Business Studies Class 12 Project On Principles Of Management

Business Studies Class 12 Project On Principles Of Management

CERTIFICATE

This is to certify that Rahul Sharma of Class XII Commerce of GOVT BOYS SR SEC SCHOOL Tukhmirpur  , has completed his project file under my supervision. He has taken proper care and shown utmost sincerity in the completion of this project. I certify that this project is upto my expectation and as per the guidelines issued by C.B.S.E.

 

Mr. SP (Dept. of Commerce) 

GBSS SCHOOL Tukhmirpur 

Signature:

 

ACKNOWLEDGEMENT

I am very thankful to my Business Studies Teacher, Mr. SP Sir , who helped me in analyzing the application of Principles of Management. It made my concepts more clear, enhanced my knowledge and help me realize the importance of Principle of Management. I am also thankful to the C.B.S.E. for giving me such an amazing opportunity of making this project, and giving a suitable instruction and guidelines for the project.

Rahul Sharma 

XII Commerce

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INDEX

• Certificate
• Henry Fayol
•  Acknowledgement
• Biography Of Fayol

• Principles Of Management

1. Division Of Work
2. Authority and Responsibility 
3. Discipline 
4. Unity Of Command
5.  Unity Of Direction 
6. Sub-ordination Of Individual Interest
7. Remuneration Of Employees 
8. Centralization and Decentralization 
9. Scalar Chain 
10. Order 
11. Equity 
12. Stability of Personnel 
13. Initiative
14. Esprit de Corps

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Henri Fayol

Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration that is often called Fayolism. He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. Like his contemporary, Frederick Winslow Taylor, he is widely acknowledged as a founder of modern management methods.

 

Biography Of Fayol

Fayol was born in 1841 in a suburb of Istanbul, Ottoman Empire. His father (an engineer) was appointed superintendent of works to build the Galata Bridge, which bridged the Golden Horn. The family returned to France in 1847, where Fayol graduated from the mining academy “École Nationale Supérieure des Mines” in Saint-Étienne in 1860.

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In 1860 at the age of nineteen Fayol started the mining company named “Compagnie de Commentry – Fourchambault – Decazeville” in Commentry as the mining engineer. In 1888 he became managing director, when the mine company employed over 10,000 people, and held that position over 30 years until 1918. By 1900 the company was one of the largest producers of iron and steel in France and was regarded as a vital industry.

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Based largely on his own management experience, he developed his concept of administration. In 1916 he published these experience in the book “Administration Industrielle et Générale”, at about the same time as Frederick Winslow Taylor published his Principles of Scientific Management.

 

Principles of Management

• Division of Work – Fayol presented work specialization as the best way to use the human resources of the organization. Authority – Managers must be able to give orders.
• Authority gives them this right. Note that responsibility arises wherever authority is exercised.
• Discipline – Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership.
• Unity of command – Every employee should receive orders from only one superior.
• Unity of direction – Each group of organizational activities that have the same objective should be directed by one manager using one plan for achievement of one common goal.
• Subordination – The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole.
• Remuneration – Workers must be paid a fair wage for their services. • Centralization – Centralization refers to the degree to which subordinates are involved in decision making.
• Scalar chain – The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain.
• Order – this principle is concerned with systematic arrangement of men, machine, material etc. there should be a specific place for every employee in an organization
• Equity – Managers should be kind and fair to their subordinates.
• Stability of tenure of personnel – High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.
• Initiative – Employees who are allowed to originate and carry out plans will exert high levels of effort.
• Esprit de corps – Promoting team spirit will build harmony and unity within the organization.

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Division of Work

The specialization of the workforce according to the skills of a person, creating specific personal and professional development within the labour force and therefore increasing productivity; leads to specialization which increases the efficiency of labour. By separating a small part of work, the workers speed and accuracy in its performance increases. This principle is applicable to both technical as well as managerial work,. this can be made useful in case of project works too. Planning is to decide what to do before. Business Studies Class 12 Project On Principles Of Management

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We know that TATA Group is an umbrella that covers various business industries Considering this, it only makes sense to divide work by allocating it to different employees, thereby enabling them to build up experience and continuously increase and improve their skills. This leads to increased productivity and ultimately higher profits. Business Studies Class 12 Project On Principles Of Management

For instance, Tata Beverage Group recruits for the following areas :

• Plantation Management
•  Finance  Business Studies Class 12 Project On Principles Of Management
• Sales and Distribution
•  Brand Marketing Business Studies Class 12 Project On Principles Of Management
• Information Technology 
• Medical Professionals

Authority and Responsibility

The issue of commands followed by responsibility for their consequences. Authority means the right of a superior to give enhance order to his subordinates; responsibility means obligation for performance. This principle suggests that there must be parity between authority and responsibility. They are co-existent and go together, and are two sides of the same coin. and the authority must be commensurate with responsibility. Business Studies Class 12 Project On Principles Of Management

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Authority, as defined by Fayol, is the right to give orders and the power to exact obedience. Tata Group realizes that MNCs decision making and conflict resolution follow a straight line. It believes that if decisions are held up due to conflicting viewpoints, the issue is expected to speedily traverse up the line for a resolution. Sometimes there is no empowerment.

For instance – An employee of a Tata Beverage Group is entrusted with confidentialinsider information. He shall not use or proliferate information that is not available to the investing public. By doing this, the company provides authority to its employees of holding such information. At the same time, responsibility is exacted by the employees that this information will remain confidential throughout their term with the company. Such insider information might include – Raising of finances, Restructuring plans., Asset revaluations, Financial information such as profits, earnings and dividends etc. Business Studies Class 12 Project On Principles Of Management

 

Discipline

Discipline refers to obedience, proper conduct in relation to others, respect of authority, etc. It is essential for the smooth functioning of all organizations. This will also help shape the culture inside the organization. Business Studies Class 12 Project On Principles Of Management

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Goes without mentioning, successful organization requires the common effort of workers, even if judicious use of penalties are required to exact this effort. Tata has drafted its own ‘Code of Conduct’ to guide the behavior of its employees. Highlights of this Code of Conduct :

•  “Every employee of a Tata company, including full-time directors and the chief executive, shall exhibit culturally appropriate deportment in the countries they operate in, and deal on behalf of the company with professionalism, honesty and integrity, while conforming to high moral and ethical standards. Business Studies Class 12 Project On Principles Of Management
• Every employee of a Tata company shall preserve the human rights of every individual and the community, and shall strive to honour commitments. Business Studies Class 12 Project On Principles Of Management
• Every employee shall be responsible for the implementation of and compliance with the Code in his/her environment. Failure to adhere to the Code could attract severe consequences, including termination of employment.”

Unity of Command

This principle states that every subordinate should receive orders and be accountable to one and only one superior. If an employee receives orders from more than one superior, it is likely to create confusion and conflict . Unity of Command also makes it easier to fix responsibility for mistakes and the authority should be commensurate with responsibility

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Workers should receive orders from only one Manager.

The Management team for each department within Tata Beverage Group has been clearly defined. Each employee under his/her respective department should receive orders from the manager of the department. Various managers of different departments are as follows – Business Studies Class 12 Project On Principles Of Management

• Hameed Huq – Managing Director ► MD Kumar – Executive

Unity of Direction

All those working in the same line of activity must understand and pursue the same objectives. All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager. It seeks to ensure unity of action, focusing of efforts and coordination of strength.

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The entire organization should be moving towards a common objective in a common direction.

Tata Beverage Group cooperates with other Tata companies including applicable joint ventures, by sharing knowledge and physical, human and management resources, to achieve common goals and objectives. The entire Tata Group as a family, has a single direction. Also, as mentioned in the code of conduct, a Tata company shall recommend to its board of directors the adoption of policies and guidelines periodically formulated by Tata Sons. This provides an example of how a policy framework laid down by the superior body guides and directs the companies to a common objective. Business Studies Class 12 Project On Principles Of Management

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Subordination of Individual Interest

The management must put aside personal considerations and put company objectives first. Therefore the interests of goals of the organization must prevail over the personal interests of individuals. Business Studies Class 12 Project On Principles Of Management

The interests of one person should not take priority over the interests of the organization as a whole. The Code of Conduct of Tata Beverage Group clearly states that an employee or director of the company shall always act in the interest of the company.

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He/she should ensure that any business or personal association which he/she may have does not involve a conflict of interest with the operations of the company and his / her role therein. The Code of Conduct cites 3 areas of actual or potential conflict of interests. One of the highlights warns employees that the interest of the company or group cannot be compromised. Any personal interest that may potentially influence company interest should be disclosed. Failure to do so can lead to suitable disciplinary action. Business Studies Class 12 Project On Principles Of Management

 

Remuneration Of Employees 

Workers must be paid sufficiently as this is a chief motivation of employees and therefore greatly influences productivity. The quantum and methods of remuneration payable should be fair, reasonable and rewarding of effort. Remuneration is paid to worker as per their capacity and productivity. The main objective of an organization is to maximize the wealth and the net profit as well. For this purpose, the organization has paid wages, salary, and benefit to their staff properly and scientifically so that organizational efficiency can be ensured. Business Studies Class 12 Project On Principles Of Management

Worker’s rate of pay is subject to several variables such as cost of living, general business conditions etc.

Tata Group follows this principle. For instance, Since the Economic Value Added (EVA) targets for the third quarter of FY 2007-2008 were not met, TCS announced its plans to slash 1.5 percent of the variable component of employee salaries.

[The variable part of the salary was arrived after considering business unit EVA, corporate EVA, and also individual performance EVA.]

 

Centralization and Decentralization 

The amount of power wielded with the central management depends on company size. Centralization implies the concentration of decision making authority at the top management. Sharing of authority with lower levels is called decentralization. The organization should strive to achieve a proper balance. Business Studies Class 12 Project On Principles Of Management

Tata Group is a decentralized family of companies grouped into seven sectors. 

Tata Beverage Group –

• Human resources and communications, information technology, finance, production, procurement and research are handled at a global level. > 
• A global executive office is situated in London, comprising of Chief Executive and Deputy Chief Executive who oversee global operations, including factories and production, tea and coffee buying, and procurement. 
• Sales and Marketing operations have been decentralized. These operations have become the responsibility of 6 specific regions. Business Studies Class 12 Project On Principles Of Management
• The 6 key regions handling Sales and Marketing are – UK, Africa, US, South Asia, Canada and South America. Each region is led by a President.
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Scalar Chain

Scalar Chain refers to the chain of superiors ranging from top management to the lowest rank. The principle suggests that there should be a clear line of authority from top to bottom linking all managers at all levels. It is considered a chain of command. It involves a concept called a “gang plank” using which a subordinate may contact a superior or his superior in case of an emergency , defying the hierarchy of control. However the immediate superiors must be informed about the matter.

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Official Chain of Command that has to be strictly followed in an organization According to the Tata Group’s Code of Conduct – “Every employee of a Tata company shall promptly report to the management, and / or third-party ethics helpline, when she/he becomes aware of any actual or possible violation of the Code or an event of misconduct, act of misdemeanor or act not in the company’s interest.”

The specified Managerial Chain of Command is as follows – 

• Hameed Huq (Managing Director)
• MD Kumar (Executive Director – Finance) Business Studies Class 12 Project On Principles Of Management
• T Radhakrishnan (Vice-President – ICD Operations) 
• A.S. Muthanna (Vice-President – Plantations)  Business Studies Class 12 Project On Principles Of Management
• Christine F Jamal (Vice President – Corporate)
• MKC Pai (company secretary)

Order

According to the principle of order or order, the right person should be given the right job. and the right object should be placed in the right place. For example, Physical system for material resources and Social system for human resources.

To organize material resources means that there should be a proper place for everything and everything should be in its proper place. Business Studies Class 12 Project On Principles Of Management

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Similarly, to organize human resources means that there should be a place for every person and every person should be in his designated place.

Positive Effect

• Effective use of material resources and man-power. Business Studies Class 12 Project On Principles Of Management
• ‘No waste of time finding resources when needed.
• Better discipline. Business Studies Class 12 Project On Principles Of Management
• Violating Effect
• ‘Misuse of resources.

Equity

According to this principle, “Managers should deal with their subordinates as fairly as The behavior should be done so that they develop a sense of dedication towards the work. Business Studies Class 12 Project On Principles Of Management

 

“For example, a worker produces 10 units of goods in a day. Another worker, who is a relative of the manager, produces 8 units and both are paid equal wages. This is a violation of the principle of equity. The other worker should get less wages than before. Business Studies Class 12 Project On Principles Of Management

Positive Effect

• Employees remain satisfied. Business Studies Class 12 Project On Principles Of Management
• Increases the sense of dedication towards the organization.
• Skilled employees try to increase their skills further. Business Studies Class 12 Project On Principles Of Management
• ‘Unskilled workers try to acquire skills.

Stability of Personnel

According to this principle, “Stability should be created in the employees so that the work continues efficiently.”

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Positive Effect

•  Increase in employee confidence. Business Studies Class 12 Project On Principles Of Management
• Increase in the credibility of the organization. Business Studies Class 12 Project On Principles Of Management
• Inclination of skilled employees towards the organization.

Initiative

Using the initiative of employees can add strength and new ideas to an organization. Initiative on the part of employees is a source of strength for an organization because it provides new and better ideas. Employees are likely to take greater interest in the functioning of the organization. Business Studies Class 12 Project On Principles Of Management

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To instill and encourage initiative in employees, Tata Group has come up with “Tata Innovation Day’, also known as “Tata Innovista’ in 2010. On this day, following awards are given to innovation teams that come up with the best innovations

1. Promising Innovations – Given to the most successfully implemented innovations during the year.
2. Dare to Try- Award given to that team which made a valiant attempt for a major innovation, but failed. The award felicitates their spirit and encourage future initiative. Business Studies Class 12 Project On Principles Of Management
3. The Leading Edge – Award given for most innovative Business idea. Sub categories

• Innovative idea for one’s own company Business Studies Class 12 Project On Principles Of Management
• Innovative idea for a different Tata Company
• Innovative idea that is new to the Group

Esprit de Corps 

This refers to the need of managers to ensure and develop morale in the workplace; individually and communally. Team spirit helps develop an atmosphere of mutual trust and understanding.

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Tata Sponge Iron Lad. offers its employees the following to encourage and promote team spirit

• A work culture which stimulates innovation, team work & freedom to excel.
• Reward & Growth that is performance-driven Business Studies Class 12 Project On Principles Of Management
• Most contemporary perks & other amenities.
• Continuous training and development opportunities at all levels.

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