What are various principles of management? How are modern organization different from typical classical organizations

What are various principles of management? How are modern organization different from typical classical organizations, in terms of practices of various principles of management?

 

Introduction : It is very difficult to accurately define management. There is no universally accepted definition of management. Management involves both acquisition and application of knowledge. It does not go by rule of thumb or intuition alone even though it is considered to be an extension of common sense. Hence, management is a combination of both an art and a science. The scientific approach lies in decision-making, planning and in the appropriate use of technology.

The artistic approach to management can be found in the tasks of communicating, leadership and goal-setting. A few commonly used definitions of management are given below:

• Managing is an art or process of getting things done through the efforts of other people.

• Managing is the art of creation and maintenance of an internal environment in an enterprise where individuals, working together in groups, can perform efficiently and effectively towards the attainment of group goals.

• Management is the process of setting and achieving goals through the execution of five basic management functions (i.e. Planning, Organising, Staffing, Directing and Controlling) that utilise human, financial and material resources.

• Management is a process or an activity that brings together several varied resources like persons, materials, techniques and technologies to accomplish a task or tasks.

• Management, as a distinct field of study, is also the body of organised knowledge which underlies the art of management.

What are various principles of management? How are modern organization different from typical classical organizations

Taylor’s Principles

The fundamental principles that Taylor saw underlying the scientific approach to management may be summarised as follows:

• Replacing rules of thumb with science (organised knowledge);

• Obtaining harmony in group action, rather than discord;

• Achieving cooperation of human beings, rather than chaotic individualism;

• Working for maximum output, rather than restricted output; and

• Developing all workers to the fullest extent possible for their own and their company’s highest prosperity.

It may be noted that these basic principles of Taylor are not far from the fundamental beliefs of the modern manager, even though some of the techniques Taylor and his colleagues and followers developed in order to put his philosophy and principles into practice, had certain mechanistic aspects.

What are various principles of management? How are modern organization different from typical classical organizations

Fayol’s Principles

Noting that the principles of management are flexible, not obsolete and must be usable regardless of changing and special conditions, Fayol listed fourteen principles based on his experience. They are summarised below:

• Division of work: Specialisation allows workers and managers to acquire an ability, sureness, and accuracy which will increase output. More and better work will be produced with the same effort.

• Authority: The right to give orders and the power to exact obedience are the essence of authority. Its roots are in the person and the position. It cannot be conceived of apart from responsibility.

• Discipline: Discipline is composed of obedience, application, energy, behaviour and outward marks of respect between employers and employees. It is essential to any business. Without it no enterprise can prosper. It is what leaders make it.

• Unity of command: For any action whatsoever, an employee should receive orders from one superior only. One person, one boss. In no case is there adaptation of a social organism to a duality of command.

• Unity of direction: One head and one plan should lead a group of activities. It is necessary that all sing the same objective and that is one head, one plan.

• Subordination of individual interest to general interest: The interest of one person or group in a business should not prevail over that of the organisation.

What are various principles of management? How are modern organization different from typical classical organizations

• Remuneration of personnel: The price of services rendered should be fair and should be satisfactory to both employees and employer. A level of pay depends on an employee’s value to the organisation and on factors independent of an employee’s worth - such as cost of living, availability of personnel and general business conditions.

Modern organization different from typical classical organizations, in terms of practices of various principles of management

Stability

Modern organizations are more dynamic with multiple business strategies. Believing that traditional organizations are stable this might be true, and since their activities are planned upfront it does not allow for progress and change, meaning these strategies can become outdated

Flexibility

Unlike traditional organizations which are fixed, inflexible and planned, modern organizations are more flexible for change in every aspect of their work environment: from knowledge and skills, to approaches and workflows.

Risk management

Traditional organizations maintain specific policies and standards in order to mitigate any kind of risk. They are risk-averse, unlike modern enterprises which are risk-takers with well-defined calculations which assess risks from multiple dimensions. This is not only applied for a given issue at a certain point in time that has already occurred, instead, they look at the possibility of potential risk.

Technology

Traditional organizations are centralized and (too) careful to accept advanced methodology and technology. With this rapid pace in technological innovation, the chances to survive with ever-changing market demands are much harder, maybe even impossible. Going modern means switching to a contemporary mindset, focused on what is happening now. Companies that do not accept technological modernization and new ways of working will be anchored in the past.

To keep up with these dynamic market demands, organizations need to transform their business by introducing new products and services with digital signatures and augment their existing portfolio to fit in the digital ecosystem.

 

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