PRINCIPLES OF MANAGEMENT

SYLLABUS

UNIT-1:-

Definition of Management – Management and Administration – Nature and Scope of

Management - Functions of Management - Contribution of F.W. Taylor – Heniry Fayol –
Mary Parker Follet – Mc Gregor and Peter F. Drucker.

MEANING OF MANAGEMENT:-

• Management is regarded as the art of getting things done through others.

• Management is a comprehensive function of Planning, Organising, Forecasting
Coordinating, Leading, Controlling, Motivating the efforts of others to achieve
specific objectives.

DEFINITION OF MANAGEMENT:-

• According to Henry Fayol, “To manage is to forecast and to plan, to organise, to

command, to co-ordinate and to control”.
• According to Mary Parker Follet, “Management is the art of getting things done
through people.”

NATURE OF MANAGEMENT:-

1. It is a Universal Activity:-
Management is not confined to business organizations alone. It is practiced in
every type of organization—be it business, government, hospitals, schools, or
non-profits. The principles of management are applicable universally, irrespective
of the size, nature, or location of the organization. This universality makes
management a crucial function across all sectors.
2. It is Goal-Oriented:-
The essence of management lies in achieving predetermined objectives.
Managers focus all activities and resources toward reaching specific goals
efficiently and effectively. Whether it’s increasing sales, improving service quality,
or launching a new product, all management efforts are aligned with
organizational goals.
3. It is an Intellectual Activity:-
Management is not just about routine work; it involves deep thinking, strategic
planning, problem-solving, and decision-making. It requires the application of
knowledge, judgment, and foresight. Managers must assess complex situations,
weigh alternatives, and make informed decisions.
4. It is a Process:-
Management is a dynamic and continuous process consisting of several
interrelated functions—planning, organizing, staffing, directing, and controlling.
These functions are performed in a logical sequence and form a cycle that helps in
the smooth operation and achievement of goals.
5. Management Is Both A Science And An Art:-
i) Science: Management has a systematized body of knowledge, principles,
and theories developed through research and observation.
ii) Art: It also requires personal skills, creativity, intuition, and practical
know-how. The application of management principles varies based on the
manager’s experience and judgment. Thus, it is both a science and an art.
6. It is a Social Process:-
Management involves dealing with people—employees, customers, suppliers, and
other stakeholders. It emphasizes interpersonal relationships, motivation,
leadership, communication, and coordination. Managing people effectively
requires understanding their needs and working collaboratively.
7. It Adopts an Integrated Approach:-
Management integrates human, financial, physical, and informational resources to
achieve objectives. It brings together various departments (marketing, finance, HR,
etc.) and ensures all parts of the organization work in harmony to achieve common
goals.
8. It is an On-going Activity:-
Management is not a one-time task. It continues throughout the life of an
organization. As conditions change, goals evolve, and challenges emerge,
management must constantly adapt and respond to new demands, making it a
never-ending process.
9. It is Intangible:-
Management cannot be seen or touched. It is an abstract concept, but its
presence is evident through the performance and results of the organization. Good
management reflects in high productivity, employee satisfaction, and achievement
of goals.
10. Management is a Profession:-
Modern management is considered a profession due to the following
characteristics:
• Existence of a specialized body of knowledge
• Formal education and training
• Code of conduct or ethics
• Professional associations Though not fully regulated like
medicine or law, management is steadily moving toward
professional status.
11. It is a Factor of Production:-
Along with land, labor, capital, and entrepreneurship, management is a crucial
 factor of production. It coordinates and directs all other resources effectively to
generate output. Without management, even the most abundant resources cannot
be used productively.

OBJECTIVES OF MANAGEMENT

1. Optimum utilisation of resources:

The most important objectives of the management are to use various resources of
the enterprise in a most economic way.

The proper use of men, materials, machines, and money will help a business to earn
sufficient profits to satisfy various interests i.e. proprietor, customers, employees and
others. All these interests will be served well only when physical resources of the
business are properly utilised.

2. Growth and development of business:

By proper planning, organisation and direction etc., management leads a business

to growth and development on sound footing. It helps in profitable expansion of the
business. It provides a sense of security among the employers and employees.

3. Better quality goods:

The aim of the sound management has always been to produce the better quality
products at minimum cost. Thus, it tries to remove all types of wastages in the business.

4. Ensuring regular supply of goods:

Another objective of management is to ensure the regular supply of goods to the

people. It checks the artificial scarcity of goods in the market. Hence, it keeps the prices
of goods within permissible limits.

5. Discipline and morale:

The management maintains the discipline and boosts the morale of the individuals
by applying the principles of decentralisation and delegation of authority. It motivates the
employees through monetary and nonmonetary incentives. It helps in creating and
maintaining better work culture.

6. Mobilising best talent:

The employment of experts in various fields will help in enhancing the efficiency of
various factors of production. There should be a proper environment which should
encourage good persons to join the enterprise. The better pay scales, proper amenities,
future growth potentialities will attract more people in joining a concern.
7. Promotion of research and development:

Management undertakes the research and development to take lead over its
competitors and meet the uncertainties of the future. Thus, it provides the benefits of
latest research and technology to the society.

8. Minimise the element of risk:

Management involves the function of forecasting. Though the exact future can
never be predicted yet on the basis of previous experience and existing circumstances,
management can minimise the element of risk. Management always keeps its ears and
eyes to the changing circumstances.

9. Improving performance:

Management should aim at improving the performance of each and every factor of
production. The environment should be so congenial that workers are able to contribute
their maximum to the enterprise. The fixing of objectives of various factors of production
will help them in improving their performance.

10. Planning for future:

Another important purpose of management is to prepare a prospective plan. No

management should feel satisfied with today’s work. Future plans should take into
consideration what is to be done next. Future performance will depend upon present
planning. So, planning for future is essential to every organization.

IMPORTANCE OF MANAGEMENT

1. Achieving goals:
Management helps the organization in achieving its goals. The role
of a manager is to provide common guidance and direction to the individual
efforts for the fulfillment of organizational goals.
2. Increasing the efficiency:
Management helps in increasing the efficiency of the business by
increasing productivity through efficient planning, organizing, controlling
and directing.
3. Helps in creating a dynamic organization:
Management helps in providing the required impetus for an
organization to transition from one phase of development to another and
also in adjusting to the changing dynamics of the business environment.
4. Helps in achieving individual objectives:
Management helps in guiding the individuals towards attaining
personal objectives, which has a direct impact on attaining the
organizational objectives.
5. Development of society:
 By developing the organization, management helps in its growth. A
developed organization has some moral responsibilities towards society
and it does so by creating employment opportunities, providing good quality
products and services.

FUNCTIONS OF MANAGEMENT:-

Management has been described as a social process involving responsibility for

economical and effective planning & regulation of operation of an enterprise in the
fulfillment of given purposes. It is a dynamic process consisting of various elements and
activities. These activities are different from operative functions like marketing, finance,
purchase etc. Rather these activities are common to each and every manger irrespective
of his level or status

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, &
to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for
reporting & B for Budgeting.

But the most widely accepted are functions of management given by KOONTZ and O’
DONNEL i.e. Planning, Organizing, Staffing, Directing, Co-ordinating and Controlling.

For theoretical purposes, it may be convenient to separate the function of management

but practically these functions are overlapping in nature i.e. they are highly inseparable.
Each function blends into the other & each affects the performance of others.

PLANNING

ORGANISI
NG

STAFFING
FUNCTIONS OF
MANAGEMENT
DIRECTING

CO-ORDIN
ATING

CONTROLL
ING
1. Planning

It is the basic function of management. It deals with chalking out a future

course of action & deciding in advance the most appropriate course of actions for
achievement of pre-determined goals.

According to KOONTZ, “Planning is deciding in advance - what to do, when to

do & how to do. It bridges the gap from where we are & where we want to be”. A plan
is a future course of actions. It is an exercise in problem solving & decision making.

Planning is determination of courses of action to achieve desired goals. Thus,

planning is a systematic thinking about ways & means for accomplishment of
pre-determined goals. Planning is necessary to ensure proper utilization of human &
non-human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources

and developing productive relationship amongst them for achievement of
organizational goals.

According to Henry Fayol, “To organize a business is to provide it with

everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To
organize a business involves determining & providing human and non-human
resources to the organizational structure. Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
3. Staffing

It is the function of manning the organization structure and keeping it manned.

Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc.

The main purpose o staffing is to put right man on right job i.e. square pegs in
square holes and round pegs in round holes. According to Kootz & O’Donell,
“Managerial function of staffing involves manning the organization structure through
 proper and effective selection, appraisal & development of personnel to fill the roles
designed in the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose

the person and giving the right place).
• Recruitment, Selection & Placement.
• Training & Development.
• Remuneration.
• Performance Appraisal.
• Promotions & Transfer.
4. Directing

It is that part of managerial function which actuates the organizational

methods to work efficiently for achievement of organizational purposes. It is
considered life-spark of the enterprise which sets it in motion the action of people
because planning, organizing and staffing are the mere preparations for doing the
work.

Direction is that inert-personnel aspect of management which deals directly

with influencing, guiding, supervising, motivating sub-ordinate for the achievement of
organizational goals. Direction has following elements:

• Supervision- implies overseeing the work of subordinates by their superiors.

It is the act of watching & directing work & workers.
• Motivation- means inspiring, stimulating or encouraging the sub-ordinates
with zeal to work. Positive, negative, monetary, non-monetary incentives
may be used for this purpose.
• Leadership- may be defined as a process by which manager guides and
influences the work of subordinates in desired direction.
• Communications- is the process of passing information, experience, opinion
etc from one person to another. It is a bridge of understanding.
5. Co-ordinating

Co-ordination is the process of integrating and synchronising the activities of

different departments, teams, and individuals to achieve the organisational goals
efficiently and effectively.

It ensures that all activities are aligned, conflicts are avoided, and resources are
used optimally.

Key Features of Co-ordination:

i) Integrates Group Efforts:

 o Brings together the activities of individuals and departments.
o Ensures that every unit works in harmony with others.

i) Ensures Unity of Action:

a. All departments (e.g., marketing, production, finance) work towards a
common organisational goal.
ii) Continuous Process:
a. Co-ordination is required at every level and at all stages of management –
planning, organising, leading, and controlling.
iii) Pervasive Function:
a. It is applicable to all departments and levels – from top management to
workers.
iv) Facilitates Better Interpersonal Relationships:
a. Promotes mutual understanding and reduces disputes.
b. Builds trust and team spirit.
v) Achieves Organizational Goals Efficiently:

o Minimises duplication of work and efforts.

o Reduces wastage of time and resources

6. Controlling

It implies measurement of accomplishment against the standards and

correction of deviation if any to ensure achievement of organizational goals. The
purpose of controlling is to ensure that everything occurs in conformities with the
standards. An efficient system of control helps to predict deviations before they
actually occur.

According to Theo Haimann, “Controlling is the process of checking whether or

not proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation”.

According to Koontz & O’Donell “Controlling is the measurement & correction of

performance activities of subordinates in order to make sure that the enterprise
objectives and plans desired to obtain them as being accomplished”. Therefore
controlling has following steps:

• Establishment of standard performance.

• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out
deviation if any.
• Corrective action.
 DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION

Simply put, management can be understood as the skill of getting the work done from
others. It is not exactly same as administration, which alludes to a process of effectively
administering the entire organization. The most important point that differs management
from the administration is that the former is concerned with directing or guiding the
operations of the organization, whereas the latter stresses on laying down the policies
and establishing the objectives of the organization.

Broadly speaking, management takes into account the directing and controlling functions
of the organization, whereas administration is related to planning and organizing function.

With the passage of time, the distinction between these two terms is getting blurred, as
management includes planning, policy formulation, and implementation as well, thus
covering the functions of administration. In this article, you will find all the substantial
differences between management and administration.

BASIS FOR
MANAGEMENT ADMINISTRATION
COMPARISON

Meaning An organized way of managing The process of administering an

people and things of a business organization by a group of people
organization is called the is known as the Administration.
Management.

Authority Middle and Lower Level Top level

Role Executive Decisive

Concerned Policy Implementation Policy Formulation

with

Area of It works under administration. It has full control over the activities
operation of the organization.

Applicable to Profit making organizations, i.e. Government offices, military, clubs,

business organizations. business enterprises, hospitals,
 BASIS FOR
MANAGEMENT ADMINISTRATION
COMPARISON

religious and educational

organizations.

Decides Who will do the work? And How What should be done? And When
will it be done? is should be done?

Work Putting plans and policies into Formulation of plans, framing

actions. policies and setting objectives

Focus on Managing work Making best possible allocation of

limited resources.

Key person Manager Administrator

Represents Employees, who work for Owners, who get a return on the
remuneration capital invested by them.

Function Executive and Governing Legislative and Determinative

MANAGEMENT IS SCIENCE OR AN ART

i) Management as an Art:

• Art is the experienced and personal utilisation of subsisting information to

accomplish solicited outcomes. It can be procured via education, research and
practice. As art is involved with the personal utilisation of data some kind of
inventiveness and creativity is needed to follow the fundamental systems acquired.
The essential characteristics of art are as follows:
• The presence of theoretical knowledge: Art assumes the presence of specific
academic knowledge. Specialists in their particular fields have obtained specific
elementary postulates which are appropriate to a specific sort of art. For instance,
the literature on public speaking, acting or music, dancing is publicly
acknowledged.
• Personalised application: The application of this primary information differs from
person to person. Art, hence, is a highly personalised notion.
• Based on custom and creativity: Art is practical. Art includes the creative practice
of subsisting intellectual knowledge. We know that music is based on 7 notes.
However, what makes the style of a musician different or distinctive is his
performance of these notes in an artistic way that is uniquely his own solution.
ii) Management as a Science:

• Science is an organized collection of knowledge that emphasizes definite

universal truths or the action of comprehensive laws. The central characteristics of
science are as follows:
• The organized body of knowledge: Science is a precise entity of knowledge. Its
systems are based on a purpose and consequence association.
• Universal validity: Scientific conventions have global genuineness and application.
• Systems based on experimentation: Scientific conventions are originally formed
via research and then tested via repeated trial and error under the regulated
situations.

iii) Management as a Profession:

• The profession can be described as an occupation upheld by specific education

and practice, in which entry is limited. A profession has the following features:
• The well-defined theory of knowledge: All services are based on a well-defined
form of education that can be procured through education.
• Restricted entry: The entrance to a profession is defined through an examination or
through obtaining an educational degree. For instance, to become a chartered
accountant in India an aspirant has to clear a detailed examination regulated by
the Institute of Chartered Accountants of India (ICAI).
• Professional community: All professions are affiliated to a professional
association which controls entry, presents a certificate of training and expresses
and supports a system of government. To be qualified to study in India, lawyers
have to become members of the Bar Council which monitors and regulates their
actions.

CONTRIBUTION OF F.W.TAYLOR

• F. W. Taylor (Frederick Winslow Taylor) (1856-1915) was an American mechanical

engineer who sought to improve industrial efficiency. He was one of the
first management consultants. Taylor was one of the intellectual leaders of
the Efficiency Movement and his ideas, broadly conceived, were highly influential
in the Progressive Era (1890s–1920s).
• Frederick Winslow Taylor should be ever remembered for his contribution to the
management movement. In an effort to address several organizational problems.
• Taylor developed the body of knowledge what is now called ‘scientific
management’. Taylor investigated the effective use of human beings at the shop
floor level in the industrial organization.
• He defined managing as the art of “Knowing exactly what you want men to do and
then seeing that they do it in the best and cheapest way”
 • For the doing work on the scientific way, he is often called the “Father of Scientific
Management.”

Taylor’s Theory of Scientific Management for Workers

o Taylor believed that workers could be motivated by money, and therefore,

he promoted the idea of the “a fair day’s pay for a fair day’s work” concept.
If a worker does not work well in a day, he won’t be paid his money for the
day. Taylor’s theory depends on four basic principles, which state replacing
the regular working habits, also known as the ‘rule of thumb.’ It simply
means to include scientific methods to implement in the working culture
and perform innovative work rather than hard work.
o Rather than assigning workers for any job, it is better to recruit employees
according to their job field and efficiency to motivate workers and keep
them interested in the work process.
o Monitoring the working is also a part of scientific management. Allocation
of work between managers and workers is also a part of the principle. It will
divide work according to responsibility, allowing the manager to create a
proper plan to execute the overall working process.
o Taylor’s Scientific Management Principles on the Management Process

Taylor proposed the following scientific management principles:

1. Science, Not Rule of Thumb

Managers make decisions based on their judgments as a rule of

thumb. Taylor claims that even minor industrial activities may be
organised appropriately. This will assist in saving both time and human
energy. Decisions must be based on scientific research that includes
cause and effect linkages.

2. Harmony, Not Discord

Taylor underlined the need for total harmony between staff and
management. Any dispute between them harms either the employees or
the management. Both management and employees must recognize the
value of the other.

3. Mental Revolution

The Mental Revolution approach entails a shift in the attitudes of

staff and supervisors toward one another. Both parties must recognize
the value of the other and act in tandem. Both management and
employees should strive to raise the organisation’s revenues. Workers
must make reasonable efforts to ensure that the firm profits and
management share a portion of the earnings with the workers. As a
 result, mental revolution necessitates a total shift in both management
and labour mindsets.

4. Cooperation, Not Individualism

This idea, which is an outgrowth of the concept of ‘Harmony, not

Discord,’ emphasises reciprocal collaboration between employees and
management. Cooperation, mutual trust, and a spirit of generosity
should exist among managers and employees. The goal is to replace
internal rivalry with collaboration.

Individual growth to achieve maximum efficiency and profitability

To a large part, the efficiency of every organisation is determined

by the talents and competencies of its people. As a result, providing
workers with training was deemed necessary for them to understand the
best way established via a scientific methodology. To achieve efficiency,
actions should be made, beginning with the personnel selection
process. Workers should be chosen using scientific methods.

HENRY FAYOL’S CONTRIBUTION TO MANAGEMENT

• Henry Fayol (1841 -1925) was a French mining engineer who turned a leading
industrialist and a successful manager.
• He was a mining engineer in a French mining company and rose to the position of
the Chief Managing Director.
• His life-long experience, in the field of managing, was reproduced in a monograph
titled ‘Administration Industrial and General’. Fayol’s work gained popularity and
was made known to scholars and practitioners of management; only when his
monograph was published in English in the U.S.A. in 1949.

Following is a brief comment on various facts of Fayol’s work:

(a) Fayol’s classification of business functions:

According to Henry Fayol, all the activities of a business enterprise could be

divided into the following six groups:

(i) Technical activities (relating to production)

(ii) Commercial activities (relating to buying, selling or exchange).

(iii) Financial activities (relating to search for and optimum use of capital i.e.
finances)
 (iv) Security activities (relating to protection of the properties and personnel of the
enterprise)

(v) Accounting activities (relating to a systematic recording of business

transactions, including statistics also).

(vi) Managerial activities

(b) Fayol’s classification of managerial functions:

Henry Fayol classified managerial functions, as consisting of the following:

1. Planning

2. Organising

3. Commanding

4. Coordinating

5. Controlling

(c) Qualities required in managers:

Fayol mentions the following qualities required in managers; to enable them

to become better and more efficient:

1. Physical

2. Mental

3. Moral

4. Education

5. Technical

6. Experience

(d) General principles of management:

By far, the most significant contribution by Fayol is the general principles of

management listed by him, in his monograph titled ‘General and Industrial
Administration. Based on his long managerial experience, Fayol advocates
fourteen general principles of management.

Following is a brief comment on the fourteen general principles of management

recommended by Fayol

(1) Division of work:

 Division of work (or division of labour) is a famous principle of Economics,
invented by the traditional eminent economist, Adam Smith. Fayol had applied this
principle, in the context of the management of business enterprises.

Division of work leading to specialisation results in increased human

efficiency; as through the application of this principle, much more production is
possible with the same amount of human efforts. Fayol recommends the
application of this principle at both the levels in an organisation operational and
managerial.

(2) Authority and responsibility:

Authority, in management, is the key to a managerial job. It is the power

inherent in a managerial position which enables a manager to command
subordinates to work towards the attainment of enterprise objectives.

Responsibility, is the reverse of authority; whose essence is an obligation

owed by a subordinate to the superior (from whom authority is received) for the
proper performance of the job for which authority is granted to the former.

Certain observations, worth noting in this context are:

(a) Of the two terms, authority and responsibility, the former is primary and
latter is secondary or conditional. Responsibility is a corollary and natural outcome
of authority; and cannot exist independently.

(b) In order that excessive authority is not misused by the holder of it, and
responsibility could be fixed in an exact and fair manner; there must be maintained
a balance between authority and responsibility known as the principle of parity of
authority and responsibility.

(3) Discipline:

Discipline, in simple terms, means obedience to the rules of the

organisation, on the part of both-managers and subordinates – including outward
marks of respect shown by subordinates towards superiors. Discipline is
necessary in an organisation; if the organisation is to function properly and prosper
and grow.

(4) Unity of command:

Unity of command, is perhaps, one of the most useful and significant

principles of management advised by Fayol. According to this principle, a
subordinate must get orders and instructions, only from one superior at a time.

The obvious reasons for the application of this principle are:

 (a) Confusion on the part of a subordinate regarding whose orders he must
obey is done away with. If there is more than one superior dictating terms to a
subordinate; the latter would always be in a state of confusion.

(b) Fixation of responsibility in an exact manner on a subordinate by the

superior issuing orders and instructions is facilitated. A single superior issuing
orders and instructions to a subordinate can easily seek an explanation from the
subordinate as to why the work was not done properly by him; when proper
authority and work facilities had been provided to him for that purpose.

(5) Unity of Direction:

To avoid confusion of this principle from the preceding one viz., the unity of
command, unity of direction might be given a new nomenclature i.e. ‘similarity of
guidance’. Unity of direction (or similarity of guidance) implies that for each group
of activities having the same objective, there must be ‘one head and one plan’; or
similar activities must be guided in similar ways.

(6) Subordination of individual to general interest:

This principle is, in fact, nothing but an exposition of the basic management
philosophy, that in a group endeavor the individual objectives of people are
subordinate to the common group objectives. Whenever, there arises a conflict
between individual and group objectives, the management must help in arriving at
reconciliation between the two set of objectives. Further, in case of need, the
individuals must sacrifice, in favor of larger group objectives.

(7) Remuneration of personnel:

Remuneration of personnel is the price paid or payable to people –

managers and workers – for their services rendered towards the attainment of the
enterprise objectives. Since the question of remuneration is of vital importance for
a smooth functioning of organizational life, making for good or bad industrial
relations; Fayol recommends that the system of remunerating personnel must be
such as affords maximum satisfaction to both-employees and employers.

(8) Centralisation:

By the term centralisation, is meant a rightful compromise between

centralisation and decentralisation. ‘Centralisation’ refers to a reservation of
decision-making authority at top levels of management. ‘Decentralisation’, on the
other hand, means a dispersal of authority from the central (top-level) points to
middle, and specially lower levels of management.

Management must, therefore, strike out a balance between centralisation

and decentralisation; a rightful compromise between the two, which under the
circumstances will give the best overall yield, in terms of most efficient and
smooth functioning of the enterprise.

(9) Scalar chain:

Scalar chain might be defined as the chain of superiors (i.e. managers) with
grades of authority ranging from the highest to the lowest.

The following simple figure illustrates the above concept:

In the scalar chain, each upper link is a superior; each lower links a
subordinate. For example in the above figure, as between B and C, B is a
superior and C his subordinate; as between C and D, C is a superior and D
his subordinate; and so on for all other links in the scalar chain. The
uppermost link of the scalar chain represents the manager of the highest
rank (i.e. H, in this figure); the lowest most links represents the manager of
the lowest rank (i.e. H, in this figure).

Significance of the scalar chain:

The principle of the scalar chain is significant for reasons for having
systematic and orderly communication from the highest managerial link to
the lower links and vice-versa; each communication passing through
successive links of the scalar chain. In the figure given above, if e.g., B has
to communicate a message to F; it will pass from B to C, from C to D, from
D to E, and finally from E to F.

According to Fayol, the scalar chain must be strictly observed in the

usual course of the functioning of the enterprise; except in emergency
situations, when its strict observance might be detrimental to the
interests of the organisation.

(10) Order:
 The principle of ‘order’ implies a systematic arrangement of things
and personnel. Accordingly, order is classified by Fayol into two types of
orders viz.,

(a) Material order (or physical order)

(b) Social order (or human order)

Material order is described as ‘a place for everything and everything

in its place’. Social order, in a similar tone, might be described as a place for
everyone and everyone is his/ her place’.

(11) Equity:

The concept of ‘equity’ implies a sense of ‘fairness and justice’ to all

working in an enterprise. Observance of equity, alone would make personnel
loyal and devoted to the organisation.

The principle of equity could thus, be described as follows:

Loyalty and devotion must be elicited (extracted) from the personnel

through a combination of kindliness and justice, on the part of managers,
while dealing with their subordinates.

(12) Stability of tenure:

In the interest of the efficiency of organisation and management, it is

imperative that personnel must stay in the organisation for as longer a
period as possible. This might be called the principle of the stability of
tenure. A minimum rate of labour turnover (movement of people into and
out of an enterprise) is inevitable, for reasons to retirement, death and other
permanent incapacities of personnel and also for reasons of coping with
the requirements of growth and expansion of the enterprise. However,
unnecessary labour turnover must be avoided at all costs; as it are both a
cause and an effect of bad management.

(13) Initiative:

Initiative, in the managerial context, refers to the freedom to think out

a plan and its execution. It is, in fact, one of the keenest desires of, at least,
an intelligent employee, to have initiative in matters relating to his work.
Accordingly, the management must provide initiative to employees as a
measure to motivate them.

(14) Esprit de corps (or union is strength):

 Esprit de corps or union is strength is a simple common proverb,
which refers to the strength or power associated with a group, when the
members of the group work whole-heartedly in full cooperation with one
another.

As a principle of management, esprit de corps (or union is strength)

indicates a lesson to management to take steps for promoting team spirit
among the group, as it will greatly facilitate the most effective attainment of
common objectives.

CONTRIBUTION OF MARY PARKER FOLLET

■ Mary Parker Follett's management theory increases coordination among leaders and
workers.
■ Widely regarded as one of the most influential management experts in the early days
of classical management theory, Mary Parker Follett used psychology and human
relations within industrial management to revolutionize organizational behavior
theory. Follett was a social worker, author, lecturer and management consultant who
provided personal advice to countless individuals, including President Theodore
Roosevelt.
■ Follett’s management theory, particularly its focus on coordination and employee
engagement, remains relevant to small businesses today. Discover how to implement
Follett’s principles in your company for organizational success.

The management theory of Mary Parker Follett

o Follett, known as the “mother of modern management,” believed

management was “the art of getting things done through people.” Though
she never managed a for-profit enterprise, she offered valuable insight on
the importance of managers and supervisors “powering with” employers
rather than “powering over” them, and collaborating with workers to solve
conflicts.
o “Leadership is not defined by the exercise of power but by the capacity to
increase the sense of power among those led,” Follett famously said. “The
most essential work of the leader is to create more leaders.”
o Follett practiced these principles of coordination that helped develop her
theory of management.
i) Direct contact: Direct contact between employees and managers helps
organizations avoid conflict and misunderstandings. Holding regular meetings
 or discussing assignments in person is a simple way to practice this
principle. .]
ii) Early stages: Managers should learn and master coordination straightaway. No
employee should feel less important than the next; each has a significant role
that complements others.
iii) Reciprocal relationship: Every worker, regardless of their level in the hierarchy, is
responsible for pulling their weight and integrating with the rest of the
organization. No one person should be trying less or more than another – it’s a
team effort.
iv) Continuous process: Managers must maintain coordination. Don’t just learn these
principles and forget about them; channel them in everything you do.
o Follett’s management theory is still in favor today. Small businesses
and employee-centric companies may find profound success by adopting
certain elements of her theory for everyday practices.
o Because organizations often hinge on employee satisfaction, building
reciprocal leader-worker relationships boosts morale and fosters an open,
collaborative environment that enables employees to anticipate and
address conflict, rather than avoid it. In addition, when conflicts arise, a
pre-established transparent communication system facilitates honest
discussions about desires versus needs and allows a win-win situation for
all parties involved.
o Follett’s theory and management philosophy aid small businesses and
employee-first business models by including successful employee
engagement in a company’s overall business goals. Her principle of group
power gives ownership to employees at every level of the business,
regardless of hierarchy, to promote responsibility, collaboration and
communication.

Using Follett’s principles

There are three key principles in Follett’s management theory. Using them will
foster interpersonal relationships among leaders and employees that empower your
staff and boost coordination.

i) Integration
• Follett argued workers of all levels should integrate to reach a business’s
goals. If a conflict occurs, there should be a conscious effort to pull instead
of push, and to work together as a team to resolve the issue. Because each
member is doing their part, they’ll be more likely to be content with the
result
• Follett’s approach to conflict resolution through integration often produces
beneficial results for all parties. Her “push versus pull” concept illustrates
the importance of meeting every side of a conflict’s underlying needs, rather
 than its spoken desires. Identifying and addressing each group’s needs,
which are often compatible, can lead to a win-win outcome.
• Achieving integration involves holding transparent conversations with
executives and employees about differences, interests, desires, needs and
conflicts, and finding an agreeable solution. The integration principle works
because you find actionable solutions to internal and external conflicts and
discard unnecessary personal drama.
ii) ‘Power with’
• Rather than establishing a strict hierarchy and delegating power to certain
individuals over others, Follett believed leaders should practice co-active
power. Powering with your team is better than controlling them; this way,
each member feels just as valued as the next. Through Follett’s lens, this
offers a way for high-level staffers and lower workers to stop trying to take
control of each other and instead take control of a situation as a united
front.
• Follett’s “power with” philosophy provides an alternative to the coercive,
traditional “power over” approach. In the latter, managers have power over
employees, supervisors have power over managers, and business owners
have power over supervisors, managers and employees. Because many
employees prefer not to feel controlled or patronized, Follett’s “power with”
principle encourages collaboration among all levels of the established
hierarchy without disparaging those at a lower level. “Power with” boosts
morale, may prevent absenteeism, and can enrich the entire company.
• Follett didn’t recommend entirely eliminating a hierarchy structure, however.
That organizational format is still crucial, but employees should not feel like
they are less valuable to the business than their managers.
iii) Group power
• Follett made the case that leaders should value group power over personal
power. Her theory suggests that true leaders create power for the group
rather than keeping it for themselves. After all, organizations do not exist for
one person’s benefit, but rather for the entire company of workers and
customers. If this selfless mindset prevails, everyone involved will feel like
they’re on the same team rather than in competition.
• A lack of competition between leaders and workers also fosters a sense of
safety and can spark increased productivity. Group power enables
members of an organization to succeed together and share the excitement
in triumphs and the responsibility of failure.
• Follett’s principle of group power persists widely today in management as a
tool for driving a more inclusive, engaged and motivated workforce. Amid
COVID-19 shutdowns and the Great Resignation, businesses have shown a
renewed commitment to providing a healthy work environment and
reducing employee turnover through better coordination
iv) Allows for flexibility
• Within autonomy lies flexibility. By establishing personal ownership of
company goals while also allowing for flexibility in reaching them,
employers communicate they trust their employees to find the most
efficient and productive way to contribute to the team. Flexibility also
creates agile, creative problem-solving to find effective solutions that
benefit the business in the long run.
• Follett’s preference for two-way confidential conversations is handy when
allowing for flexibility in small business settings. Leaders and staffers must
build mutual trust so either party is comfortable coming to the other with
problems or conflict to find win-win solutions by anticipating, rather than
avoiding, problems and pushback.
v) Encourages a flat hierarchy structure
• Again, Follett didn’t believe in doing away with hierarchy entirely. Instead,
small businesses have an opportunity to take advantage of flat hierarchy
structures – structures with little to no middle management between
employees and executives. Because small companies often operate with
smaller teams than large corporations, executives and business owners can
facilitate closer relationships with their employees and “power with” them
instead of “power over” them.
• In addition, employees at small businesses often wear many hats to
accomplish business goals. In this environment, executives can champion
the “power with” principle by expressing gratitude for the value each
employee brings to the organization as a whole.
vi) Supports cross-team employee collaboration
• Successful businesses champion two-way relationships between
executives and employees just as much as relationships among co-workers.
Buddy systems, mentor-mentee relationships and other partnership
programs that encourage collaboration between staffers who don’t often
work together offer several advantages for small businesses. Not only do
such partnerships help each party learn about the other’s responsibilities in
the organization’s shared objectives, but they can also learn different skills
from each other that will bolster opposite sides of the business.
• For example, at a niche boutique, someone working the sales floor could
provide interesting insights to a co-worker specifically focused on growing
web traffic to the business’s online store – and vice versa. Similarly, an
employee working intake and reception in a medical testing center could
offer observations to their peers who work primarily with patients after
initial processing. Cross-team collaboration is another aspect of Follett’s
management theory that lends itself well to organizational coordination.

CONTRIBUTION OF MC.GREGOR
Theory X and Theory Y Definition:

The Theory X and Theory Y are the theories of motivation given by Douglas
McGregor in 1960’s. These theories are based on the premise that management has to
assemble all the factors of production, including human beings, to get the work done.
McGregor believed that management can use either of the needs to motivate his
employees, as grouped under theory X and theory Y.

Theory X:

Theory X relies on the authoritarian style of management, where the managers are
required to give instructions and keep a close check on each employee. As it is assumed,
the employees are not motivated, and they dislike working. This theory is based on the
following assumptions:

1. The employee is lazy and dislikes work.

2. He is not ambitious and dislikes responsibility and therefore prefers to be led.

3. The employee is self-centered and indifferent towards the organizational

interest.

4. Management is responsible for assembling all the factors of production, Viz.

Money, material, equipment, people.

5. The managers are required to control his employees, manage their efforts,
motivate them, modify their behavior to comply with the organizational needs.

6. The management must intervene to keep the employees working towards the
economic ends. The employees must be persuaded, rewarded, motivated,
punished, controlled to get the work completed.

Theory Y:

Theory Y relies on the participative style of management, where the managers

assume that the employees are self-directed and self- motivated to accomplish the
organizational objectives. Thus, here the management attempts to get the maximum
output with least efforts on their part.

Following are the assumptions of Theory Y:

1. The average human being does not inherently dislike work, they are creative and
self-motivated and likes to work with greater responsibilities.

2. Employees are self-directed and self-controlled and therefore the threat of

punishment is not only the means for getting the desired results.
 3. The extent to which an employee is committed to objectives is determined by
the rewards associated with their achievement. The most significant rewards in
this context could be the satisfaction of the ego and the fulfillment of
self-actualization needs.

4.The average human being is ambitious and is ready to take responsibilities. He

likes to lead rather than to be led by others.

5. The employees exercise a relatively high degree of imagination and creativity in

solving the complex organizational problems. Thus, theory X and theory Y are two
contrasting models that depict the set of assumptions a manager holds on his
employees, which may or may not coincide with their general way of behaving.
Therefore, these theories are based on the attitude, not attributes.

CONTRIBUTION OF PETER F. DUCKER

Among the contemporary management thinkers, Peter Drucker outshines all. He

has varied experience and background which include psychology, sociology, law, and
journalism. Through his consultancy assignments, he has developed solutions to number
of managerial problems. Therefore, his contributions cover various approaches of
management. He has written many books and papers.

1. Nature of Management:

• Drucker is against bureaucratic management and has emphasised

management with creative and innovative characteristics. The basic
objective of management is to read towards innovation. The concept of
innovation is quite broad. It may include development of new ideas,
combining of old and new ideas, adaptation of ideas from other fields or
even to act as a catalyst and encouraging others to carry out innovation.
• He has treated management as a discipline as well as profession. As a
discipline, management has its own tools, skills, techniques and
approaches. However, management is more a practice rather than a
science. Thus, Drucker may be placed in ’empirical school of management’.
 • While taking management as a profession. Drucker does not advocate to
treat management as a strict profession but only a liberal profession which
places more emphasis that managers should not only have skills and
techniques but should have right perspective putting the things into
practice. They should be good practitioners so that they can understand the
social and cultural requirements of various organisations and countries

2. Management Functions:

According to Drucker, management is the organ of its institution. It has no

functions in itself, and no existence in itself. He sees management through its tasks.
Accordingly, there are three basic functions of a manager which he must perform to
enable the institution to make its contribution for:

(i) the specific purpose and mission of the institution whether business, hospital or
university;

(ii) making work productive and the worker achieving; and

(iii) managing social impacts and social responsibilities.

All these three functions are performed simultaneously within the same
managerial action. A manager has to act as administrator where he has to improve upon
what already exists and s already known. He has to act as an entrepreneur in redirecting
the resources from seas of tow or diminishing results to areas of high or increasing
results.

Thus, a manager has to perform several functions: setting of objectives, making,

organising and motivating. Drucker has attached great importance to the objective
setting function and has specified eight areas where clear objective setting is required.
These are: market standing, innovation, productivity, physical and financial resources,
profitability, managerial performance and development, worker performance and attitude,
and public responsibility.

3. Organisation Structure:

Drucker has decried bureaucratic structure because of its too many dysfunctional
effects. Therefore, it should be replaced. He has emphasised three basic characteristics
of an effective organisation structure.

These are:

(i) Enterprise should be organised for performance;

(ii) it should contain the least possible number of managerial levels;

(iii) it must make possible the training and testing of tomorrow’s top managers—
responsibility to a manager while still he is young.

o He has identified three basic aspects in organising activity analysis,

decision analysis, and relation analysis. An activity analysis shows what
work has to be performed, what kind of work should be put together, and
what emphasis is to be given to each activity in the organisation structure.
o Decision analysis takes into account the four aspects of a decision: the
degree of futurity In the decision, the impact of decision over other
functions, number of qualitative factors that enter into it, and whether the
decision is periodically recurrent or rare. Such an analysis will determine the
level at which the decision can be made. Relation analysis helps in defining
the structure and also to give guidance in manning the structure.

4. Federalism:

Drucker has advocated the concept of federalism. Federalism refers to centralised

control in decentralised structure Decentralised structure goes far beyond the delegation
of authority. It creates a new constitution and new ordering principle. He has emphasised
the close links between the decisions adopted by the top management on the one hand
and by the autonomous unit on the other.

This is just like a relationship between federal government and state governments.
In a federal organisation, local managements should participate in the decision that set
the limits of their own authority. Federalism has certain positive values over other
methods of organising.

These are as follows:

(i) It sets the top management free to devote itself to its proper functions;

(ii) It defines the functions and responsibilities of the operating people;

(iii) It creates a yardstick to measure their success and effectiveness in operating jobs;
and

(iv) It helps to resolve the problem of continuity through giving the managers of various
units education in top management problems and functions while in an operating
position.

5. Management by Objectives:

Management by objectives (MBO) is regarded as one of the important

contributions of Drucker to the discipline of management. He introduced this concept in
1954. MBO has further been modified by Schleh which has been termed as management
by results’. MBO includes method of planning, setting standards, performance appraisal,
and motivation.
 According to Drucker, MBO is not only a technique of management but it is a
philosophy of managing. It transforms the basic assumptions of managing from
exercising cattalo to self-control. Therefore, in order to practice MBO, the organisation
must change itself MBO has become such a popular way of managing that today t is
regarded as He most modern management approach. In fact, it has revolutionalised the
management process.

6. Organizational Changes:

Drucker has visualised rapid changes in the society because of rapid technological
development. Though he is not resistant to change, he feels concerned for the rapid
changes and their impact on human life. Normally, some changes can be absorbed by the
organisation but not the rapid changes.

Since rapid changes are occurring in the society, human beings should develop
philosophy to face the changes and take them as challenges for making the society
better. This can be done by developing dynamic organizations which are able to absorb
changes much faster than static ones. Drucker’s contributions have made tremendous
impact on the management practices. His contributions have been recognised even by
the management thinkers of Socialist Bloc.