Key Notes: Principles of Management | Business Studies (BST) Class 12 - Commerce PDF Download

Principles of Management

Principles are fundamental truths or propositions serving as the foundation for belief or behavior.

Nature of Principles of Management:

• Universal Applicability: Applicable in all types of organizations (business/non-business) based on the nature of the organization.
• General Guidelines: Provide general guidance but not specific solutions due to complex and dynamic business situations.
• Formed by Practice: Developed from managerial knowledge, experiences, and experiments.
• Flexible: Not rigid; adaptable and modifiable by managers as per the situation.
• Behavioral: Aim at influencing human behavior.
• Cause and Effect: Establish cause-and-effect relationships for various situations.
• Contingent: Applicability depends on the prevailing situation.

Significance of Principles of Management:

• Insights into Reality: Guide managers, improve their knowledge, and enhance their understanding of managerial situations.
• Resource Utilization: Optimize resource utilization, reducing waste and cost.
• Scientific Decisions: Base decisions on facts, be realistic, measurable, and unbiased.
• Adapt to Environmental Changes: Help organizations meet changing environmental requirements.
• Social Responsibility: Aid in fulfilling social responsibilities.
• Management Training and Research: Form the core of management knowledge, supporting training and research.

Taylor's Scientific Management

Conducting business activities using standardized tools, methods, and trained personnel to maximize output, quality, and efficiency.

Principles of Scientific Management:

• Standardization and Simplification: Develop standards for all activities to maximize output; simplify to reduce costs and waste.
• Method Study: Find the best way to perform a task for efficiency and cost reduction.
• Motion Study: Identify and eliminate wasteful worker movements to improve efficiency.
• Time Study: Determine standard time for job completion for workforce planning.
• Fatigue Study: Identify rest intervals to maintain worker stamina and prevent issues.
• Differential Piece Wage System: Differentiate efficient and inefficient workers for fair wages.

Fayol's Principles of Management

Specialization promotes efficiency, accuracy, and speed.

Principles of Management developed by Fayol:

• Division of Work: Divide work into tasks for specialization and increased productivity.
• Authority and Responsibility: Balance authority and responsibility for effective management.
• Discipline: Obedience to organizational rules and agreements.
• Unity of Command: Each employee should receive orders from one superior.
• Unity of Direction: All activities with the same objective must have one plan and one head.
• Subordination of Individual Interest: Prioritize organizational interests over individual interests.
• Remuneration of Employees: Fair wages within the organization's paying capacity.
• Centralization and Decentralization: Balance decision-making authority.
• Scalar Chain: Formal lines of authority and communication.
• Order: Proper arrangement of people and materials.
• Equity: Fair treatment of employees.
• Stability of Personnel: Minimize employee turnover.
• Initiative: Encourage employees to take the initiative.
• Esprit De Corps: Promote team spirit, unity, and harmony among employees.

Fayol vs. Taylor:

• Basis: Fayol based on personal experience; Taylor on observations and experiments.
• Focus: Fayol aimed at improving overall administration; Taylor focused on productivity.
• Applicability: Fayol's principles are universally applicable; Taylor's mainly for specialized situations.
• Perspective: Fayol's principles applicable to top-level management; Taylor's for lower-level shop floor.
• Human Element: Fayol considered human element but emphasized production; Taylor gave more importance to the human element.
  Note: These principles provide a foundation for effective management practices and should be adapted as needed based on specific organizational contexts.