08 principle of management assignment (1)

management with management performing the science and instruction and the workers performing the labor, each group doing "the work for which it was best suited." Taylor's strongest posit

JAMNALAL BAJAJ INSTITUTE

OF MANAGEMENT STUDIES

PRINCIPLE OF MANAGEMENT

ASSIGNMENT PROFESSOR - MANDKE

PREPARED BY S G Nadar

MMM – I ROLL NO - 59

Q 1 Explain Principle of Management

Ans

The Principles of Management are the essential, underlying factors that form the foundations of successful management According to Henri Fayol (1841-1925) in his book General and Industrial Management (1916), there are fourteen 'principles of management'

Management principles are statements of fundamental truth These principles serve as

guidelines for decisions and actions of managers They are derived through observation and analysis of events which managers have to face in practice

1 Division of Work -

The specialization of the workforce, creating specific personal and professional development within the labour force and therefore increasing productivity; leads to specialization which increases the efficiency of labour By separating a small part of work, the workers speed and accuracy in its performance increases This principle is applicable to both technical as well as managerial work

2 Authority and Responsibility-

The issue of commands followed by responsibility for their consequences Authority means the right of a superior to give order to his subordinates; responsibility means obligation for performance This principle suggests that there must be parity between authority and

responsibility They are co-existent and go together, and are two sides of the same coin

3 Discipline-

Discipline refers to obedience, proper conduct in relation to others, respect of authority, etc It

is essential for the smooth functioning of all organizations

4 Unity of Command -

This principle states that every subordinate should receive orders and be accountable to one and only one superior If an employee receives orders from more than one superior, it is likely to create confusion and conflict

Unity of Command also makes it easier to fix responsibility for mistakes

5 Unity of Direction -

All those working in the same line of activity must understand and pursue the same

objectives All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager

It seeks to ensure unity of action, focusing of efforts and coordination of strength

6 Subordination of Individual Interest

The management must put aside personal considerations and put company objectives first Therefore the interests of goals of the organization must prevail over the personal interests of individuals

7 Remuneration -

Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity The quantum and methods of remuneration payable should be fair, reasonable and rewarding of effort

8 The Degree of Centralization -

The amount of power wielded with the central management depends on company size

Centralization implies the concentration of decision making authority at the top management Sharing of authority with lower levels is called decentralization The organization should strive to achieve a proper balance

9 Scalar Chain -

Scalar Chain refers to the chain of superiors ranging from top management to the lowest rank The principle suggests that there should be a clear line of authority from top to bottom linking all managers at all levels It is considered a chain of command It involves a concept called a

"gang plank" using which a subordinate may contact a superior or his superior in case of an emergency,defying the hierarchy of control.However the immediate superiors must be

informed about the matter

10 Order -

Social order ensures the fluid operation of a company through authoritative procedure

Material order ensures safety and efficiency in the workplace

11 Equity -

Employees must be treated kindly, and justice must be enacted to ensure a just workplace Managers should be fair and impartial when dealing with employees

12 Stability of Tenure of Personnel -

The period of service should not be too short and employees should not be moved from positions frequently An employee cannot render useful service if he is removed before he becomes accustomed to the work assigned to him

13 Initiative -

Using the initiative of employees can add strength and new ideas to an organization Initiative

on the part of employees is a source of strength for the organization because it provides new and better ideas Employees are likely to take greater interest in the functioning of the

organization

14 Esprit de Corps -

This refers to the need of managers to ensure and develop morale in the workplace;

individually and communally Team spirit helps develop an atmosphere of mutual trust and understanding

These can be used to initiate and aid the processes of change, organization, decision making, skill management and the overall view of the management function

Fayol also divided the management function into five key roles:

Q 2 Explain management and its functions

Ans

Management is creative problem solving This creative problem solving is accomplished through four functions of management: planning, organizing, leading and controlling The intended result is the use of an organization's resources in a way that accomplishes its mission and objectives

Planning is the ongoing process of developing the business' mission and objectives and

determining how they will be accomplished Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal

Organizing is establishing the internal organizational structure of the organization The focus

is on division, coordination, and control of tasks and the flow of information within the organization It is in this function that managers distribute authority to job holders

Staffing is filling and keeping filled with qualified people all positions in the business

Recruiting, hiring, training, evaluating and compensating are the specific activities included

in the function In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators

Directing is influencing people's behavior through motivation, communication, group

dynamics, leadership and discipline The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives

Controlling is a four-step process of establishing performance standards based on the firm's

objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary

Each of these functions involves creative problem solving Creative problem solving is broader than problem finding, choice making or decision making It extends from analysis of the environment within which the business is functioning to evaluation of the outcomes from the alternative implemented

Q 3 Explain controlling

Ans:

Controlling involves ensuring that performance does not deviate from standards Controlling consists of three steps, which include establishing performance standards, comparing actual performance against standards, and taking corrective action when necessary Performance standards are often stated in monetary terms such as revenue, costs, or profits, but may also

be stated in other terms, such as units produced, number of defective products, or levels of customer service

The measurement of performance can be done in several ways, depending on the

performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals Managers at all levels engage in the managerial function of controlling to some degree

The managerial function of controlling should not be confused with control in the behavioral

or manipulative sense This function does not imply that managers should attempt to control

or manipulate the personalities, values, attitudes, or emotions of their subordinates Instead, this function of management concerns the manager's role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives Controlling also requires a clear understanding of where responsibility for deviations from standards lies Two traditional control techniques are the budget and the performance audit Although controlling is often thought of in terms of

financial criteria, managers must also control production/operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization

The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager's job as well as the best way to classify accumulated knowledge about the study of management Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions

Q.4 Explain Lillian gilberth

Ans:

Lillian Gilbreth was the mother of modern management Together with her husband Frank, she pioneered industrial management techniques still in use today She was one of the first

"superwomen" to combine a career with her home life She was a prolific author, the

recipient of many honorary degrees, and the mother of 12 She is perhaps best remembered for motherhood Her children wrote the popular books Cheaper by the Dozen and Belles on Their Toes about their experiences growing up with such a large and famous family But Lillian Moller Gilbreth was not only a mother; she was an engineer and an industrial

She went to Columbia, but illness forced a return to California after her first year Undaunted, she went back to Berkeley and received a master's degree in literature in 1902 She celebrated

by planning a vacation She spent some time in Boston before embarking, and there she met her future husband

Frank Gilbreth, who never went to college, was interested in efficiency in the workplace His enthusiasm for the subject was contagious He proposed to Lillian Moller three weeks after her return from Europe, and together they began their study of scientific management

principles Frank started a consulting business and Lillian worked at his side They began their family and in 1910 moved to Rhode Island, where Gilbreth took her doctorate in

psychology at Brown University in 1915 with four young children in tow at the ceremony

But where Frank was concerned with the technical aspects of worker efficiency, Lillian was concerned with the human aspects of time management Her ideas were not widely adopted during her lifetime, but they indicated the direction that modern management would take She recognized that workers are motivated by indirect incentives (among which she included money) and direct incentives, such as job satisfaction Her work with Frank helped create job

standardization, incentive wage-plans, and job simplification Finally, she was among the first to recognize the effects of fatigue and stress on time management

Lillian Gilbreth continued her work alone after Frank's death in 1924 In 1926, she became the first woman member of the American Society of Mechanical Engineers She went to Purdue in 1935 as a professor of management and the first female professor in the

engineering school In her consulting business, she worked with GE and other firms to

improve the design of kitchens and household appliances She even created new techniques to help disabled women accomplish common household tasks

She did not retire from professional work until she was in her 80s She traveled widely, speaking and writing about management issues In 1966, she won the Hoover Medal of the American Society of Civil Engineers She died at the age of 92, the recipient of more than a dozen honorary degrees Her ability to combine a career and family led to her being called,

by the California Monthly in 1944, "a genius in the art of living."

Q 5 What are the contribution of Frederick Taylor

scientific management Under personal management, a captain of industry was expected to be personally brilliant Taylor claimed that a group of ordinary men, following a scientific method would out perform the older "personally brilliant" captains of industry

Taylor consistently sought to overthrow management "by rule of thumb" and replace it with actual timed observations leading to "the one best" practice Following this philosophy he also advocated the systematic training of workers in "the one best practice" rather than

allowing them personal discretion in their tasks He believed that " a spirit of hearty

cooperation" would develop between workers and management and that cooperation would ensure that the workers would follow the "one best practice." Under these philosophies Taylor further believed that the workload would be evenly shared between the workers and

management with management performing the science and instruction and the workers

performing the labor, each group doing "the work for which it was best suited."

Taylor's strongest positive legacy was the concept of breaking a complex task down in to a number of small subtasks, and optimizing the performance of the subtasks This positive legacy leads to the stop-watch measured time trials which in turn lead to Taylor's strongest negative legacy Many critics, both historical and contemporary have pointed out that

Taylor's theories tend to "dehumanize" the workers To modern readers, he stands convicted

by his own words:

" … in almost all of the mechanic arts, the science which underlies each act of each workman

is so great and amounts to so much that the workman who is best suited to actually doing the work is incapable of fully understanding this science, without the guidance and help of those who are working with him or over him, either through lack of education or through

insufficient mental capacity."

One can see Taylor turning to "science" as a solution to the inefficiencies and injustices of the period His idea of breaking a complex task into a sequence of simple subtasks closely

mirrors the interchangeable parts ideas pioneered by Eli Whitney earlier in the century Furthermore, the concepts of training the workers and developing "a hearty cooperation" represented a significant improvement over the feudal human relations of the time

Successes

Scientific management met with significant success Taylor's personal work included papers

on the science of cutting metal, coal shovel design, worker incentive schemes and a piece rate system for shop management Scientific management's organizational influences can be seen

in the development of the fields of industrial engineering, personnel, and quality control

From an economic standpoint, Taylorism was an extreme success Application of his methods yielded significant improvements in productivity Improvements such as Taylor's shovel work at Bethlehem Steel Works (reducing the workers needed to shovel from 500 to 140) were typical

Q 6 Contribution of George Elton Mayo's Hawthorne Experiments

Ans:- Henri Fayol - Administration

The Studies

The Hawthorne Studies (or experiments) were conducted from 1927 to 1932 at the Western Electric Hawthorne Works in Chicago, where Harvard Business School professor Elton Mayo examined productivity and work conditions Studies grew out of preliminary experiments at the plant from 1924 to 1927 on the effect of light on productivity Those experiments showed

no clear connection between productivity and the amount of illumination but researchers began to wonder what kind of changes would influence output

Variables Affecting Productivity

Specifically, Mayo wanted to find out what effect fatigue and monotony had on job

productivity and how to control them through such variables as rest breaks, work hours, temperature and humidity In the process, he stumbled upon a principle of human motivation

that would help to revolutionize the theory and practice of management

Mayo took six women from the assembly line, segregated them from the rest of the factory and put them under the eye of a supervisor who was more a friendly observer than

disciplinarian Mayo made frequent changes in their working conditions, always discussing and explaining the changes in advance He changed the hours in the working week, the hours

in the workday the number of rest breaks the time of the lunch hour Occasionally, he would return the women to their original, harder working conditions

Relay assembly

The investigators selected two girls for their second series of experiments and asked them to choose another four girls, thus making a small group of six The group was employed in assembling telephone relays - a relay being a small but intricate mechanism composed of about forty separate parts which had to be assembled by the girls seated at a lone bench and dropped into a chute when completed The relays were mechanically counted as they slipped down the chute It was intended that the basic rate of production should be noted at the start, and that subsequently changes would be introduced, the effectiveness of which would be measured by increased or decreased production of the relays

Conditions and results

The experimental group had considerable freedom of movement They were not pushed around or bossed by anyone Under these conditions they developed an increased sense of responsibility and instead of discipline from higher authority being imposed, it came from within the group itself

Q 7 Explain informal organaziation

Ans:-

The Informal Organization

In addition to formal organizational structures, an organization may also have a hidden side that doesn't show up on its organizational chart This hidden informal organization is defined

by the patterns, behaviors, and interactions that stem from personal rather than official

relationships

In the informal organization, the emphasis is on people and their relationships; in the formal organization, the emphasis is on official organizational positions The leverage, or clout, in the informal organization is informal power that's attached to a specific individual On the other hand, in the formal organization, formal authority comes directly from the position An individual retains formal authority only so long as he or she occupies the position Informal power is personal; authority is organizational

Firmly embedded within every informal organization are informal groups and the notorious grapevine; the following list offers descriptions of each:

Informal groups Workers may create an informal group to go bowling, form a union,

discuss work challenges, or have lunch together every day The group may last for several years or only a few hours Sometimes employees join these informal groups simply because

of its goals Other times, they simply want to be with others who are similar to them Still others may join informal groups simply because they want to be accepted by their coworkers

The grapevine The grapevine is the informal communications network within an

organization It is completely separate from — and sometimes much faster than — the

organization's formal channels of communication

Formal communication usually follows a path that parallels the organizational chain of

command By contrast, information can be transmitted through the grapevine in any direction

— up, down, diagonally, or horizontally across the organizational structure Subordinates may pass information to their bosses, an executive may relay something to a maintenance worker, or employees in different departments may share tidbits

Grapevine information may be concerned with topics ranging from the latest management decisions to the results of today's World Series game to pure gossip The information may be important or of little interest By the same token, the information on the grapevine may be highly accurate or totally distorted

The informal organization of a firm may be more important than a manager realizes

Although managers may think that the informal organization is nothing more than rumors that are spread among the employees, it is actually a very important tool in maintaining company-wide information flow Results of studies show that the office grapevine is 75 percent to 90 percent accurate and provides managers and staff with better information than formal communications

Rather than ignore or try to suppress the grapevine, managers should make an attempt to tune

in to it In fact, they should identify the people in the organization who are key to the

information flow and feed them information that they can spread to others Managers should make as big an effort to know who their internal disseminators of information are as they do

to find the proper person to send a press release Managers can make good use of the power

of the informal organization and the grapevine

Q 8 Explain informal organaziation

Ans:-

Formal organization

A formal organization refers to the structure of well defined jobs, each bearing a definite measure of authority, responsibility and accountability Thus, a formal organization is created through the co-ordination of efforts of various individuals Every member is responsible for the performance of a specified task assigned to him on the basis of authority responsibility relationship in an organization

1 To employees

(i) Sense of belonging: In a formal organization, there is lack of sense of belongingness

and personal satisfaction

(ii) Value for emotional problems: In the daily work routine there are many

opportunities for tension and frustration

(iii) Aid on the job: In case of accidents or illness, members of an informal group help one

another

(iv) Innovation and originality: By enabling members to modify the job situation more to

their liking, the informal organization creates the necessary environment for individual innovation and originality The individual can experiment with his ideas

(v) Important channel of communication: News travels quickly via informal groups

They are the clandestine transmitters and receivers of information before it is officially released

(vi) Social control: Informal groups provide all its members a set of norms or guides to

correct behavior Members are expected to conform to those norms

(vii) Check on authority: Informal group forces the manager to plan and act more

carefully than he would otherwise Informal organization is a check and balance on unlimited use of authority by a manager

2 To management

(i) Less supervision: Informal group is self-policing This relieves the management of

much of the burden of supervision

(ii) An aid to management: The information gives the manager much feedback about

employees and their work experiences thereby increasing his understanding of what he needs

to do

Disadvantages of an Informal organization

(i) Resistance to change: An informal organization is bound by customs, conventions

and culture

(ii) Role conflict and sub-optimization: In an informal organization, everyone works

towards the same objectives Members put their own group objectives ahead of organization’s objectives Hence, the organization suffers

(iii) Rumour: An informal organization sometimes functions as a carrier of rumor

(iv) Group think philosophy: Workers become loyal to their groups

Q 9 What do you understand by M.B.O Explain?

Ans

Management by objectives (MBO) is a systematic and organized approach that allows

management to focus on achievable goals and to attain the best possible results from

available resources

It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization Ideally, employees get strong input to identify their objectives, time lines for completion, etc MBO includes ongoing tracking and feedback in the process to reach objectives

Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his book 'The Practice of Management' In the 90s, Peter Drucker himself decreased the significance of

this organization management method, when he said: "It's just another tool It is not the great cure for management inefficiency Management by Objectives works if you know the objectives, 90% of the time you don't."

Core Concepts

According to Drucker managers should "avoid the activity trap", getting so involved in their day to day activities that they forget their main purpose or objective Instead of just a few top managers, all managers should:

participate in the strategic planning process, in order to improve the implementability of the plan, and

implement a range of performance systems, designed to help the organization stay on the right track

Managerial Focus

MBO managers focus on the result, not the activity They delegate tasks by "negotiating a

contract of goals" with their subordinates without dictating a detailed roadmap for

implementation Management by Objectives (MBO) is about setting yourself objectives and then breaking these down into more specific goals or key results

Where to Use MBO

The MBO style is appropriate for knowledge-based enterprises when your staff is competent

It is appropriate in situations where you wish to build employees' management and leadership skills and tap their creativity, tacit knowledge and initiative

self-Q 10 Write short note of McKinseys7S

Ans

M a c’ s 7 S – McKensey’s Model

This is one of the recently developed models of management The model was developed by the widely respected consulting firm of McKinsey and Company It is based on two best selling books, namely, The Art of Japanese Management and In Search of Excellence The model was tested extensively by McKinsey’s consultants in their studies of many companies This frame work has also been used by respected business schools such as Harvard and Stanford Thus Theory and Practice support each other

However, if effort to get all the attributes starting with ‘S’, (to serve as memory hook)

meaning of some of the terms had to be stretched Like while ‘skills’ is used for personal skills, here it stands for capabilities of the organisation as a whole

By Super-ordinate Goals, the theorists have emphasised that goal statements are very

important in determining the destiny of the enterprise They also point out that values must

be shared by organisation members Therefore special attention is to be given to personal and organisational values

Strategy

Structure

System

Staff Style

Skill

Super-ordinate Goals of org

Q 11 Write short notes on Line and Staff

Ans

Line and Staff Organisation

One of the ways to classify the diverse functions of an organisation is to divide them into line and staff functions The words line and staff are basically euphemisms for main and support functions The line functions are defined as those that contribute directly to accomplishment

of the objectives of the enterprise where as staff functions are those which help the line persons to execute their tasks more efficiently and effectively Accordingly, production and sales (and some times finance also) are termed as line and planning, purchasing, accounting, personnel, plant maintenance and quality control are regarded as staff functions

Unfortunately, this division has been a constant source of debate and friction amongst the managers and the academicians The separating line between two functions is very thin and many functions fall in the grey area Often one function regarded as line by one authority is termed as staff by another Take for instance, Tool Room in-charge in a production shop While the Headquarter authorities classify the job as line function, the machine operator in the same shop is not willing to accept it as such The purpose of the staff personnel is to investigate, research, assist and give advice to the line people

The line and staff personnel are quite often at loggerheads Both have grouse against each other However, such grouse are minimised by cross training/rotation of staff and line

appointments whereby every person gets to work in both kinds of jobs and thus understands the functions and nuances of the other better This method has been successfully adopted by the Defence Forces

Despite being enveloped by the constant debate, and being source of friction in the

organisation, this method has its own undeniable advantages: -

Characteristics

1 Line executives command, they are doers

2 The staff specialists advice, they are thinkers

3 The staff plays a major part in planning the activity

4 The Line manager have clear and absolute authority for execution of decisions

Advantages of Line And Staff Type of Organisation

1 Planned Specialisation Allows hiring of super specialist to tackle problem

2 Affords opportunity to investigate the problem thoroughly Man involved in the day

to day production process will rarely have time to invest in research

3 Bifurcation of conceptual and executive functions

4 Training ground

5 Sound decisions

6 Less burden on Line executive

7 Suitable for large organisations

Q 12 What are the Barriers to Organizational Communication ?

Ans

Communication can be defined as, “transfer of thoughts and information from one person to another person Communication can be oral (Direct or telephonic or messanger), written (letters, emails, sms) or even in sign language Effective communication is vital for success in any field Improper and ineffective communication can be the difference between success and failure Communication is a difficult art and requires careful handling to avoid disastrous results

Communication could be a one way or two way process But for the communication

to be effective and reliable, it should be two way as far as possible

Communication can be in three directions:

1 Upward – From subordinates/workers to senior officers/management

2 Downward – From Superiors/management to subordinates and workers

3 Lateral – Between colleagues, peers, interdepartmental meetings, etc

In the above process, the error could occur at any point resulting in unplanned effects and results

ABC of Communication In the most simplistic form, an effective communication has to have three independent attributes A, B & C, ie

Communication is rarely with 100% accuracy There will always be distortions in

communication due to either failure to code the message or decode and understand the

message correctly The reasons for above failure are many These reasons are termed as Barriers in communication They could be grouped as follows: -

6 Difference in Values between two people

7 Poor Listening – Hearing is with ears while listening is with mind (attentiveness is the keyword in listening)

8 Perceptions – Opinionated, etc

9 Inappropriate gestures and postures

10 Deficiency of knowledge of receiver (in technical matters)

2 Physical Barriers

1 Interference

Improving Communication Communication can be greatly improved if some simple steps

are observed diligently

1 The sender should format and code his message keeping the attributes/environment of receiver in mind Like critical messages should be avoided when the person is in high emotional state Similarly, if a person is working in high noise area, it is better to send a small note rather than shout out the instructions

2 Keep the message short and sweet Long messages are often not read fully or read at high speed with little understanding

3 Any message should have as few intermediaries as possible since there is loss of accuracy at each transmission and reception

4 Only simple and familiar words and phrases should be used

5 Avoid jargon, slang and colloquiums

Q 13 Explain Theory X and Theory Y

Ans

McGregor, in his book “The Human side of Enterprise” states that people inside the

organization can be managed in two ways The first is basically negative, which falls under the category X and the other is basically positive, which falls under the category Y After viewing the way in which the manager dealt with employees, McGregor concluded that a manager’s view of the nature of human beings is based on a certain grouping of assumptions and that he or she tends to mold his or her behavior towards subordinates according to these assumptions

Under the assumptions of theory X :

• Employees inherently do not like work and whenever possible, will attempt to avoid

it

• Because employees dislike work, they have to be forced, coerced or threatened with punishment to achieve goals

• Employees avoid responsibilities and do not work fill formal directions are issued

• Most workers place a greater importance on security over all other factors and display little ambition

In contrast under the assumptions of theory Y :

• Physical and mental effort at work is as natural as rest or play

• People do exercise self-control and self-direction and if they are committed to those goals

• Average human beings are willing to take responsibility and exercise imagination, ingenuity and creativity in solving the problems of the organization

• That the way the things are organized, the average human being’s brainpower is only partly used

On analysis of the assumptions it can be detected that theory X assumes that lower-order needs dominate individuals and theory Y assumes that higher-order needs dominate

individuals An organization that is run on Theory X lines tends to be authoritarian in nature, the word “authoritarian” suggests such ideas as the “power to enforce obedience” and the

“right to command.” In contrast Theory Y organizations can be described as “participative”, where the aims of the organization and of the individuals in it are integrated; individuals can achieve their own goals best by directing their efforts towards the success of the organization

However, this theory has been criticized widely for generalization of work and human