A project report on Fayol's

Principles Of Management.

Netaji Subhash
Chandra Bose Higher
Secondary
School,Sambalpur.

Subject:- Business Studies and Management.

Name of the student:- Aparna Sahoo.

Class:-+2 Second Year Commerce.
Exam Roll no.:-
Regd. No.:- ND15C18095.

Signature Signature
Signature

Of the Of the
Of the

Student. External.
Internal.
 ABSTRACT
Life insurance in it modern form come to INDIA from England in 1818

with the formation of Oriental life insurance company. The government of

INDIA nationalised the life insurance industry in 01/09/1956 for year their

after insurance remained a monopoly of the public sector.

It was only after seven year of deliberation and debate that

R.N.MALHOTRA Committee report of 1994 become the first serious

document. Calling for the re-opening of the insurance sector was to private

players. The sector was finally opened up to private players in 2001.

The objectives of the study are to compare the financial performance

of LIC Of INDIA and private sector life insurance companies INDIA to

understand the concept and mechanisms of insurance.

The study is divided into four categories. The first category is

"INTRODUCTIONS" and "METHODOLOGY". The second category is described

about the "ANALYSIS AND INTERPRETATION". In the third category,we

have "CONCLUSION". And finally we have "BIBLIOGRAPHY" in the fourth

category.

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 CONTENTS

SL.N Topics Page no.

o
1. Introduction. 1-2

2. Methodology. 3

3. Analysis and 4-12

interpretation.
4. Conclusion. 13

5. Bibliography. 14

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 INTRODUCTIONS
Life insurance corporation:-
Life Insurance Corporation of India is the only public sector life

insurance company in India. It was founded in 1956 with the

measure of

more than 245 insurance companies and provident society.

LIC has its headquarters in Mumbai the commercial capital of

India

and currently functions with 8 zonal office and 113 divisional

offices.

It is the largest life insurance company in India with over

2000

branches and over 14 lakh agents to solicit life insurance business

in the

country.

LIC provides wide range of life insurance plans from pure

term

insurance plans to saving and investment products. It has a

phenomenal

presence in both urban and rural India.

Henry Fayol:-
Henry Fayol (1841-1975). Henry Fayol was born in France. He got
degree

in mining engineering in 1860 and started working as engineer in

a coal
mining company in 1888 , he was promoted as the managing
director of

the company at that time the company was situation of insolvency.

He accepted the challenge and applied his managerial

techniques to

bring out the company from this situation and he succeeded.

When he retired after 30 years the company was a leading

coal

mining company with financial background.

His principle of management came to the notice of the

public when

he published then in a book in 1916.

Management:-
According to Henry Fayol," To manage is to forecast and plan , to
organising,

to command , to co-ordinate and to control."

From the above definition we found 5 function:-

1. Planning :- Planning is the primary and very important function

for
management. Planning is deciding in advance what is to be done
in
future.
2. Organising :- The energy of every individual is channelised to
achieve the
enterprise objectives. The function of organising is to
arrange,guide,

co-ordinate,direct and control the activities of other factors of

production,like men,material,money and machine so as to

accomplish
the objective of the enterprise.
3. Staffing :- The function involves manning the positions created by
organisation process. It is concerned with human resources of an
organisation.
4. Directing :- Directing is concerned with carrying out the desired
plans. It
initiates organised and planned action and ensures effective
performance
by subordinates towards the accomplishment of group activities.
5. Controlling :- Controlling can be defined as, "Determining what is
being
accomplished,that is evaluating the performance,if necessary,
applying
corrective measures so that the performance takes place
according to
plans."

Note:- Modern authors, however, do not view co-ordination

as a

separate function of management.

Objectives of the study:-

1. To study the 14 various principles of management of the
organisation.

2. To study the effectiveness and efficiency of the organisation by

the use

various Principles of Management.

Organisations selection:-
In order to achieve the objective of this project we needed an
organisation

where business is carried on a medium scale and various activities

are

performed.

On the advice of our class in charge metal Pvt. Ltd. India

was
selected because it had following characteristics:-

1. It is capable of fullfilling the purpose of project.

2. It is situated nearby and visiting it would be easy.

Organisation detail:-
Name :- Jk metal Pvt. Ltd. India.

Year of establishment :- 2004.

Number of employees :- 20.

Annual sales :- 40 crores.

Annual profit :- 5 crores.

Fixed assets :- 3 crores.

Current assets :- 5 crores.

Area served :- All India.

Levels of management:-
 There are 3 levels of management and those are:-
1. Top level management:- The top level consists of the board of
directors,
president, vice President, CEO, etc. They are responsible for controlling
and over seeing the entire organisation. They set a tone at the top and
develop strategic plans, company policies and make decisions on the
direction of the business. These managers plays a significant role to the
shareholders and general public.
2. Middle level management:- These consists of general managers, branch
managers and development managers. They are accountable to the top
level management for their departmental functions. They define and
discuss information and policies from top level management to lower
level management and most importantly they provide guidance to lower
level managers towards better performance.
3. Lower level management:- This level consists of supervisors, section
lead,
foremen etc. They focus on controlling and directing. They usually have
the responsibility of assigning employees tasks guiding and supervising
 employees on day to day activity, enduring quality and standard of
goods.

METHODOLOGY
 The present research study is based on secondary data.
 14 principles of management.

Sample questions:-
1. Do you have all the authority connected with your work?
2. Do you get orders from more than one boss?
3. Do you give top priority to the interests of the company?
4. Do you get reasonable remuneration?
5. Are the daily decisions made by the person concerned?
6. Are the major decisions taken only by the higher authorities?
7. Does the boss directly communicate with you?
8. Does your company give equal remuneration to all the employees doing a similar
job?
9. Have you served this company for more than one year?
10. Does your boss give importance to your suggestions?

ANALYSIS AND
INTERPRETATION
 Based on sample questions:-
1. Principle of division of work:-

According to the principle whole work should be divided into small

parts and each individual should be assigned only one part of the work
according to his ability and taste.
When a particular individual performs the same job repeatedly,
he will become an expert in doing that particular work and so that the
benefit of specialisation may be achieved.

2. Principle of parity between authority and responsibility:-

Authority means power to take decision. Responsibility means obligation

to complete the job on time. According to the principle, there should

be a proper balance between authority and responsibility. Excess of

 authority without matching responsibility may bring negative results

and excess of responsibility without matching authority will not allow

the worker to complete his job on time.

Questions Ye No No No. Of respondents

s response

Do you have all the authority 14 3 3 20

connected with your work?

3. Principle of discipline:-

Discipline means obedience, respect for authority and observance of

rules. According to this principle, the organisational rules and

employment agreement should be obeyed by both the superior and

subordinates which are necessary for the successful working of the

organisation.

Discipline can be established by:-

 Providing good supervision at all levels.

 Clearly explaining the rules.
 Implementing a system of reward and punishment.

4. Principle of unity of command:-

According to this principle, an individual employee should receive order

from only on superior at a time and that employee should be

answerable only to that superior. If there are many superior giving

orders to the same employee, he will not be able to decide as to which

order is to be given priority. He thus find himself in a confused

situation such a situation adversely affects the efficiency of the

subordinates.

Questions Ye N No response No. Of reapondents

s o

Do you get orders from more 2 16 2 20

than one boss?

5. Principle of unity of direction:-

Unity of direction means that there should be one head for one plan

for a group of activities having same objective. In other words all the

activities should be carried under the direction of one head. In this

connection Fayol feels that for the efficient running of an organisation

the unity of direction is important to enhance the efficiency of the

employee.

6. Principle of subordination of individual interest to general interest:-

According to this principle, the interest of an organisation should give

priority over the interests of one individual employee. In an

organisation even individual interest has its own interests.

Questions Ye No No response No. Of

s respondents

Do you give top priority of 16 2 2 20

the interests of the company?

7. Principle of fair remuneration to employees:-

Fayol is of the opinion that the employees should get a fair

remuneration. So that the employees and the owners final

equal amount of satisfaction.

It is manager to ensure that employees are being

paid remuneration according to their work with perfect

dedication, honesty and capacity. As a result, the

organisation shall have to face failure. Fair remuneration

should be determined on the basis of :-

  Government laws relating to wages.
 Financial position of the organisation.
 Demand of labour and their ability.

8. Principle of effective centralisation and decentralisation:-

If the power to take decision rests with top level management, then

it is called "Centralisation". But if the power to take decision is given

to the person performing the job at middle and lower level

management, then it is called "Decentralisation".

Fayol is of the opinion that there should be a proper balance

between centralisation and decentralisation.

Questions Ye No No No. Of
s response respondents

Are the major decisions taken 18 0 2 20

only by the higher authorities?

9. Principle of scalar chain:-

It refers to a formal line of authority which moves from highest to

lowest ranks in a straight line. This chain must be followed in a

strict manner. It means each order or communications must move

from top to bottom and vice-versa in a straight line. Fayol has

explained this principle with the help of a ladder. Due to more clear

system of authority and communication problem can be solved faster.

Gang plank is the exception of this principle of scalar chain. This

gang plank concept was developed to establish a direct contact with

the employee of equal rank in case of emergency to avoid delay in

communication.

Questions Ye N No response No. Of

s o respondents

Does the boss of your boss 10 5 5 20

directly communicate with you?

10. Principle of order:-

In this principle order does not mean command but it refers to

orderly arrangement of men and materials. According to this principle

of order, a right person should be placed at the right job and right

thing (material) should be placed at the right place.

11. Principle of equity:-

Equity refers to fair treatment i.e., kind and justice in part of superior

while dealing with their subordinates. All the employees should be

treated equally and impartially.

Fayol tells us in connection with this principle that there

should not be any equality of treatment between a person whose

work is really good and a person who is a shirker by nature. Rather

to the latter should be treated properly. Doing so will be equitable.

Questions Ye N No No. Of
s o response respondents

Does your company give equal 16 4 0 20

remuneration to all the employees
doing a similar job?

12. Principle of stability in the tenure of Personnel:-

From the point of view of management it is absolutely harmful to

change the employees frequently as it is a reflection of inefficient

management. Therefore according to this principle there should be

stability in the tenure of the employees so that the work continues

 efficiently. Fayol think that instability in the tenure of employees is a

case of poor management and results high rate of labour turnover.

Questions Yes N No No. Of

o response respondents

Have you served this company 12 8 0 20

for more than one year?

13. Principle of initiative:-

According to this principle, employee in the organisation must give

an opportunity in making and executing plan. It is the duty of the

manager to encourage the feeling of initiative among his employees

for doing some work or taking some work or taking some decision

but within the limits of authority and discipline. By doing so the

subordinates will present new and useful ideas.

14. Principle of Esprit De Corps:-

As per this principle, a manager should continuously make efforts to develop a

team spirit among the subordinates. To do this, he/she should use the word "we"
instead of "I" during the conversation with the subordinates.

T- Together.

E- Everyone.

A- Achieves.

M- More.

Esprit De Corps helps in achievement of group

goals.

Questions Yes N No response No. Of

o respondents
Does your boss give 14 4 2 20
importance to your
suggestions?

CONCLUSION
The concerned company JK metals Pvt. Ltd. India is a production unit.

Company needs New talent and experience to achieve organisational

objectives. If we compare the different factors with the basic principles

governed by Henry Fayol, we get some clue about the management.

 Planning process of the organisation is good but not effective.

 Organising procedure of the company is definitely excellent.
 The staffing process lacks the presence of experience staff.
 A production process are conducted by the staff they know the
advantages and the problems in their units. Management ignore their
ideas.
 Controlling process of these organisation is awesome because the
boss Co-ordinate with employees directly.

Suggestions for the management:-

 The company should focus more on experience staff in the company.

 The opinion of senior staff should get more importance on decision
making.
 People working in several units should participate more in the
directing process. In this way company get the benefit of both
experience and innovation.
 Some dedicated staff in the company with their maximum effort.
They deserve promotion.
 There are some people in the organisation who are trying to
dominate the voice and talent of junior staff. Organisation needs to
identify them and warn for future.

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BIBLIOGRAPHY
In making of this project most of the help was given by my teacher Mr.
Kaushik Dash (lecturer of Business Studies and Management).

Other sources:-

1. Books:-
 NCERT- Text book in Business Studies.
2. Newspaper:-

 Hindustan Times.
 The Times of India.

3. Magazine:-

 Business today.

4. Internet:-

 WWW. Topper Learning . Com.

 WWW. CHSE guide . Com.
 WWW. LIC . Com.

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