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An Introduction to Principles of Management: What you need to know?

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14th Mar, 2023
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An Introduction to Principles of Management: What you need to know?

Businesses exist for multiple reasons. Earning a profit is the most prominent reason out of all. Different principles of management are designed to ensure the company consistently generates profit and remains up and running forever.

 During the earlier times, several businesses used to get shut now and then because of ill-management practices. That’s when Henry Fayol and F.W. Taylor formulated the 14 principles of management. These principles are still perceived as the driving force of different businesses, helping them secure good profits while keeping their employees happy and satisfied. 

This guide will help you understand scientific management principles and why small and large organizations are still using them.

14 Important Principles of Management

 F.W. Taylor came up with 14 principles of scientific management to focus on the scientific way of managing businesses. Earlier, other scientists developed a few methods to manage companies. Still, Taylor disregarded them as he believed laborers and managers take up the core business responsibility.

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 These principles of management are quite crucial as they touch upon all the primary functions of management, like planning, organizing, controlling, etc. Let’s have a look at the 14 principles of management and understand them in detail.

1. Division of Work

 Division of work is one of the most critical principles of management. The principle works on the concept that if you assign a worker with any specialized task, they will gain expertise by doing so and become much more efficient than the other workers.

Hence, you should entrust the workers with limited duties and not fill their plates with everything. Therefore, creating a system where every employee has a specialized role is much more effective.

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2. Authority and Responsibility 

Managerial authority is important if you want a task to be carried out efficiently. Hence, you need to create a proper chain of command and give the managers authority to control the workforce responsible for carrying out different tasks.

If proper authority is not given to the managers, they will not be able to carry out their responsibilities well. Therefore, giving them authority and responsibilities to get the work done can actively contribute to the work environment. A company should try to create a perfect balance between authority and responsibility.

3. Discipline

 Discipline is one of the 14 principles of management that is highly relevant in all organizations. You must ensure discipline to run your business smoothly while complying with timelines. Discipline should prevail in the entire organization, be it managers, employees, or other stakeholders interacting with the company regularly.

 To ensure discipline, every company should have rules and guidelines to reinstate how employees should behave and treat other employees. Also, you must ensure that the organizational regulations are followed by everyone who is a part of the organization. You can achieve this only if you have good control over the employees.

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4. Unity of Command

 Unity of Command is one of the principles of scientific management that talks about having a clear line of command. It talks about owning a regulated reporting structure in the company. Employees should know their immediate supervisor and the chain of command they need to follow. A company should ensure that all the employees report to a single manager.

 There is a lot of ambiguity if an employee has two or more managers. Also, it can give rise to misunderstandings and create a lot of confusion within the company.

5. Unity of Direction

 Every company should work toward one direction, and all employees must be aware of this direction. Every employee’s contribution to the organization should take the company in a pre-decided order. A unity of direction translates to a single plan and the supervision of a single manager for every employee.

 For instance, if the company’s agenda is to promote its products via marketing, there should be a single plan to carry out all these activities. While you can break down the project into different components and assign them to sub-managers, they should all work in a unified direction.

6. Subordination of Individual Interests to Collective Interests

The company’s goals should supersede your personal goals. It is one of the principles of management that states that the company is over everything as it is working to serve the customers. A good manager will create goals for the company that ensure the employee’s personal goals are also fulfilled.

 Hence, every company should ensure that the individual objectives of the employees are not sabotaging the company’s more significant and overall objectives; if individual goals overpower, the company is destined to fall.

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7. Remuneration

 All employees work in exchange for some remuneration. However, the employees will not give their best if they are not fairly remunerated for their services. As a company, you must pay at least an amount equal to the minimum wage decided by the law.

A company can decide the additional pay for a candidate based on their contribution to the company’s objectives. If a company underpays its employees, it will not be able to keep them motivated or retain them, as it will start looking out for better opportunities in other organizations.

The remuneration structure should include monetary and non-monetary components so that the employees stay motivated and give their cent percent to their work. Also, you should devise a system to reward the employees for their excellent performance.

8. Centralization

Centralization is one of the most vital principles of scientific management as it talks about who should control the company. According to Fayol, the power of managing the company should be vested in a few hands. If you delegate the authority to everyone, there will be a lot of confusion in the company. Also, the chances of misusing the power of the employees will increase.

 Hence, there should be a fair balance between centralization and decentralization of power so the company can be managed effectively. The degree of balance differs from company to company. You can follow a tier system to decide the proportion of power the employees of that tier should have.

9. Scalar Chain

 A scalar chain is a distinct line of communication between subordinates and superiors. Employees should know their position within the organizational structure and whom to contact in an emergency.

Fayol proposes that an organizational chart be created so workers can readily perceive this structure to apply this in the company. A chart will establish a clear line of communication and how the employees must reach out to people at different levels of management if an issue needs immediate attention.

10. Order

The order of manpower, resources, etc., plays a significant role in running a company. Everything should be found at the right place at the right time. They can only be utilized to their full potential if the resources are placed correctly. If any of the resources are in the wrong place, they can be mishandled or misused by the employees for personal use.

Therefore, you should devise a structure for deploying several resources and stick to it religiously.

11. Equity

Equity is considered one of the critical principles of scientific management, as having equity in any organization supersedes any other requirements. All managers should treat all their subordinates equally and display ethical behavior towards everyone in the organization.

 Equity has two elements: kindness and justice. Hence, every employee in the organization should be kind and just towards all their co-employees and subordinates. This creates a healthy atmosphere within the company.

12. Stability of Tenure of Personnel

Minimizing staff turnover is a priority for all businesses. A company can only do so by keeping its employees satisfied and happy. According to this important management principle, organizations should reduce the number of people who leave the company and try to maximize their output.

When a company onboards a new employee, they should be given a few days to adjust to the system, understand everything better, and become quite efficient. Job security is crucial for every employee; they will give their best when they feel their job is safe. Also, when you fire employees, you will have to waste time and resources to train them.

14. Initiative 

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This principle suggests that initiative should be promoted among all employees. Employees feel driven and valued when they have a say in how they can do their duties. Employers should pay attention to employee complaints and support the creation and implementation of improvement programs.

Conclusion

The principles of management are the driving forces behind any company. Hence, it is important to understand and implement them in your organization to maximize its potential. The best thing about the 14 principles of management is they not only focus on making profits but also highlight how the employees should be treated and how work should be assigned within an organization.

If you want to understand these principles better, you can take up the Master of Business Administration Course on upGrad. Offered by San Francisco’s leading institute, the Golden Gate University, this course is designed for fresh graduates and working professionals to upskill themselves with management concepts. 

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Frequently Asked Questions (FAQs)

1What are the 14 principles of management based on?

The 14 management principles are based on the five core functions of management. These functions include planning, organizing, commanding, coordinating, and controlling.

2Which principle of management talks about retaining employees?

The management principle of personnel's tenure stability concerns minimizing staff turnover and keeping your staff happy.

3What does Esprit de Corps mean?

The literal meaning of Esprit de Corps is team spirit. It motivates all the employees of an organization to work together.

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