CSEET · Business Laws and Management

Principles of Management and Modern Approaches: formula sheet

Full chapter guide

Key formulas

Definition in one line: Management = Planning + Organising + Staffing + Directing + Controlling, to reach goals; Use this as the base of any definition answer. Some texts add coordination as the essence of all functions.
Effectiveness vs efficiency: Effectiveness = doing the right task; Efficiency = doing the task right (least cost); Efficiency is about means, effectiveness about ends.
Levels of management: Top (policy, strategy) → Middle (implementation, coordination) → Lower (supervision); Top level plans mainly in the long term; lower level deals with day-to-day operations.
Management as a field: Art (skill) + Science (principles, not exact) + Emerging profession; Never say it is a full profession.
Order of schools: Classical → Neo-classical (Human relations) → Behavioural → Modern (Systems, Contingency, Quantitative); Use this to place a thinker or idea in time. Schools overlap, so treat it as a broad sequence.
Classical school branches: Scientific (Taylor) + Administrative (Fayol) + Bureaucratic (Weber); Taylor is the shop-floor view, Fayol is the top-management view, Weber is the structure view.
Taylor's principles of scientific management: Science, not rule of thumb; Harmony, not discord; Cooperation, not individualism; Maximum output, not restricted output; Development of each person to greatest efficiency; These are the commonly listed principles. Related techniques include time study, motion study, differential piece rate and functional foremanship.
Key contributors: Taylor – scientific management; Fayol – 14 principles and five functions; Weber – bureaucracy; Mayo – Hawthorne and human relations; Maslow – need hierarchy; McGregor – Theory X and Y; Most MCQs ask you to match a name with a contribution.
Contingency idea: Best method = depends on the situation; The keyword is 'it depends'. No universal principle applies everywhere.
Fayol's five functions: Planning, Organising, Commanding, Coordinating, Controlling; Fayol's original list. Commanding is the same idea as directing; staffing is not separate in his list.
Unity of command: One employee → one superior; Concerns who gives orders to a person. Its absence causes confusion and conflict of orders.
Unity of direction: One group of activities with the same objective → one head, one plan; Concerns the whole team or department, not the individual. Its absence causes activities to pull in different ways.
Scalar chain and gang plank: Scalar chain = formal line from top to bottom; gang plank = direct cross-link between same-level employees; The gang plank allows quick communication when the chain is slow, with the knowledge of superiors.
Fayol vs Taylor: Fayol = top management, whole organisation; Taylor = shop floor, work efficiency; Fayol's principles are universal in application; Taylor's focus on tasks and workers.
Taylor's principles of scientific management: 1. Science, not rule of thumb | 2. Harmony, not discord | 3. Cooperation, not individualism | 4. Maximum output, in place of restricted output | 5. Development of each person to his greatest efficiency and prosperity; Learn all five in this order. Exam options often swap the pairs, so recall the 'not' part exactly.
Techniques of scientific management: Functional foremanship | Standardisation and simplification of work | Method study | Motion study | Time study | Fatigue study | Differential piece rate system; Know what each one does. Time study sets the standard time, motion study removes wasted movements, fatigue study fixes rest intervals.
Differential piece rate system: Efficient worker (at or above standard output): higher rate per piece | Inefficient worker (below standard): lower rate per piece; The rate depends on whether output meets the standard. Both rates apply to all units the worker makes that day. It rewards efficiency and penalises slow work.
Functional foremanship: 8 specialist foremen: 4 in the planning department and 4 in the production department; Planning side: route clerk, instruction card clerk, time and cost clerk, disciplinarian. Production side: speed boss, gang boss, repair boss, inspector.
Planning process (usual sequence): Set objectives → Develop premises → Identify alternatives → Evaluate alternatives → Select best alternative → Implement the plan → Follow up; Textbooks vary slightly in wording. Keep the order of ideas: objectives first, follow-up last.
Types of plans: Standing plans: policies, procedures, methods, rules | Single-use plans: programmes, projects, budgets; Standing plans are repeated. Single-use plans are made for one situation. Budgets are commonly placed under single-use plans in ICSI-style notes.
Organising process: Identify work → Divide into jobs → Group into departments → Assign duties → Establish reporting relationships; Authority and responsibility are assigned at the last stages.
Line vs line and staff: Line: direct vertical authority | Line and staff: line authority + specialist advisory staff; Staff officers advise. They do not command line managers.
Staffing process: Manpower planning → Recruitment → Selection → Placement and orientation → Training and development → Performance appraisal; Recruitment attracts candidates. Selection chooses among them.
Delegation vs decentralisation: Delegation: assigning authority to a subordinate for a task | Decentralisation: systematic spreading of decision power throughout the organisation; Delegation is an act of a manager and is necessary. Decentralisation is a policy choice and is optional.
Maslow's hierarchy (low to high): Physiological → Safety → Social → Esteem → Self-actualisation; Basic needs come first. Food, shelter and pay are physiological. Job security is safety. Friendship is social. Status and recognition are esteem.
Leadership styles: Autocratic = leader decides; Democratic = group consulted; Laissez-faire = group decides freely; Look for who takes the decision in the question.
Control process: Set standards → Measure actual performance → Compare with standards → Find deviations → Take corrective action; The order is fixed. Standards come first because nothing can be compared without them.
Elements of directing: Supervision + Motivation + Leadership + Communication; Directing is the function that starts and sustains action.
Coordination vs cooperation: Coordination = management's deliberate effort for unity; Cooperation = voluntary willingness to help; Coordination is a function of management. Cooperation is an attitude.
Systems approach: Inputs → Transformation process → Outputs (with feedback from the environment); Organisation is a set of interrelated parts; a business is an open system.
Contingency approach: Best method = depends on the situation ("if this, then that"); Rejects the idea of one universal best way to manage.
TQM core ideas: Customer focus + total employee involvement + continuous improvement + teamwork + fact-based decisions; Quality is everyone's job, not only the inspection department's.
MBO cycle: Set objectives jointly → Plan action → Work and monitor → Review results → Give feedback and reset; Associated with Peter Drucker; objectives are agreed between superior and subordinate.
Open vs closed system: Open = interacts with environment; Closed = does not; Business organisations are treated as open systems.

Quick revision

Management is getting things done through people to achieve organisational goals.
Management is both a science and an art, and it is a continuous process.
Taylor is known as the father of scientific management and worked on methods of work and efficiency.
Fayol gave 14 principles meant for the administration of the whole organisation.
Taylor's focus is the worker level, while Fayol's focus is the top and middle management level.
Unity of command means an employee receives orders from only one superior.
Unity of direction means one head and one plan for a group of activities with the same objective.
Planning decides in advance what to do, how to do it and who will do it.
Organising arranges resources and assigns duties; staffing fills positions with the right people.
Directing includes supervision, motivation, leadership and communication.
Coordination brings the efforts of different people and departments together.
Controlling compares actual results with plans and corrects deviations, so it links back to planning.

Common mistakes

Calling management an exact science. Fix: Write 'inexact' or 'behavioural' science, because results vary with human behaviour.
Saying management is a full profession. Fix: Say 'emerging profession'. No licence is compulsory and there is no single binding body or code for all managers.
Confusing Taylor with Fayol. Fix: Taylor is the father of scientific management (work at operator level). Fayol is the father of modern administrative theory (14 principles, management functions).
Saying the Hawthorne experiments proved that pay is the main motivator. Fix: The finding was that social factors, attention and group norms strongly affect output. Pay and physical conditions were not the whole story.
Mixing up unity of command and unity of direction. Fix: Command is about one person and one boss. Direction is about a group of activities and one plan.
Writing staffing as one of Fayol's five functions. Fix: Fayol's list is planning, organising, commanding, coordinating, controlling. Check the question for 'Fayol'.
Mixing up Taylor and Fayol Fix: Taylor is the shop floor, scientific methods and efficiency. Fayol is the top level, administration and 14 general principles.
Saying differential piece rate pays the same rate to all workers Fix: Differential means two rates. A higher rate for those who reach the standard and a lower rate for those who do not.
Treating delegation and decentralisation as the same thing. Fix: Delegation is one manager giving a task and authority to one subordinate. Decentralisation is a policy spreading decision power across the organisation. Delegation is compulsory in any firm. Decentralisation is a choice.
Placing recruitment and selection as the same step. Fix: Recruitment is searching for and attracting candidates. Selection is choosing the suitable ones from them. Recruitment comes first.

Exam tips

In Paper 4, expect direct one-mark questions on features, levels and art/science/profession. Learn the clue words.
Memorise the exact phrases 'inexact science' and 'emerging profession'; they are the usual correct options.
Learn the main difference between management and administration: administration decides policy at top level, management carries it out. Be ready for match-the-column.
Keep the top, middle and lower level roles in a small three-line table in your notes and revise it daily.
Make a one-page chart of thinker, school and key idea. Most MCQs in Paper 4 on this topic are direct matches.
Learn Taylor's techniques and Fayol's contribution as separate lists so you do not mix them.
For 'which school' questions, find the keyword first and then eliminate options. There is no negative marking, so always attempt every question.
Remember the Hawthorne conclusion in one line: social and group factors affect productivity.