Enrolment No.

MBA Information Systems 1st Year Assignment

Annamalai University

1.1: Principles of Management

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Question #1: Discuss the importance and application of principles
of management in the present day context.
Answer:-

Management
Management is a very popular and widely used term. It is a global
phenomenon. All organisations irrespective of their objectives - business,
political, cultural or social are involved in management because it is
management which helps and directs the various efforts towards a definite
purpose.
By nature management is dynamic and versatile. Defining management in a
comprehensive way by considering all its characteristics is a difficult task.
However some renowned authors have defined management as follows
To manage is to forecast, to plan, to organize, to command to co-ordinate
and control. Henry Fayol
The art of getting things done through people Mary Parker Follet
Management is the process of planning, organising, leading and controlling
the efforts of organisation members and of using all other organisational
resources to achieve stated organisational goals James A.F. Stones
Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which
people can perform and individuals and can co-operate towards attainment
of group goals Harold Koontz.
Management is the process of working with and through others to effectively
achieve the goals of the organization, by efficiently using limited resources in
the changing world. Management involves creating an internal environment;
it is the responsibility of management to create such conditions which are
conducive to maximum efforts so that people are able to perform their task
efficiently and effectively. It includes ensuring availability of raw materials,
determination of wages and salaries, formulation of rules & regulations etc.
Good management includes both being effective & efficient.
Management can be in following categories:
Management as Process
Management as Activity
Management as Discipline
Management as Science
Management as Art
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Management as Profession

Principles of Management
Henry Fayol is widely acclaimed as founder of the classical management
school. He was the first to systematize what management is all about. In an
attempt to develop a science of management he divided business operations
into six activities:
1. Technical
2. Commercial
3. Financial
4. Security
5. Accounting
6. Managerial
Fayol held that managerial ability should be acquired first in school and later
in the workshop. In order to acquire managerial knowledge he developed 14
principles of management to be taught in academic institutions, they are as
follows
1. Division of Labour: The objective of this principle is to achieve
maximum efficiency from workers through specialization not only in
technical aspect but in all other aspects of the organization.
For example: A modern company like TVS motor company employs
specialized workers like marketers, advertisers, skilled technologists,
specialist managers, accountants, QC controllers, Production Line
maintenance specialists, etc.
2. Authority and Responsibility: Responsibility is the essential
counterpart of authority and they are correlated. An ideal manger is
expected to have official authority arising from official positions as well
as his inherent personal authority. Such person authority is
compounded of intelligence experience, moral worth, ability to lead,
past services, etc.
3. Discipline: All personnel serving in the organization should be
disciplined. That is to respect the rules and agreements that govern
the organization. According to Fayol, discipline will result from good
leadership at all levels of the organization, fair agreements and
judiciously enforced penalties upon breaching.
4. Unity of Command: Which means a person should get orders and
instructions from only one superior. Fayol believed that, conflicts in
instructions and confusion in authority will result when a person
reports to more than one superior.
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5. Unity of Direction: According to this principle each group of activities
with the same objective should have one head and one plan. Unity of
direction provides better coordination among various activities to be
undertaken by an organization.
For example: the personnel department in a company should not have
two directors, each with a different hiring plan.
6. Subordination of individual interest to the common good:
Common interest is above the individual interest. In any undertaking
the interest of an employee should not take precedence over the
interest of the organization as a whole.
7. Remuneration: Remuneration of employees should be fair and
provide maximum possible satisfaction for both employee and
employer. Fayol advocated profit sharing plan for managers but not for
workers.
8. Centralization: Everything which goes to increase the importance of
subordinates is decentralization; everything which goes to reduce it is
centralization. Fayol believed that managers should retain final
responsibility but also need to give their subordinates enough authority
to do their jobs properly.
9. The Hierarchy: Organizations today define this using organizational
chart. There should be a scalar chain of authority and of
communication ranging from the highest to the lowest. It suggests that
each communication going from highest to lowest level or vice versa
must flow through each position in the line of authority. Fayol has
suggested gang plank which is used to prevent the scalar chain from
bogging down action. His scalar chain and gang plank is as shown
below:

Scalar Chain and gang

plank
According to the figure, A is top man having immediate subordinates B
an L. In turn B and L are having immediate subordinates C and M. This
continues to level G and Q.
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Ordinarily communication flow from top to down should be A B C
D E F G, from down to top should be G F E D C B A. That
means communication between F to P will be F E D C B A L
M N O P, which consumes time. To speed up this Fayol suggested
Gang Plank without weakening the chain of command. In order to
achieve this superiors of F and P should authorize them to
communicate directly provided each informs his superior of any action
taken. According to Fayol this system allows F and P to deal in few
hours with some questions or other which via scalar chain would have
taken long time passing through twenty transmissions.
10.
Order: This is a principle relating to the arrangement of people
and material. People and material should be in right place at the right
time. In material order, there should be a place for everything and
everything should be in right place. Similarly, in social order, people in
particular should be in jobs or positions most suited to them.
11.
Equity: Equity is combination of both justice and kindness.
Equity in treatment and behavior is liked by everyone; in turn it brings
loyalty in the organization. Which means managers should be friendly
and fair to their subordinates.
12.
Stability of Staff: There should be reasonable security of jobs.
No employee should be removed within short time. A high employee
turnover rate is not good for the efficient functioning of the
organization, which is both cause and effect of bad management.
13.
Initiative: Within the limits of authority and discipline managers
should encourage and give freedom to employees for taking initiative,
even though this may result in some mistakes.
14.
Espirit de Corps: This is an extension to unity of command
based on the principle of Union is strength. Promoting team spirit will
give the organization a sense of unity. To Foyal, even a small factor
could help to develop this spirit. He suggested. For example the use of
verbal communication instead of formal, written communication,
whenever possible.

Application of Principles of management

Management process suggests that all the managers in the organization
perform certain functions to get things done by others. Principles of
management individually contribute to the overall effectiveness of the
organization and also they are interrelated. Management principles are
applicable in any type of organization irrespective of its nature and size to
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serve the following purposes
1. Planning: Planning means to outline future course of action to achieve
the desired results. This includes what one wants to achieve, when to
achieve and how to achieve. Planning involves determination of
objectives, setting rules and procedures, setting policies, budgeting
etc.

2. Organizing: Organizing is the process of dividing work into convenient

tasks and grouping of such tasks in the form of positions, grouping
various positions into departments and sections, assigning tasks to
individual positions, and delegating authority to each position so that
the work is carried out as planned. Structure of an organization varies
based on its size and the nature of activities involved.
3. Motivation: Motivation creates a desire in people to act. In the case
of organizational management, motivation is specifically directed
towards getting people to act pursuant to the structure defined by the
organizing step. Motivation can be in the form of rewards, such as
compensation, or in the form of punishments, such as loss of
compensation/employment.
4. Controlling: Controlling is the process of directing the use of
resources and verifying that the plan is being accomplished through
the procedures identified in the organizing step. Controlling also
includes taking corrective action in event that the plan is not being
accomplished because procedures are not being followed. Identifying
whether the problems exist in terms of motivating, organizing,
planning, or forecasting is essential to exerting control that will lead
the organization to the desired outcome.
5. Coordinating: Coordinating consists of getting disparate resources to
work together. Not only must an organization be coordinated within
itself, but an organization must be coordinated with its suppliers and
customers if it is to be successful.
Within the organization,
coordination plays the important role of ensuring that forecasting,
planning, organizing, motivating, and controlling are internally
consistent and moving in all aspects of the organization towards
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achieving its goals. Coordinating outside of the organization helps to
refine the forecast, planning, and organizing processes by gathering
inputs from customers and suppliers regarding their needs and
capabilities.

6. Communicating: Communicating pulls all of the other principles of

management together. Each phase requires communication so that
everyone involved can provide input and know the result.
Furthermore, information has to be communicated between each of the
processes so that they remain consistent with the organization's
overall objectives. Communication with customers and suppliers is
also critical so that as much information as possible is available at
each step. Communication is important in the event of a problem
identified at a particular step that affects other principles, such as
identified problems with the forecasting or organizing steps, so that it
can be addressed.

Importance of Management Principles

The principles of management have tremendous impact upon the practice of
management in increasing the efficiency of the organization. Need and
importance of principles of management can be visualized as follows.

1. Improves Understanding: From the knowledge of principles

managers get indication on how to manage an organization. The
principles enable managers to decide what should be done to
accomplish given tasks and to handle situations which may arise in
management. These principles make managers more efficient.

2. Direction for Training of Managers: Principles of management

provide understanding of management process what managers would
do to accomplish what. Thus, these are helpful in identifying the areas
of management in which existing & future managers should be trained.
3. Role of Management: Management principles make the role of a
manager concrete. Therefore these principles act as ready reference to
the managers to check whether their decisions are appropriate.
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Besides these principles define managerial activities in practical terms.
They tell what a manager is expected to do in specific situation.
4. Guide to Research in Management: The body of management
principles indicates lines along which research should be undertaken to
make management practical and more effective. The principles guide
managers in decision making and action. The researchers can examine
whether the guidelines are useful or not. Anything which makes
management research more exact and pointed will help improve
management practice.
5. Establishes Sound Organization: To establish sound organizational
structure is one of the objectives of management which is in tune with
objective of organization and for fulfilment of this, it establishes
effective authority & responsibility relationship. Management fills up
various positions with right persons, having right skills, training and
qualification. It enables the organization to survive in changing
environment. With the change is external environment, the initial coordination of organization must be changed. It is responsible for
growth and survival of organization.
6. Essentials for Prosperity of Society - Efficient management leads
to better economical production which helps in turn to increase the
welfare of people. Good management makes a difficult task easier by
avoiding wastage of scarce resource. It improves standard of living. It
increases the profit which is beneficial to business and society will get
maximum output at minimum cost by creating employment
opportunities which generate income in hands. Organization comes
with new products and researches beneficial for society.

Principle of Management in Day to Day Context

1. Principles of Management are Universal
Management principles are applicable to all kinds of organizations business & non
business.
They are applicable to all levels of management.
Every organization must make best possible use by the use of
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management principles.
Therefore, they are universal or all pervasive.

2. Principles of Management are Flexible

Management principles are dynamic guidelines and not static rules.
There is sufficient room for managerial discretion i.e. they can be
modified as per the requirements of the situation.
Modification & improvement is a continuous phenomenon in case of
principles of management.
3. Principles of Management have a Cause & Effect Relationship
Principles of management indicate cause and effect relationship
between related variables.
They indicate what will be the consequence or result of certain
actions. Therefore, if one is known, the other can be traced.
4. Principles of Management - Aims at Influencing Human
Behavior
Human behavior is complex and unpredictable.
Management principles are directed towards regulating human
behavior so that people can give their best to the organization.
Management is concerned with integrating efforts and harmonizing
them towards a goal.
But in certain situations even these principles fail to understand
human behavior.
5. Principles of Management are of Equal Importance
All management principles are equally important.
No particular principle has greater importance than the other.
They are all required together for the achievement of organizational
goals.

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Question #2: Co-ordination is the orderly arrangement of group
effort to provide unity of action in pursuit of common purpose
Elucidate this statement.
Answer:-

Co-ordination
The synchronization and integration of activities, responsibilities, and
command and control structures to ensure, that the resources of an
organization are used most efficiently in pursuit of the specified objectives.
Some renowned authors have defined management as follows
Co-ordination is balancing and keeping together the team by ensuring
suitable allocation of task to the various members and seeing, that tasks are
performed with due harmony among the members themselves E. F. L.
Brech
Co-ordination is the process whereby an executive develops an orderly
patter of group efforts and secures unity of action in the pursuit of common
purpose Mc Farland
Co-ordination is orderly arrangement of group efforts to provide unity of
action in the pursuit of common goals Mooney and Reelay
Co-ordination is regarded as the essence of the management rather than one
of its functions. It is a force which binds all other functions of management
together. Management seeks to accomplish co-ordination through its basic
functions of preparation, organizing, staffing, directing and controlling. Thats
the reason why, co-ordination is not a separate function of management.
Achieving harmony between individual efforts towards achievement of group
goals is a key to accomplishment of management. Co-ordination is the core
of management and is inherent in all functions of management. Coordination can be achieved through the following ways
1. Co-ordination through Planning: Planning facilitates co-ordination
by integrating the various plans through joint discussion, exchange of
ideas. Example: co-ordination between finance budget and purchases
budget.
2. Co-ordination through Organizing: Mooney considers co-ordination
as the fundamental nature of organizing. In fact when a manager
groups and assigns various actions to subordinates, and when he
creates departments co-ordination topmost in his mind.
3. Co-ordination through Staffing: A manager should bear in mind
that the right no. of recruits in various positions with right type of
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education and skills are taken which will make certain right men on the
right job.
4. Co-ordination through Directing: The purpose of giving orders,
instructions & guidance to the subordinates is served only when there
is a harmony between superiors & subordinates.
5. Co-ordination through Controlling: Manager ensures that there
should be co-ordination between actual performance & benchmark
performance to achieve organizational goals.

Types of Co-ordination
Co-ordination can be broadly classified as follows
Based on Coverage:

Internal: Co-ordination between units of same organisation is termed

as internal co-ordination. Internal co-ordination summarizes the
activities of different units so as to make the organization effective.

External: This means co-ordination between an organisation and its

external environment comprising government, community, customers,
investors, suppliers, competitors, research institutions, etc. It requires
proper match between policies and activities of the enterprise and the
outside world.

Based on Flow:

Vertical: Co-ordination between different levels of the hierarchy down

the line in an organisation is known as vertical co-ordination. It ensures
that all the levels in the organisation act in harmony and in accordance
with the goals and policies of the organisation. Vertical co-ordination is
assured by top management through delegation of authority.

Horizontal or Lateral: refers to co-ordination between different

departments and other units at the same level of the management
hierarchy. For instance, co-ordination between production department
and marketing department is horizontal or lateral co-ordination.

Need for Co-ordination

Performance of various managerial functions in an integrated way ensures
fair degree of co-ordination among individuals and departments. In large
organization due to its size special efforts are needed for co-ordination due
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to the complexities mentioned below
1. Large Number of Personnel: The increasing number of persons
involved in the large organisations complicates the problems of coordination. Individuals join organization to fulfil their needs. Many times
these needs may be different than group needs and goals. Each
individual is unique by nature; higher the number, higher will be the
degree of incompatibility. In order to achieve efficiency it is imperative
that both organizational and individual goals are brought to a level of
conformity, and management tries to integrate both goals through coordination.
2. Specialisation: There is high degree of specialisation in modern
organisations. Specialisation arises out of complexities of modern
technology as well as from diversity of tasks and persons needed to
them. It will be very expensive if specialists are allowed to work
without co-ordination. Therefore, some mechanism is required to coordinate the efforts of various specialists in the organization.
3. Functional Differentiation: Functions of an organization are normally
divided into departments, divisions, sections and the like. Coordination is therefore necessary to link the functions together and
assure their contribution to the total result.
4. Interdependence: The need for co-ordination arises because of
interdependence of organizational units and subunits and people
working within these. Because of this interdependency, performance of
one unit is affected by others. Therefore, in order to optimise effective
use of the organizational resources, the efforts of all the units have to
be integrated through high degree of co-ordination. There are three
type of interdependence: pooled, sequential and reciprocal.
5. Individual
Vs
Organizational
interests:
Individuals
join
organization to fulfil their desires and expectations. In turn,
organization expects certain things from the individual. Incompatibility
between these two expectations leads to clash of interests. In such a
case individual efforts may not contribute to the achievement of
organizational objectives. Therefore there is a need for co-ordination
and integration of both interests.

Principles of Co-ordination
In order to achieve effective co-ordination Marry Parker Follet has laid down
the following principles of co-ordination.

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1. Early Start: Co-ordination must start at the early stage in the
management process that is planning stage. The task of co-ordination
becomes easier subsequently in a management process if it starts at
the planning stage. Mutual exchange of ideas helps in clearing doubts
and misunderstanding. If not started in the early stage securing coordination becomes impossible at later stages.
2. Direct Personal Contact: It emphasises on the importance of direct
contact between managers and their subordinates. It helps in
achieving effective co-ordination and eliminates conflicts and
misunderstandings. It facilitates managers to co-ordinate different
activities of their subordinates effectively and efficiently.
3. Continuity: Co-ordination is a continuous process. In order to maintain
perfect balance between various units and people, management
should strive hard to continuously maintain co-ordination. Coordination should be maintained during all stages of management
Planning, organizing, directing and controlling.
4. Integration: This principle calls for Integration of efforts to achieve a
common purpose. Reciprocal relationship among departments and
employees concerned is very important to achieve effective coordination and thereby successfully attaining a common purpose.
Every decision taken by a department or a person in an organization
affects all other departments or persons, because they are related to
each other. Hence prior to taking any decision all managers should
discuss its effect on other persons and departments.

Techniques for effective Co-ordination

The basic objective of all managerial functions is to get things done by coordination efforts. Different organizations adopt different mechanisms to
achieve effective co-ordination. Since there is no universally accepted
method of performing co-ordinated managerial functions, managers have to
achieve co-ordination by making some special efforts. Some of them are as
follows
1. Chain of command: This technique is very important particularly in
vertical co-ordination. Vertical co-ordination is required to harmonise
the work allocated to several levels in the organisation. It ensures that
various levels do not act out of accord with each other or with policies
and organisational objectives. The concept of unity of efforts, timing
and orderly efforts apply to all levels and all units of the organisation.
Managers can use their authority to issue orders and instructions to
their subordinates, this process can go down the organisation.
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2. Leadership: If co-ordination cannot be achieved by mere exercise of
authority, managers can use their leadership to bring co-ordination
among their subordinates. Leadership is the process of inducing
subordinates to co-operate willingly. Leadership brings individual
motivation and persuade the group to have identity of interests and
outlook in group efforts. Thus many conflicting situations can be
overcome by including people to work in harmony by exercising
leadership.
3. Committees: Committee is a body of persons entrusted with
discharge of some functions collectively as a group. The role of
committee is significant in achieving horizontal coordination.
Coordinating horizontally is a matter of relating the efforts of
functional, divisional or territorial units to each other. Committee
ensures that problems which arise out of relationships among various
units can be solved by group decisions. The core of group decision
making, so far as coordination is concerned, lies in the opportunities
for free and open discussion and interchange of ideas, problems,
proposals and solutions. Improved understanding of organisation wide
matters leads to better coordination.
4. Meetings: Periodic meetings can be highly effective in promoting
coordination through better communication. Usually, it is desirable for
a regular time to be set aside for meetings. These meetings generally
contribute in the following ways to achieve coordination
To give everyone present a sense of the unity and
interconnectedness of the work of the organisation as a
whole;
To learn from the superior managers about new problems and
developments which affect their work;
To solicit and enlist the thought and co-operation of staff
members in the solution of problems;
To provide an opportunity for subordinates to bring up
questions which the superior manager should know about and
which may affect the operations of parallel divisions of the
organisation;
To provide a forum in which fraction points or areas of
inadequate coordination are brought into open.
5. Special coordinators: Generally, in big organisations special
coordinators are appointed. They normally work in staff capacity to
facilitate the working of main managers. A coordination cell may also
be created. The basic responsibility of the cell is to collect the relevant
information and send this to various heads of sections or departments
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so that interdepartmental work and relationship is coordinated. In
some cases, a particular person is appointed to coordinate the work of
a particular nature. For example, in a particular project, along with
various functionaries, a project coordinator can also be appointed. His
basic function is to coordinate various activities of the project and keep
information about the development of the project.
6. Self-coordination: The basic principle of self-coordination is
modification of functioning of department in such a way that each
department coordinates with other department. Each department or
section or individual affects others and also gets affected by others.
Therefore, if those departments, sections, or individuals apply a
method of working which facilitates others, then self coordination can
be achieved. However, mere communication does work unless there is
a proper organisational climate in which each one sees the integration
of his goals with organisational goals and also the benefits of his
departments with others.

Conclusion
In an organization every individual is related with others and his function
affects others. Since all individuals, ultimately contribute to the same end
result, their contribution will be maximum when there is positive effect of
ones efforts over others. Without co-ordination the efforts of some will be
counter-productive for others. Hence co-ordination is relevant for group
efforts and not individual efforts. It involves the orderly pattern of group
efforts because an individual who is working in isolation does not affect
functioning of others and no need for co-ordination arises. Co-ordination
emphasises unity of efforts which is the heart of co-ordination.

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