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❖ -Fayol's 14 principles

Figure 1 – Henri Fayol’s 14 Principles of Management (Fayol, 1916)

1. Division of Work
In practice, employees are specialized in different areas and they have
different skills. Different levels of expertise can be distinguished within the
knowledge areas (from generalist to specialist).

Personal and professional developments support this. According to Henri

Fayol specialization promotes efficiency of the workforce and increases
productivity. In addition, the specialization of the workforce increases their
accuracy and speed. This management principle of the 14 principles of
management is applicable to both technical and managerial activities.

2. Authority and Responsibility

In order to get things done in an organization, management has the
authority to give orders to the employees. Of course with this authority
comes responsibility. According to Henri Fayol, the accompanying power
or authority gives the management the right to give orders to the
subordinates.
The responsibility can be traced back from performance and it is therefore
necessary to make agreements about this. In other words, authority and
responsibility go together and they are two sides of the same coin.

3. Discipline
This third principle of the 14 principles of management is about
obedience. It is often a part of the core values of a mission statement and
vision in the form of good conduct and respectful interactions. This
management principle is essential and is seen as the oil to make the
engine of an organization run smoothly.

4. Unity of Command
The management principle ‘Unity of command’ means that an individual
employee should receive orders from one manager and that the
employee is answerable to that manager.

If tasks and related responsibilities are given to the employee by more

than one manager, this may lead to confusion which may lead to possible
conflicts for employees. By using this principle, the responsibility for
mistakes can be established more easily.

5. Unity of Direction
This management principle of the 14 principles of management is all
about focus and unity. All employees deliver the same activities that can
be linked to the same objectives. All activities must be carried out by one
group that forms a team. These activities must be described in a plan of
action.

The manager is ultimately responsible for this plan and he monitors the
progress of the defined and planned activities. Focus areas are the efforts
made by the employees and coordination.
6. Subordination of Individual Interest
There are always all kinds of interests in an organization. In order to have
an organization function well, Henri Fayol indicated that personal interests
are subordinate to the interests of the organization (ethics).
The primary focus is on the organizational objectives and not on those of
the individual. This applies to all levels of the entire organization, including
the managers.

7. Remuneration
Motivation and productivity are close to one another as far as the smooth
running of an organization is concerned. This management principle of
the 14 principles of management argues that the remuneration should be
sufficient to keep employees motivated and productive.

There are two types of remuneration namely non-monetary (a

compliment, more responsibilities, credits) and monetary (compensation,
bonus or other financial compensation). Ultimately, it is about rewarding
the efforts that have been made.

8. The Degree of Centralization

Management and authority for decision-making process must be properly
balanced in an organization. This depends on the volume and size of an
organization including its hierarchy.

Centralization implies the concentration of decision making authority at

the top management (executive board). Sharing of authorities for the
decision-making process with lower levels (middle and lower
management), is referred to as decentralization by Henri Fayol. Henri
Fayol indicated that an organization should strive for a good balance in
this.

9. Scalar Chain
Hierarchy presents itself in any given organization. This varies from senior
management (executive board) to the lowest levels in the
organization. Henri Fayol ’s “hierarchy” management principle states that
there should be a clear line in the area of authority (from top to bottom
and all managers at all levels).
This can be seen as a type of management structure. Each employee can
contact a manager or a superior in an emergency situation without
challenging the hierarchy. Especially, when it concerns reports about
calamities to the immediate managers/superiors.

10. Order
According to this principle of the 14 principles of management, employees
in an organization must have the right resources at their disposal so that
they can function properly in an organization. In addition to social order
(responsibility of the managers) the work environment must be safe, clean
and tidy.

11. Equity
The management principle of equity often occurs in the core values of an
organization. According to Henri Fayol, employees must be treated kindly
and equally.
Employees must be in the right place in the organization to do things right.
Managers should supervise and monitor this process and they should
treat employees fairly and impartially.

12. Stability of Tenure of Personnel

This management principle of the 14 principles of management
represents deployment and managing of personnel and this should be in
balance with the service that is provided from the organization.

Management strives to minimize employee turnover and to have the right

staff in the right place. Focus areas such as frequent change of position
and sufficient development must be managed well.

13. Initiative
Henri Fayol argued that with this management principle employees should
be allowed to express new ideas. This encourages interest and
involvement and creates added value for the company.
Employee initiatives are a source of strength for the organization
according to Henri Fayol. This encourages the employees to be involved
and interested.

14. Esprit de Corps

The management principle ‘esprit de corps’ of the 14 principles of
management stands for striving for the involvement and unity of the
employees. Managers are responsible for the development of morale in
the workplace; individually and in the area of communication.

Esprit de corps contributes to the development of the culture and creates

an atmosphere of mutual trust and understanding.

Levels of management

he levels of Management and Their Functions are Discussed Below:

1. Top Level Management

Top-Level Management is also referred to as the administrative level. They coordinate services and
are keen on planning. The top-level management is made up of the Board of Directors, the Chief
Executive Officer (CEO), the Chief Financial Officer (CFO) and the Chief Operating Officer (COO) or
the President and the Vice President.

The Top-level management controls the management of goals and policies and the ultimate source
of authority of the organization. They apply control and coordination of all the activities of the firm
as they organize the several departments of the enterprise which would include their budget,
techniques, and agendas.

Top-level management is accountable to the shareholders for the performance of the organization.
There are several functions performed by the top-level management, but three of them are the
most important, and they are:

• To lay down the policies and objective of the organization

• Strategizing the plans of the enterprise and aligning competent managers to the
departments or middle level to carry them out.

• Keeping the communication between the enterprise and the outside world.

2. Middle Level of Management

Middle-level Management is also referred to as the executory level, they are subordinates of the
top-level management and are responsible for the organization and direction of the low-level
management. They account for the top-level management for the activities of their departments.
The middle-level managers are semi- executives and are made up of the departmental managers
and branch managers. They could be divided into senior and junior middle-level management if
the organization is big. They coordinate the responsibilities of the sub-unit of the firm and access
the efficiency of lower-level managers.

The middle-level managers are in charge of the employment and training of the lower levels. They
are also the communicators between the top level and the lower level as they transfer
information, reports, and other data of the enterprise to the top-level. Apart from these, there are
three primary functions of the middle-level management in the organization briefed below:

• To carry out the plans of the organization according to policies and directives laid down by
the top-level management.

• To organize the division or departmental activities.

• To be an inspiration or create motivation for junior managers to improve their efficiency.

3. Lower Level of Management

The lower level of Management is also referred to as the supervisory or the operative level of
managers. They oversee and direct the operative employees. They spend most of their time
addressing the functions of the firm, as instructed by the managers above them.

The lower-level managers are the first line of managers as they feature at the base of operations,
so they are essential personnel that communicates the fundamental problems of the firm to the
higher levels. This management level is made up of the foreman, the line boss, the shift boss, the
section chief, the head nurse, superintendents, and sergeants

Taylor's work on scientific management

Principles of Scientific Management by Taylor:

F.W. Taylor or Fredrick Winslow Taylor, also known as the ‘Father of scientific
management’ proved with his practical theories that a scientific method
can be implemented to management. Taylor gave much concentration on
the supervisory level of management and performance of managers and
workers at an operational level. Let’s discuss in detail the five principles of
management by F.W Taylor.

1. Science, not the Rule of Thumb-

This rule focuses on increasing the efficiency of an organisation through
scientific analysis of work and not with the ‘Rule of Thumb’ method. Taylor
believed that even a small activity like loading paper sheets into boxcars
can be planned scientifically. This will save time and also human energy.
This decision should be based on scientific analysis and cause and effect
relationships rather than ‘Rule of Thumb’ where the decision is taken
according to the manager’s personal judgement.

2. Harmony, Not Discord-

Taylor indicated and believed that the relationship between the workers
and management should be cordial and completely harmonious.
Difference between the two will never be beneficial to either side.
Management and workers should acknowledge and understand each
other’s importance. Taylor also suggested the mental revolution for both
management and workers to achieve total harmony.

3. Mental Revolution-
This technique involves a shift of attitude of management and workers
towards each other. Both should understand the value of each other and
work with full participation and cooperation. The aim of both should be to
improve and boost the profits of the organisation. Mental Revolution
demands a complete change in the outlook of both the workers and
management; both should have a sense of togetherness.

4. Cooperation, not Individualism-

It is similar to ‘Harmony, not discord’ and believes in mutual collaboration
between workers and the management. Managers and workers should
have mutual cooperation and confidence and a sense of goodwill. The
main purpose is to substitute internal competition with cooperation.

5. Development of Every Person to his Greatest Efficiency-

The effectiveness of a company also relies on the abilities and skills of its
employees. Thus, implementing training, learning best practices and
technology, is the scientific approach to brush up the employee skill. To
assure that the training is given to the right employee, the right steps
should be taken at the time of selection and recruiting candidates based
on a scientific selection.
 Peter Drucker's contribution

1. Nature of Management:

Drucker is against bureaucratic management and has emphasised management with creative

and innovative characteristics. The basic objective of management is to read towards

innovation. The concept of innovation is quite broad. It may include development of new

ideas, combining of old and new ideas, adaptation of ideas from other fields or even to act as

a catalyst and encouraging others to carry out innovation.

He has treated management as a discipline as well as profession. As a discipline,

management has its own tools, skills, techniques and approaches. However, management is

more a practice rather than a science. Thus, Drucker may be placed in ’empirical school of

management’.

While taking management as a profession. Drucker does not advocate to treat management

as a strict profession but only a liberal profession which places more emphasis that managers

should not only have skills and techniques but should have right perspective putting the

things into practice. They should be good practitioners so that they can understand the social

and cultural requirements of various organisations and countries.

2. Management Functions:

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According to Drucker, management is the organ of its institution. It has no functions in

itself, and no existence in itself. He sees management through its tasks. Accordingly, there

are three basic functions of a manager which he must perform to enable the institution to

make its contribution for:

(i) the specific purpose and mission of the institution whether business, hospital or

university;
All these three functions are performed simultaneously within the same managerial action. A

manager has to act as administrator where he has to improve upon what already exists and s

already known. He has to act as an entrepreneur in redirecting the resources from seas of

tow or diminishing results to areas of high or increasing results.

Thus, a manager has to perform several functions: setting of objectives, making, organising

and motivating. Drucker has attached great importance to the objective setting function and

has specified eight areas where clear objective setting is required. These are: market

3. Organisation Structure:

Drucker has decried bureaucratic structure because of its too many dysfunctional effects.

Therefore, it should be replaced. He has emphasised three basic characteristics of an

effective organisation structure.

He has identified three basic aspects in organising activity analysis, decision analysis, and

relation analysis. An activity analysis shows what work has to be performed, what kind of

work should be put together, and what emphasis is to be given to each activity in the

organisation structure.

4. Federalism:

Drucker has advocated the concept of federalism. Federalism refers to centralised control in

decentralised structure Decentralised structure goes far beyond the delegation of authority.

It creates a new constitution and new ordering principle. He has emphasised the close links

between the decisions adopted by the top management on the one hand and by the

autonomous unit on the other.

This is just like a relationship between federal government and state governments. In a

federal organisation, local managements should participate in the decision that set the limits

of their own authority. Federalism has certain positive values over other methods of

organising.
5. Management by Objectives:

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Management by objectives (MBO) is regarded as one of the important contributions of

Drucker to the discipline of management. He introduced this concept in 1954. MBO has

further been modified by Schleh which has been termed as management by results’. MBO

includes method of planning, setting standards, performance appraisal, and motivation.

According to Drucker, MBO is not only a technique of management but it is a philosophy of

managing. It transforms the basic assumptions of managing from exercising cattalo to self-

control.

6. Organizational Changes:

Drucker has visualised rapid changes in the society because of rapid technological

development. Though he is not resistant to change, he feels concerned for the rapid changes

and their impact on human life. Normally, some changes can be absorbed by the

organisation but not the rapid changes.

Decision making process

The 7 steps of the decision making process

Step 1: Identify the decision that needs to be made

When you're identifying the decision, ask yourself a few questions:

• What is the problem that needs to be solved?

• What is the goal you plan to achieve by implementing this decision?

• How will you measure success?

Step 2: Gather relevant information

Gathering information related to the decision being made is an important step to making an
informed decision. Does your team have any historical data as it relates to this issue? Has anybody
attempted to solve this problem before?
It's also important to look for information outside of your team or company. Effective decision
making requires information from many different sources. Find external resources, whether it’s doing
market research, working with a consultant, or talking with colleagues at a different company who
have relevant experience. Gathering information helps your team identify different solutions to your
problem.

Step 3: Identify alternative solutions

This step requires you to look for many different solutions for the problem at hand. Finding more
than one possible alternative is important when it comes to business decision-making, because
different stakeholders may have different needs depending on their role. For example, if a company
is looking for a work management tool, the design team may have different needs than a
development team. Choosing only one solution right off the bat might not be the right course of
action.

Step 4: Weigh the evidence

This is when you take all of the different solutions you’ve come up with and analyze how they would
address your initial problem. Your team begins identifying the pros and cons of each option, and
eliminating alternatives from those choices.

Step 5: Choose among the alternatives

The next step is to make your final decision. Consider all of the information you've collected and how
this decision may affect each stakeholder.

Sometimes the right decision is not one of the alternatives, but a blend of a few different
alternatives. Effective decision-making involves creative problem solving and thinking out of the box,
so don't limit you or your teams to clear-cut options.

One of the key values at Asana is to reject false tradeoffs. Choosing just one decision can mean losing
benefits in others. If you can, try and find options that go beyond just the alternatives presented.

Step 6: Take action

Once the final decision maker gives the green light, it's time to put the solution into action. Take the
time to create an implementation plan so that your team is on the same page for next steps. Then it’s
time to put your plan into action and monitor progress to determine whether or not this decision
was a good one.

Step 7: Review your decision and its impact (both good and bad)

Once you’ve made a decision, you can monitor the success metrics you outlined in step 1. This is how
you determine whether or not this solution meets your team's criteria of success.

If this solution was not the best alternative, your team might benefit from using an iterative form of
project management. This enables your team to quickly adapt to changes, and make the best
decisions with the resources they have.
Organization culture

Types of organizational culture

According to professors Robert Quinn and Kim Cameron at the University of Michigan, there are four
main types of organizational culture. These types are the Adhocracy Culture, Clan Culture, Hierarchy
Culture, and Market Culture.

1. Adhocracy Culture

Also known as the Create Culture, this corporate structure enables a fast-paced and creative working
environment where employees can think outside the box. Companies with this organizational culture
always seek cutting-edge solutions to clients’ problems. To put it simply, these workers are risk-
takers. Individual ideas are welcome, and every team member is free to experiment if the concept
contributes to the company’s success. For example, Apple is a well-known company with this
corporate culture.

2. Clan Culture

In some environments, almost every team member feels like family. Such an organization most likely
operates under the Clan Culture. Also known as the Collaborative Culture, workspaces with this
organizational structure have a collaborative spirit where employees collectively contribute to the
company’s growth. Most family-owned businesses tend to adopt this corporate value style. For
example, the American food company Chobani operates with this organizational culture. Sometimes,
the boss acts more like a parental figure than an employer. Employees tend to consult each other
before making an important business decision, and such organizations often thrive on loyalty.

3. Hierarchy Culture

The Hierarchy Culture, or Control Culture, is usually more formal than most. Here, every operation
follows a procedure, and deviation from the structure is impossible. Unlike the Adhocracy or Clan
Culture, Hierarchy Culture operates on traditional business ethics. Examples include companies in
the healthcare sector. These businesses have a recognized chain of command, and employees are
only sometimes free to mingle with their bosses. Routines, careful planning, employee expertise, and
total risk avoidance characterize the Hierarchy Culture.

4. Market Culture

The Market Culture, as the name indicates, is results-driven. Market Culture is also known as
Compete Culture, and the primary goal of companies adopting this model is usually to dominate the
market. Deadlines, sales targets, and constant strategizing usually characterize such workplaces. The
companies that operate with this culture are highly competitive with demanding bosses who expect
employees to deliver results as fast as possible. Amazon is an example of a company that practices
this organizational culture. Overall, profitability is the primary framework for the Market Culture.

It is hard to determine which organizational culture is best because each has its benefits and
drawbacks. However, you can decide on more than one of these styles in your company’s corporate
culture.
❖ -motivation

Douglas McGregor's theories (Theory x and Theory y)

In the year 1960, Douglas McGregor, a management professor at the Massachusetts Institute of
Technology, proposed two theories based on the hypothesis related to human behaviour in his
book The Human Side of Enterprise. He believed that while motivating people, there are certain
assumptions about human nature that should be taken into consideration. According to McGregor,
there are two aspects of human behaviour at work which he described as Theory X (negative aspect)
and Theory Y (positive aspect).

The process of stimulating and inspiring people at work to contribute to the best of their capability
for the achievement of organisational objectives is known as Motivation. Motivation is the inner
psychological force that activates and compels a person to behave in a particular manner. It is a
process of inductive individual desire towards a goal. Human beings drive satisfaction when the goal
is achieved. Both financial and non-financial factors motivate employees in the organization.

Theory X

According to McGregor, Theory X is based on the following assumptions:

• The average human being will avoid work whenever it is possible because of their inherent
dislike of work.

• Most of the people are gullible and not very intelligent.

• Most people by nature, always resist change and have security as their priority.

• An average person doesn’t like responsibility, lacks ambition, and prefers to be directed by
others.

• Lastly, an average human being is self-centred and indifferent to organisational goals.

Simply put, Theory X assumed that the basic source of an employee’s motivation is money after
which he prefers security.

Based on these assumptions, the following proposition is put together:

1. It is the responsibility of the management to organise the elements of a productive enterprise

(money, equipment, material, and people) in the interest of economic gain.

2. While talking about human beings, management includes directing the efforts of people,
motivating them, controlling their actions, and modifying their actions and behaviour based on the
organisational needs.

3. It is essential for the management to reward, persuade, punish, and control people. It is because,
without their active intervention, these people would become passive and even resist the
organisational needs.

4. As it is assumed in this theory that people dislike work, it is necessary to coerce, control, direct,
and threaten them with punishment to get things done from them for the accomplishment of the
organisational goals.

As the above-mentioned assumptions are negative in nature, it can be said that Theory X developed
by McGregor is a traditional or conventional approach to motivation. The management feels external
control is more appropriate to deal with irresponsible, unreliable, and immature people. McGregor
believes that an organisation that closely supervises and controls its subordinates, and has highly
centralised authority is one which is built upon the notions of Theory X. Besides, in these kinds of
organisations there is autocratic leadership, and the employees, if any, will have very less say in the
decisions affecting them. The management motivates people by promising them greater pay and
through the threat of punishment. Simply put, an organisation following Theory X will have an
impersonal climate as it uses carrot and stick approach to motivation.

Theory Y

The assumptions on which Theory X was formulated had some faulty misconceptions about human
nature. McGregor realised that there are some needs that were not considered in Theory X, such as
ego satisfaction, social needs, and self-fulfilment of individual workers. Therefore, to meet these left-
out needs, McGregor developed a counter approach, known as Theory Y, which proposes that:

1. It is the responsibility of the management to organise the elements of a productive enterprise in

the interest of social as well as economic gains.

2. The theory also states that people are not passive or restricted to the needs of the organisation by
nature. Their nature changes to this because of experience.

3. Characteristics like readiness to direct behaviour towards the organisational goals, motivation,
potential for development, etc., are already present in the people. The management has to just make
it possible for these people to recognise these characteristics in themselves.

4. Besides, it is important for the management to arrange the condition and methods of operations
of the organisation so that the employees can achieve their personal goals by directing their efforts
towards the goals of the organisation.

The assumptions on which Theory Y is based are as follows:

• First of all, it is assumed that if the working conditions are favourable, then it can be as
natural as play and rest. Average human being has no inherent dislike towards work. If the
work is meaningful to a person, then it can be a source of satisfaction and there is a high
possibility that it is performed voluntarily.

• If an individual is committed to work, then he/she will exercise self-control and self-direction
to accomplish the work and organisational objectives. In simple terms, the threat of
punishment or external control is not the only means of motivating an individual to complete
the work and accomplish organisational goals.

• Besides, if an objective is associated with some reward, then the employee will have a high
commitment toward the accomplishment of those objectives. For example, a person will be
more committed to an organisational objective or work which accomplishes his self-
development needs and satisfies his ego. Also, once an individual has selected his goal, he
will continue with the work without any control or close supervision.

• If an average human being gets proper working conditions, then they will not step back from
their responsibility. They will not only take the responsibility but will also work towards
fulfilling it. Simply put, lack of ambition, avoidance of responsibility, and emphasis on
security arise because of experience, not because of an individual’s inherent dislike of work.
 • It also assumed that imagination, creativity, and ingenuity are found in high amounts in
human beings.

• People have unlimited potential but, under modern industrial life conditions, their
intellectual potential is not fully utilised.

With the above explanation and assumptions, it can be seen that the modern and dynamic nature of
human beings is represented through Theory Y. This theory is based on assumptions that are closer
to reality. An organisation following Theory Y has decentralised authority, a two-way communication
system, job enrichment, and participative leadership. The theory focuses on responsible jobs and
self-control. With the help of the assumptions of Theory Y, there can be a more cooperative
relationship between the workers and their managers. In simple terms, with Theory Y, the
management of an organisation tries to establish a working environment in which an individual’s
personal needs and goals can relate to the organisational goals.

different steps in conflict management

Step 1: Define the source of the conflict.

The more information you have about the cause of the problem, the more easily you can help to
resolve it. To get the information you need, certain resolution strategies can be adopted as follows.
Use a series of questions to identify the cause, like, "When did you feel upset?" "Do you see a
relationship between that and this incident?" "How did this incident begin?"

As a manager or supervisor, you need to give both parties the chance to share their side of the story.
It will give you a better understanding of the situation, as well as demonstrate your impartiality. As
you listen to each disputant, a conflict resolution technique is to say, "I see" or "uh huh" to
acknowledge the information and encourage them to continue to open up to you.

Step 2: Look beyond the incident.

Often, it is not the situation but the point of view of the situation that causes anger to fester and
ultimately leads to a shouting match or other interpersonal conflict.

The source of the workplace conflict might be a minor issue that occurred months before, but the
level of stress has grown to the point where the two parties have begun attacking each other
personally instead of addressing the real problem. In the calm of your office, you can get them to
look beyond the triggering incident to see the real cause. Once again, probing questions will help
ease a disagreement, like, "What do you think happened here?" or "When do you think the problem
between you first arose?

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Step 3: Request solutions.

After getting each party's viewpoint, the next step is to get them to identify how the situation could
be changed. Again, question the conflicting parties to solicit their ideas: "How can you make things
better between you?" When managing conflict as a mediator, you have to be an active listener,
aware of every verbal nuance, as well as a good reader of body language.

You want to get the disputants to stop fighting and start cooperating, and that means steering the
discussion away from finger pointing and toward ways of resolving the conflict.

Step 4: Identify solutions both disputants can support.

You are listening for the most acceptable course of action. Point out the merits of various ideas, not
only from each other’s perspective, but in terms of the benefits to the organization. For instance, you
might suggest the need for greater cooperation and collaboration to effectively address team issues
and departmental problems.

Step 5: Agreement.

The mediator needs to get the two parties to shake hands and accept one of the alternatives
identified in Step 4. The goal is to reach a negotiated agreement. Some mediators go as far as to
write up a contract in which actions and time frames are specified. However, it might be sufficient to
meet with the individuals and have them answer these questions: “What action plans will you both
put in place to prevent conflicts from arising in the future?” and “What will you do if problems arise
in the future?

❖ -Different schools of mgmt.