Principles of Management

Written and reviewed by Rohit Singh, Computer Science & Commerce faculty at UniDrill (MCA, Osmania University · 6 years teaching). Based on NCERT Business Studies Class XII, Chapter 2.

Two bosses, one tired employee

Imagine you work at a shop. The owner tells you to arrange the new stock first, and thirty minutes later the manager tells you to serve customers first. Both are senior to you and both are right from their own view. You cannot please both, so you do half of each. Rules written to avoid exactly this kind of mess are what principles of management are about. This chapter gives you two sets of them: Henri Fayol's 14 principles for running a whole organisation, and F.W. Taylor's scientific management for the shop floor.

What a principle is, and what it is not

A principle of management is a broad and general guideline for decision-making and behaviour. A principle does not tell a manager exactly what to do. It tells the manager what to think about. For example, a manager may promote people on seniority and another on merit, and each follows a principle about how to reward staff.

Students mix principles up with two similar ideas.

Principles of management also differ from principles of pure science. Science principles are exact and fixed. Management principles deal with human behaviour, so they have to be applied with judgement.

Nature of principles. Seven words describe them, and each has a clue.

Significance of principles. Why do managers need them?

Scientific management: Taylor's way

F.W. Taylor was an American engineer who worked on factory floors. He saw workers doing a job by habit ("rule of thumb"), with every worker doing it differently, and owners blaming workers for slow output. He asked a simple question: what is the best way to do this job? His idea was that management should know exactly what it wants workers to do and see that they do it in the best and cheapest way. That is scientific management.

Four principles. These are principles, not techniques. Learn them as "X, not Y" pairs.

Seven techniques. These are the tools used to apply those principles. The CUET favourite is "which of these is a technique, not a principle".

The table has eight rows for seven techniques because standardisation and simplification of work count as one technique. Standardisation sets the standards, and simplification removes the extras.

Functional foremanship. Taylor split the foreman's job into eight specialists. Under a planning in-charge are four, and under a production in-charge the other four.

Beyond the textbook. For the exam: functional foremanship is one of Taylor's techniques, and Fayol's unity of command is stressed in the Fayol vs Taylor comparison. In reality: because each worker takes orders from eight specialists, functional foremanship breaks the unity of command that Fayol held so important. This is the clearest example of why the two approaches differ, and examiners use it for assertion-reason questions.

Pause and predict: at a standard of 20 units a day, a worker making 25 units gets ₹12 per unit on all 25, and a worker making 15 units gets ₹9 per unit on all 15. Which technique is this?

Check your answer: the differential piece wage system. It pays different rates for above-standard and below-standard performance, to motivate everyone to reach the standard.

Fayol's 14 principles

Henri Fayol was a French mining engineer who ran a large company. While Taylor looked up from the shop floor, Fayol looked down from the manager's chair at the whole organisation. His principles are meant for managers at the top, and they are general guidelines for any organisation. The clue column shows how each one hides in a case question.

Unity of command and unity of direction. These two are swapped in options more than any other pair.

Mini-case. At Pune-based Bright Apps, two project leaders are each building their own version of the same shopping app with different plans and different deadlines. This is a failure of unity of direction, since the same objective needs one head and one plan. Meanwhile, a junior designer takes tasks from both the creative head and the technology head, which breaks unity of command.

Discipline, order and equity are different things. Discipline is about obeying rules. Order is about the right person, material and place. Equity is about fairness in treatment.

Initiative and esprit de corps are different things. Initiative allows individuals to start something new. Esprit de corps builds a team feeling.

Mini-case. At Sagar Garments, the cutting supervisor and the stitching supervisor in two different branches urgently need to coordinate a rush order. They call each other directly and inform their bosses later. Normally they would pass the message up and down the scalar chain, but in an emergency the gang plank lets them skip it. This shortcut applies to same-level employees and only in emergencies.

Beyond the textbook. For the exam: learn all 14 as a list with their meanings. In reality: Fayol himself said that there is nothing rigid or absolute in management, and he treated his list as open, not closed. This matches the idea that principles are flexible and contingent: the right degree of centralisation, for example, depends on the size and situation of the firm.

Pause and predict: a firm shifts its managers every few months so none of them stays long enough to learn the job. Which of Fayol's principles is being ignored?

Check your answer: stability of personnel. Managers need reasonable time to show results, and frequent transfers raise recruitment and training costs.

Fayol versus Taylor

Taylor and Fayol worked on different levels, so their principles do not conflict as much as they complement. The comparison table is a favourite, so rebuild it from memory.

Exam traps

60-second revision

Where this chapter connects

• Previous: Nature and Significance of Management defines management and its functions, which these principles are meant to guide.
• Next: Business Environment shows the outside forces that make principles flexible and contingent.
• Function chapters: Organising applies division of work, authority and scalar chain, and Staffing uses ideas such as stability of personnel.