Principles of Managemet Assignment

SECTION A
Bharat Engineering Works Limited is operating in the engineering products industry and is specialized in producing industrial machineries. They were the market leader until the latest development in the market. Until then, Bharat Engineering never had to struggle to increase sales and market their products. In Fact, they were unable to cater the whole market on their own. But, recently two competitors entered the market. And the previously soaring demand just started to fade away.

As the two new companies entered the market, Bharat Engineering Works Limited started facing problems. As a first thing their demand started to diminish rapidly. As we all know, more competition in the market means customers have more choices of substitutes. Customers started to switch to other substitutes in the market. As I believe, one major reason for this is Bharat Engineering not being able to cater the demand. Competitors will easily recognize such market gaps and move in immediately. In this case, the two new entrants entered the market and got hold of the unsatisfied customers and customers who were looking for a cheap and quality product.

Quality and cost problems are not to be forgotten. Bharat Engineering Works Limited has never looked forward and never really was aware of the newest developments in the market. One proof for that is the company using production machineries that are outdated and never innovating or overhauling the existing ones either. They just stayed right where they just stayed right where they started without further developing and catching up with the latest technology and other developments in the industry.

Lacking an integrated planning system is another challenge Mr. Kumar faced in the process. The board of directors of the company had already advised to implement such a system to the management formally and informally. Without such system information gathering and planning will be like labour work. Collaboration between departments, putting together information and deriving a conclusion based on that can take so much time without some Standard Operating Procedures or an Integrated Planning System.

Business these days are done with an aggressive manner. Especially in a competitive market such as the one in which Bharat Engineering Works Limited is operating. To survive in these competitions the company needs ‘Marketing & Sales Power’. They are the key factors to move ahead. But once Mr. kumar started to explore the nature of this problem, marketing manager of the company steps forward and reveals that he doesn’t have enough sales support to compete and win in a competitive market. The budget for sales and marketing is too small. There are things sales team can do in collaboration with the marketing team. Like taking demonstration teams to the customers and winning business. Though these kind of activities are effective, they are costly.

The productions manager also complained about the old machineries in the production line. These old systems prevents from reducing prices and producing a quality product. At that time competitors of Bharat had much better equipments. Those equipments help them to produce the final product at better quality than Bharat Engineering. This happened to be the major challenge to the company. And this was the major reason that this problem came to the notice of the senior management.

Upgrading their production machineries is the first thing they have to do to tackle the new entrants’ problem. Because Bharat cannot produce products at a better quality and at a cheaper cost if they stick to the old machineries. Therefore, in order to regain their previous strength in the market, it is recommended to install automated production lines and become equally competent to its competitors.

As mentioned earlier, the internal management was not entirely satisfactory in this issue. Once investigation has been started and some information gathered on the problem, Kumar has identified several problems in the management as well as in the decisions they have taken. Moreover, some things are left without proper care in the company. One such example is that research and development team wasn’t able to identify this problem before hand to tackle it more efficiently. And the other thing is that they were not able to maintain the quality standards of their products at its optimum level since the beginning. As a result, with the first choice customers had, they have moved to other suppliers. All these things need to be corrected.

As I feel, it is the lack of leadership in the management that leads the company in top such a crisis. The management should have been able to take precautionary measures to avoid or to reduce the impact of such a problem. As General Manager at Bharat Engineering Works Limited, Mr. Kumar needs to encourage and develop leadership skills in the management team. This will help them to forecast into the future, plan ahead to take a company in to profitability even in high competition. In this particular situation, the company needs to regain its market share and gain more control over the market like they did before. Emphasizing more on the leadership skills, they will be able to take rational decisions, take risks and lead the employees to success.

Motivation is also another very important factor to be considered when facing with a problem. No special motivation and courage is to be seen from employees. Maybe this is due to the consistent unchanging tradition they had in the company before. But, at times of crisis, everyone on the company needs to work on motivation and put additional effort to the company so they can save their own company. Mr. Kumar needs to make employees feel more belonging to the organization and motivate them. Motivation can be financial or nonfinancial. But at this stage, it is not likely that the company can afford monetary means to motivate staffs. Instead Mr. Kumar is advised to identify and implement no monetary means to motivate employees.

The company obviously needs improvement in the information flow, communication and the chain of command. Based on the information presented in the case, it is evident that they do not have a very proper understanding in between departments and between management and subordinates. Managers need to realize that operational level employees are the people doing works physically and their feedback and suggestions are vital for future improvements. But it is seen that high level staffs ignoring the subordinate feedback. In addition to that Mr. Kumar has also identified that some information is not passed properly to the operational level or middle managers. As a result, misunderstandings occur and the end result turns out to be harmful to the company. In general, all information flow and communication channels and skills need to be improved.

Mr. Kumar can advise the HR department to run training and awareness programs to the employees. Inter-department coordination and employee collaboration also has to be improved to face competitive markets in today’s world. Because a company is one single body and departments are individual’s organs that keep the organizational body running. And the total productivity depends on the performance of each individual part of the company. Usually collaboration and friendliness in a company is developed by encouraging to engage in activities together. It can be group projects or other social events in which people can take part.

In general, The Company can be easily restructured or policies in the company can be changed to reflect the changes suggested above. Mr. Kumar has to put in a little more effort to implement and execute these changes and in return I believe Bharat Engineering Works Limited will come back stronger.

SECTION B
Henri Fayol, the French industrialist, he was responsible for the development of modern management. Started his career as a coal mine engineer, he successfully developed his company. His book on ‘General and Industrial Management’ (1916) was a memorial work on management. Fayol’s 14 principles are listed below:

Division of Work
Division of work means dividing the total work of all kinds and allotted to various persons according to their expertise in a particular area. In other words, it is called as specialization. According to this principle, an individual is not capable of doing all types of work. Therefore, the works should be assigned to the specialist of his job. Division of work promotes efficiency because it permits a subordinate to do their task in a specific area reducing the scope of his responsibility. Division of work increases the performance, ability and accuracy in the in the workforce.

Authority

The concept of authority and responsibility go together or co-existing.
Authority was defined by Fayol as the right to give orders and the power to exact obedience. Those who have authority to give orders must be willing to accept responsibility for the results. Therefore, whoever assumes authority also assumes responsibility.

Discipline

According to Henry Fayol discipline means sincerity about the assigned work and enterprise, carrying out orders and instructions of superiors and to have faith in the policies and programs of the business enterprise. Fayol states that discipline is absolutely essential for smooth and orderly running of a business unit. For proper discipline, the enterprise must to have disciplined superiors at all levels, need a clear and fair agreements and judicious use of all penalties. A well-disciplined working force is absolutely necessary for improving the quality and quantity of the production.

Unity of Command
According to this principle, a subordinate should take order from only one superior and he should be responsible and accountable to him. In other words, a sub-ordinate should not receive instructions from more than one person because it undermines authority, weakens discipline, divides loyalty, cause confusion, delays and chaos, escaping responsibilities, duplication of work and overlapping of efforts. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential. Unity of command provides the enterprise a disciplined, stable & orderly existence and also creates harmonious relationship between superiors and sub-ordinates.

Unity of Direction

Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives and related activities should be grouped together. Therefore, there should be one plan of action for them and they should be under the charge of a particular manager. According to this principle, efforts of all the members of the organization should be directed towards common goal. Unity of direction enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way the principle of direction create dedication to purpose and loyalty.

Basis

Unity of command
Unity of direction
Meaning
It implies that a sub-ordinate should receive orders and instructions from only one boss. It means one head, one plan for a group of activities having similar objectives.

Nature
It is related to the functioning of personnel’s.
It is related to the functioning of departments, or organization as a whole. Necessity
It is necessary for fixing responsibility of each sub-ordinate. It is necessary for sound organization.

Advantage
It avoids conflicts, confusion & chaos.
It avoids duplication of efforts and wastage of resources.

Result
It leads to better superior sub-ordinate relationship.
It leads to smooth running of the enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically come from the unity of direction. Subordination of individual interests to general interests

This principle of management state that employees should surrender their personnel interest before the general interest of the enterprise. As far as possible, reconciliation should be achieved between individual and group interests. But in case of conflict, individual must sacrifice for general interests. Therefore, in order to achieve this attitude, it is essential that employees should be honest & sincere, proper & regular supervision of work, reconciliation of mutual differences and clashes by mutual agreement.

Remuneration

The organization should give fair salaries and wages to the employees. It should depend on circumstances, such as cost of living, ability of the company to pay, prevailing wage rates in the industry. As far as possible it should accord satisfaction to both employer and the employees. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers and management. Apart from financial benefits, non-financial benefits should be provided such as good working conditions, canteen facilities, recreation facilities, free education, residential facilities etc. By applying this principle to the organization it creates harmonious relationship and pleasing atmosphere of work.

Centralization and Decentralization

According to this principle, there should be one central point in the organization which handles overall direction and control of all the parts. In other words, centralization is a situation in which top management retains most of the decision making authority. Decentralization means disposal of decision making authority to all the levels of the organization or sharing authority downwards is decentralization. According to Fayol, “Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization. Therefore, it is essential to have a proper balance between centralization and decentralization.

Scalar Chain

The scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. A subordinate should feel free to contact his superior through the scalar chain. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain. The flow of information between management and workers is a must. Business problems need immediate solution. Therefore the management cannot always depend on the established scalar chain. It requires that direct contact should be established.

Order

This principle is concerned with proper & systematic arrangement of things and people. Arrangement of things is called material order and placement of people is called social order. As we say about material order, there should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity. And selection and appointment of most suitable person on the suitable job is called as social order. There should be a specific place for every one and everyone should have a specific place so that they can easily be contacted whenever need arises. Equity

It means combination of fairness, justice and kindness. An organization must practice equity and equality of treatment while dealing with their subordinates. There should not be any discrimination as regards caste, religion and sex, age, relation etc. An effective management always accords sympathetic and human treatment. Equity ensures healthy and industrial relations between management and labor.

Stability of tenure of personnel
Fayol emphasized that employees should not be shifted frequently from one job position to another i.e. the period of service in a job should be fixed. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served. Fayol defines “Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”. As a result, the time, effort and money spent on training the worker will go waste. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.

Initiative

Under this principle, the successful organization should facilitate to its employees to suggest their new ideas, experiences and more convenient methods of work. Subordinates should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. It helps in developing an atmosphere of trust and understanding. People then enjoy working in the organization because it adds to their zeal and energy. They can be encouraged with the help of monetary &
non-monetary incentives.

Espirit de Corps
It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. In order to achieve the best possible results, individual and group efforts are to be strongly integrated and coordinated. While working in team must require subordinates from all level, whole-hearted support and co-operation and they should sacrifice their personal interest and contribute his best energies to achieve the best possible results. Following steps should be undertaken to inculcate Espirit de Corps: There should be proper co-ordination of work at all levels.

Subordinates should be encouraged to develop informal relations among themselves. Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society.

Henri Fayol’s 14 principles of management clearly explain how management should interact with the personnel. Fayol’s 14 principles of management covers concepts in a extensive way, therefore almost any business can apply his theory of management. Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation. Above mentioned Fayol’s 14 principles are universally accepted and those principles meet the requirements of modern management. These 14 principles of management are essential to implement in any organization if they wish to have a better working environment, run the business effectively, to stand in the top of the market etc.

Art requires application of knowledge and skill to trying about desired results. Art may be defined as personalized application of general theoretical principles for achieving best possible results. Science is a systematic body of knowledge relating to a specific field of study that contains general facts which explains a phenomenon. Following are the characters of art:

Practical Knowledge: Every art needs practical knowledge therefore understanding the theory part is not sufficient. It is essential to know practical application of theoretical principles. such as if a person want be a anchor, he may not only be having the dare to come out in front of audience but need to know how to entertain the audience, how to fix up the technical problems which occurs while happening on the stage etc. Likewise a superior can never be successful just by obtaining a certificate or diploma in management; he must have also know how to apply various principles in real situations by functioning in capacity of supervisor.

Personal Skill: Although theoretical base may be same for every artist, but each one has his own style and approach towards his job. That is why the level of success of performance differs from one person to another. Example: There are many qualified singers in music industry but Michael Jackson is recognized for his style. In the same way management as an art is also personalized. Likewise, every supervisor has his own way of handling things based on his knowledge, experience and personality.

Creativity: Every artist has an element of creativity in line. That is why he aims at inventing something that has never existed before which requires combination of intelligence and imagination. Management is also creative in nature like any other art. It adds human and non-human resources in useful way so as to achieve desired results. Like preparing a delicious food, it needs lots of ingredients to make it delicious.

Perfection through practice: We used to say in daily life “practice makes perfect”, in the same way every artist becomes more and more proficient through constant practice. Similarly supervisors learn through an art of trial and error initially but application of management principles over the years makes them perfect in the job of supervising.

Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same manner, management is also directed towards accomplishment of pre-determined goals. Superiors use various resources like men, money, material, machinery and methods to promote growth of an organization.

The above mentioned points clearly reveals that management combines features of both science as well as art. It is considered as a science because it has an organized body knowledge which contains certain universal truth. It is called an art because managing a business implies certain skills which are personal possessions of managers. Science provides the knowledge and art deals with the application of knowledge and skills. A manager to be successful in his profession must acquire the knowledge of science and the art of applying it. Therefore, management is a judicious blend of science as well as an art because it proves the principles and the way these principles are applied is a matter of art.

References
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