Bhasin’ limited was engaged in the business of food processing and selling its products under a popular brand. Lately the business was expanding due to good quality and reasonable prices. Also with more people working the market for processed food was increasing. New players were
also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had
to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which
had characterized the company, previously was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease. Actually the company had implemented changes without creating the required infrastructure.
Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
Explain these principles in brief.
What steps should the company management take in relation to the above principles to restore the company
also coming to cash in on the new trend. In order to keep its market share in the short run the company directed its existing workforce to work overtime. But this resulted in many problems. Due to increased pressure of work the efficiency of the workers declined. Sometimes the subordinates had
to work for more than one superior resulting in declining efficiency. The divisions that were previously working on one product were also made to work on two or more products. This resulted in a lot of overlapping and wastage. The workers were becoming indisciplined. The spirit of teamwork, which
had characterized the company, previously was beginning to wane. Workers were feeling cheated and initiative was declining. The quality of the products was beginning to decline and market share was on the verge of decrease. Actually the company had implemented changes without creating the required infrastructure.
Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
Explain these principles in brief.
What steps should the company management take in relation to the above principles to restore the company
Principles of 1. Division of work
2. Unity of command
3. Unity of direction
4. Discipline
5. Remuneration of personnel
6. Order
7. Initiative and
8. Esprit de corps are violated by the company.
The principles are explained below:
(i) Division of Work: The division of work divides the work into several tasks, and each task is performed by a trained specialist who draws expertise. According to Fayol, the purpose of division of work is to produce more and better work for the same effort. The work is done more efficiently and effectively if the work is divided among specialists.
(ii) Unity of command: Under the principle of unity of command an employee should receive orders from only one boss because if he gets orders from more than one boss he will get confused and the employee may not understand it Whose command should be executed first. And the employee may give an excuse by saying that if he gets orders from more than one boss then he is fulfilling the orders of the other boss. So there should be unity of order to avoid these confusions and excuses of the employees.
(iii) Unity of Direction: Unity of direction means that all the units of an organization should move towards common objectives with coordination. According to this principle, each group of activities with similar objectives should have a principal and a plan. And the organization and its members should be directed towards the attainment of the same goal. For example, if my company is manufacturing both mobiles and laptops then it should have two separate divisions for both and each division should have its own in-charge, planning and executive resources.
The following steps should the company management take in relation to the above principles to restore the company to its past glory:
(i) The company must increase its capital investment because the existing capacity of the company is not able to cooperate with the increased workload.
The principles are explained below:
(i) Division of Work: The division of work divides the work into several tasks, and each task is performed by a trained specialist who draws expertise. According to Fayol, the purpose of division of work is to produce more and better work for the same effort. The work is done more efficiently and effectively if the work is divided among specialists.
(ii) Unity of command: Under the principle of unity of command an employee should receive orders from only one boss because if he gets orders from more than one boss he will get confused and the employee may not understand it Whose command should be executed first. And the employee may give an excuse by saying that if he gets orders from more than one boss then he is fulfilling the orders of the other boss. So there should be unity of order to avoid these confusions and excuses of the employees.
(iii) Unity of Direction: Unity of direction means that all the units of an organization should move towards common objectives with coordination. According to this principle, each group of activities with similar objectives should have a principal and a plan. And the organization and its members should be directed towards the attainment of the same goal. For example, if my company is manufacturing both mobiles and laptops then it should have two separate divisions for both and each division should have its own in-charge, planning and executive resources.
(iv) Discipline: Discipline means following the organizational rules and employment contract which are essential for the functioning of the organization. Both the workers and the management should honor their commitments without prejudice to each other.
(v) Remuneration of employees: The overall salary and compensation should be fair to both the employees and the organization. All employees should be given a fair salary so that they get at least a fair living. And also the wages to be paid by the organization should be within the paying capacity of the organization.
(vi) Order: Order does not mean order, in fact order means order. According to this principle the right person should be in the right place and the right thing should be put in the right place. If everything is in right place then there will be no hindrance in business activities. And this will increase efficiency and productivity. And if the men and material are not kept in a systematic manner then at the right time or when the need arises they are not able to contact the right person and this will lead to delay in the work.
(vii) Initiative: Initiative means taking the first step with self-motivation. It means thinking and executing plans. According to Fayol in this theory workers should be encouraged to develop and implement their own plans for improvement. Initiatives should be encouraged but not meant to go against established practices and rules. A good company should have employee suggestion system and any good suggestion should be rewarded.
(viii) Esprit de Corps: It means that the management should promote a team spirit of unity and harmony among the employees. And the manager should replace 'I' with 'WE' in all his interactions with the workers. This will inculcate mutual trust and a sense of belonging among the team members. And it will also reduce the need to use penalties.
(v) Remuneration of employees: The overall salary and compensation should be fair to both the employees and the organization. All employees should be given a fair salary so that they get at least a fair living. And also the wages to be paid by the organization should be within the paying capacity of the organization.
(vi) Order: Order does not mean order, in fact order means order. According to this principle the right person should be in the right place and the right thing should be put in the right place. If everything is in right place then there will be no hindrance in business activities. And this will increase efficiency and productivity. And if the men and material are not kept in a systematic manner then at the right time or when the need arises they are not able to contact the right person and this will lead to delay in the work.
(vii) Initiative: Initiative means taking the first step with self-motivation. It means thinking and executing plans. According to Fayol in this theory workers should be encouraged to develop and implement their own plans for improvement. Initiatives should be encouraged but not meant to go against established practices and rules. A good company should have employee suggestion system and any good suggestion should be rewarded.
(viii) Esprit de Corps: It means that the management should promote a team spirit of unity and harmony among the employees. And the manager should replace 'I' with 'WE' in all his interactions with the workers. This will inculcate mutual trust and a sense of belonging among the team members. And it will also reduce the need to use penalties.
The following steps should the company management take in relation to the above principles to restore the company to its past glory:
(i) The company must increase its capital investment because the existing capacity of the company is not able to cooperate with the increased workload.
(ii) There must be unity of command, by making subordinates responsible to only one superior.
(iii) They should clearly define the authority responsibility relationships in context of expansion of production activity.
(iv) One division for one product should be followed to ensure unity of direction and division of work.
(v) Employees should be motivated by giving them incentive and motivated employees will lead to restore discipline, initiative and esprit de corps.
(vi) Fair remuneration should be given, to increase the efficiency of the employees.
(iv) One division for one product should be followed to ensure unity of direction and division of work.
(v) Employees should be motivated by giving them incentive and motivated employees will lead to restore discipline, initiative and esprit de corps.
(vi) Fair remuneration should be given, to increase the efficiency of the employees.
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