1. General Principles of Management
UNIT II

2. EVOLUTION OF MANAGEMENT
THOUGHT
 The concept of organisation and administration existed in Egypt
in 1300 BC.
 In the field of business organisation, some contributions have
come from Robert Owen, James Watt, Charles Babbage etc.
 Robert Owen- emphasised on personnel aspects in
management and advocated a number of benefits to employers.
 It was unrecognized – two centuries ago.
 Central activity of our age and economy
 The Emergence of Management Thought can be classified under
various schools of management and can be put into 3 broad
categories as follows:
 The Classical Approach
 The Behavioural Approach
 The Quantitative Approach

3. A. CLASSICAL APPROACH
It has 3 branches:
I. Scientific Management
II. Administrative Principles
III. Bureaucratic Organisation
I. Scientific Management:
Fredrick W. Taylor in his book “Scientific Management” criticised
the method of traditional management which were composed
of:
a. Subjective or intuitive evaluation
b. Jobs were performed by rule of thumb rather than standard
times, methods or motives
c. No efforts were made to introduce new techniques of
management
d. No formal techniques of skill and professional development
existed. Training was under apprentice system
e. Management was considered as a group of overall
supervisors rather than a group performing unique duties.

4. I. SCIENTIFIC MANAGEMENT
 Frederick W. Taylor (1856 – 1915)
 Father of Scientific Management
 Raise productivity through greater efficiency in
production and increased pay for workers, by
applying the scientific method.
 His principles emphasize using science,
creating group harmony and cooperation,
achieving maximum output and developing
workers.

5. PRINCIPLES OF F.W.TAYLOR
1. Replacing rule of thumb with science:
Rule of thumb emphasises estimation and Science
denotes precision in determining any aspect of work.
2. Harmony in group Action:
There should be mutual give and take situation and
proper understanding
3. Co-operation
4. Maximum Output
5. Development of workers

6. SCIENTIFIC MANAGEMENT
 Henry L. Gantt
 Principles and concepts of F.W. Taylor was
refined and enlarged
 Called for scientific selection of workers and
“harmonious cooperation” between labour and
management
 Developed the Gantt chart
 Stressed the need for training

7. SCIENTIFIC MANAGEMENT
 Frank and Lillian Gilbreth
 Frank is known primarily for his time and motion
studies – motion and fatigue studies
 Lillian an industrial psychologist, focused on the
human aspects of work and the understanding
of workers’ personalities and needs
 Economical motion of bricklaying, shorthand
symbols for analysts

8. Merits and Criticisms of Scientific
Management
Merits:
a. More production and high profits
b. Job satisfaction
c. Personality Development
d. Higher standard of living
Criticisms:
a. Unsuitable for small employees
b. Unemployment when machines replace labour
c. Retarding human development i.e., workers are
reduced to the status of machines and totally
deprieved of thinking function.

9. II. ADMINSTRATIVE
PRINCIPLES
 Henry Fayol (1841-1925) was a leading French
industrialist and a successful manager.
 His life long experience, in the field of managing was
reproduced in a monograph titled “Administration
Industrial and Generale” in 1916 and translated into
English in 1944 in U.S.
Fayol’s classification of Managerial Functions:
a. Planning
b. Organising
c. Commanding
d. Co-ordinating
e. Controlling

10. Fayol’s General Principles of
Management
 Henry Fayol
 Father of Modern management theory
 Divided industrial activities into six groups
a. Technical (related to production)
b. Commercial (related to buying, selling or exchange)
c. Financial (related to search for and optimum use
of capital)
d. Security (related to protection of properties &
personnel of an enterprise)
e. Accounting (related to record of business
transactions)
f. Managerial
• Recognised the need for teaching management
• Formulated the 14 principles of management

11. 14 PRINCIPLES
1. DIVISION OF WORK – To take advantage of
specialisation,
different workers for different jobs
depending upon natural condition, skills
etc.
2. AUTHORITY AND RESPONSIBILITY – right to give
orders and
power to extract obedience
3. DISCIPLINE – good supervisors at all level, clear
and fair agreements between
employees and employer,
judicious application of penalties
4. UNITY OF COMMAND – one superior to avoid conflict in
instructions
5. UNITY OF DIRECTION – complete identity between

12. 14 PRINCIPLES
6. SUBORDINATION OF INDIVIDUAL INTEREST TO
GENERAL INTEREST – more money, recognition,
status etc
7. REMUNERATION - should be fair – general business
conditions, cost of living, productivity and
capacity of the firm – efficiency and
morale & fosters good relationship
between employees and
management
8. CENTRALISATION – reservation of decision-making
authority at top level of
management. It is subject to the
nature of the organisation how big/small it
is.
9. SCALAR CHAIN – means hierarchy of authority from the

13. 14 PRINCIPLES
10. ORDER – efforts – right place for everything and for the
right man
11. EQUITY – equality of fair treatment – combination of
kindness and justice
12. STABILITY OF TENURE OF PERSONNEL – to do more
and better job
13. INITIATIVE – freedom to think out and execute a plan –
innovation => initiative
14. ESPRIT DE CORPS – means team spirit – union is
strength. Harmony and unity of
staff – strength to the company

14. III. BUREACRATIC
ORGANISATION
Max Weber (1864-1920) is a German Social Scientist.
Main characteristics of Weber’s bureaucratic model:
i) A division of labour by functional specialisation i.e.,
each member performs his specialised job.
ii) A well defined hierarchy of authority
iii) A system of rules covering the duties and rights of
employers
iv) A system of procedures for dealing with work
situations
v) Impersonal relations between people i.e., there is no
place for emotions, sentiments and personal
attachment.

15. MERITS AND DEMERITSOF
BUREAUCRACY
MERITS:
1. Specialisation
2. No overlapping of duties as duties and
responsibilities are clearly defined
3. Systematic and orderly functioning
4. Efficient functioning because of technical
competence
DEMERITS:
1. Too much paper work
2. Lack of flexibility
3. No place for human consideration
4. Lack of initiative

16. B. BEHAVIOURAL APPROACH
The traditionalists emphasised on physical –
technical aspects of managing and little attention was
paid to human factors.
The human relation approach seeks to examine
and analyse the impact of the human factor towards
more effective management.
The various behavioural scientists include:
 Hugo Munsterberg
 Walter Dill Scott
 Max Weber
 Vilfredo Pareto
 Elton Mayo and F. J. Roethlisberger

17. Human Relations Approach
Human Relations was given more importance by
Elton Mayo who conducted an experiment, which formed
the basis for this approach called as Hawthorne
Experiments.
HAWTHORNE EXPERIMENTS:
1. Hawthorne Experiments are conducted at the
Hawthorne Plant of the Western Electric Company,
U.S.A., during 1924-32.
2. The experiments were conducted by an eminent team of
researchers from the Harvard Business School, under the
leadership of Elton Mayo, who is the father of Human
Relations School.
3. The basic purpose motivating these experiments was
whether physical facilities like raw materials, machinery,
technology etc were the factors responsible for human
efficiency or were there certain other factors more

18. BEHAVIOURAL SCIENCES
 Elton Mayo and F. J. Roethlisberger
 Famous studies at the Hawthorne plant of
Western Electric Company on the influence
of social attitudes and relationships of work
groups on performance.
 Four different types of experiments were
conducted in this regard.

19. HAWTHORNE EXPERIMENTS
 Illumination Experiments – Level of
Illumination.
 Relay Assembly Test Room – Break,
Supervisor,
Working time.
 Mass Interviewing Programme –
Social relations inside the organisation had an
unmistakable influence on their attitude and
behaviours.

20. Positive Contributions of
Hawthorne Experiments
i. An organisation is a SOCIAL SYSTEM; with a
culture on its own.
ii. INFORMAL GROUPS have a serious impact on
worker’s productivity.
iii. FRIENDLY SUPERVISION has a favourable
influence on human efficiency at work.
iv. FREE FLOW OF COMMUNICATION, in the
organisation makes for good human relations.

21. Limitations of Hawthorne
Experiments
i. Experiments were not conducted in a scientific
manner. There was no system involved in
selecting the work, workers and the
environment.
ii. The Hawthorne plant was not a typical plant as
it was a thoroughly unpleasant place to work.
Therefore, the results could not be valid for
others.
iii. The experimented workers did not exhibit their
natural work-behaviour because they felt that
they are more important to others and induced
them to demonstrate unusual work behaviour –
HAWTHORNE EFFECT.

22. C. THE QUANTITATIVE
APPROACH

23. MODERN MANAGEMENT
THOUGHT
 Peter F. Drucker: Very prolific writer on many general
management topics.
 W. Edwards Deming: Introduced quality control in
Japan.
 Laurence Peter: Observed that eventually people get
promoted to a level they are incompetent.
 William Ouchi: Discussed selected Japanese
managerial practices adapted in the
US environment.
 Thomas Peters & Robert Waterman: Identified

24. SYSTEMS APPROACH
 Stress one aspect at the expense of others.
 Difficult to which aspect is most useful and
appropriate in a given situation.
 Needed – one broad, detailed, conceptual
framework that can help a manager diagnose and
decide which tool or a combination of tools will be
best do the job – system approach.

25. KEY CONCEPTS
 A system is a set of interdependent parts –
task, structure, people and technology.
 Central to the systems approach is the
concept of “holism” – relation of
interdependence.
 A system can either be open or closed – open
system: interacts with the environment

26. Organisation as an open
system
FIG:

27. KEY CONCEPTS
 Every system has a boundary
• Where it ends and other system begins.
• Separates the parts of the system from the
environment.
• Protects the transformation process from
the vagaries of its environment.

28. CONTINGENCY
 Attempts to integrate various schools of thoughts.
 No universal applicability under all conditions.
 Managers can identify the technique that will, in a
particular situation best contribute to the
attainment of management goals.
 Therefore they should develop situational
sensitivity and practical selectivity.

29. CONTINGENCY
 Designing organisational structure, degree of
centralisation, information decision systems,
motivational and leadership approach,
establishing communication and control systems
etc.