An academic principle or law is a scientific truth. It is a general proposition sufficiently applicable to the series of phenomena under consideration to provide a guide for thought. In the words of Megginson "There exists a systematic body of knowledge that constitutes a core of principles of management that are true in all managerial situations: these principles are applicable whether it is a business organisation, a government one or a religious one, a social one or any other type and they are true at all levels." The need for such principles are defined by Koontz O'Donnel as under:
Henry Fayal made 14 statements and used the term 'Principles' for them. Many others have propounded many varied principles ranging from 10 to 57. These are as under: -
Division of work
The work of every person in the organization should be limited as far as possible to the performance of a single leading function.
This is a concept originally in production management ushered in through the advent of the Industrial Revolution, which in turn introduced production of goods and services in a mass scale through the application of newly invented knowledge in science and technology. Earlier one artisan used to attend to the total fabrication of a single article or product. In the modern world the individual artisan is replaced by a team of organized workers carrying on mass production of goods and services through the use of plant and equipment. It is the concept of division of work (or functional responsibilities) that bind together this group individual into a well-balanced and cohesive team
The concept of Division of Work was first mentioned by Adam Smith in his book 'Wealth of Nations'. He propounded that by dividing the job of producing needles into distinct processes and entrusting each process to a single individual, the overall production of needles per individual in a unit of time multiplies by several times. The individual worker attains a specialization in his job and improves his speed of performance and output tremendously. These are the benefits of Division of Work.
The concept holds equally valid in all kinds of managerial tasks. Performing homogeneous tasks lead to specialization. It also enables the individual to secure beforehand the special skills needed for each category of job, even at the point of his entry into the organization. Indeed the hierarchy of organizational structure in corporate management is always made on functional basis. This process of division of work is further carried out within each functional division or department, i.e. up to the floor level or desk level.
When Business Organization were owned, controlled and managed by one or two individual, there was not much need for applying Division of Work. Anyone in the work team comprising the proprietor/partners and handful of assistants employed could doing anything and everything. But today's business extends its operational jurisdiction over a wide geographical area. Powers and decision making opportunities are delegated down the hierarchy, after formally defining and codifying the rules or system procedures for attending each task. Everyone knows what his tasks are and how to do the same. He attends to his job with a sense of independence, while still working in a inter-dependent culture. He is accountable. He has opportunities to show his merit and secure reward for the same. These are the benefits of division of work and functional specialization.
While division of work and specialization is thus the bedrock of modern system of very large enterprises and complex organizational structure, it should also pointed out, team-working applying division of work are not new to our knowledge, as these are practiced even by tiny creatures like ants and bees.
Specialization also has its disadvantages. Frequently situation turns out that no one is attending to a complete job and each is performing a part of the job. The pride and job devotion which the original artisan, turning out a complete product possessed may not be experienced by the modern worker. His individual contribution may become invisible in a group endeavour. A good worker may suffer on account poor contribution of his part by another co-worker. There may be lack of coordination or cooperation. Today's modern business management grapples with such problems to find solutions.
Authority & Responsibility
Responsibility goes with authority. The two are co-extensive, as responsibility is a natural consequence and a corollary of authority. Wherever authority is exercised, responsibility arises.
Discipline
It implies respect for agreements designed to secure obedience. It must prevail throughout an organization to ensure its smooth functioning. Discipline ensures fair and clear agreements, good supervision and judicious application of penalties.
Unity of Command
Every employee must receive orders and be accountable to only one boss. It is necessary to avoid conflicting orders and to ensure order and stability in the organization.
The hierarchical Management system is based on delegation of powers and functions. At every level employee are delegated powers. They also receive work order, instructions and guidelines. Frequently a good part of such instructions/guidelines are structured and codified in Manuals, Job charts or Office orders. The employee is accountable for executing his functions and producing the results fixed. Who will directly enforce this accountability? Under the concept of Unity of Command the employee will always report to his immediate superior in the hierarchical ladder who alone will communicate orders, instructions and guidelines to him. The organization following this concept can secure the maximum contribution from each employee. On the other hand if an employee is to function under simultaneous command of two or more superiors, he may be receiving uncoordinated or even mutually conflicting job orders, resulting in confusion and chaos. Employees without commitment may also try to cover their failures. At anytime he may plead that he had not attended properly the work entrusted by one superior, because another superior wanted something else very urgently. In an emergency or crisis management, problems can be effectively pursued and solved by a team only if the principle of Unity of Command is adhered to and the team works with commitment and cooperation
One specific advantage of Unity Command is derived at the Command level. At the higher level it provides a convenient span of control. At any point in a hierarchy a senior Manager deals and communicates only with a few persons immediately junior to him and reporting to him, though there may some hundreds of employees in junior position working down in the Organization. This concept is dealt with separately.
Unity of command is linked to the concept of routing or flow of communications/orders. The General Manager will route his orders to the functional manager, who in turn to the Department head and from there to the section head and finally to the base worker. The concept of unity of command is not violated, if in an urgent situation a general Manager communicates directly to a junior level, overlooking the intermediate functionaries. In such a situation, the intermediaries concerned should not be kept in the dark, but a copy of the communication is also endorsed to them.
Unity of Direction
There should be one head and one plan for a group of activities having the same objective. This is essential to ensure unity and coordination in the enterprise. Unity of command does not exist without unity of direction but not necessarily flow from it
Subordination of individual to general interests.
Efforts should be made to reconcile individual interests with common interests. Where there is a conflict between the two, the interests of the organization should prevail over individual interests. This requires continuous and exemplary supervision and fair agreements
Remuneration
The amount of remuneration and the methods of payment should be just and fair and should provide maximum possible satisfaction to both employee and employers.
Remuneration, reward or compensation package all means the same. Compensation paid should be fair and adequate. The dictum goes that cheap labour is always the costly labour. This is because it leads to wastage and bad quality products. Reward offered in the first instance should attract talented individuals to the organization and in the next phase it should serve to retain them in service over a period of time Growth of the organization should lead with it the growth and development of the employees within. Reward should be linked to productivity and performance. Employer looks to the cost of production and wants keeps the same low, the employee desires for good remuneration or better wages. It is productivity that can reconcile both interests.
Centralisation
Powers and authority are delegated and many routine functions can be decentralised. However responsibility and control will still remain centralised. This needs regular review, monitoring and calling for reports, to verify authority/powers delegated are properly utilised for the benefit of the organization and all safeguards are followed.
Scalar Chain
Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organization. It should not over-stretched and consist of too-many levels.
Order
Order conveys that there should be a place of everything and everything should be at its place. This applies not only to arrangement of materials and stores, but also to placement of personnel.
Equity
Equity implies that the employee should be treated with justice and kindness. Managers should be impartial in their dealings with subordinates. Equity helps to create cordial relations between management and workers which is essential for the successful functioning of any enterprise.
Stability of tenure of personnel
Employees work better if job security and career progress is assured to them. Insecure tenure and high rate of employee turnover will affect the organization adversely.
Initiative
Employees at all levels should be given the opportunity to take initiative and exercise judgement in the formulation and execution of plans. Initiative refers to freedom to think for one self and use discretion in doing work It develops interest of the employee in the jobs and provide job satisfaction to them.
Initiative is originality in perception and of approach to performance. This is a basic quality of an inborn leader. Majority of us have the tendency to imitate, i.e. follow the most safe path and choose only those courses, which are time tested and universally followed by others. But it is left to a chosen few to look far ahead and venture into missions, where others do not tread in. There were thousands of sailors in Spain and Portugal, the sea faring Nations in the Middle Ages. But it was left only to one Christopher Columbus to brave the sea and sail endlessly westwards in his quest for finding a sea-route to America. Columbus knew the world is round (in a sphere shape) and east to west or west to east a voyage on its circumference will bring the sailor back to the point from where he started. Columbus did not reach India, but he discovered a New World, when he landed through his efforts on the eastern cost of North America. While it is only the accomplished leader, who has initiative as an outstanding quality, many individuals do have traces of initiative in some area other. In a participate style of management, as distinguished by the authoritative system of management, importance is given to the initiative and role of the worker. Systems of performance appraisal allows the goals to be reached by the employee at end of each period to decided in mutual discussions. Employee is provided need based facilities and achieving his targets. This provides for bringing the individual initiative and expertise at each level into play and a healthy competition amongst employees. Another forum for encouraging initiative and talent of the employee is the Employee Suggestion Scheme, where employees are allowed freely to give suggestion on any matter leading to productivity in the enterprise.
Esprit de corps
This refers to harmony and mutual understanding among the members of the organization. Management should not follow the policy of 'divide and rule'. Rather it should strive to maintain team spirit and cooperation among employees so that they can work together as a team for the accomplishment of common objectives. Unity among the personnel can be developed through proper communication and co-ordination.
The above are the 14 principles expounded by Henry Fayal. A few important additional principles propounded by other authors are given below.
Unity of objectives
When there a number of objectives, these should be mutually harmonious and not mutually conflicting. We cannot pay maximum dividends and also build maximum reserves in our business. These two are conflicting. In such cases we have to strike a balance and define objectives without overriding each other. The practice is to define a primary "mission" and goals for guidance of the management and define objectives thereafter based on the "mission" or goals accepted.
Span of control
Man is capable of multi-tasking. The different limbs of a human body can work simultaneously or in very quick sequence. A person driving an automobile across a congested traffic is an example. His legs skillfully alters between the accelerator and the break. His hands respond to the gear control and adjust the wheel to keep the vehicle in the safe path. His eyes are alert to the traffic ahead, while still directing the vehicle in the route towards his destination. In between the automobile driver is also able to share a joke with a co-traveler in a two way inter-active conversation. In fact it is the human mind that controls and coordinates the activities of individual parts of the human body. What is the limit to the number tasks that a human mind can apply itself and give its response simultaneously. The answer is the theory of 5 plus 2 or minus 2. That is an accomplished leader can respond to a maximum seven tasks, while the very average or ordinary person at the base level may be able to provide answers at a time only to 3 problems.
In Management this limiting factor to stretch a manager's capacity for direction, supervision and control over the job performance by his subordinates is called 'Span of Control'. The management at the higher levels talks only to the immediately placed next level in the hierarchy. Routine data or information is not placed before them. Only exception reports, variations between budgeted and actual performance and summarised data are put up to them. Management is carried on by strategic control. Span of control is not limiting the effectiveness of management. In fact it contributes towards the same. It is limiting the points through which such control is exercised and not limiting the control as such. It is controlling at the core points, which is quick and efficient. At every level the Manager concerned is accountable not only for his performance, but also for the performance of all juniors reporting to him. Hence exercising direct control on a junior provides for indirect control on all his subordinates. Span of control, while reducing the physical burden on the senior manager provides for decentralization and healthy development of management talent at different levels. It develops better understanding and team working.
Exception (Management by Exceptions)
A principle of management in which a management decision that cannot be made at one level is passed up to the next level for a decision; i.e. exceptional decisions are passed up the management tree.
The principle used in budgetary control in which items of income or expenditure that show no variances or small variances require no action, whereas exceptional items showing adverse variances to an unacceptable degree require action to be taken.
In other words the principle of Management by Exception (MBE):implies that Managers delegate as much responsibility and activity as possible to those below them, stepping in only when absolutely necessary.
Fayol himself has cautioned that the principles of management are not hard and fast rules. Rather these are flexible guidelines to be modified in different situations . They should be used carefully, and discreetly rather than blindly. "It is a matter of knowledge how to make use of them, which is a difficult art requiring intelligence, experience, decision and proportion."
According to Fayal managerial functions and principles are applicable to all types of organizations. All organizations face the problem of utilisation of scarce resources. Theoretical knowledge of management is, therefore, transferable from one organization to another
