INTRODUCTION TO MANAGEMENT

1.1 Introduction:
One of the most important activities in
business is the management of the 4M’s Course Contents
men, machines, material and money.
1.1 Introduction and Definition of
Simply speaking, management is what Management
managers do. But that simple statement
1.2 Nature of Management
doesn’t tell us much does it?
1.3 Management is a science and
In one context, it may comprise the an art
activities of executives and
administrative personnel in an 1.4 Difference between
organization. Administration and Management
1.5 Functions of Management
1.6 Levels of Management
In a broad perspective, management can
1.7 Managerial skill
be considered as the proper utilization of 1.8 Role of Manager
people and other resources in an 1.9 Scientific theory
1.10 Henry fayol’s 14 principles of
organization to accomplish desired
Management
objectives. 1.11 Abraham Maslow’s need
theory

Definition:
 According to F.W. Taylor “Management
in business and human organization
activity is simply the act of getting people
together to accomplish desired goals”.
  According to Peter Druker, “Give direction to their organization, provide
leadership, and decide how to use organizational resources to
accomplish goals”.

 According to Henri Fayol, “Management is to forecast, to plan, to organize, to

command, to co-ordinate and control activities of others”.
According to Fredmund Malik defines as Management is the transformation of resources into
utility.

Organization Function of
Resources Management

- Man - Planning
- Material - Organizing
- Machine - Staffing Organizational
- Money - Leading goals
- Information - controlling
- Technology

1.2 Nature of Management

Nature of management can be described as follows.

1. Continuous Process:

Management is a never ending process. It will remain the part of organization

till the organization itself exists. Management is an unending process as past
decisions always carry their impact for the future course of action.

2. Universal in Nature:

Management is universal in nature i.e. it exists everywhere in universe

wherever there is a human activity. The basic principles of management can
be applied anywhere whether they are business or non-business organization.

3. Multidisciplinary:
 Management is basically multidisciplinary. Though management has
developed as a separate discipline it draws knowledge and concepts of various
other streams like sociology, psychology, economics, statistics etc.
Management links ideas and concepts of all these disciplines and uses them
for good-self of the organization.

4. Management is goal oriented:

Management is a goal oriented activity. It works to achieve some

predetermined objectives or goals which may be economic or social.

5. Management is a group activity:

Management is a vital part of group activity. As no individual can satisfy all his
needs himself, he unites with his co-workers and work together as an
organized group to achieve what he cannot achieve individually.

6. Dynamic:

Management is dynamic in nature i.e. techniques to manage business changes

itself over a period of time.

7. System of authority:

Authority is power to get the work done by others and compel them to work
systematically. Management cannot perform in absence of authority.
Authority and responsibility depends upon position of manager in
organization.

8. Management is Science:

Management is considered as science. Science tells about the causes and

effects of applications and is based on some specific principles and
procedures. Management also uses some principles and specific methods.
These are formed by continuous observations.

9. Management is an art:

Management is considered as art as both requires skills, knowledge, experience and

creativity for achievement of desired results
 .

1.3 Management is a Science and an Art

According to the nature of management, there is a controversy that whether

management is a science or an art. This controversy is very old & is yet to be
settled. It should be noted that, learning process of science is different from that
of art. Learning of science includes principles while learning of art involves its
continuous practice.

 Management as a Science

Science is a systematic body of knowledge relating to a specific field of study that

contains general facts which explains a phenomenon. It establishes cause and
effect relationship between two or more variables and underlines the principles
governing their relationship. These principles are developed through scientific
method of observation and verification through testing.

Science is characterized by following main features:

1. Universally accepted principles – Scientific principles represents basic truth

about a particular field of enquiry. These principles may be applied in all
situations, at all time & at all places. E.g. – law of gravitation which can be applied
in all countries irrespective of the time.

Management also contains some fundamental principles which can be applied

universally like the Principle of Unity of Command i.e. one man, one boss. This
principle is applicable to all type of organization – business or non business.

2. Experimentation & Observation – Scientific principles are derived through

scientific investigation & researching i.e. they are based on logic.
E.g. the principle that earth goes round the sun has been scientifically proved.
Management principles are also based on scientific enquiry & observation and
not only on the opinion of Henry Fayol. They have been developed through
experiments & practical experiences of large no. of managers.
E.g. it is observed that fair remuneration to personal helps in creating a satisfied
work force.
 3. Cause & Effect Relationship – Principles of science lay down cause and effect
relationship between various variables.
E.g. when metals are heated, they are expanded. The cause is heating & result is
expansion.
The same is true for management; therefore it also establishes cause and effect
relationship.
E.g. lack of parity (balance) between authority & responsibility will lead to
ineffectiveness. If you know the cause i.e. lack of balance, the effect can be
ascertained easily i.e. ineffectiveness. Similarly if workers are given bonuses, fair
wages they will work hard but when not treated in fair and just manner, reduces
productivity of organization.

4. Test of Validity & Predictability – Validity of scientific principles can be tested

at any time or any number of times i.e. they stand the time of test. Each time
these tests will give same result. Moreover future events can be predicted with
reasonable accuracy by using scientific principles.
E.g. H2 & O2 will always give H2O.
Principles of management can also be tested for validity.
E.g. principle of unity of command can be tested by comparing two persons – one
having single boss and one having 2 bosses. The performance of 1st person will
be better than 2nd.
It cannot be denied that management has a systematic body of knowledge but it
is not as exact as that of other physical sciences like biology, physics, and
chemistry etc. The main reason for the inexactness of science of management is
that it deals with human beings and it is very difficult to predict their behaviour
accurately. Since it is a social process, therefore it falls in the area of social
sciences. It is a flexible science & that is why its theories and principles may
produce different results at different times and therefore it is a behaviour
science.

 Management as an Art
Art refers to the way of doing specific things; it indicates how an object can be
achieved. In the words of George R. Terry, "Art is bringing about of a desired
result through the application of skill." Art is, thus, skillful application of
knowledge which entirely depends on the inherent capacity of a person which
comes from within a person and is learned from practice and experience. In this
sense, management is certainly an art as a manager uses his skill, knowledge and
experience in solving various problems; both complicated and non-complicated
that arises in the working of his enterprise successful.

1. Practical Knowledge: Every art requires practical knowledge therefore

learning of theory is not sufficient. It is very important to know practical
application of theoretical principles.
E.g. to become a good painter, the person not only should know about the
different colour and brushes but different designs, dimensions, situations etc
to use them appropriately. A manager can never be successful just by
obtaining degree or diploma in management; he must have also known how
to apply various principles in real situations, by functioning as a manager.
2. Personal Skill: Although theoretical base may be same for every artist, but
each one has his own style and approach towards his job. That is why the level
of success and quality of performance differs from one person to another.
E.g. there are several qualified painters but M.F. Hussain is recognized for his
style. Similarly management as an art is also personalized. Every manager has
his own way of managing things based on his knowledge, experience and
personality, that is why some managers are known as good managers (like
Aditya Birla, Rahul Bajaj) whereas others as bad.

3. Creativity: Every artist has an element of creativity in line. That is why he aims
at producing something that has never existed before which requires
combination of intelligence & imagination. Management is also creative in
nature like any other art. It combines human and non-human resources in a
useful way so as to achieve desired results. It tries to produce sweet music by
combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist
becomes more and more proficient through constant practice. Similarly
managers learn through an art of trial and error initially but application of
management principles over the years makes them perfect in the job of
managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete
results. In the same manner, management is also directed towards
 accomplishment of pre-determined goals. Managers use various resources like
men, money, material, machinery & methods to help in the growth of an
organization.

Thus, we can say that management is an art therefore it requires application of

certain principles rather it is an art of highest order because it deals with shaping
the attitude and behavior of people at work towards the desired goals

1.4 The difference between Management and Administration

Top level:
- General manager
- Managing director
- Chief executive
- Board of directors
Middle level:
- The departmental heads
- The branch heads
Lower level:
- The foremen
- Supervisors
- Superintendents

Basis Administrative Management

Meaning It is concerned with Management is an art of
 formulation of broad getting things done through
objectives, plans & others by directing their efforts
policies. towards achievement of pre-
determined goals.
Nature Administration is a Management is an executing
decision-making function.
function
Process Administration decides Management decides who
what is to be done & should as it & how should he
when it is to be done. do it.

Function Administration is a Management is a doing

thinking function function because managers get
because plans & work done under their
policies are determined supervision.
under it.

Skill Conceptual and Human Technical and Human skills

skills
Level Top level function Middle & lower level function

1.5 Functions of Management

 Planning
 Organizing
 Staffing
 Directing
 Controlling

1. Planning
  It is the basic function of management. It deals with chalking out a future
course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals or mission.

 According to KOONTZ, “Planning is deciding in advance

- what to do,

- when to do &

- how to do.

It bridges the gap from where we are & where we want to be”.

 A plan is a future course of actions. It is an exercise in problem solving &

decision making.

 Planning is determination of courses of action to achieve desired goals.

Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals.

 Planning is necessary to ensure proper utilization of human & non-

human resources. It is all pervasive, it is an intellectual activity and it also
helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing
 After a plan is in place, a manager needs to organize her team and
materials according to her plan. Assigning work and granting authority
are two important elements of organizing.

 A manager has the organizational responsibilities that include the ability

to identify different roles, choose the right roles for the employees,
delegate the tasks to the employees and ensure that the employees have
the resources to perform their tasks better.

 It is the process of bringing together physical, financial and human

resources and developing productive relationship amongst them for
achievement of organizational goals.

 According to Henry Fayol, “To organize a business is to provide it with

everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.
3. Staffing
 It includes manpower or human resource planning.

 Staffing involves recruitment, selection, induction and positioning the

people in the organization.

 Decisions on remuneration packages are part of staffing.

 Training, retraining, development, mentoring and counseling are

important aspects of staffing.

 It also includes performance appraisals and designing and administering

the motivational packages.

4. Directing
 It is one of the most important functions of management to translate
company's plans into execution.

 It includes providing leadership to people so that they work willingly and

enthusiastically.

 Directing people involves motivating them all the time to enthuse them
to give their best.

 Communicating companies plans throughout the organization is an

important directing activity.

 It also means coordinating various people and their activities.

 Directing aims at achieving the best not just out of an individual but
achieving the best through the groups or teams of people through team
building efforts.

5. Controlling
 It implies measurement of accomplishment against the standards and
correction of deviation if any to ensure achievement of organizational
goals.

 The purpose of controlling is to ensure that everything occurs in

conformities with the standards. According to Theo Haimann,
“Controlling is the process of checking whether or not proper progress is
being made towards the objectives and goals and acting if necessary, to
correct any deviation”.
  According to Koontz & O’Donell “Controlling is the measurement &
correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as
being accomplished”. Therefore controlling has following steps:

 Establishment of standard performance.

 Measurement of actual performance.
 Comparison of actual performance with the standards and
finding out deviation if any.
 Corrective action.


1.6 Levels of Management / Types of Manager

This distinction is drawn keeping in mind the authority, responsibility and the nature
of functions performed by different managers.

1. Top level / General manager

 These managers work at the highest level of the organizational

hierarchy.

 The number of managers in this group is the smallest. Their basic

function is to lay down the plans, policies and procedures.

 They co-ordinate the various departments of the organization with

each other and also interact with the external environment, to keep
themselves aware of the changes taking place outside the
organization.

 The co-ordinate the overall activities of the firm and direct the major
organizational activities by continuously performed.

 The top level managers are normally called as ‘Chief executive

officer’, ‘President’, Vice-president, General manager etc.

2. Middle level / Functional manager

  They act as a link between the top level and the lower level
managers.

 They direct the activities of their subordinates for the achievement of

the overall organizational goals.

 The organization is divided into different departments and these

managers act as the head of their respective departments.

 These managers are normally called as ‘Departmental managers’,

Plant managers’, ‘Assistant manager’ etc. the exact title may once
again differ from organization to organization.

 These managers spend most of their time in managing the company’s

day to day operations and have very little interaction with the outside
parties such as customers, suppliers etc.

3. Lower level / Front-line manager

 They are also called as the first line managers. They directly supervise
the employees or the work force by giving them orders and helping
them.

 They also co-ordinate the work of employees with the organizational

resources.

 They are normally called as ‘foreman’, ‘supervisors’, ‘office

managers’, they may be technical supervisors, production
supervisors, financial supervisors.

1.7 Managerial skills

Successful managers are those who possess the technical, human and conceptual
skills, though their degree may vary from top level to lower levels down the
organizational hierarchy.

As we move down the organizational hierarchy, there is more of technical skills

required by the managers and less of conceptual skills.
1) Conceptual skills
 It is the mental ability of managers to co-ordinate and integrates the
organizations interests and activities.

 It is the ability to foresee the opportunities that must be exploited so

that the organization can make the best use of them and co-ordinate
them with its internal system.

 It involves broad knowledge and imagination on the part of managers

to use these skills so that the overall objectives can be implemented
effectively.

2) Human skills
 A manager is the one who performs the functions of management.
These functions have to be performed by managers at all the
organizational levels.

 Managers at the top level pass orders to the workers through the
middle and the lower level managers for achieving the organizational
goals. In this, knowledge and application of human and behavioral
skills is very important for the managers to get the work done
through their subordinates.
  Human skill is the ability to work with, understand and motivate
other people, either as individuals or groups.

3) Technical skills
 It is the ability to use the tools and techniques in an area that a
person is specialized in.

 It requires specialized knowledge to perform the work in that

specialized area. These areas may be manufacturing, public
administration, industrial management or business management.

1.8 Role of Manager

1. Interpersonal Roles :
1) Figurehead –
The manager occupies an official position whereby he performs the duties
of signing certain documents, making speeches, receiving official visitors
and other duties of legal and social nature.

2) Leader –
The manager looks after the interests of his subordinates and also tries to
solve their psychological and work-related problems. He lays down the
goals for his followers, co-ordinates the individual goals with the
organizational goals, motivates his followers to accomplish those goals and
 also creates a feeling of enthusiasm, loyalty and confidence amongst them
for the purpose of achieving the said goals.

3) Liaison –
The manager serves a connecting link between his organization and
outsiders or between his unit and other organizational units. The major
objectives of his role are to maintain a link between the organization and
its external environment (society, consumers, government etc).

2. Informal Roles :
1) Monitor –
The manager constantly collects information about these factors which
affect his activities. Such factors may be within the organization as well as
outside it. They have to monitor all the activities of the organizations by
reading various journals and periodicals.

2) Disseminator –
The manager passes some of his privileged information to other members
of the organizations. This is done through formal and informal interaction
of managers with their subordinates by holding meetings or circulating
notice and circulars to them.

3) Spokesman –
The manager act as a link between their superiors and subordinates as also
between the external and the internal organizational environment. The
instruction and ordinances issued by superiors are passed on to their
subordinates while the reactions and problems of subordinates are
communicated to their superiors.

3. Decisional Roles :
1) Entrepreneurs –
The managers keep thinking of new ideas for the development of the
organization. They try to implement these ideas within the given
framework of resources. It may be required, at times, to bring certain
changes in products, processes, technology etc.

2) Disturbance handlers –
 The managers try to solve the unexpected disturbance arising in and
outside the organization. There might be problems such as firing the
employees by the superiors or demanding of a higher wage by the
employees or facing of a tough situation with the customers or suppliers of
materials which need the active role of manager as a disturbance handler
to solve them.

3) Negotiators –
They mediate between the organization and the employees. In case of any
conflict, they work in the interests of the organization and its work force so
that the organizational goals are not at stake.

1.9 Scientific Management

Scientific management was a theory of management that analyzed and synthesized
workflows. Its main objective was improving economic efficiency, especially labor
productivity. It was one of the earliest attempts to apply science to the engineering
of processes and to management.

During the beginning of the 20th century, skilled labour was not available in United
States as a result of which productivity suffered. The management thinkers were
looking for ways and means to increase the efficiency of workers so that productivity
could be increased. Different alternatives of deleting or combining the operations of
work were being looked into.

It was then that scientific management theory came into existence which was
propounded by Fredrick W. Taylor (1856-1915), who is also known as the father of
scientific management.

Taylor found that in most of the organizations, time and work studies were not the
basis of doing the work as a result of which ‘how much work should be done in a day
and how much should be paid for each day’s work’ was not paid attention to.

Taylor observed that some workers were more talented than others, and that even
smart ones were often unmotivated. He observed that most workers who are forced
to perform repetitive tasks tend to work at the slowest rate that goes unpunished.

Taylor thought on these lines and developed his theory of scientific management
which emphasized on determining the best way of doing each task/job by eliminating
all types of wastages of men and materials.
He also emphasized on time and motion studies to find out the optimum time and
nature of operation to be performed for the successful completion of each task.

Taylor’s theory is based on his working experience in three different companies:

Midvale Steel, Simonds Rolling Machine Company and Bethlehem Steel.

1. Midvale Steel :

Taylor joined Midvale Steel as a labourer. During his tenure at Midvale Steel,
Taylor observed that workers were working at less than their full capacity. He
attributed this to the following reasons;

 Workers feared to work fast because they thought that if they finished
their work fast, they would be turned out by the management or that their
pay would be lowered.

 The wage system was based on paying daily wages as a result of which
workers used to be present the factory but their output was low.

He suggested the following principles to overcome this problem. These

principles formed the basis of scientific management theory.

a) The development of true science of management :

Scientific means should be developed to determine how tasks are done.

Each task should be based on time and motion study and not on the past
experience of workers.

b) The scientific selection of workers :

It aimed at selecting the right worker for the right job and training him to
perform the task through the scientific method.

c) The scientific education and development of the worker :

This would enable the workers to put their best to the organizational
output by understanding the work and the method of work. The
supervisors should also cooperate with the workers by inviting their
suggestions and discussing the new and improved methods of work.

d) Division of work responsibilities :

 Taylor advocated that managers should be entrusted with the task of
planning the work using scientific methods and workers should execute
the work according to these standards.

Taylor also introduced a system of ‘differential rate system’ whereby he asked

the managers to pay a higher wage to the workers who finished their work in
less than the standard time and lower rate to those who produced lesser than
the standard level.

2. At Simonds Rolling Machine Company :

Taylor worked as a management consultant. In one of their projects, workers

had to inspect the bicycle ball bearings. It was felt by the management that
since this work involved long working hours and was also not innovative; the
worker efficiency would not increase. Taylor studied and timed the
movements of the best workers and motivated and trained the rest of the
workers to come up to that level. For this the again adopted the system of
‘differential rate’ and also introduced certain improvements in their working
hours including rest hours. This brought about a change in the quality of
production and worker’s earning and management’s profit, both rose up.

3. Bethlehem Steel :

In the Pig iron experiment, he studied the time and movement of workers
who unloaded raw materials from the incoming railcars and loaded the
finished goods on the outgoing ones. He observed that each worker could
load about 12.5 tons per day and earn $1.15 for the same each day. Taylor
selected the most efficient worker, studied his time and motion study. He
introduced rest periods during the day long working hours of the workers and
offered the incentive plans to workers for reaching the targeted performance.
He set the target of 47.5 tons per day and a wage rate of $1.85 per day those
who met these standards.

Principles of Scientific Management:

1) The development of true science of management:

• Use Time and Motion Studies

- Motion studies are performed to eliminate waste
- Motion study evolved into a technique for improving work methods.
- Motion study comes first before the setting of time standards.
 • Motion studies are used to

- Develop the best work method.

- Develop motion consciousness on the part of all employees.
- Develop economical and efficient tools, fixtures, & production aids.
- Assist in the selection of new machines and equipment.
- Train new employees in the preferred method.
- Reduce effort and cost.
- Time study developed in the direction of establishing standard times
- Time study is a direct and continuous observation of a task, using a
timekeeping device (stopwatch for example) to record the time taken for accomplish
a task

2) The scientific selection of workers :

It aimed at selecting the right worker for the right jon and training him to
perform the task through the scientific method.

3) The scientific education and development of the worker:

This would enable the workers to put their best to the organizational output
by understanding the work and the method of work. The supervisors should also
cooperate with the workers by inviting their suggestions and discussing the new and
improved methods of work.

4) Equal division of work and responsibility between worker and manager:

Taylor advocated that managers should be entrusted with the task of planning
the work using scientific methods and workers should execute the work according to
these standards.

Techniques of Scientific Management

1. Time Study -
 a. It is a technique which enables the manager to ascertain standard time
taken for performing a specified job.
b. Every job or every part of it is studied in detail.
c. This technique is based on the study of an average worker having
reasonable skill and ability.
d. Average worker is selected and assigned the job and then with the help
of a stop watch, time is ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determined through
observations, experiment and analysis by keeping in view an average
worker.

Standard Time × Working Hours = Fair Day’s Work

2. Motion Study –
a. In this study, movement of body and limbs required to perform a job
are closely observed.
b. In other words, it refers to the study of movement of an operator on
machine involved in a particular task.
c. The purpose of motion study is to eliminate useless motions and
determine the best way of doing the job.
d. By undertaking motion study an attempt is made to know whether
some elements of a job can be eliminated combined or their sequence
can be changed to achieve necessary rhythm.
e. Motion study increases the efficiency and productivity of workers by
cutting down all wasteful motions.
3. Functional Foremanship -
 a. Taylor advocated functional foremanship for achieving ultimate
specification.
b. This technique was developed to improve the quality of work as single
supervisor may not be an expert in all the aspects of the work.
c. Therefore workers are to be supervised by specialist foreman.
d. The scheme of functional foremanship is an extension of principle pf
specialization at the supervisory level.
e. Taylor advocated appointment of 8 foramen, 4 at the planning level &
other 4 at implementation level.
f. The names & function of these specialist foremen are: -
 Instruction card clerk concerned with tagging down of
instructions according to which workers are required to perform
their job
 Time & cost clerk is concerned with setting a time table for doing
a job & specifying the material and labor cost involved in it.
 Route clerk determines the route through which raw materials
has to be passed.
 Shop Disciplinarians are concerned with making rules and
regulations to ensure discipline in the organization.
 Gang boss makes the arrangement of workers, machines, tools,
workers etc.
 Speed boss concerned with maintaining the speed and to remove
delays in the production process.
 Repair boss concerned with maintenance of machine, tools and
equipments.
 Inspector is concerned with maintaining the quality of product.
4. Standardization -

a. It implies the physical attitude of products should be such that it meets

the requirements & needs of customers.
b. Taylor advocated that tools & equipments as well as working conditions
should be standardized to achieve standard output from workers.
c. Standardization is a means of achieving economics of production.
 d. It seems to ensure -
 The line of product is restricted to predetermined type, form,
design, size, weight, quality. Etc
 There is manufacture of identical parts and components.
 Quality & standards have been maintained.
 Standard of performance are established for workers at all levels.
5. Differential Piece Wage Plan -

a. This tech of wage payment is based on efficiency of worker.

b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no.
of pieces are paid wages at lower rate than prevailing rate i.e. worker is
penalized for his inefficiency.
d. This system is a source of incentive to workers who improving their
efficiency in order to get more wages.
e. It also encourages inefficient workers to improve their performance
and achieve their standards.
f. It leads to mass production which minimizes cost and maximizes
profits.
6. Other Techniques -

a. Various other techniques have been developed to create ordeal

relationship between management and workers and also to create
better understanding on part of works.
b. Those includes use of instruction cards, strict rules & regulations,
graphs, slides, charts etc, so as to increase efficiency of workers.
 1.10 Henry fayol’s 14 principles of Management
 Fayol wrote during the same time period as Taylor.

 He wrote from personal experience as he was the managing director of a

large French coal-mining firm.

 Henri Fayol's management theory is a simple model of how management

interacts with personnel. Fayol's management theory covers concepts in a
broad way, so almost any business can apply his theory of management.
Today the business community considers Fayol's classical management
theory as a relevant guide to productively managing staff.

 His belief that management was an activity common to all business

endeavors, government and even the home led him to develop 14 principles
of management- that could be applied to all organizational situations, these
principles are following-

Management Principles developed by Henri Fayol:

1. DIVISION OF WORK: Work should be divided among individuals and groups to
ensure that effort and attention are focused on special portions of the task.
Fayol presented work specialization as the best way to use the human
resources of the organization.
2. AUTHORITY: The concepts of Authority and responsibility are closely related.
Authority was defined by Fayol as the right to give orders and the power to
exact obedience. Responsibility involves being accountable, and is therefore
naturally associated with authority. Whoever assumes authority also assumes
responsibility.
3. DISCIPLINE: A successful organization requires the common effort of workers.
Penalties should be applied judiciously to encourage this common effort.
4. UNITY OF COMMAND: Workers should receive orders from only one
manager.
5. UNITY OF DIRECTION: The entire organization should be moving towards a
common objective in a common direction.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS:
The interests of one person should not take priority over the interests of the
organization as a whole.

7. REMUNERATION: Many variables, such as cost of living, supply of qualified

personnel, general business conditions, and success of the business, should be
considered in determining a worker’s rate of pay.
8. CENTRALIZATION: Fayol defined centralization as lowering the importance of
the subordinate role. Decentralization is increasing the importance. The
degree to which centralization or decentralization should be adopted depends
on the specific organization in which the manager is
working.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority
scale. Each manager, from the first line supervisor to the president, possesses
certain amounts of authority. The President possesses the most authority; the
first line supervisor the least. Lower level managers should always keep upper
level managers informed of their work activities. The existence of a scalar
chain and adherence to it are necessary if the organization is to be successful.
10. ORDER: For the sake of efficiency and coordination, all materials and people
related to a specific kind of work should be treated as equally as
possible.
11. EQUITY: All employees should be treated as equally as
possible.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees
should always be a high priority of management. Recruitment and Selection
Costs, as well as increased product-reject rates are usually associated with
hiring new workers.
13. INITIATIVE: Management should take steps to encourage worker initiative,
which is defined as new or additional work activity undertaken through self-
direction.
14. ESPIRIT DE CORPS: Management should encourage harmony and general
good feelings among employees.
 He was also suggested which type of ability should be required for the manager.
Fayol summed up the qualities of managers under the following heads:
1. Physical – Health and vigor
2. Mental – Ability to analyze, interpret and arrive at conclusions
3. Moral – Willingness to accept responsibility, loyalty and dignity
4. General education – Knowledge of overall affairs of the organization
5. Special knowledge – Knowledge of a specific activity; technical, commercial
or financial
6. Experience – Knowledge gained over a period of time while working in a
particular functional area.

1.11 Abraham Maslow’s Hierarchy need

Abraham Maslow, a practicing psychologist, developed one of the most widely

recognized need theories, a theory of motivation based upon a consideration of
human needs. His theory of human needs had three assumptions:

 Human needs are never completely satisfied.

 Human behavior is purposeful and is motivated by the need for satisfaction.
 Needs can be classified according to a hierarchical structure of importance,
from the lowest to highest.

Maslow broke down the needs hierarchy into five specific areas:
 Physiological needs. Maslow grouped all physical needs necessary for
maintaining basic human well-being, such as food and drink, into this
category. After the need is satisfied, however, it is no longer is a motivator.

 Safety needs. These needs include the need for basic security, stability,
protection, and freedom from fear. A normal state exists for an individual to
have all these needs generally satisfied. Otherwise, they become primary
motivators.

 Belonging and love needs. After the physical and safety needs are satisfied
and are no longer motivators, the need for belonging and love emerges as a
primary motivator. The individual strives to establish meaningful relationships
with significant others.

 Esteem needs. An individual must develop self-confidence and wants to

achieve status, reputation, fame, and glory.

 Self-actualization needs. Assuming that all the previous needs in the hierarchy
are satisfied, an individual feels a need to find himself.