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Principles of Management
The 14 Management Principles from Henri Fayol (1841-1925) are:
1. Division of Work. Specialization allows the individual to build up experience, and to continuously
improve his skills. Thereby he can be more productive.
2. Authority. The right to issue commands, along with which must go the balanced responsibility for
its function.
3. Discipline. Employees must obey, but this is two-sided: employees will only obey orders if
management play their part by providing good leadership.
4. Unity of Command. Each worker should have only one boss with no other conflicting lines of
command.
5. Unity of Direction. People engaged in the same kind of activities must have the same objectives
in a single plan. This is essential to ensure unity and coordination in the enterprise. Unity of
command does not exist without unity of direction but does not necessarily flows from it.
6. Subordination of individual interest (to the general interest). Management must see that the
goals of the firms are always paramount.
7. Remuneration. Payment is an important motivator although by analyzing a number of possibilities,
Fayol points out that there is no such thing as a perfect system.
8. Centralization (or Decentralization). This is a matter of degree depending on the condition of the
business and the quality of its personnel.
9. Scalar chain (Line of Authority). A hierarchy is necessary for unity of direction. But lateral
communication is also fundamental, as long as superiors know that such communication is taking
place. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the
lowest level in the organization. It should not be over-stretched and consist of too-many levels.
10. Order. Both material order and social order are necessary. The former minimizes lost time and
useless handling of materials. The latter is achieved through organization and selection.
11. Equity. In running a business a combination of kindliness and justice is needed. Treating
employees well is important to achieve equity.
12. Stability of Tenure of Personnel. Employees work better if job security and career progress are
assured to them. An insecure tenure and a high rate of employee turnover will affect the
organization adversely.
13. Initiative. Allowing all personnel to show their initiative in some way is a source of strength for
the organization. Even though it may well involve a sacrifice of personal vanity on the part of
many managers.
14. Esprit de Corps. Management must foster the morale of its employees. He further suggests
that: real talent is needed to coordinate effort, encourage keenness, use each persons abilities,
and reward each ones merit without arousing possible jealousies and disturbing harmonious
relations.
Functions of Management
On any given day, small
business owners and managers will
engage in a mix of many different kinds
of activitiesfor example, deal with
crises as they arise, read, think, write,
talk to people, arrange for things to be
done, have meetings, send e-mails,
conduct performance evaluations, and
plan. Although the amount of time that is
spent on each activity will vary, all the
activities can be assigned to one or
more of the five management functions:
planning, organizing, staffing, directing,
and controlling.
Planning
Planning is foreseeing future circumstances and requirements, then, setting objectives, making
long and short term plans and determining the policies to be followed with standards to be set.
In planning, managers receive and store information, monitor and disseminate the information.
A manager makes decisions on strategy and allocation of resources and initiate planned changes
Strategic planning is the process of developing and analyzing the organizations mission, overall
goals, general strategies and allocating resources.
Steps in planning
1. Define the organizations
2.
SWOT ANALYSIS. Analyze the strength, weaknesses and identify opportunities and
threats of the organization i.e. SWOT Analysis baseline. SWOT analysis is used as the
basis for future improvements.
3.
Setting goals and objectives. Goals and objectives are developed to bridge the gap
between current capability and the mission. Objectives are statements describing
results and the way in which they will be achieved. They are more specific and
narrower than goals.
4.
Develop a strategy. Information collected from the environmental scan is used to:
a) Match strengths with opportunities and address weaknesses while trying to
minimize threats to its existence. b) Make superior profits by getting a competitive
advantage over competitors.
5.
6.
Evaluating / monitoring and control. Evaluation and control consists of: (a) Defining
parameters to be measured. (b) Defining the target values of those parameters. (c)
Performing measurement. (d) Comparing measured results to predefined standards.
(e) Making necessary changes.
Organizing
This is the identification and classification of the required activities, the grouping of activities
necessary to attain objectives, the assignment of each grouping to a manager with authority and
the provision of coordination.
In organizing, structures are created, relationships established and resources are allocated for the
accomplishment of activities.
In organizing, plans are reviewed, tasks to be performed are listed, tasks are grouped into jobs that
can be done by an individual, departments are created, work is assigned to individuals and
authority is delegated.
Organizational Structure
Each organization has an organizational structure.
a) Ideally, in developing an organizational structure and distributing authority,
managers' decisions reflect the mission, objectives, goals and tactics that grew out
of the planning function. Specifically, they include: Division of labor, Delegation of
authority, Departmentation, Span of control, Coordination
Staffing
Staffing involves manning the organizational structure through proper and effective appraisal,
selection and development of people to fill the roles designed into the structure.
Staffing is also known as Human Resource Management. In other words, it is the management
function devoted to acquiring, training, appraising, and compensating employees.
Controlling
Controlling is about keeping an eye on things. It is the process of evaluating and regulating
ongoing activities to ensure that goals are achieved.
Controlling provides feedback for future planning activities and aims to modify behavior and
performance when deviations from plans are discovered.
2. The second step is measuring performance, where the actual performance or results are
determined.
3. Comparing performance is step three. This is when the actual performance is compared to
the standard.
4. The fourth and last step, taking corrective action, involves making whatever actions are
necessary to get things back on track. The controlling functions should be circular in motion, so
all the steps will be repeated periodically until the goal is achieved.
In controlling we must:
Directing
It is that part of managerial function which actuates the organizational methods to work efficiently
for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in
motion the action of people because planning, organizing and staffing are the mere preparations for doing
the work. Direction is that inert-personnel aspect of management which deals directly with influencing,
guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
Supervision implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications is the process of passing information, experience, opinion etc. from one
person to another. It is a bridge of understanding.
Conclusion
Management has been identified as a systematic body of knowledge based on general
principles, concepts, theories and techniques which are variable in terms of business practice.
These are embodied in the managerial functions of planning, organizing, staffing, directing and
controlling which form the job of a manager.
In planning we establish objectives, and plans.
In Organizing, activities are grouped.
In staffing we recruit, select and train personnel required by the organization.
In directing the manager leads, motivates and appraise personnel.
Controlling is concerned with how well the organization is faring.
References
1) Kibera,F.N(1996). Introduction to business: AKenya perspective, Nairobi: Kenya literatureBureau
PP 104-1142. Koontz,H and Weihrich,H. (1988).Management, Ninth edition. New York:McGrawHill book company
2) http://www.cliffsnotes.com/WileyCDA/CliffsRevi
3) http://www.xanga.com/lalitkhungar/667247144/learn-8211managerial-function-of-staffing.html