English as “ General and
industrial management” in 1949.
Which are as follows.
1)DIVIsion of work :work is to divided into
the small task and given to the
appropriate ( specialised ) employee.
According to Fayol – by division of work
can given more productive ( efficient)
work . that’s why in a corporate world
work is divided into the departments.

2)Authority and responsibility: According

to Fayol- Authority and responsibility are
2 sides of a coin. In which Authority is
the power to giving order and to be obey
that order by subordinates. On the other
hand responsibility is giving the result by
efficient and effective work.IN case
manager have only authority not the
responsibility than the work could not be
done in proper manner. It may increase
waste of time , efferts, and resourses.
3)Unity of command : According to this
Principle , there should be one and only
boss for every employee. Unity of
command states that if a employee
receive instructions from more than one
boss( authority) than he may confuse or
conflict between more than one order
and not able to do one job at a time.
Rather than if he receive one order at a
time than he can do his job in very
efficient manner.
4) Unity of direction : By this principle
Fayol states that all the units of an
organisation may have only one plan or
one goal this can maintain the unity of
action. All of the employees work
together for acheiving that specific goal.

5)Subordinate of individual interest to

general interest: All individuals have
their own interest ( goal) for work in a
company. If they work for their own goal
than it quite possible that no one can
 achieve their goal but there is a chance
to achieve their personal goal if they
work together for one goal of
organisation.
6)Remuneration of employee :the
remuneration of employee should be fair
for the organisation as well as to the
employees also. Remuneration includes
the salary, commission, wages and any
other compensation .it should be equals
to their work. The fair remuneration is
motivate for the employee .

7)Centralisation and decentralisation of

work: when the decision taking power is
only with one authority it is known as
centralisation of work but when it is
divided into the more than one person it
is known as decentralisation of work.
There is required to be balance between
both . authority have to divide their
work, some power with their
 subordinate but have to retain final
authority.

8)Scalar chain: According to Fayol there

should be a chain of communication
between superior and subordinates . the
communication flow in the organisation
is to be upward or downward but in case
of Emergency, and saving time it can
flow department to department.

Draw chart ( shown in school )

Leave the space

9)Stability of personnel : stability of

personnel means to retain the
employees in the organisation . higher
the employees turnover increase the
cost of selection , and training . lower
the employees turnover will decrease
the cost as well as increase the work
efficiency.
10) Order: Availability of resources
whether its human and material at right
place and right time. Thing at at place
make sure that there is no delay in any
work .
11) Equity : equity means equlity in all
employess whether they are different by
gender , age, religion, caste, nationality,
language, . Equal opportunity is to be
given to everyone
12) Initiative : workers should be
encouraged for giving suggestions/
advice on the plan for improvement in
the organaistion. But it is nerver means
to disobey or reject the established plan
of organisation.
13) Esprit de crop : esprit de crop states
team work, According to Fayol,
management should promote team
work/ team spirit. Lack of team work or
harmony in work can difficult the way of
achieving the objectives of oragisation.
Managers should use “we” instant of” I”.
 this will rise the trust among the
members .
14) Discipline: Discipline means
obedience of order, rules , regulations of
the organisation. Discipline is required to
be maintain by all whether they are
superior or subordinate , employees or
workers( labour).
 Difference between unity of command and
unity of direction : do it you self
 Difference between fayol’s principles and
taylor principle : do it you self.

FREDRICK WINSLOW TAYLOR:

F.w. Taylor : F.W Taylor was born on 1856 and
was passed away on 1915 . he was an
American mechanical Engineer . he had
wrote so many books seems like:
Concrete, plain and reinforce,
Notes on belting
On the arts of cutting metals
A piece rate system
The making of a putting green
 Not for the genius but for the average man.
“ The principle of scientific management”
published in 1911
He gave 4 scientific principles of
management which are as follows:
1)Science is not rule of thumb: this principle
of Taylor refers that . like science
management principles is also not the’rule
of thumb’. Traditional principles or methods
can be evaluate or investigate through
study, analysis, practice.
2)Harmony not discord: Harmony refers to
the equalise in all levels of the organisation
because all departments and level are
equally important for running the business
if top level make some planning , that plan
should be run by mid and lower level,
workers should not going for strike, and
authority have to share organisational gain
with their employees.
3)Cooperation not individualism: According
to this principle “ there are coordination in
between all the workman whether they as
superior or subordinates . superior have to
 listen subordinate’s idea, suggestion
whereas subordinates have to follows or
obey the rules regulation of the
organisation. In the organisation if all work
force will work together , they can
achieving the common goal of the
organisation.
4)Development of each and every person to
his or her greatest efficiency and prosperity:
workers development is very important for
the growth and development of business .
train each and every employee of the
business for every work so there is no delay
in the work of business and increasing
mental , physical and intelligible capacity of
worker should increase the efficiency of
company.

 Techniques of scientific management :

a)Functional foremanship : foreman represent
the lower level authority it is also divided
into some subordinate authorities because
one person cant be able do all work at a
 time . that is known as functional
foremanship . it is divided into –
Chart by bookkkk……..
b) Method study : method study is to find
out the best option out of the available
alternatives. The main aim behind using
method study is to reduce the cost , and
saving the time .
c)Motion study : motion study refers to
movement of things this study about the
lifting , putting objects, changing position in
organisation. Unnecessary movement of
things can less effective work.
d) Time study :time study determind the
standard time taken in a particular job.the
objective of time study is to determined
number of employee to be employed for a
particular task.
e) Fatigue study : every person have to take a
break while working that break calm their
mind and they will work with double energy
which will increase the productivity of
business. But there would be a balance
between break and work lots of work can
 reduce the effective work and lots of break/
unlimited break even reduce the
productivity of organisation.
f) Differential piece wages system : Taylor
introduce piece rate wages system by his
book “ A piece rate system “
by this theory he would like to
give reward to the efficient worker who
really work on and above the standard set
byy the authority. This wages system
motivate the workers to work hard or better
their performance . this wages system
change the workers mind set towwads
competition this mind set is known as
MENTAL REVOLUTION.
For more wages all worker are
work together with their full efficiency
and get more output for organisation.

g) Standardisation and simplification of work:

According to Taylor- Standardisation of
work refers to set standard for each activity
for:
For Establishing quality and excellence in
work.
For establish standard in performance
whether the performance of a human or
manchine.
For reduce the negligence
Simplification of work refers to the
eliminate unnecessary thing to reduce the
cost of production and increase the efficient
work in a concern.
 Chapter 3 business environment

 Meaning of business environment :

 Features of business environment :
1) Dynamic in nature
2)Specific and general force:
3)Totality of external force:
4)Inter – relatedness
5)Uncertainty:
6)Complexity :
7)Relatively:
 Importance of business environment:
A)It enable the firm to identify opportunity
and getting the first mover advantage :
B)It helps the firm to identify threats and
earlier warning signals :
C) It helps in tapping usefull resources :
D) It
helps in coping with rapid changes :
E) It helps in assisting in planning and policy
formulation:
F) It helps in improving performance:
  Types of business environment :
-Social environment
- Political environment:
- legal envinonemt :
- technology environment:
- Economic environment:
* Economic environment in India:

 Impact of change in government policies on

business:
# Increasing competition
# more demanding customer :
# rapidly change in techno.:
# necessity for change
# Need for developing human resource:
# market orientation :
# Loss of budgetary support to the the public
sector:
 Chapter 4 planning
 Meaning of planning :
 Features of planning :
a) Planning is primary fuction of management:
Planning focus on achiving objectives :
b)
c) planning is pervasive :
d) planning is continues :
e) planning is futuristic:
f) planning envolves decision making:
g) planning is mental exercise

 Importance of planning :
1)Planning provides direction :
2)Planning reduce the risk of uncertainty :
3)Planning reduce the overlapping and waste
ful activities:
4)Planning provides innovation :
5)Planning facilitates decision making :
6)Planning establish the standard of
controlling :
 Limitation of planning :
 1)planning leads to rigidity
2)planning may not work dynamic
environment
3)planning reduces creativity
4)planning involves huge
5)planning is a time-consuming process
6)planning does not guarantee success
* Planning process
1)setting objectives
2)developing premises
3) Identifying alternative courses of action:
4) evaluative alternative courses:
5) selective alternative :
6) implementing the plan:
7) follow up action :
* Types of plan :

- single use plan

- standing plan
* other classifications of plan
1) objectives of plan
2) strategy
3) policy
4) procedure
5) method
6) Rule
7) programme
8) Budget:
Chapter 5 Organisation
Meaning :

Definition of organisation : by book

 Process of organiation :
1)Identification and division of work:
2)Departmentalisation :
3)Assignment of duties
4)Establishing of duties and reporting
relationships:
 Importance of organisation :
1)Adaptation of changes:
2)Optimum utilisation of resources:
3)Development of personnel:
4)Expansion and growth :
5)Effective administration :
6)Clarity in working relationships:
7)Benefits of specialisation :
 Organisational structure :
  Types of organisational structure :

1)Functional structure :
2)Divisional structure :
 Formal and informal organisation
- Formal organisation
Meaning
Definition of formal organisation
Features of formal organisaiton
Advantage of formal org.
Disadvantage of formal org.
Informal organisation :
Meaning
Definition of informal organisaiton :
Features of informal org.
Advantage of informal informal org.
Drawback of informal org.

Delegation of authority and responsibility :

Meaning of delegation :
Definition of delegation ;
Elements of delegation
1)Delegation of authority :
 2)Delegation of responsibility :
3) Accountability :
- Importance of delegation
1)Employee development:
2)Motivation of employee :
3)Facilitation of growth :
4)Basis of management hierarchy :
5)Better coordination ;
6)Effective managment :

 Centralisation and decentralisation

- Meaning Decentralisation
- Definition of decentralisation
- Importance of decentralisation :
1)Develops initiative among subordinates
2)Develops managerial talent for the
future :
3)Quick decision making :
4)Relief to top mangament :
5)Facilitates growth :
6)Better control:
- Centralisation :
 Difference between centralisation and
decentralisation : do it your self
 Difference between Accountability Authority
and responsibility; do it by your self:
Chapter 6 Staffing
Meaning
- Importance of staffing :
 Staffing is the part of human resource
management:
 Process of staffing :
1)Estimating the manpower requirement :
2)Recruitment :
3)Selection:
4)Placement and orientation:
5)Tranning and development ;
6)Performance evaluation :
7)Promotion and career planning:
8)Compensation :
 Aspects of staffing ;
Recruitment :
Sources of recruitment
- Internal source :
Types of internal source
1)Transfer:
2) Promotion
Merits of internal source
Limitation of internal source :
 - External source :
External source recruitment are as
follows:

1} direct recruitment :
2} casual callers
3} advertisement
4} employment exchange :
5) placement agencies and management
consultant :
6} campus recruitment :
7} Recommendation of employees:
8} Labour contractors;
9} Advertisement on television;
10} web publishing :

Merits of external source:

Limitation of external source :

 Selection
- Process of selection :
1)Preliminary screening :
2)Selection test:
 A ] Intelligence tests :
B] aptitude test :
C] Personality test:
D] trade test
E } Interest test :
3)Employment interview :
4)Reference and background check :
5)Selection decision :
6)Medical examination :
7)Job offer
8)Contract of employment
 Traning and development :
- Importance of training to the employee
- Importance of traning to the organisation
- Methods of training on the job :
1) Coaching
2)Job rotation
3) Internship
4)Apprenticeship programme
- Methods of training off the job :
1)Classroom lecture
2)Films;
3)Case study :
4)Computer modelling
5)Vestibule training
6) Programmed instruction
 Chapter 7 directing
Meaning of directing :
Features of directing ;
1)Directing initiates action
2) Directing takes place at every level of
management
3)Directing is a continues process
4) Directing flows top to bottom
- Importance of directing
- Principles of directing
1)Maximum individual contribution
2)Harmony of objectives
3)Unity of command
4)Appropriateness of direction techniques
5)Managerial communication
6)Use of informal organisation
7)Leadership
8)Follow through
 There are 4 elements of directing
1)Supervision
2) Communication
3)Motivation
 4)Leadership

1)Supervision :
- Importants of supervision
2)Motivation
Definition of motivation
Features of motivation
Importance of motivation
 Maslow’s theory of motivation / hierarchy
theory of motivation ;
1)Basic physiological needs:
2)Safety needs
3) Affiliation needs/ belonging need
4)Esteem need;
5)Self actualisation need :
 Financial and non financial motivation ;
1)Financial motivational insentives :
A. pay and allowances
B. profit sharing
C. bonus
D. productivity linked wages incentives
E. co- partnership/ stock option
F. retirement benefit
G. perquisites
2)non financial incentives :
- status
- organisation climate
- career advancement opportunity
- job enrichment
- employee recognisation programmes
- job security
- employee participation
- employee empowerment ;

3)leadership
definition of ledership
features of leadership
importance of leadership
# qualities of a good leader
1)physical features
2)knowledge
3)integrity
4)initiative
5)communication skill
6)motivation skill
7)self confidence
8)decisiveness
 9)social skill
- leadership style
there are 3 basic style of leadership
1} automatic or authoritarian leader
2} democratic or participative leader
3} laissez faire or free- rein leader
4) communication
Definition of communication
Features/ elements of communication
1.sender
2. massage
3.Encoding
4. Media
5.Decoding
6.Receiver
7.Feedback
8.Noise
Importance of communication
- Acts of basis of coordination
- Helps in smooth working of an enterprise
- Acts as basis of decision making
- Increases managerial efficiency :
 - Boosts morale and provides
- Establishes effective leadership
- Promotes cooperation and industrial peace
 Formal/ informal communication
1)Formal communication :
- Single chain
- Wheel
- Circular
- Free flow
- Inverted
2) Informal communication :/ grapevine
network
- Single `stand network ;
- Gossip network
- Probability network
- Cluster network
 Barriers in communication
1)Semantic barriers ;
- Body language and gesture decoding
- Technical jargon
- Unclarified assumption
- Faulty translation
- Symbols with different meaning
- Badly expressed massage :
 2)Psychological barriers :
- Premature evaluation
- Lack of attention
- Loss of transmission and poor retention
- Distrust:

-
3)Organisational barriers :
- Organisation policy
- Rules and regulation
- Status
- Complexity
- Organisaitonal facilities
-
4) Personal barriers :
- Lack of confidence of superior on his
subordinates
- Unwilling to communicate something
- Lack of proper incentives
- Fear of challenge to authority :
 Improving communication effectiveness :
1)Communicate according to the needs of
receiver ;
2)Consult others before communicating :
3)Clarify idea before communication :
4)Communicate for present as well as future :
5)Follow up communications
6) Be a good listener :
7)Ensure proper feedback
8)Convey things of help and value to
listeners ;
9)Be aware of language , tone and content of
massage :
 Chapter 8 controlling
Meaning
Definition of controlling ; According to
Koontz and O ‘ Dannel …… copy from book
 Importance of controlling
1)Accomplishing organisational goal
2)Judging accuracy of standard
3)Making efficient use of resourcces
4)Improving employee motivation
5)Ensuring order and discipline:
6)Facilitating coordination in action
 Limitation of controlling :
1)Difficulty in setting quantitative standard :
2)Little control on external factors ;
3)Resistance from employees
4)Costly affair ;
 Relation between planning and controlling :
 Controlling process
1)Setting performance standards :
2)Measurement of actual performance :
3)Comparing actual performance with
standard :
4)Analysing deviations :
 5)Taking corrective action
 Techniques of management control :
1)Traditional technique :
A. personal observation :personal
observation enables the manager to
collect information of employee. That
technique pressure the employee to well
work . that is a time consuming process
because mangers have to observe their
personnel , personally
B. statistical report :personnel information
related to their performance is read or
analysis by graph, chart, table . that
method of evaluation is more easier to
another .
C. break even analysis : the sales volume at
which there is no profit and no loss is
known as break even point( BEP) it very
useful technique for manger to estimate
profit at different level of sales
break even point : fixed cost / ( selling
price per unit - variable cost )
D. budgetary control :
2) Modern technique
a.Return on investment
b.Ratio analysis
c. Responsibility analysis
d.Management audit
e.PERT and CPM
f. Management information system ;
d