‘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.
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?
a.
The following principles are violated by the company:
1. Division of work
2. Unity of command
3. Unity of direction
4. Discipline
5. Remuneration of personnel
6. Order
7. Initiative
8. Esprit de corps
b.
1. Division of work: Division of work separates the work into a number of tasks, and each task is performed by the trained specialist which leads to specialization. According to Fayol, the intention of division of work is to produce more and better work for the same effort. If the work is divided into specialists then the work is performed more efficiently and effectively.
2. Unity of command: Under the principle of unity of command an employee should receive orders from only one boss because if he receives orders from more than one boss then he will get confused and the employee may not understand whose orders should be executed first. And the employee may give excuses by saying that he was fulfilling the orders of the other boss if he receives orders from more than one boss. So to avoid these confusions and excuses of the employees there must be unity of command.
3. Unity of direction: Unity of direction means all the units of an organization should be moving towards the same objectives with coordination. According to this principle each group of activities having the same objective must have one head and one plan. And the organization and its members must be directed towards the achievement of the same goal. For example, if my company is manufacturing both mobile and laptop then it should have two different divisions for both of them and each division should have their own incharge, plans and executive resources.
4. Discipline: Discipline means obedience of organizational rules and employment agreement which are necessary for the working of the organization. The workers and the management both should honour their commitments without any prejudice toward one another.
5. Remuneration of employees: The overall pay and compensation should be fair for both the employees and the organization. All the employees should be given fair wages which give them at least a reasonable living. And at same time the wages paid by the organization should be within the paying capacity of the organization.
6. Order: Order doesn’t mean command it actually means orderliness. According to this principle the right person should be at the right place and the right thing should be placed at the right place. If everything will be at the right place then there will be no hindrance in the activities of business. And this will increase efficiency and productivity. And If the men and material are not placed in an organized manner then not be able to contact the right person at the right time or when required and this will delay work.
7. Initiative: Initiative refers to taking the first step with self motivation. It means thinking out and executing the plans. According to Fayol in this principle workers should be encouraged to develop and carry out their plans for improvement. Initiative should be encouraged but it doesn’t mean going against the established practices and rules. A good company should have an employee suggestion system and any good suggestion should be rewarded.
8. Esprit de Corps: This means that the management should promote a team spirit of unity and harmony among employees. And the manager should replace ‘I’ with ‘WE’ in all his conversation with the workers. This will give rise to a spirit of mutual trust and belongingness between team members. And this will also minimize the need for using penalties.
c.
1. The company must increase its capital investment because the existing capacity of the company is not able to cooperate with the increased workload.
2. There must be unity of command, by making subordinates responsible to only one superior.
3. They should clearly define the authority responsibility relationships in context of expansion of production activity.
4. One division for one product should be followed to ensure unity of direction and division of work.
5. Employees should be motivated by giving them incentive and motivated employees will lead to restore discipline, initiative and esprit de corps.
6. Fair remuneration should be given, to increase the efficiency of the employees.
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