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Meaning of Management Principles

A principle refers to a statement which reflects the fundamental truth about some
situtation based on cause-and-effect relationship.
The principles serve as general practical guidelines to the manager for making decisions,
taking action, and solving various problems systematically. They are not rules, but only
a guide to action.
These management principles do not provide straight jacket solutions to the
managerial problems but only gives guidance to managers for taking decisions while
working.
Principles are applicable to different kinds of organisations such as business, hospitals,
clubs, and educational institutions etc.
Principles of management have been developed on the basis of observation and
experimentation as well as personal experiences of the managers.

Principles of management cannot be tested in laboratories like the principles of pure

science.
They deal with human behaviour and, thus, are to be applied creatively given the demands
of the situation.

Values are general rules for behaviour of individuals in society formed through common
practice. Principles of management are formed after research in work situations, which
are technical in nature.
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NATURE/FEATURES/CHARACTERISTICS OF MANAGEMENT PRINCIPLES

(i) General guidelines
The principles of management are guidelines to action and behaviour of
managers.The principles are guidelines to action but do not provide readymade solutions
to all managerial problems. This is so because real business situations are very complex
and dynamic and are a result of many factors.
For example, in dealing with a situation of conflict between two departments, a manager
may emphasise the primacy of the overall goals of the organisation (i.e. subordination
of individual interest to general interest).

(ii) Universal applicability:

The principles of management apply to all types of organisations, at all levels
and at all times.
The principles of management are intended to apply to all types of organisations,
business as well as nonbusiness, small as well large, public sector as well as private
sector, manufacturing as well as the services sectors. However, the extent of their
applicability would vary with the nature of the organisation, business activity, scale of
operations, etc.
For example, for greater productivity, work should be divided into small tasks and each
employee should be trained to perform his/her specialised job (i.e., Division of work).
This principle is applicable to a government office where there is a diary/dispatch clerk
whose job is to receive and send mail or documents, a data entry operator whose task
is to input data on the computer, a peon and an officer etc. This principle is also
applicable to a limited company where there are separate departments like Production,
Finance, Marketing and Research and Development etc. Extent of division of work,
however, may vary from case to case.

(iii) Evolutionary/formed by practice and experiments :

The management principles are developed only after deep and thorough research
work. They are not developed overnight. Proper observations and experiments are
conducted before developing them. Therefore, they are evolutionary in nature.
For example. Principle of Division is not developed overnight but principle was developed
when, it was observed that dividing the work result in improved performance and then
this was tried and tested in different organisation and when majority organisation got
result of specialisation then this principle was made.

(iv) Flexibility :
Management principles can be applied in a variety of ways depending on the situation.
According to the needs of the organization, some changes in the application of prin-
ciples can be made. These are not really a set of hard and fast rules. These are not
set of rigid statments.
For example : The principle of centralisation insists on concentration of power and
authority at top level but the extent and degree of centralisation may vary according
to nature of organisation and centralisation does not mean total centralisation, there
can be use of decentralisation at lower level if organisation demands it.

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(v) Behavioural in nature :

Management principles are formed to guide and influence the behaviour of employees.
These principles insist on improving relationship between superior, subordinates and all
the members of organisation.
For exmaple : Principle of discipline improves commitment of employees towards the
organisation and principle of Esprit de corps mould the behaviour of employees towards
team spirit.

(vi) Cause and effect relationship:

The principles of management tell the managers if a particular principle is applied in a
particular situation, what may be its likely effect.
The principles of management are less than perfect since they mainly apply to human
behaviour. In real life, situations are not identical. So, accurate cause and effect
relationships may be difficult to establish.

(vii) Contingent :
Management principles are contingent or dependent upon the situations prevailing in
organisation. Their application and effect depend upon the nature of organisation. The
application of principle has to be changed according to the nature, size and type of
organisation.
For example : The principle of fair remuneration insists on fair or adequate salary to
employee but what amount of salary is fair depends upon the nature, size and financial
capacity of the company. Fair may mean Rs. 50,000 p.m. to a multinational company
and it may mean Rs. 5,000 p.m. to a small company. So principles do not specify the
absolute amount to be paid but there is relativity depending upon paying capacity of
the different companies.

Significance/Importance of Management Principles

1. Provide useful insights into reality : The principles of management increases the
knowledge, ability and understanding of managers so that they can quickly understand
the situations and circumstances. They enable managers to learn from past mistakes
and conserve time by solving recurring problems quickly.
For example, a manager can leave routine decision-making to his/her subordinates and
deal with exceptional situations which require his/her expertise by following the principles
of delegation.

2. Optimum utilisation of resources and effective administration

 Principles of management help in optimum utilisation of resources because by using the
management principles managers can take the decisions in such a manner that they
can give maximum benefit with minimum cost. The wastages associated with a trial-
and- error approach can be overcome.
For example: scientific principles suggest to cut down the wasteful movements and
setting up of standard time to complete a task. By saving time, energy and efforts
activities can be made economical and result in maximum utilisation of resources.

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 Principles of management rectrict the scope for personal decision making of managers.
They help in effective administration by limiting the boundary of managerial discretion
so that their decisions may be free from personal prejudices and biases.
For example, in deciding the annual budgets for different departments, rather than
personal preferences, managerial discretion is bounded by the principle of contribution
to organisational objectives (i.e. Subordination of individual interest to general interest).

3. Scientific decisions :
Management principles help in thoughtful decision-making. Decisions must be based on
facts, thoughtful , justifiable and as per the requirement to achive the objectives of
organisation.Decisions must be timely, realistic and can be measure and evaluate.
 They emphasise logic rather than blind faith.
 Management decisions taken on the basis of principles are free from bias and prejudice.
 They are based on the objective assessment of the situation.

4. Meeting changing environment requirements(Dynamic)

Every businessman must make organisational changes in response to changes in the
business environment. Management principles teach managers how to make changes
in the right direction and at the right level in the organisation. Despite the fact that
management principles are relative and general guidelines, changes in the organisation
can be made by modifying them.
For example, management principles emphasise division of work and specialisation. In
modern times, this principle has been extended to the entire business whereby companies
are specialising in their core competency and divesting non-core businesses. One may
cite the decision of Hindustan Unilever Limited in divesting non-core businesses of
chemicals and seeds. Some companies are outsourcing their non-core activities like
share-transfer management and advertising to outside agencies. Even core processes
such as R&D, manufacturing and marketing are being outsourced today (‘Business
Process Outsourcing’ and ‘Knowledge Process Outsourcing’).

5. Fulfilling social responsibility

Because a business is a product of society and uses society’s resources, it must
contribute to society by fulfilling social obligations. Management principles guide managers
in performing social responsibilities as well as achieving organisational goals.
Moreover, the interpretation of the principles also assumes newer meanings with the
change in time. So, if we talk of ‘equity’ today, it does not apply to wages alone. Value
to the customer, care for the environment, dealings with business associates would all
come under the purview of this principle.

6. Management training, education and research: Management principles are used as

a basis for management training, education and research.Management Institutes i.e.IIM
and many develops aptitude tests. These tests could not have been developed without
an understanding of management principles.
Professional courses such as MBA (Master of Business Administration) and BBA (Bachelor
of Business Administration) also teach these principles as part of their curriculum at
the beginner’s level.

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FAYOL'S PRINCIPLES OF MANAGEMENT

(i) Background and History of Fayol :

• Henry Fayol was born in France in 1841.
• He got degree in mining engineering in 1860 and started working as engineer in 1841 in
a coal mining company.
• In 1888, he was promoted as the managing director of the company. At that time the
company was in the situation of insolvency.
• He accepted the challenge and applied his managerial techniques to bring out the
company from this situation and he succeeded.
• When he retired after 30 years the company was a leading coal-steel company with
strong financial background.
Writings: ‘Administration industrielle et generale’. It was published in English as "Gen-
eral and industrial Management" in 1949 and is widely considered a foundational work
in classical management theory.

(ii) Major Contributions of Fayol :

Hen ry Fayol becam e fam ous as "Father of Management Studies and
Thoughts",because of the following contributions :
(a) He classified all activities of an undertaking into Technical, Commercial, Financial, Ac-
counting and Managerial.
(b) He first time identified the major function of management e.g. planning, organising
Commanding, Coordinating and controlling.
(c) He developed fourteen principles of management which act as guidelines for managers
to perform managerial activities.
(d) He also suggested that qualities a manager must possess should be-Physical, Moral,
Education, Knowledge and Experience.

(iii) Principles of Management Developed by Fayol :

(1) Division of Work :
According to this principle, the entire task or unit of work should be divided into small
tasks, and instead of assigning the entire task to one person, one task of work should
be assigned to one person based on the person’s capability, qualification, and experience.
When a person performs the same part of a job over and over, he becomes perfect and
specialised at it, and his efficiency level rises.
Fayol said not only the factory work but technical, managerial and skill jobs should also
be divided into small segments for specialisation.
You can observe this principle at work in any organisation like hospital or even a
government office.
For example, in a company there are separate departments for finance, marketing,
production and HR. All the departments perform specialised tasks. This leads to functional
specialisation.
For example : In a furniture manufacturing company one person can be asked to cut
the wood pieces, one to join them one to polish one to give finishing touch to furni-
ture.

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Positive effects of principle of division of work:

Specialisation: Whenever work is divided according to qualifications then automatically
it leads to specialisation.
Improves efficiency: When employee is performing only one part of job then he
becomes expert in that and results in less wastage of resources.

Consequences of violation of this principle:

Lack of efficiency.
There will be no specialisation.
Chances of duplication of work

(2) Authority and Responsibility :

Authority means power to take decision and right to give orders.
There are two types of authority—(a) official authority, i.e., authority to command and
(b) personal authority which is the authority of the individual manager. Authority is
both formal and informal.
Responsibility means obligation to complete the job assigned on time.
Managers require authority commensurate with their responsibility. There should
be a balance between authority and responsibility.
Excess of authority without matching responsibility may bring negative results and
excess of responsibility without matching authority will not allow the worker to com-
plete his job on time.
In other words An organisation should build safeguards against abuse of managerial
power.
At the same time, a manager should have necessary authority to carry out his
responsibility.

Example 1 : For example, suppose a divisional manager enhances the target produc-
tion from 500 units to 600 units per month but authority to purchase the raw material
was not given by him. So, the production manager cannot be balmed if he could not
achieve the revised production target. Excess of responsibility with less authority
results in noncompletion of job.
Example 2
If a sales manager requires to offer a credit period of 60 days to negotiate a deal with
a buyer to fetch the company net margin of Rs.25 lakh, he should not be given power
to offer a credit period of 100 days because it is not required. If authority granted is
more than responsibility, it may lead to misuse of authority. An organisation should
build safeguards against abuse of managerial power. This is the principle of ‘Authority
and Responsibility
According to the principle of 'Authority and Responsibility', a manager should have the
right to punish a subordinate for willfully not obeying a legitimate order but only after
sufficient opportunity has been given to a subordinate for presenting his/her case.

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(3) Discipline : Discipline refers to general rules, regulations for systematic working in an
organistion.Discipline also include
Following code of conduct, rules and regulations of employment agreement.
Clear and fair agreement among subordinate and superior.
Fayol insists that discipline is required at superior as well as subordinate level. The
disciplinary rules shall not be applicable only on subordinates but discipline requires
at every level.
Discipline does not mean only rules and regulations but it also mean honour
commitments by employees towards organisation as well as by management
towards employees .
Judicious application of penalties
Example
Suppose management and labour union have entered into an agreement whereby
workers have agreed to work overtime without any additional payment to revive the
company out of loss. In return, the management has promised to increase wages when
this mission is accomplished.

(4) Unity of Command:

According to this principle, an employee should only receive orders from one superior
and be accountable to that one superior, because if he receives orders from multiple
superiors, he will become confused and unable to decide which orders must be carried
out first
Dual subordination should be avoided. This principle resembles from military organisation.
For example :Suppose a salesperson is asked to make a deal with a buyer and is
allowed to give 10 % discount by the marketing manager. But the finance manager does
not permit him to offer more than 5% discount. Now there is no unity of command.
For example, if employee of production department is asked to go slow in production
to maintain quality standard by the production in-charge and sales in-charge instructs
the employee to fasten the production to meet the pending orders. In this situation
employee will get confused as to whose instructions must be followed by him.
Positive effects of this principle:
No confusion in the mind of subordinate.
No ego clashes.
Improves effectiveness in working.

Violation of this principle will lead to following consequences:

Confusion in the mind of employee.
Subordinate will get chance to escape from his responsibilities by giving excuses.
Ego clashes among the different superiors.
Difficulty in maintaining discipline in the organisation

(5) Unity of Direction :

According to this principle, “one unit means one plan,” which means that all of the
efforts of the organization’s members and employees must be directed in one direction,
which is the achievement of a common goal. Each department and group with a
common goal should have only one head and one plan

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Example: If a company is manufacturing motorcycles as well as cars, then it should

have two separate divisions. Each division should have its own incharge, plans and
resources. The working of the two divisions should not overlap on any account.
Positive effects
 Unity of direction ensures unity of action and coordination.
 It prevents overlapping of activities.

(6) Subordination of Individual Interest to General Interest :

The interests of an organisation should take priority over the interests of any
one individual employee.
A manager can ensure this by his/her exemplary behaviour. For example, he/she should
not fall into temptation of misusing his/her powers for individual/ family benefit at the
cost of larger general interest of the workers/ company. This will raise his/her stature
in the eyes of the workers and at the same time ensure same behaviour by them.
Explanation
Every worker has some individual interest for working in a company. The company has
got its own objectives. For example, the company would want to get maximum output
from its employees at a competitive cost (salary). On the other hand, an employee
may want to get maximum salary while working the least. In another situation an
individual employee may demand some concession, which is not admissible to any
other employee like working for less time. In all the situations the interests of the
group/company will supersede the interest of any one individual. This is so because
larger interests of the workers and stakeholders are more important than the interest
of any one person. For example, interests of various stakeholders i.e., owners,
shareholders, creditors, debtors, financers, tax authorities, customers and the society
at large cannot be sacrificed for one individual or a small group of individuals who want
to exert pressure on the company.

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(7) Remuneration of Persons : Remuneration of employees should be just and equitable

so as to give maximum satisfaction to both the employee and the organisation.
 The employees should be paid fair wages/ salaries, which would give them at least a
reasonable standard of living.
 At the same time, it should be within the paying capacity of the company.
This will ensure good relations between workers and management. Consequently, the
working of the company would be smooth.
The fair wage is determined accrding to :
 Financial capacity of the concern
 By keeping in mind the minimum Wage Act of govt.
 The wages and salaries paid by the competiors.
For example : If in a particular year the organisation has earned more profit than
apart from giving extra profit to shareholders and owners, some part of profit must be
given to employees also in the form of bonus. This will encourage and motivate to put
more efforts and increase the profit of the company.
Positive effects of this principle :
 Employees get motivated.
 Devotion and commitment of employees improves.
Consequences of violation of this principle :
 Increase in turnover of employees.
 Dissatisfaction and demotivation of employees.

(8) Centralisation and Decentralisation :

 Centraliation refers to concentration of authority or power in few hands at the top
level. Decentralisation means evenly distribution of power at every level of mangement.
 Fayol says that an organisation should have a balance between complete centralisation
and decentralisation. According to Fayol a company must not be completely centralised
or completely decentralised but there must be combination of both depending upon the
nature and size of the organisation.
 A small organisation can be well organised and managed with centrealised technique
but in large organisation there is need for decentralisation.
 Secondly, if employees are efficient and competent then they can be trusted by
having decentralisation but if employees are not fully developed and are less in number
then there must be centralisation.
For example : The major decisions and activities of setting up organisational goals,
plans, policies, strategies can be centralised but there can be policy of decentralisation
for the activities of routine work such as purchase of raw materials, fixing targets of
workers etc.

(9) Principle of Scalar Chain :

 An organisation consists of superiors and subordinates. The formal lines of authority
from highest to lowest ranks are known as ‘Scalar chain’.
 According to Fayol, “Organisations should have a chain of authority and communi-
cation that runs from top to bottom and should be followed by managers and the
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 Fayol insists that this chain must be followed strictly in the organisation for communi-
cation. Every information must pass through every key of this chain, no skipping of any
one key should be allowed.

We consider a situation where there is one head ‘A’ who has two lines of authority
under him/her. One line consists of B-C-D. Another line of authority under ‘A’ is L-M-N.
If ‘C’ has to communicate with ‘M’, who is at the same level of authority, then he/she
has to follow the route C-B-A-L-M . If this chain is broken then there are chances of
communication gap in the organistion.
Sometimes following scalar chain becomes a long process and if some important infor-
mation has to be passed it gets delayed so in case of emergency and urgent informa-
tion, Fayol permitted a short cut in the chain which is called "Gang-Plank'. Gang-
plank permits direct communication between the employees working at the same
level of authority without following the scalar chain.
 No gang-plank can be constructed between the people working at different levels i.e.,
no gang plank between D and L.

Positive effects of this principle :

 Systematic flow of information.
 No communication gap in the organisation.
A worker cannot directly contact the CEO of the company. If at all he/she has to, then
all the formal levels i.e., foreman, superintendent, manager, director etc. must know
about the matter. However, in an emergency it can be possible that a worker can
contact CEO directly.

(10) Principle of Order :

According to Fayol, “People and materials must be in suitable places at appropriate
time for maximum efficiency.” The principle of order states that ‘a place for every-
thing (everyone) and everything (everyone) in its (his/ her) place’. Essentially,
it means orderliness

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Fayol insists that there must be a fixed place to keep every material and thing used in
the organisation and fixed place or seat or cabin for every employee of the organisation
so that no time and energy is wasted in search of any material or any person.
For example : if a worker is in need of a tool he must know in which box or toolroom
it will be found and if he needs guidance from supervisor he must know the fixed cabin
of supervisor. If no fixed place is given then worker will waste his time and energy in
search of tools or supervisor.
Example
In a school, books are kept in office, chalks in the library and office records in the staff
room.
In this case, the management principle of ‘Order’ is violated. In the absence of
orderliness, school objectives will not be achieved efficiently and effectively.
Positive effects
If there is a fixed place for everything (everyone) and it (he/she) is present there,
then there will be no hindrance in the activities of business/factory. y This will lead to
increased productivity and efficiency.

(11) Principle of Equity :

This principle emphasises kindliness and justice in the behaviour of managers towards
workers. There should be no discrimination on account of sex, religion, language,
belief, nationality, caste,etc. This will ensure loyalty and devotion. There will be cordial
relations between managers and workers.
For example : The roles for granting medical leave to an employee should be same
irrespective of their position, grade or gender.
According to Fayol, “Good sense and experience are needed to ensure fairness
to all employees, who should be treated as fairly as possible.”
Example
In multinational corporations, people of various nationalities work together in a
discrimination free environment. Equal opportunities are available for everyone in such
companies to rise.
Positive effects of this principle :
 Employees get statisfied.
 Motivate the employees and boost up the morale of the employees.
Fayol does not rule out use of force sometimes. Rather he says that lazy personnel
should be dealt sternly to send the message that everyone is equal in the eyes of the
management. There should be no discrimination against anyone on account of sex,
religion, language, caste, belief or nationality etc.

(12) Stability of Tenure of Personnel :

 Personnel should be selected and appointed after due and rigorous procedure. But
once selected they should be kept at their post/position for a minimum fixed
tenure. They should have stability of tenure. They should be given reasonable

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time to show results.

 According to Fayol, “Employee turnover should be minimised to maintain
organisational efficiency.”
 It refers to no frequent termination and transfer. According to this principle the man-
agement must provide the feeling of job security among the employees becasue with
the feeling of insecurity for the job, the employees cannot contribute their maximum.
 Stability of tenure of personnel is good for the business because of the following
reasons:
(i) Any frequent transfer will create instability/ insecurity among employees. They would
tend to leave the organisation.
(ii) Recruitment, selection and training costs of new employees will be high.
(iii) There will be poor output levels and customer service till new employees are appointed.

(13) Initiative :
 Initiative means taking the first step with self-motivation. It is given an opportunity to
employees for thinking out and executing the plan.
 According to Fayol, “Workers should be encouraged to develop and carry out
their plans for improvements, within the prescribed limits of authority. “
 So managers must welcome the suggestions and ideas of employees before framing
the plan.Example:A good company should have an employee suggestion system
whereby initiative/ suggestions which result in substantial cost/time reduction should
be rewarded.
 The initiative does not mean disobedience, i.e., once decisions are taken by manage-
ment then every employee must follow it whether it is according to employees sugges-
tion or not.
 Positive effects of this principle :
 Develops feeling of belongingness in employees.
 It gives internal satisfaction to employees.
 Employees achieve the target on time if they are set up with their consultation.

(14) Espirit de corps :

‘Espirit de corps’ means ‘unity is strength’. According to Fayol, managment should
promote a team spirit of unity and harmony among employees.
Management should promote teamwork especially in large organisations because oth-
erwise objectives would be difficult to realise. It will also result in a loss of coordina-
tion.
A manager should replace ‘I’ with ‘We’ in all his conversations with workers to foster
team spirit.
Positive effects
 This will give rise to a spirit of mutual trust and belongingness among team members.

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 It will also minimise the need for using penalties

For example : if the production manager assigned a target of manufacturing 100 units
to a group of 10 members divided the target among themselves to produce 10 units
each principle of team spirit says that each member of the group should not concen-
trate only on achieving his individual target of 10 units but they must concentrate on
achieving group target of 100 units so if two workers of that group fall sick, then the
other eight members must divide their individual target among themselves and try to
achieve the target of their group.

SECIENTIFIC MANAGEMENT DEVELOPED BY F.W. TAYLOR

Background and History of F.W. Taylor :
F.W. Taylor was born in 1856 in USA. In 1878 he joined Midval Steel Company as a
mechanical engineer. Using his engineering background Taylor set out scientific studies
and techniques. He was primarily concerned about the efficency of workers and opti-
mum utilisation of resources. Taylor's principles and techniques were based on the
observations he conducted in factories where methods of production lack planning and
working methods were haphazard.

Contributions of Taylor :
F.W. Taylor became famous as a father of scientific management. His main contribu-
tions which made him so popular were :
(a) Taylor published books and research papers explaining his scientific view on industrial
organisation and managment.
(b) His major contribution was publishing of "Shop Management", "Piece Rate System"and
"Principles of Scientific Management".
(c) He emphasised on adoption of scientific methods to the problems of managment.
He insisted that managers should adopt scientific and systematic management meth-
ods in place of rule of thumb or trial and error methods.

Meaning of Scientific Management :

“Scientific management means knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way.”
Scientific management implies the application of science to management. It means
conducting business activities according to standardised tools, methods and trained
peronnel in order to increase the output, improve its quailty and reduce the costs and
wastes. Scientific managment insists on replacement of role of thumb by science that
means decisions in the organisation should not be taken on the basis of wills and
wishes of manager but decisions must be based on scientific studies conducted by
using scientific tools.

Scientific Principles of Management :

Taylor formulated four principles of scientific mangement which are explained below :
(1) Science, not rule of thumb : Taylor believed that there was only one best mehod to
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maximise efficiency. This method can be developed through scientific study and analy-
sis of each element of a job. The method so devoloped should substitute ‘Rule of
Thumb’ (or trial and error approach) throughout the organisation.
The selection of secientific method will result in tremendous saving of human efforts,
time and materials.
For example : In rule of thumb the standard time required to do a particular job is
decided by the managers on the basis of his past experience. Taylor insists that
standard time for a job should be set up scientifically by performing time study in the
organisation and then the day's target should be fixed.
According to Taylor, even a small production activity can be scientifically planned and
managed. This can result in tremendous saving of human energy as well as wastage of
time and materials. The more sophisticated the processes, greater would be the sav-
ings.

(2) Harmony, not discord :

Factory system of production implied that managers served as a link between the
owners and the workers. Since as managers they had the mandate to ‘get work done’
from the workers so there is always existed the possibility of a kind of class-conflict
between managers and workers. Taylor recognised that this conflict helped none,
the workers, the managers or the factory owners.
Taylor emphasised that there should be complete harmony between the man-
agement and workers. Both should realise that each one is important.
To achieve this, Taylor advocated a complete ‘Mental Revolution’ on the part of both
management and workers.It means that management and workers should transform
their thinking.
Both should be part of the family. In such a situation even trade unions will not think of
going on strike etc.
 Management should share the gains of the company with workers at the same
time workers must contribute to their best level. Both should aim to increase the
profits of the company.
According to Taylor -”Prosperity for the employer cannot exist for a long time
unless it is accompanied by prosperity for the employees.”

Japanese work culture is a classic example of a situation of Harmony, not Discord.

In Japanese companies, ‘paternalistic style of management’ is in practice. There is
complete openness between the management and workers. If at all workers go to
strike drey wear a black badge but work more than normal working hours to gain die
sympadiy of the management.

Concept of Mental Revolution

Mental revolution involves a change in the attitude of workers and management towards
one another from competition to cooperation. Both should realise that they require one
another. Both should aim to increase the size of surplus. This would eliminate the need
for any agitation. Management should share a part of surplus with workers. Workers
should also contribute their might so that the company makes profits. This attitude will
be good for both of them and also for the company. In the long run only worker’s well-
being will ensure prosperity of the business

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(3) Cooperation not Individualism :

This principle is the extension of the "harmony not discord."
 There should be complete cooperation between the labour and the management
instead of individualism. Competition should be replaced by cooperation. Both
should realise that they need each other.
 Management should welcome good suggestions of employees and they should
be rewarded for their suggestion which results in substantial reduction in costs.
 They should be part of management and, if any important decisions are taken,
workers should be taken into confidence.The managment must take worker in con-
fidence before setting up the standard task for them because when standards or
targets are set up in consultation of workers, then they will try their best to achieve
it.
 At the same time workers should desist from going on strike and making unreasonable
demands on the management. In fact when there will be open communication system
and goodwill there will be no need for even a trade union.
 According to Taylor, there should be an almost equal division of work and responsibility
between workers and management. Management should work almost side by side with
the workers helping, encouraging and smoothing the way for them. This is called
‘paternaistic style’ of management, whereby the employer takes care of the needs
of the employees.
In Japanese companies, paternalistic style of management is in practice.

(4) Development of worker to their greatest efficiency and prosperity :

Industrial efficiency depends to a large extent on personnel efficiency.
Worker training was essential also to learn the ‘best method’ developed as a conse-
quence of the scientific approach.
 Taylor was of the view that worker's efficency is linked right from the process of
employee selection. Each person should be scientifically selected. Then, work assigned
should suit her/his physical, mental and intellectual capabilities.
 To increase efficiency, employees should be given the required training. Efficient em-
ployees would produce more and earn more. This will ensure their greatest efficiency
and prosperity for both company and workers.

Scientific Techniques of Taylor :

Alongwith scientific principles Taylor developed some scientific techniques by con-
ducting warious experiments at his work place.
The common techniques are :
1. Functional foremanship :
 In the factory system, the foreman represents the managerial figure with whom the
workers are in face-to- face contact on a daily basis. The foreman is the lowest
ranking manager and the highest ranking worker. Foreman is very important person
around whom revolves the entire production planning, implementation and control.
 Thus, Taylor concentrated on improving the performance of role of foreman in the
factory set-up. In fact, he identified a list of qualities of a good foreman/supervisor.
Foremen should have intelligence, education, tact, judgment, special knowledge, manual
dexterity and energy, honesty and good health. Since all these qualities could not be
found in a single person so Taylor proposed eight specialists. Each specialist is to be
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