Principles of Management

They are flexible because they are not rigid prescriptions; they can be modified by the manager to suit the demands of the situation and the changing business environment.

The main objective is to determine the standard time taken to perform a well-defined job, which helps in fixing fair day’s work and labor costs.

Cooperation, not Individualism.

1. Long working hours without rest pauses.
2. Unsuitable working conditions (e.g., poor lighting, bad ventilation).

Stability of Personnel. (This principle emphasizes minimizing employee turnover to maintain organizational efficiency).

Differential Piece Wage System.

It implies that an employee should receive orders from only one superior.

• Prevents Confusion: The subordinate knows exactly whom to obey.
• Avoids Ego Clashes: Prevents conflict between superiors.
• Fixes Responsibility: It makes accountability clear.

Scientific Management refers to knowing exactly what you want men to do and seeing that they do it in the best and cheapest way.
Principles:

1. Science, not Rule of Thumb: Use scientific analysis to find the ‘one best way’ rather than intuition/experience.
2. Harmony, not Discord: Managers and workers should work together, recognizing each other’s importance (Mental Revolution).
3. Cooperation, not Individualism: Constructive suggestions from employees should be rewarded; open communication system.

Principle Violated: Principle of Order (“A place for everything and everything in its place”).

Consequences:

• Wastage of time and energy in searching for men and materials.
• Inefficiency in operations and hindrance in workflow.

1. Providing managers with useful insights into reality: They add to knowledge and understanding of managerial situations.
2. Optimum utilization of resources: Helps in reducing wastage and maximizing output at minimum cost.
3. Scientific decisions: Decisions become more realistic, balanced, and free from bias.
4. Meeting changing environment requirements: Principles are flexible and can be modified to adapt to changes.

• Scalar Chain: The formal lines of authority from highest to lowest ranks. Communication must flow through this chain (A -> B -> C -> D).
• Gang Plank: An exception to the Scalar Chain. In case of emergency, two subordinates at the same level (e.g., D and G) can communicate directly to avoid delay, provided they inform their respective superiors.

Principle Violated: Subordination of Individual Interest to General Interest. (Mr. Rathore prioritized his personal interest/cousin’s profit over the company’s profit).

Positive Impacts of following this principle:

• Achievement of organizational goals effectively.
• Coordination between individual and organizational objectives.
• Fairness and transparency in the organization.

1. Science, not Rule of Thumb: Discarding the old ‘hit and trial’ method. Every job should be analyzed scientifically to find the most efficient way.
2. Harmony, not Discord: There should be complete harmony between management and workers. Both should realize that each one is important (Mental Revolution).
3. Cooperation, not Individualism: Competition should be replaced by cooperation. Management should take workers into confidence for decisions affecting them.
4. Development of Each and Every Person to His/Her Greatest Efficiency and Prosperity: Workers should be selected scientifically, assigned work suited to them, and trained to increase efficiency and earnings.

• a. Unity of Direction: One head and one plan for a group of activities having the same objective. Example: A car company with two divisions (Luxury and Economy) should have separate heads and plans for each.
• b. Equity: Fair and kind treatment to employees. No discrimination based on caste, gender, religion. Example: Equal pay for equal work for both men and women.
• c. Espirit de Corps: Management should promote a team spirit of unity and harmony. Example: Using “We” instead of “I” in conversations.
• d. Order: A place for everything/everyone and everything/everyone in its place. Example: Tools are always found in the tool room, not scattered on the floor.
• e. Centralisation and Decentralisation: Balance between concentration of power (Centralisation) and dispersal of authority (Decentralisation). Example: Key policy decisions by top management, routine decisions by lower levels.
• f. Initiative: Workers should be encouraged to develop and carry out their plans for improvements. Example: A worker suggesting a cost-saving method should be welcomed and rewarded.

Functional Foremanship: An extension of division of work to the shop floor. Taylor suggested separating Planning and Production functions. Under each, there are 4 specialist foremen (Total 8 bosses) instructing a worker:

• Planning: Route Clerk, Instruction Card Clerk, Time & Cost Clerk, disciplinarian.
• Production: Speed Boss, Gang Boss, Repair Boss, Inspector.

Mental Revolution: A change in the attitude of workers and management towards one another from competition to cooperation. Both should realize they need each other and aim to increase the size of the surplus (profit) rather than fighting over how to divide it.

1. Time Study: Determines the standard time taken to perform a well-defined job. Used to fix incentive schemes and labor costs.
2. Motion Study: Study of movements (lifting, putting, sitting) to eliminate unnecessary movements and design efficient tools/equipment.
3. Fatigue Study: Determines the amount and frequency of rest intervals required in completing a task to regain stamina.
4. Method Study: Finds the ‘one best way’ of doing the job (from raw material procurement to final delivery) to minimize cost and maximize quality.
5. Simplification and Standardisation:
   • Standardisation: Setting standards for every business activity (process, raw material, time, product).
   • Simplification: Eliminating unnecessary diversity of products (sizes, types) to save inventory and labor costs.

Basis	Taylor (Scientific Management)	Fayol (General Administration)
Perspective	Shop Floor level (Factory).	Top Level Management.
Focus	Increasing productivity through work simplification.	Improving overall administration.
Applicability	Specialized situations (Manufacturing).	Universally applicable.
Basis of Formation	Observation and Experimentation.	Personal Experience.
Unity of Command	Violated (Functional Foremanship – 8 bosses).	Strictly followed.

Both are highly relevant today:

• Taylor’s Relevance: In modern manufacturing (Lean manufacturing, Six Sigma), the concepts of standardization, time study, and efficiency are fundamental. “Best way” is still the goal of operations management.
• Fayol’s Relevance: Concepts like Unity of Command, Division of Work, and Esprit de Corps are the bedrock of modern organizational structures. His managerial functions (Planning, Organizing, etc.) are still the standard framework for teaching management.

a. Principles Violated:

1. Unity of Command: “Subordinates had to work for more than one superior.”
2. Unity of Direction: “Divisions… made to work on two or more products… overlapping.”
3. Discipline: “Workers were becoming indisciplined.”
4. Espirit de Corps: “Spirit of teamwork… beginning to wane.”
5. Initiative: “Initiative was declining.”
6. Stability of Personnel: (Implied by overwork and declining efficiency).

b. Explanation: (Brief definitions as per Fayol – see Q2 above).

c. Steps to Restore Glory:

• Ensure one boss for every employee (Unity of Command).
• Separate divisions based on products (Unity of Direction).
• Implement fair rules and penalties (Discipline).
• Encourage team building activities (Espirit de Corps).
• Invite suggestions from workers (Initiative).

a. Will it result in the intended outcome?
Yes. Introducing scientific management will replace the current chaotic “rule of thumb” approach with systematic planning, standardization, and specialization. This specifically addresses the issues of overlapping, inefficiency, and lack of accountability faced by Bhasin Ltd.

b. Precautions for Implementation:

• Mental Revolution: Management must ensure workers don’t feel exploited by the new rigorous standards.
• Training: Workers must be trained to use the new “standard” methods.
• Wage Incentives: The differential piece rate must be fair, motivating the efficient without overly penalizing the inefficient initially.

c. Answer regarding each technique:

1. Scientific Management: Will bring order and logic to production.
2. Production Planning (Routing, etc.): Will organize the workflow, reducing delays.
3. Functional Foremanship: Will provide specialized supervision (Planning vs Execution), improving quality.
4. Work Study: Will set realistic targets (Standard Time) and efficient methods.
5. Standardisation: Will ensure consistent quality of the food products (regaining market share).
6. Differential Piece Rate System: Will directly motivate the workers to be efficient to earn more, solving the issue of declining efficiency.