IGNOU : M.COM : MCO 1 : UNIT 1 : Q - 3. What are various principles of management? How are modern organisations different from typical classical organisations, in terms of practices of various principles of management?

Ans. Basic Principles of Management 

Different experts have described principles of management in various ways. However, general principles of management as propounded by Henri Fayol are one of the most comprehensive principles of management. 

The general principles of management as given by Henri Fayol have following components: 

Division of Work: It is closely related to specialisation. Division of work promotes more skills on a particular job, leading to more efficiency. 

Authority and Responsibility: Authority is the vested power through the position one holds. Authority and responsibility go hand in hand. Authority is required to fulfil the responsibilities entrusted. 

Discipline: By discipline, Fayol meant obedience, application, energy, and respect. Penalties should be judiciously applied, and supervision should be competent and fair. 

Unity of Command: A subordinate should take orders from only one authority. Fayol apprehended that in the absence of unity of command, authority is undermined, discipline is jeopardized, order gets disturbed, and stability gets threatened. 

Unity of Direction: Fayol advocated that there should be only one head and only one plan. 

Subordination of Individual Interests to General Interests: The interest of organisation should come before the interest of an individual. 

Remuneration: Practice of fair pay should prevail and attempt should be made to arrive at the best scheme of payment. 

Centralisation: For overall control there should be one central point in the organisation. In relatively larger organisation, appropriate decentralisation may be practiced through delegation of authority. 

Scalar Chain: Authority should flow from top to bottom through unbroken chain. Through scalar chain various people in the organisation are connected in a particular way and the chain determines the direction of flow of communication. However in many cases, quicker action is possible if people at lower level directly communicate between themselves. 

Order: People and materials should be at right place at right time. A position should be manned with a person who is most suitable for that job. 

Equity: Equity brings forth loyalty and devotion from employees. 

Stability of Staff: Stable work force promotes efficiency in the organisation. 

Initiative: Initiative should be promoted in the organisation and a climate of sufficiently tolerating mistakes should be promoted. 

Esprit de Corps: Through promoting team spirit and fellow feeling, an organisation can become stronger. More informality and healthy communication promote unity in the organisation. 

Apart from these 14 principles of management given by Fayol, there are some other principles of management also which you should know. In brief they are: 

Harmony of Objectives: Organisations perform more effectively when all functions are directed towards harmonised grand objective. 

Universality of Management: A sound principle of management is applicable to any type of organisation, engaged in varied activities, and located anywhere. 

Primacy of Objectives and Planning: Objectives and planning precede any other activities in an organisation. 

Control by Exception: Subordinate staff should take up routine activities, and management should take up exceptional control and supervision, having broader impact on the organisation. 

Decision by Exception: A manager should take decision within the boundary defined by authority of the position. The higher authority should decide a matter beyond that boundary. 

Equality of Authority, Power, Responsibility, and Accountability: In an organisation, authority, power, responsibility, and accountability should be in balance. Otherwise the results are hostility, friction, resentment, dissatisfaction, and strife. If organisation is not balanced, it may be a factor responsible for its decay in the long run. 

Coordination: Coordination is the corner stone of the efficient functioning of the organisation. Each activity as well as efforts of the people working in the organisation should be coordinated. 

The basic principles of management as described above provide a guideline for managing an organisation effectively. The application of these principles generate efficiency and effectiveness in an organisation. However we should remember that certain principles of management have universal and eternal appeal whereas some other principles need to be flexible in nature in order to create healthy flow of activities within an organisation.