Fayol's 14 Principles of Management
Fayol's principles are listed below:
- Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
- Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
- Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
- Unity of Command – Employees should have only one direct supervisor.
- Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
- Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
- Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
- Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
- Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
- Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
- Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
- Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
- Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
- Esprit de Corps – Organizations should strive to promote team spirit and unity.
Max Weber’s Bureaucratic 6 Principles
Max Weber listed six major principles of the bureaucratic form as follows:
- A formal hierarchical structure – In a bureaucratic organization, each level controls the level below it. Also, the level above it controls it. A formal hierarchy is the basis of central planning and centralized decision-making.
- Rules-based Management – The organization uses rules to exert control. Therefore, the lower levels seamlessly execute the decisions made at higher levels.
- Functional Specialty organization – Specialists do the work. Also, the organization divides employees into units based on the type of work they do or the skills they possess.
- Up-focused or In-focused Mission – If the mission of the organization is to serve the stockholders, board, or any other agency that empowered it, then it is up-focused. On the other hand, if the mission is to serve the organization itself and those within it (like generating profits, etc.), then it is in-focused.
- Impersonal – Bureaucratic organizations treat all employees equally. They also treat all customers equally and do not allow individual differences to influence them.
- Employment-based on Technical Qualifications – Selection as well as the promotion of employees is based on technical qualifications and skills.
While these rules have received criticisms from many corners, the bureaucratic form of the organization continues to live on.
💠 D) Hawthorn Experiment (1920)
workers feel motivated when manager show interest in their work.
💠 E) System Theory - open ans closed system
Systems theory treats an organization as a system. A system can be either closed or open, but most approaches treat an organization as an open system. An open system interacts with its environment by way of inputs, throughputs, and outputs.
💠 F) Chaos Theory It treat organisation as a system but it is complicated, nonlinear and dynamic.
💠 G) Contingency theory Modern theory of management also known as situational approach. it implies that one size does not fit to all.
Managing according to the situation.
💠 H) Behavioural management theory
The behavioral management theory is often called the human relations movement because it addresses the human dimension of work. Behavioral theorists believed that a better understanding of human behavior at work, such as motivation, conflict, expectations, and group dynamics, improved productivity.
💠 I) Elton Mayo's theory also known as human relatiin approach
Eployees should not be treated as machine.
⚜️Managerial skills and Traits
According to professor Robert Katz managerial skills are of three kind.
A) conceptual skill - This skill induce the person to have vision about the organisation as a whole. Conceptual skill are amalgamation of initiative, creative and analytical skills. Such skills help in identifying the source or cause of problem, thus enabling the manager to solve the problem for the entire organisation.
B) Human relation based skills or interpersonal skills - These skills are otherwise known as interpersonal skills. it deal with an ability of the manager to effectively and efficiently work with human. Such skills enhances communication and working with others. This is skill is required at all hierarchies of management, as management works with people.
C) Technical skills - These are task specific knowledge/ skills. which are generally required for front and workers.
about from this there are several skills which are required at different level of management to perform different roles like
Administrative
Problem solving
Leadership skills
Decision making
Analytical skills
Listening skills
Communication skills
Time management skills
Conflict handling or grievance handling skills
Goal setting skills
⚜️ Management roles
Mintzberg has propounded various roles a manager has to fulfill.
A) INTERPERSONAL ROLES
1- FIGUREHEAD - inspiring the workers in the organisation and make them feel connected with the organisation and each other
2- LEADER - motivating and supporting and focus on achieving organisational objectives.
3- LIAISON - communicating between inside and outside of the organisation
B) information role
1- Monitor - monitoring environment within or outside the organisation.
2- Disseminator - This role enables manager in sharing the knowledge and information within his team. Dissemination is the process of gathering information from external as well as internal sources and disseminating relevant information with the teammates.
3- Spokesperson- the manager is the key person, who explains positive and negative side of steam.
C) Decisional role
1- Entrepreneur
2-Disturbance handler
3- Resource allocator
4- Negotiator
⚜️MANAGEMENT PROCESS
According to DE McFarland, management is the distinct process by which the managers create, direct, maintain and operate purposive organisation thoughts systematic, coordinated and cooperative human efforts.
According to GR Terry, management is a distinct process consisting of planning, organising, actuating and controlling, performed to determine and accomplish stated objectives by the use of human beings and other resources.
Function of management is broadly drived into 7.
Koontz and O'dennell have classified management function into 5
the most useful method of classify is to group them around the activities of planning, organising, stuffing, directing and controlling.
1) planning
2)organisig
3) staffing
4) directing
5) controlling
Henri fayol the father of principle of management has classified the management function as following
1) planning, including forecasting
2) Organising
3) commanding c
4) coordinating.
5) controlling
⚜️ Functions of management
A) Planning - Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.
Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the criticalcontingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast futureconditions. These forecasts form the basis for planning.
Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.
There are many different types of plans and planning.
Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment.
Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conduct strategic planning.
Features of planning :
A) it is no negotiable in nature
B) it is goal oriented
C) it is pervasive in nature
D) it require coordination
E) it should be flexible in nature as it is done for future prospects. Since future is uncertain so Planning must have enough room to cope with futures unpredictability.
F) it is dynamic in nature
Process of planning:-
It involves a series of stamp in which it is asked.
1. where are we now ?
2. Where do we want to be?
3. How might we get their?
4. which way is best?
5. How can we ensure your arrival?
👉 The planning process :
1. where are we now ?
A) Marketing audit
B) Ratio analysis
C) Competitor analysis
D) Customer analysis
2. Where do we want to be?
A) Mission and objective
B) Segmentation (STP)
C) Marketing strategies
3. How might we get their?
A) Marketing mix
4. which way is best?
A) Choice criteria screening
B) Modelling
5. How can we ensure your arrival?
A) Problems to overcome
B) Management controls
B) Organising:-
According to Theo Haimann, organising is the process of defining and grouping the activity of the enterprise and establishing authority relationship among them.
Process of organising :
1. Identification and enumeration of activities
2. Division of activities
3. Grouping up of activitiess
4. Assignmentof group of activities
5. Granting necessary rights
6. Coordinating the functioning of various department
C) Staffing :-
Koontz & O'Donnell - The managerial function of staffing involves managing the organisation structure through the proper and effective selection, appraisal and development of personnel to fit the role desired into the organisation.
Process of staffing :
A) Estimating the manpower requiremet
B) Recruitment
C) Selection
D) Placement and induction
E) Training and development
F) Appraisal
G) Promotion
H) Compensation and remuneration
D) Directing :-
According to Koontz & O'Dennell - Directing is the executive function of guiding and observing subordinates.
According to William Newman and E Kirby Warren, directing deals with the steps a manager take to get subordinate and others to carry out plans.
E) Co-ordination:-
According to Henry Fayol, co-ordination harmoniese, synchronise and unifies individual efforts for better action and for the achievement of the business objectives.
According to MC Farland, coordination is the process whereby an executive develops and orderly pattern of group efforts among his subordinates and secure unity of action in the pursuit of common purpose.
*Coordination is an integral function
*Forms of coordination
a) Vertical coordination
b) Horizontal coordination
F) Controlling:-
According to Henry Fayol, control of an undertaking consists of seeing that everything is being carried out in accordance with the plan which has been adopted the orders which have been given, and principle which have been laid down. It's objective is to point out mistakes in order that they may be rectified and prevented from recurring.
According to Harold Koontz, controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plan devised to attend them are accomplished.
Process of controlling:
1. Evaluating performance standard
2. Measuring actual performance
3. Comparison of actual and standard performance and evaluating gap
4. Analysing division (CPC and MB)
5. Taking corrective action
🔴 Communication-
According to Newman and Summers, communication is an exchange of facts, Ideas, opinions or emotions by two or more persons.
According to Allen the sum total of all the things one person does when he want to create understanding in the mind of another. It is a bridge of meanings which involves a systematic and continuous process of telling, listening and understanding.
Pictorial explanation of "process of communication" 👇
Type of communication -
1) on the basis of channel
a) formal communication
i) Circle ⭕ ii) Chain iii) Wheel iV)Free flow
b) Grapevine or informal communication
i) Single strand ii) Gossip iii)Probability iV) Cluster V) Y- Pattern
2) on the basis of medium
a) Oral communication
i) TV & radio ii) Loudspeaker iii) Meeting. iv) Telephone v) Interview
b) Written communication
i) Book. ii) News paper iii) Advertisement iv) MSG & Emails etc.
3) On the basis of direction
i) Downward communication
ii) Upward communication
iii) Lateral or Horizontal communication
iv) Diagonal/ crosswise communication
4) On the basis of form
i) Verbal
ii) Non verbal
🔴 Decision making
According to George R Terry, decision making is the selection based on some criteria from two or more possible alternatives.
According to PF Drucker, whatever a manager does he does through making decisions.
Decision making process (7 steps):-
1) Identifying the problem
2) Collect information
3) Identify the alternatives
4) Weight the evidence
5) Course from alternatives
6) Take action
7) Review decision
Type of decisions:
a) Routine decision b) Strategic decision
c) Programmed decision d) non-programmed decision
e) Reversible decision f) Irreversible decision
g) Individual decision h) Group decision
i) Authoritative decision j) Facilitative decision
ERROR AND COMMON BIASES IN DECISION MAKING:
a) Availability bias b) Overconfidence bias
c) Anchoring bias d) Hindsight bias
e) Representation bias f) Randomness bias
g) Escalation of commitment bias h) Confirmation bias
i) Risk aversion bias j) Indecisiveness bias
k) Other bias
⚜️THEORIES OF DECISION MAKING :-
A) Normative decision theory / Rational theory / economic man theory-
It is a classical approach to decision making. It is also known as prescriptive theory of management.
The theory was propounded by PF Drucker and Ansoff. This theory of generally used where decisions are to be made with regards to quantitative data, numbers such as economics and finance. The key focus of the theory is on how managers should make decisions if they want to maximise their productivity.
Since the decision making in this theory is based on numbers input only so it is also known as rational theory of economic man theory.
B) Descriptive theory -It is also known as positive theory. This theory was propounded by March and Ceyart.
It is dependent on observed behaviour of individual and group under certain assumptions and situations. It is also known as behaviour decision theory.
C) Bounded rationality theory-
It is proposed by Herbert A Simon. He propounded that attainment of rationality is unrealistic. It is based on the principles that human mind can not remember/ retrieve all information ( present/ past/ future) or data given to them. Because of this limitation, the decision maker will take decision which is satisfactory and not optimal.
D) Practical approach-
This theory is based on both rational and behaviour approach. It is appropriate for the manager who take rushed and impulsive decision or who takes changing there decision rapidly in limited resources.
E) Personal approach-
It was given by Janis and Mann. This theory focus on how individual actually make a decision when they are agitated, worried, nervous or anxious be it in there personal or organisational atmosphere.
It is also known as conflict model. This theory deals with intuitive decision making.
TOOLS AND TECHNIQUES IN DECISION MAKING :
1) Decision tree
2) Delphi technique
3) Decision matrix
4) cost benefit analysis
5) T chart ( Pros and cons analysis)
6) Pest analysis ( deals with external environment)
7) SWOT analysis
8) Conjoint analysis ( helps is proving the product)
9) Pereto Analysis ( Prioritizing the task)
10) Multivoting
11) Linear programming
12) Monte-Carlo simulation/ simulation techniques ( use random sampling as true variable. This is used in social care, logistics and SCM)
13) Payback analysis ( Helps in ascertaining the time required by the project to cover the investment cost)
🔴ORGANISING:-
It is the second step is management process.
⚜️Organisational structure- According to Mintzberg (1972), organisational structure is the framework of the relations on the job, systems, operating process, people and groups making efforts to achieve the goal. Organisational structure is a set of methods deciding the task to determining duties and coordinate them.
Designing the structure- PF Drucker identifies 3 type of analysis which should be made in deciding the design of an organisation structure.
A) Activity analysis
B) Decisions analysis
C) Relation analysis
Organisational chart and structures -
Type of organisational structure:
1) Line organisational structure
2) Functional or staff organisational structure
3) Staff and line organisational structure
4) Divisional organisational structure
5) Hybrid organisational structure
Organisational design:
An organisational structure defines the formal relationship and role of employees.
Elements of organisational design:
1) Work specialisation
2) Chain of command
3) Formalisation
4) Departmental
5) The span of control
6) Centralisation and de-centralisation
