Question

F Ltd. 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 the 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 characterised the company previously, was beginning to wane. Workers were feeling cheated and the 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.

Explain these principles in brief.

(i) Division of work

(ii) Unity of command

(iii) Unity of direction

(iv) Discipline

(v) Order

(vi) Initiative

(vii) Remuneration

(viii) Esprit de corps

Answer 1

(i) Unity of Direction: It implies that there should be one head and one plan for a group of activities having the same objective. All the related activities should be put under one group, and they should be in the control of one manager.

(ii) Equity: This principle emphasises kindliness and justice in the behaviour of managers towards workers.

There should be no discrimination against anyone on account of sex, religion, language, caste or belief and equal opportunities should be available for all.

(iii) Esprit De Corps: It means the union is the strength. Fayol emphasised on teamwork. This spirit brings harmony in the groups and they strive to work hard to achieve the targets of an organisation. For this. managers should replace 'I' with 'We' in all his conversations.

(iv) Order: According to this principle, there should be an orderly arrangement and specific place for everything (material order) and everyone (social order) in the organisation.

(v) Centralisation and Decentralisation: The concentration of decision-making authority is called centralisation whereas its dispersal among more than one person is known as decentralisation. According to Fayol, an organisation should strive to achieve a proper balance between centralisation and decentralisation according to the size of organisation, ability of superiors, ability of subordinates, etc. In general, large organisations have more decentralisation than small organisations.

(vi) Initiative: Fayol suggested that employees at all levels should take initiatives or actions without any force or foundations. They should be encouraged to develop and carry out plans for improvements. Initiative means taking the first step with self-motivation.