Henry Fayol - The French Mining Engineer. The 14 Principals of Management.

1. DIVISION OF WORK :

Fayol assumes that the division of work permits reduction in the number of objects to which attention and effort must be directed has been recognized as the best means of making use of individuals and groups.
Fayol consider that the specialization is the best way to use the human recourses of the organization.

AUTHORITY AND RESPONSIBILITY :

Fayol defined Authority as the right to give orders and the power to exact obedience.
Responsibility defined as valiantly accepted and born merits some reflection; it is a kind of courage everywhere much appreciated.
Naturally the responsibility is a consequence of authority and authority essential counterpart.
As well as Fayol founds that the good leader should possess and infuse into those around him encourage to accept the responsibility.

DISCIPLINE :

Any work or organization it’s need a collective energies of personnel. Discipline is what leaders make it as well it’s the respect for agreements which are directed at reaching obedience, sanction should be applied through these agreements to support  this collective effort.

UNITY OF COMMAND :

Fayol assumes that all the employees should take the order or command just only from one superior, avoiding from the dual command which is leading to conflicts among superiors.

UNITY OF DIRECTION :

One head and one plan for group of activities having the same objectives. It must not be confused with unity of command. Fayol assumes that the unity of direction (one head one plan) is a scale for organized work of the group by the body cooperates. 

SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS:

The general interest of the work must excel on the individual interest through concerted efforts to achieve the desired goals of the work. 

REMUNERATION OF PERSONNEL : 

There must be wages for individuals ,wages should be fair as much as possible for the services provided by individuals;,there are factors given for estimating the value of the worker by the employer.
Fayol gave a great importance to the method of payment and it estimated significant effect on business progress and described it as" thorny problem".
Fayol discussed several payment methods used for the workers, junior managers and higher manager according to these methods, we see that there is no integrated system or a standard practice in Payment Methods.

CENTRALIZATION :

Centralization and decentralization vary mainly how big of the enterprise or organization and the quality of individuals. Fayol defined centralization as the extent of participation for subordinates in decision making.

SCALAR CHAIN :

As Fayol defined the scalar chain as the line of authority, Hierarchy from ultimate authority to lowers levels, Hierarchy is very important to keep the unity of direction later communication between superiors is also essential to proceed swiftly and simply. 

ORDER:

Fayol found that order has two divisions (material and social order) and both are necessary for the organization.
Material order: there should be suitable and definite place for each item and every place to be effectively used and specific activity and product to avoiding loss in material and time 
Social order: choosing and appointed the right person in the right job. There should be a specific place for each employee to be easy contacted in need region. 

EQUITY :

Equity means combination of kindliness and justice .The employees should be treated fair and kind and the employer should be fair while dealing with subordinates.

STABILITY OF TENURE OF PERSONNEL :

Arranged enough of time for the training period for new employees and stop any unnecessary job position movement on this period otherwise the time and effort spent on the training the employee will go waste.  And this was what Fayol appointed to that time is required for an employee to get used to a new work and succeed to doing it well if he is removed before the he will not be able to render worthwhile services. Stability of job, employees and employers creates a team spirit and belongingness among employees which ultimately increase the formation of the work. 

INITIATIVE :

Managers should encourage employees to initiative with freedom. Initiative gives more zeal energy to all levels of personnel and much more development to the work. Initiative is the power of thinking out and executing.

ESPRIT DE CORPS: 

Management should encourage harmony and general good feeling among employees 
. Fayol suggests that “real talent is needed to coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s merit without arousing possible jealousies and disturbing harmonious relation”. 

Nature of Management .A simple Explanation.

Nature of Management:

1. Management is Purposeful : Management is a goal-oriented activity. For instance management of a business aims to satisfy the customer, to earn profit and to increase the goodwill and the image of the business. There is no need of management, if there are no pre-determined goals or objectives. The success of management is judged by the extent to which organizational goal are achieved.
   
2. Management is a Process : Management is a process which consists of certain functions like planning, organizing, staffing, directing and controlling. These functions require specialized knowledge and skill for their efficient performance. They are performed continuously by the by the management at all level in the organization.
   
3. Management is a Group Activity : Management is an integral part of any group activity. It involves the use of group efforts in the pursuit of well defined goals or objectives. It can not exist independent of the group or organization it manages.
   
4. Management is a Multi-disciplinary Subject : Though the management is a distinct discipline, it contains principles taken from many social science like anthropology, psychology, sociology, etc. So, it is a multi-disciplinary subject.
   
5. Management is Achieving Result through Others : The management cannot do every thing themselves. They must have the necessary ability and skill to get work accomplished through the effort of others.
   
6. Management is Universal : Management is essential for effective performance of any organized activity. Thus, it is universal in nature. The principle and techniques of management have universal applications. They can be applied to all types of organizations.
   
7. Management is Intangible : The management has been called the unseen force, its presence is evidenced by the result of its efforts orderliness, informed employees, buoyant spirit and adequate work output. Thus feeling of management is result oriented. One may not see with naked eyes the functioning of management. But its results are apparently known. People often comment on the effectiveness of the management on the basis of the end result though they are incapable of observing it during operation.
   
8. Management is both a Science and an Art : Management has an organized body of knowledge consisting of the well-defined concept, principle and techniques which have wide applications. So it is a science.
   

Evolution Of Mnagament Thought.

Explain the Evolution of Management Thought

Evolution of management thought may be divided into four stages

1. Pre-scientific management period.
2. Classical Theory
   
   1. Scientific Management of Taylor
   2. Administrative Management of Fayol
   3. Bureaucratic Model of Max Weber
3. Neo-classical Theory or Behaviour Approach
4. Modern Theory or Systems Approach

Evolution of Management Thought

Pre-scientific Management Period

The advent of industrial revolution in the middle of the 18th century had its impact on management. Industrial revolution brought about a complete change in the methods of production, tools and equipments, organization of labour and methods of raising capital.

Employees went to their work instead of receiving it, and so, the factory system, as it is known today, become a dominant feature of the economy. Under this system, land and buildings, hired labour, and capital are made available to the entrepreneur, who strives to combine these factors in the efficient achievement of a particular goal. All these changes, in turn, brought about changes in the field of management. Traditional, conventional or customary ideas of management were slowly given up and management came to be based on scientific principles. In the words of L. F. Urwick- "Modern management has thrown open a new branch of human knowledge, a fresh universe of discourse". During the period following the industrial revolution, certain pioneers tried to challenge the traditional character of management by introducing new ideas and character of management by introducing new ideas and approaches. The notable contributors of this period are:

1. Professor Charles Babbage (UK 1729 -1871): He was a Professor of Mathematics at Cambridge University. Prof Babbage found that manufacturers made little use of science and mathematics, and that they (manufacturers) relied upon opinions instead of investigations and accurate knowledge. He felt that the methods of science and mathematics could be applied to the solution of methods in the place of guess work for the solution of business problems. He advocated the use of accurate observations, measurement and precise knowledge for taking business decisions. He urged the management of an enterprise, on the basis of accurate data obtained through rigid investigation, the desirability of finding out the number of times each operation is repeated each hour, the dividing of work into mental and physical efforts, the determining of the precise cost for every process and the paying of a bonus to the workers in proportion to his own efficiency and the success of enterprise.
2. James Watt Junior (UK 1796 - 1848) and Mathew Robinson Boulton(1770 - 1842): James Watt Junior and Mathew Robinson Boulton contributed to the development of management thought by following certain management techniques in their engineering factory at Soho in Birmingham. They are:-
3. Robert Owens (UK 1771 - 1858): Robert Owens, the promoter of co-operative and trade union movement in England, emphasized the recognition of human element in industry. He firmly believed that workers' performance in industry was influenced by the working conditions and treatment of workers. He introduced new ideas of human relations - shorter working hours, housing facilities, training of workers in hygiene, education of their children, provision of canteen etc. Robert Owen, managed a group of textile mills in Lanark, Scotland, where he used his ideas of human relations. Though his approach was paternalistic, he came to be regarded as the father of Personnel Management.
4. Henry Robinson Towne (USA 1844 -1924): H.R Towne was the president of the famous lock manufacturing company "Yale and Town". He urged the combination of engineers and economists as industrial managers. This combination of qualities, together with at least some skill as an accountant, is essential to the successful management of industrial workers. He favoured organized exchange of experience among managers and pleaded for an organized effort to pool the great fund of accumulated knowledge in the art of workshop management.
5. Seebohm Rowntree (UK 1871- 1954): Rowntree created a public opinion on the need of labour welfare scheme and improvement in industrial relations. The Industrial Welfare Society, The Management Research Groups and the Oxford Lecture Conferences in the U.K owed their origin and progress to the interest and zeal of Rowntree.

Classical Theory

Prof. Charles Babbage, James Watt Junior and Mathew Robinson Boulton, Robert Owen, Henry Robinson Towne and Rowntree were, no doubt, pioneers of management thought. But, the impact of their contributions on the industry as a whole was meagre. The real beginning of the science of management did not occur until the last decade of the 19thcentury. During this period, stalwarts like F.W. Taylor, H.L. Gantt, Emerson, Frank and Lillian Gilberth etc., laid the foundation of management, which in due course, came to be known as scientific management. This epoch in the history of management will be remembered as an era in which traditional ways of managing were challenged, past management experience was scientifically systematized and principles of management were distilled and propagated. The contributions of the pioneers of this age have had a profound impact in furthering the management know-how and enriching the store of management principles.

F.W. Taylor and Henry Fayol are generally regarded as the founders of scientific management and administrative management and both provided the bases for science and art of management.

Features of Management in the Classical Period:

1. It was closely associated with the industrial revolution and the rise of large-scale enterprise.
2. Classical organization and management theory is based on contributions from a number of sources. They are scientific management, Administrative management theory, bureaucratic model, and micro-economics and public administration.
3. Management thought focussed on job content division of labour, standardization, simplification and specialization and scientific approach towards organization.

1. Taylor's Scientific Management: Started as an apprentice machinist in Philadelphia, USA. He rose to be the chief engineer at the Midvale Engineering Works and later on served with the Bethlehem Works where he experimented with his ideas and made the contribution to the management theory for which he is so well known. Frederick Winslow Taylor well-known as the founder of scientific management was the first to recognize and emphasis the need for adopting a scientific approach to the task of managing an enterprise. He tried to diagnose the causes of low efficiency in industry and came to the conclusion that much of waste and inefficiency is due to the lack of order and system in the methods of management. He found that the management was usually ignorant of the amount of work that could be done by a worker in a day as also the best method of doing the job. As a result, it remained largely at the mercy of the workers who deliberately shirked work.
He therefore, suggested that those responsible for management should adopt a scientific approach in their work, and make use of "scientific method" for achieving higher efficiency. The scientific method consists essentially of
1. Observation
2. Measurement
3. Experimentation and
4. Inference.
He advocated a thorough planning of the job by the management and emphasized the necessity of perfect understanding and co-operation between the management and the workers both for the enlargement of profits and the use of scientific investigation and knowledge in industrial work. He summed up his approach in these words:
• Science, not rule of thumb
• Harmony, not discord
• Co-operation, not individualism
• Maximum output, in place of restricted output
• The development of each man to his greatest efficiency and prosperity.
Elements of Scientific Management: The techniques which Taylor regarded as its essential elements or features may be classified as under:
1. Scientific Task and Rate-setting, work improvement, etc.
2. Planning the Task.
3. Vocational Selection and Training
4. Standardization (of working conditions, material equipment etc.)
5. Specialization
6. Mental Revolution.
1. Scientific Task and Rate-Setting (work study): Work study may be defined as the systematic, objective and critical examination of all the factors governing the operational efficiency of any specified activity in order to effect improvement. Work study includes.
   1. Methods Study: The management should try to ensure that the plant is laid out in the best manner and is equipped with the best tools and machinery. The possibilities of eliminating or combining certain operations may be studied.
   2. Motion Study: It is a study of the movement, of an operator (or even of a machine) in performing an operation with the purpose of eliminating useless motions.
   3. Time Study (work measurement): The basic purpose of time study is to determine the proper time for performing the operation. Such study may be conducted after the motion study. Both time study and motion study help in determining the best method of doing a job and the standard time allowed for it.
   4. Fatigue Study: If, a standard task is set without providing for measures to eliminate fatigue, it may either be beyond the workers or the workers may over strain themselves to attain it. It is necessary, therefore, to regulate the working hours and provide for rest pauses at scientifically determined intervals.
   5. Rate-setting: Taylor recommended the differential piece wage system, under which workers performing the standard task within prescribed time are paid a much higher rate per unit than inefficient workers who are not able to come up to the standard set.
2. anning the Task: Having set the task which an average worker must strive toperform to get wages at the higher piece-rate, necessary steps have to be taken top lan the production thoroughly so that there is no bottlenecks and the work goes on systematically.
3. lection and Training: Scientific Management requires a radical change in the methods and procedures of selecting workers. It is therefore necessary to entrust the task of selection to a central personnel department. The procedure of selection will also have to be systematised. Proper attention has also to be devoted to the training of the workers in the correct methods of work.
4. Standardization: Standardization may be introduced in respect of the following.
   1. Tools and equipment: By standardization is meant the process of bringing about uniformity. The management must select and store standard tools and implements which will be nearly the best or the best of their kind.
   2. Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely to result in damage to machinery.
   3. Conditions of Work: To attain standard performance, the maintenance of standard conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.
   4. Materials: The efficiency of a worker depends on the quality of materials and the method of handling materials.
5. Specialization: Scientific management will not be complete without the introduction of specialization. Under this plan, the two functions of 'planning' and 'doing' are separated in the organization of the plant. The `functional foremen' are specialists who join their heads to give thought to the planning of the performance of operations in the workshop. Taylor suggested eight functional foremen under his scheme of functional foremanship.
   1. The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it.
   2. The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work.
   3. The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper returns of work from them.
   4. The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.
   5. The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal motions in the quickest and best way.
   6. The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers.
   7. The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around him and his machines.
   8. strong>The Inspector: To show to the worker how to do the work.
6. Mental Revolution: At present, industry is divided into two groups – management and labour. The major problem between these two groups is the division of surplus. The management wants the maximum possible share of the surplus as profit; the workers want, as large share in the form of wages. Taylor has in mind the enormous gain that arises from higher productivity. Such gains can be shared both by the management and workers in the form of increased profits and increased wages.
Benefits of Scientific Management: Taylor's ideas, research and recommendations brought into focus technological, human and organizational issues in industrial management. Benefits of Taylor's scientific management included wider scope for specialization, accurate planning, timely delivery, standardized methods, better quality, lesser costs, minimum wastage of materials, time and energy and cordial relations between management and workers. According to Gilbreths, the main benefits of scientificmanagement are "conservation and savings, making an adequate use of every one'senergy of any type that is expended". The benefits of scientific management are:-
1. Replacement of traditional rule of thumb method by scientific techniques.
2. Proper selection and training of workers.
3. Incentive wages to the workers for higher production.
4. Elimination of wastes and rationalization of system of control.
5. Standardization of tools, equipment, materials and work methods.
6. Detailed instructions and constant guidance of the workers.
7. Establishment of harmonious relationship between the workers.
8. Better utilization of various resources.
9. Satisfaction of the needs of the customers by providing higher quality products at lower prices.

Courtsey:https://www.wisdomjobs.com

New Manager's New Roles in the 21st Century.

The 21st Century Mangers role has become very difficult and is becoimg more difficult in the coming years. All all managers are KNOWLEDGE WORKERS , the emphasis on knowledg has increased by leapes and bounds. It is bit difficult from what it was required 20/30 years before.

As we are living in the WORLD OF VUCA, 

V=VOLATILITY,

U=UNCERTAINTY,

C=COMPLEXITY 

A=AMBIGUITY

The role of managers has increaded tremendously and AGILITY is the BUZZ WORD to manage VUCA.

The following aspects may be said to be inclusive under managerial role.

KNOW YOUR PRODUCT and  SERVICES: 

Then you do the following.

• Demand analysis and forecasting.
• Cost and production analysis.
• Pricing decisions, policies and practices.
• Profit management.
• Capital management.
• Stake Holder Management.
• Looking out for New Oppertunities.
• Coming out from Non Profit Making Business.

These aspects may also be defined as the ‘Management Thought’ or "Old Wine in a New Bottle". In recent years, there is a trend towards integrations of managerial conpects and operations research and applied mathametics. Hence, techniques such as linear programming, inventory models (EOQ) and theory of games, decesion tree, have also been regarded as a part of managerial role. The Manager must have deep knowledge on all these above subjects and as we said and learnt in the scientific management by TAYLOR , it is becoing more scientific with precession.

With help of advance information technolgy and new technologies coming in like BIG DATA, AI, DEEP LEARNING, MACHINE LEARNING, most of the decesesion are taken by IT /AI with accuracy , with optimally useing the scarecity of resources in a GLOBAL SCALE.If a business can not scale up it's going to die soon, this should be kept in mind.One should be very care ful when to slace up and when to go slow.

BUSINESS ECO SYSTEM:

The most important role for the manager now a days is the deep understanding of the Business Ecosystem.

Demand Sorting ,Analysis and Forecasting:
A business firm is an economic organization, which transforms productive resources into goods that are to be sold in a market. A major part of managerial decision-making depends on accurate estimates of demand. This is because before production schedules can be prepared and resources are employed, a forecast of future sales is essential. This forecast can also guide the management in maintaining or strengthening the market position and enlarging profits. The demand analysis helps to identify the various factors influencing demand for a firm’s product and thus provides guidelines to manipulate demand in a global scale. Demand analysis and forecasting, thus, is essential for business planning and occupies a strategic place in managerial functions. It comprises of discovering the forces determining sales ,consumer behabiour and their measurement and there after meticulas planning in order to acheive them. The main  PREDICTIVE  ANALYTIC topics covered in this are:

• Demand determinants.
• Demand distinctions.
• Demand forecasting.

Cost and Production Analysis:
A study of economic costs, combined with the data drawn from the firm’s accounting records, can yield significant cost estimates. These estimates are useful for management decisions. The factors causing variations in costs must be recognised and thereby should be used for taking management decisions. This facilitates the management to arrive at cost estimates, which are significant for planning purposes. An element of cost uncertainty exists in this because all the factors determining costs are not always known or controllable. Therefore, it is essential to discover economic costs and measure them for effective profit planning, cost control and sound pricing practices. Production analysis is equally  important as  cost analysis. The chief topics covered under cost and production analysis are:

• Cost concepts and classifications.
• Cost-output relationships.
• Economics of scale.
• Production functions.
• Cost control.
• Budgetig.

Pricing Decisions, Policies and Practices .
Pricing is a very important area which the managers should know all the ingredients and copmonents /vendors which makes the pricing. In fact price is the origin of the revenue of a firm. Focus on TOP LINE  ( Revenue)  should be the top priority, which comes from the pricing. As such the success of a business firm largely depends on the accuracy of price decisions of that firm. Remember if you can manage your TOP LINE ,you can manage your BOTTOM LINE.The important aspects dealt under area, are as follows:

• Price determination in various market forms.
• Pricing methods
• Differential pricing product-line pricing and price forecasting.

Profit Management:
Profit is not a dirty word. It is the combination of three things of management's 1.Effectiveness.2.Effort.3.Risk Premium.
Business firms are generally organized with the purpose of making profits. In the long run, profits provide the chief measure of success. In this connection, an important point worth considering is the element of uncertainty existing about profits. This uncertainty occurs because of variations in costs and revenues. These are caused by factors such as internal and external. If knowledge about the future were perfect, profit analysis would have been a very easy task. But in the VUCA world it's becoming very difficult.However, in a world of uncertainty, expectations are not always realized.  The important aspects covered under this area are:

• Nature and measurement of profit.
• Break-Even Planning.
• Profit policies and techniques of profit planning.
• Managing Fluctuation of profits.

Profits:The proof of the pudding is in eating.Take care about your P/E ratois.

Capital Management:
Among the various types and classes of business problems, the most complex and troublesome for the business manager are those relating to the firm’s capital investments. Capital management implies planning and control and capital expenditure. In this procedure, relatively large sums are involved and the problems are so complex that their disposal not only requires considerable time and labor but also top-level decisions. The main elements dealt with cost management are:

• Cost of Capital.
• Capital Budgeting .
• Capital Structure Planing.
• Rate of return and selection of projects, managing Debts and Debt Services.
• Exit paln for Loss making projects.

HR Management:

The human aspect is an important aspect , even though the ROBOTICS ,AI may take over many things , but it will also create job, the need for human resourse will never die down the skill sets required will be diffrent , learning, un -learning, skilling , de -skilling will be continious process. The continious improvement and self dicovery for each and every indivisual is a must.Charls Darwin may be re-discovered,re-thought in a new way, and every day. Survival of the fittest.

The various aspects outlined above represent the major uncertainties, which a business firm has to consider . As we dicsucced the VUCA,demand volatility and uncertainty, cost volatility and uncertainty, price volatility and uncertainty, profit uncertainty and capital market volatilityand  uncertainty. 
Therefore alertness and continious attention is required as a role for a manager in the 21st century. The job has become a tight rope walking , and the job role chalenges are increasing continiously. 

Classical Management Theory

Kaizen

https://www.youtube.com/watch?v=k3qi2zPlurI

Will be back soon.

Will be back soon.

Regards Debashish Brahma