Chapter 2 Principles of Management Notes
ASSIGNMENT
Chapter 2 Principles of Management Notes
Meaning of Principles of Management
In any business organization, certain rules and practices are established to guide employee behavior and improve efficiency. These are referred to as Principles of Management. They help in achieving business goals more effectively by aligning human efforts with organizational objectives.
Concept of Principles of Management
Unlike the fixed laws in physical sciences, management principles are flexible and adaptable. Since they are closely connected with human behavior, they can be updated and refined over time. These principles serve as a broad and reliable guide for decision-making and its successful implementation in management practices.
Nature of Management Principles
The key characteristics of management principles include:
They are universal and can be applied to various organizations.
These principles are flexible and not final conclusions.
They act as guidelines, not strict rules.
They significantly influence human behavior.
Their application often depends on situational factors or contingencies.
Importance of Management Principles
Management principles play a crucial role in improving the overall efficiency and effectiveness of business operations. Their benefits include:
Improving managerial effectiveness.
Ensuring optimal use of human and material resources.
Helping businesses make fair and unbiased decisions.
Assisting managers in adapting to changing business environments.
Supporting the fulfillment of social responsibilities.
Enhancing the training, education, and development of employees.
Evolution of Management Thoughts
Introduction to Management Thoughts
Management ideas have evolved through various studies, observations, and practices over time. Different scholars and experts have contributed their own viewpoints, leading to the development of multiple schools of thought in management.
1. Classical Theory of Management
This theory includes ideas developed up to the end of the 19th century. It emphasizes structure, efficiency, and productivity. Key contributors include:
Frederick W. Taylor – Scientific Management
Henry Fayol – General Principles of Management
Max Weber, Henry Gantt, and Frank & Lillian Gilbreth also played vital roles.
2. Neo-Classical Theory of Management
To address the limitations of the classical theory, management thinkers introduced new behavior-based approaches.
Elton Mayo’s Hawthorne Experiments laid the foundation for this theory, which focuses on:
Group dynamics
Human relations
Employee motivation
Key contributors: Elton Mayo, Maslow, Herzberg, McGregor, Likert, Chris Argyris.
3. Behavioral Approach to Management
This approach highlights the importance of employee satisfaction and productivity through understanding psychological aspects.
Topics include:
Human relationships
Leadership styles
Communication methods
Conflict resolution in industry
4. Modern Management Approach
Post-1960, management became more professional and interdisciplinary. It integrates subjects like:
Psychology
Sociology
Mathematics
Statistics
Information Technology
Key contributors include:
Koontz, O’Donnell, Dr. George Terry, Peter F. Drucker, William Ouchi, C.K. Prahalad.
Scientific Management – Frederick Taylor
Introduction
Frederick W. Taylor introduced the concept of Scientific Management and is known as its founder.
He challenged the outdated traditional methods with a systematic and scientific approach.
Meaning
Scientific management represents a mental shift in how employees view their tasks, relationships, and employers. It focuses on efficiency, standardization, and productivity.
Definition
Scientific management means knowing precisely what tasks workers must perform and ensuring those tasks are done in the most efficient and cost-effective way.
Core Concepts of Scientific Management
Assigning tasks based on the mental and physical capabilities of workers.
Ensuring maximum output from every worker.
Providing higher wages (30% to 100%) to fast and efficient workers.
Principles of Scientific Management
Replace traditional methods with scientific techniques.
Let managers plan, and workers implement.
Use job analysis to increase speed and reduce costs.
Standardize tools, equipment, time, and work conditions.
Recruit and train workers scientifically.
Offer incentives and motivation to skilled workers.
Focus on cost reduction while maintaining scientific accuracy.
Foster mutual understanding between workers and employers.
Techniques Used in Scientific Management
Time Study: Analyzing the time taken to complete specific tasks.
Motion Study: Eliminating unnecessary movements to save time and energy.
Differential Wage System: Encouraging efficiency through performance-based wages.
Henry Fayol’s Administrative Principles
Henry Fayol categorized business operations into six functions:
Technical
Commercial
Financial
Security
Accounting
Managerial
He formulated 14 key principles based on practical experience:
Division of Work
Authority and Responsibility
Discipline
Unity of Command
Unity of Direction
Subordination of Individual Interest to General Interest
Fair Remuneration
Centralization
Scalar Chain (Hierarchy)
Order
Equity
Stability of Personnel
Initiative
Espirit de Corps (Team Spirit)
Contribution of Peter F. Drucker
Peter F. Drucker emphasized the value of human resources in management. His major contributions include:
Management by Objectives (MBO)
Self-regulation in Management
Focus on Human Resource Management, Marketing, and Stress Management
Due to his extensive influence, he is widely regarded as the Father of Modern Management.