Principles of Management Class 12 Short Notes

Principles refer to a statement that reflects the fundamental truth about some phenomenon on cause and effect relationship. Here are the principles of management class 12 short notes.

Principles of Management

Management principles are fundamental truths of general validity that have value in predicting the result of management action.

Difference Between F.W. Taylor and Henry Fayol

Principles of Henri Fayol

The best way to learn Fayol’s 14 principles is to learn this mnemonic:
“DAD U C USSR O I SEE”

D = Division of Work
A = Authority and Responsibility
D = Discipline
U = Unity of Direction
C = Centralisation and Decentralisation
U = Unity of Command
S = Scalar Chain
S = Stability of Personel
R = Remuneration of Employees
O = Order
I = Initiative
S = Subordination of Individual Interest to General Interest
E = Espirit De Corps
E = Equity

Division of Work

According to this principle, the whole work must be divided into small tasks. Instead of providing the whole work to one person, smaller units of work should be assigned to one person according to the capability, qualification, and experience of the person.

Authority and Responsibility

According to Fayol, authority is the right to give orders and obtain obedience and responsibility as the result of authority.

There must be a balance between authority and responsibility.

Discipline

Discipline is the obedience to organizational rules and employment agreements which are necessary for the organization’s work.

Unity of Direction

According to this principle, one unit means one plan i.e. all the units of the organization should be moving towards the same objective through coordinated and focused results.

Centralisation and Decentralisation

The concentration of decision-making authority is called centralization whereas its dispersal among more than one person is known as decentralization.

According to Fayol, there is a need to balance subordinate involvement with managers through decentralization and retention of final authority through centralization.

Unity of Command

According to this principle, an employee should receive orders from one boss only because if he/she receives orders from more than one boss then he/she will get confused.

Scalar Chain

Scalar Chain means the line of authority or chain of superiority from highest to lowest rank.
Some information has to be passed in urgency or in case of emergency, Fayol permitted a shortcut in the chain which is known as Gang Plank.

Stability of Personal

It refers to no frequent transfer and termination. According to Fayol, employee turnover should be minimized to maintain organizational efficiency.

Personnel should be selected very carefully but once selected they should be kept at their position for a minimum fixed tenure.

Remuneration of Employees

According to this principle, employees in the organization must be paid fairly adequately to give them minimum satisfaction.

Employees should be paid wages and salaries which would give them a reasonable standard of living.

Order

According to Fayol, people and materials must be in suitable places at appropriate times for maximum efficiency.

In this principle, order does not mean command but it refers to the orderly arrangement of men and materials.

Initiative

The initiative refers to taking the first step with self-motivation. Fayol suggested that workers should be encouraged to develop and carry out their plans for improvements.

It gives satisfaction to the employees if the management welcomes the suggestions and ideas of the employees.

Subordination of Individual Interest to General Interest

According to this principle, the interest of the organization must supersede the interest of individuals or employees.

In the organization, every employee is working with some objective. At the same time, there is always an objective of the organization.

Espirit De Corps

According to this principle, management should promote team spirit, unity, and harmony among the employees. This will bring cooperation and coordination, especially in large organizations.

A manager should replace ‘I with we’. This will give rise to mutual trust and belongingness among team members.

Equity

Equity refers to the kind, fair, and just treatment of employees. If a manager is biased in dealing with employees, they will get dissatisfied and will not contribute to their maximum capacity.

Equity here does not mean equal salary to a peon and the supervisor but equity means the application of some disciplinary rules, and leave rules, in the same way, irrespective of grade, position, and gender.

Principles of F.W. Taylor

F.W. Taylor became famous as the father of scientific management. He emphasized an adaption of scientific methods to the problems of management.

Here are his four scientific principles:

Science, not rule of thumb

According to this principle, Taylor insists that each job performed in the organization should be based on scientific inquiry and not on intuition, experience, or the hit-and-miss method.

Rule of thumb means the dictatorship of the manager whereas scientific decisions are based on cause of effect and scientific measurement of methods of production.

Harmony, not discord

According to this principle, those who work together in an organization must work in harmony i.e. with mutual give and take and proper understanding.

He insists that there is a need to change the attitude of workers and management towards each other. Management should share the gains of the company with the workers, at the same time workers must contribute to their best level.

Cooperation, not individualism

This principle is the extension of harmony, not discord. According to this principle, the work must be carried on in cooperation with each other with confidence and understanding for each other.

Management should welcome the good suggestions of the employees and they should be rewarded for their suggestions at the same time, workers should not go on strike and make unreasonable demands.

Development of each and every person to his or her greatest efficiency and prosperity

Industrial efficiency depends upon the efficiency of workers whereas workers’ efficiency depends upon proper training and selection.

Taylor insisted that due care should be taken while selecting the employees and after selecting, they must be given jobs according to the qualifications.

Also, employees must be sent for training from time to time to update their knowledge. This will ensure the greatest efficiency and prosperity for both the company and the workers.

Scientific Techniques of Taylor

There are total 7 techniques given by Taylor which are as follows;
1) Functional Foremanship
2) Standardisation and Simplification of work
3) Differential Piece Wage System
4) Fatigue Study
5) Method Study
6) Motion Study
7) Time Study

Functional Foremanship

In this technique, Taylor suggested the division of the factory into two departments;

Taylor felt that workers must be free from the burden of planning and they must concentrate on the work and production. To develop specialization, Taylor suggested under each department, there must be some functional expert to supervise, guide, and instruct the workers.

Taylor said that a foreman (lowest ranking manager and highest ranking worker) must be intelligent, educated, honest, energetic, etc. which are the qualities that cannot be found in one person so Taylor stressed having a minimum of 8 experts.

Standardisation and Simplification of Work

Standardization refers to the process of setting standards for every business activity. It does not mean only quality standards but it refers to setting up standards for size, type, weight, measures, and quality of product.

Simplification refers to the elimination of unnecessary diversity of products, sizes, and types. It will result in savings on the cost of labor, machines, and tools.

Controlling Class 12 Notes Business Studies

Differential Piece Wage System

In this technique, Taylor wanted to differentiate between efficient and inefficient workers. He wanted to pay more to the efficient workers and less to the inefficient workers.

Due to this, efficient workers would be motivated to work more, and inefficient workers would also be motivated by seeing the efficient worker with more pay.

Fatigue Study

Taylor suggested that the period and frequency of rest intervals should not be decided by the wish and experience of the manager but by conducting a scientific study known as a fatigue study.

Method Study

This study is conducted to find out the best method or way of performing the job which keeps the cost of production minimum and maximizes the organization’s resources.

Motion Study

Motion study is conducted to determine the movements of workers when they are performing the jobs, to differentiate between productive and unproductive movements, to cut unproductive and wasteful movements, etc.

Time Study

The technique is conducted to determine:
1) Standard time required to perform a job.
2) Setting up standard targets for the workers
3) Determining the number of workers required to perform a job.
4) Categorizing the workers into efficient and inefficient workers.

Mental Revolution

Taylor said that in every organization, workers feel that they are overburdened and underpaid whereas management feels that workers always go against the policy, damage the equipment, and work carelessly.
Taylor stressed that there is a need to change the attitude of both groups. He referred to the change as a mental revolution of mind between positive thinking and feeling of cooperation with each other.

Characteristics of Principles of Management

1. Universal Application
2. General Guidelines
3. Formed by practice and experimentation
4. Flexible
5. Mainly Behavioral
6. Based on cause and effect relationship
7. Contingent

Importance of Principles of Management

1. Providing managers with useful insight into reality.
2. Optimum utilization of resources
3. Scientific decisions
4. Meeting changing environment requirements
5. Fulfilling social responsibility
6. Management training, education, and research

These are the principles of management class 12 short notes. If you have any doubt, you can either join my telegram channel or comment below to get your doubts resolved.