Principles of Management — Class 12 Business Studies

Principles of management are broad, general guidelines for managerial decision-making and behaviour. They are formed by observation and experiment, are general guidelines (not rigid rules), are flexible, mainly behavioural, cause-and-effect relationships and contingent on the situation. Their significance lies in providing useful insight, optimum use of resources, scientific decisions, meeting changing requirements, fulfilling social responsibility and supporting management training. Henri Fayol, regarded as the father of general management, gave fourteen principles: division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual interest to general interest, remuneration of employees, centralisation and decentralisation, scalar chain (with the gang plank for quick horizontal communication), order, equity, stability of personnel, initiative and esprit de corps. F.W. Taylor, the father of scientific management, sought to replace rule of thumb with science. His principles were science not rule of thumb, harmony not discord, cooperation not individualism, and development of each worker to greatest efficiency and prosperity. His techniques included functional foremanship, standardisation and simplification of work, method, motion, time and fatigue study, and the differential piece-wage system. Together, Fayol and Taylor laid the foundations of modern management thought.