In a reputed Co., for the last few days, differences have cropped up between management and workers. The workers were demanding more bonus. This matter hai aggravated so much that the attention of both the parties has been diverted from production to division of profit. Consequently, the profits of the company began to fall down. In order to assess the situation of company's rapidly falling profits, a team of specialists was invited. After investigation, besides the differences, one more fact was revealed. That fact was the Purchase Manager of the company was purchasing raw material from the company run by his own brother at a price more than market price. So, with the increase in cost, profit was reduced.
Due to poor performance, many customers also left the company.
(a) Which technique of scientific management will be suitable for the company and why?
(b) Which principle of management given by Henry Fayol is being ignored by the company? Explain briefly.
(c) Which factors of Business environment are affecting the company? Identify the type and factors.

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Solution

(a) The technique of scientific management which will be suitable for the company is Standardisation and Simplification of work.
Standardisation is the process of setting standards for different factors. Standards can be set for process, raw materials , time , product , methods etc in order to maximise the output keeping in mind the quality standards.
Simplification refers to the elimination of unwanted varieties , sizes , products and dimensions. In other words, simplification means optimum utilisation of resources.
(b) The principle of management by Henry Fayol which is ignored by the company is Principle of Remuneration of Employees.
According to this principle. the remuneration payable to the employees should be fair to both employees and the employer. The employees should get fair wages which ensure at least a reasonable standard of living. on the other hand , it should be within the paying capacity of the business.
(c) Business Environment is defined as the sum total of all the external factors and forces which influence the .The social factors of business environment is affecting the company . Changes in social environment affects the demand for the product, supply of labour and capital.

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1. Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
2. Explain these principles in brief.
3. What steps should the company management take in relation to the above principles to restore the company to its past glory?

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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 wasteage. The workers were becoming undisciplined. The spirit of teamwork, which had characterised 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.

a. Identify the Principles of Management (out of 14 given by Henry Fayol) that were being violated by the company.
b. Explain these principles in brief.
c. What steps should the company management take in relation to the above principles to restore the company to its past glory?

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.

Identify the principle of management (out of 14 given by Henry Fayol)that were being violated by the company.

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