The Administrative Theory Of Management, Training And Development, And Ethical Practices In Accounting And Finance

Five Basic Elements of Management

Administrative theory of Management guides the managers regarding their interaction with the employees. Henry Fayol who was a French mining engineer, managing director and an industrialist evolved the 14 Principles of Management to guide those managers who were not practicing the scientific approach of management in his time. He is known for his contribution for his management science in his work “General and Industrial Management in 1929 A.D.  (Godwin et al., 2017).

So, in this assignment, the basic elements of management according to the Administrative theory of Management will be discussed. Also, the various aspects of training and development programs for the improvement of skills of the workforce will be analyzed and stated (Gambo, 2015).

Also, different aspects of ethics will be compared and contrasted with law. The ethical issues faced by the managers in the organizations will be analyzed    and resolved with the help of examples.

The administrative theory of the 14 Principles of Management was developed by Henri Fayol in 1911. He was the founder of theories of modern scientific management known as the principles of management (Peaucelle, 2015)   . As per the Administrative Theory of Management,   the five basic elements of management are as follows:

1. Planning: It refers to predicting  the future and developing  action plans accordingly
2. Organizing: It is the development of the structure where human and non-human resources can work together.
3. Commanding: It is the procedure of providing directions by the seniors to their juniors in an organization.
4. Coordinating: It is the procedure of assimilating the efforts of various departments for the fulfillment of the goals of the organization.
5. Controlling: It refers to comparing the real performance with the desired performance and evaluating if there is a need of improvement and implementing it to improve the performance (Mbalamula, Suru and Seni, 2017).

The 14 principles of management given by Henry Fayol are focused on five principle of management. So, the guidelines to effective management are as follows:

1. Division of work: Each work should be divided into small parts so that every division can be handled with greater ease and efficiency. The tasks should be allotted according to the employee’s skills and knowledge.
2. Authority and Responsibility: The authoritative power allows the management the right to give orders to its juniors. Thus authority and responsibility are the two sides of the same coin.
3. Discipline: It comprises of the basic values of the mission and vision of the organization and is crucial for the overall effectiveness of the organization.
4. Unity of Command:  The employee should report to one manager and must be accountable to that specific manager.
5. Unity of Direction: There should be only one leader and a single plan for similar series of activities having the same objective.
6. Subordination of individual interests: The main focus is on the goals of the organization rather than those of the employees. Thus the personal interests of the employees are subordinate to the organizational objectives.
7. Remuneration: Rewarding the efforts is crucial to keep the employees inspired and dynamic.
8. The Degree of Centralization: The organization should endeavor for a good equilibrium between the centralization and decentralization of decision making.
9. Scalar Chain: There should be an unambiguous line in the area of authority from top to bottom and each employee can contact the immediate senior in an emergency without challenging the chain of command.
10. Order: The organization should have appropriate assets at its disposal so it can function properly.
11. Equity: The employees should be treated fairly and impartially.
12. Stability of Tenure of Personnel: The management should try to reduce the employee turnover. They should employ the appropriate staff at the appropriate place.
13. Initiative: The employees should be allowed to express the new and creative ideas which will help in adding value to the organization.
14. Esprit de Corps: The management should strive for evaluation of the culture of mutual trust and understanding (Uzuegbu and Nnadozie, 2015)

The lessons learnt from Henri Fayol’s 14 principles of management can improve the managerial skills in following ways:

1. These are universal and can be applied according to the needs of the managers.  
2. These guidelines assist in specialization of the employees and help the workers to be more effective and efficient.
3. By giving the authority to perform the job to the employee, he will be able to perform his role responsibly.
4. By maintaining clarity of rules and punishment systems, there would be discipline in the organization.
5. Thus these principles have helped the manager to develop the necessary skills thereby making the management more effective (Charifzadehand Taschner, 2017).

Training is a methodical approach to evaluate knowledge, skills and attitude to attain maximum performance in an activity. The different methods to train the workers are as follows:

1. Systematic Approach: It comprises of  dividing the training procedures into various stages namely:

• Analysis: It comprises of evaluation of the objectives of training and the approach to equip the trainees with knowledge and expertise to meet the aims of the organization.
• Design: It consists of designing the training procedures in such a way that the learners and trainers can apply to meet the learning goals.
• Develop: It involves the procurement of the necessary resources which will assist in designing the training package.
• Implement: It comprises of practically implementing the training package into designing. It includes delivery of the training and arranging facilities for the training.
• Evaluating: It involves analyzing the training prior to and after its duration. It comprises of analyzing the trainees regarding the contents of the training and assessing their opinions on training (Biech, 2015).

1. Pre-service Training: It is the process of training through which the employees are made ready to perform a professional job. They are not entitled to receive a job unless they get affiliation from the institution.
2. In service-training: It is the process of improvement of the skills of the staff with the aim to develop the potential of the existing employees holding a position with the allocated job accountabilities. It can be divided into five types which are described below:

• Induction or Orientation Training: It is given immediately after the joining of the employee. The purpose of induction training is to develop an attitude of dedication among the employees for the service of the organization.
• Foundation Training: It is conducted for the purpose that the employees should be equipped with the professional knowledge of the rules and regulations of the government, administrative competences and leadership abilities etc.(Kolb, 2015).
• Maintenance or refresher training: It is conducted to upgrade the specific subject knowledge of the employees. It is conducted so that the employees are equipped with the new information and methods and the older ones are reviewed.
• On-the-Job Training: It is provided by the superiors to their subordinates regarding newly introduced skills and knowledge in the specified field.
• Career or Development Training: It is conducted to enhance the capabilities and skills of the employees to assist them in performing greater responsibilities at higher designations (Chartered Institute of Personnel and Development, 2015).

The analyses of training methods which can be used to upgrade the performance of the staff of the blue –Chip Company in London are as follows:

1. Off the job training methods: It assists the trainer to build good relationships with the new employees. It includes various methods such as Lecture method in which the trainer presents the content orally with the introduction and purpose of the topic. The other methods are Discussion, Audio Visual and Case Incident methods.
2. On the job Training methods: It involves various methods such as job instruction training method which comprises of four steps viz preparation, instruction, performance and follow up. The other methods are job rotation, apprenticeship, mentoring etc.
3. Technology based training: This type of training is designed for matching the learner’s needs and it helps in the retention of the employees. The various methods used in technology based training are computer based training which includes videos and animations which are useful for easy learning. The other methods are synchronous and non-synchronous training etc. (Asfaw, Argaw and Bayissa, 2015).

Ethics is a branch of moral philosophy which resolves the doubts and questions about morality such as good and bad , right and wrong, virtue and vice , justice etc. while   law is the system of regulations which is imposed by a framework of institutions. It shapes various aspects of the society such as politics and economics in numerous ways and plays the role of primary social mediator of associations between people (Aziz, Ghani and Shaari, 2016).

Laws are mandatory for people to follow whereas ethics are voluntary to follow in a business. Ethics are inherited since birth whereas laws are followed in accordance with requirement of specific actions. Ethics involve emotions whereas law is unemotional in its execution. Ethics guide how well the laws can be obeyed.

14 Principles of Management

Legal considerations are crucial than ethical considerations. Ethics suggest that the business must abide the law and act in the self-interest while law suggests that the managers must abide by the laws for the advantage for the company. Some activities of the business may be legal but they are not observed as ethical for the same time (Downe, Cowell and Morgan, 2016).

One example is manufacturing practices of Nike which is one of the largest manufacturers of sportswear in the world. While producing its majority of the products in South East Asia, its foreign workers were paid minimum wages and they were working in bad conditions for long hours. Although paying low wages to the workers is legal but it cannot manage their day to day expenses. As a result, they are buried in debts and this increases their bitterness towards the employees. As long as the organization is meeting the lowest wage criteria of the host country, nothing is unlawful about paying low wages but these practices are unethical (Hill, Jones and Schilling, 2014).

Ethics are crucial because they dictate human behavior and social interactions. For an organization to be ethically valued in the society, it must comply with the ethical principles. There are certain ethical issues which are faced by the managers such as discrimination of the employees, secretly letting out the customer details to third party without obtaining consent by the customer. They face the unethical issues pertaining to lying, fraud, deception and theft which may add economic value to the business (Hiekkataipale and Lamsa, 2016).

For example, the Kentucky Fried Chicken which is one of the most famous fast food brands in the world is facing with the ethical dilemma of providing greasy and unhealthy food to its customers. With the development of the living standard of the people, they are becoming aware of their heath. Their nutritional attitudes and behaviors are changing. This is the ethical dilemma which KFC is facing because it has already gained the reputation of proving fast food amongst its customers (Alvani and Jahromi, 2016).

In the case of KFC, it made a public apology for the use of oil containing Trans Fatty acids and food ingredients for cooking with Sudan Red. Also, it investigated the entire affair. It removed all the unhealthy options from its menu and replaced them with a new range of healthy options to pick from. To promote its new products and increase its sales, it reduced its cost of production and distributed special discount vouchers in public places which could also be downloaded from its official site (Lo, 2013).

Training Methods

Another example of ethical issues faced by the managers of the toy manufacturing companies. They are faced with the ethical issues relating to the employment of the underage and forced labor. On the contrary the law says that no one should be denied of employment based on their gender, age, origin or religion (IESE, 2016).

To overcome this problem, the company should employ children above 18 years of age and it should give vocational training to the minors so that they can earn their livelihood when they become major (Carroll, Brown and Buchholtz, 2017).

Conclusion 

Thus, to conclude, for an organization to be successful, it should assimilate the principles of Administrative Management Theory which endeavors to find a logical way to strategize the organization by formalizing administrative structures at work. As per Henry Fayol, the 14 principles of management provide guidelines for decision making and management actions.

Another aspect for the success of the company is organizational training and development programs. The training and development programs comprise of identifying the training needs , describing the  required learning, explaining the training objectives, planning the training program, implementing them and  reviewing the performance of the employees after the training has been conducted. Also, the company should follow the ethical standards for boosting up its image and to have an edge over others in the competitive market.

References 

Alvani, S.M. and Jahromi, S.K.(2016) Ethical Decision Making in Issues Management. IOSR Journal of Humanities and Social Science. 21(7), pp. 34-39.

Asfaw, A.M., Argaw, M.D. and Bayissa, L.(2015) The Impact of Training and Development on Employee Performance and Effectiveness: A Case Study of District Five Administration Office, Bole Sub-City, Addis Ababa, Ethiopia. Journal of Human Resource and Sustainability Studies. 2015(3),pp. 188-202.

Aziz, N.A.A., Ghani, A.H.A. and Shaari, H. (2016) Issues and Problems in Ethical Practices amongst Takaful Agents. International Review of Management and Marketing.6 (S4), pp. 21-26.

Biech, E. (2015) Training and Development for Dummies. John Wiley & Sons.

Carroll, A.B., Brown, J. and Buchholtz, A.K. (2017) Business & Society: Ethics, Sustainability & Stakeholder Management. Cengage Learning.

Charifzadeh, M. and Taschner, A. (2017) Management Accounting and Control: Tools and Concepts in a Central European Context. John Wiley & Sons.

Chartered Institute of Personnel and Development (2015) Learning and Development 2015 [online]. Available from: https://www.cipd.co.uk/Images/learning-development_2015_tcm18-11298.pdf  [Accessed 12^th March, 2018].

Downe, J., Cowell, R. and Morgan, K. (2016) What Determines Ethical Behavior in Public Organizations: Is It Rules or Leadership? Public Administration Review. 76(6),pp. 898-909.

Gambo , H.S.(2015) The Impact of Training and Development on Workers’ Productivity. Review of Public Administration and Management. 3(1),pp. 1-4.

Godwin, A., Handsome, O.E., Ayomide, W.E., Enobong, A.E. and Johnson, F.O.(2017) Application of the Henri Fayol Principles of Management in Startup Organizations. IOSR Journal of Business and Management. 19(10), pp. 78-85.

Hiekkataipale, M. M. and Lamsa, A. M. (2016)The Ethical Problems of Middle Managers and Their Perceived Organisational Consequences.  Transformations in Business & Economics. 15(3),  pp.36- 52.

Hill, C.W.L., Jones, G.R. and Schilling, M.A. (2014) Strategic Management: Theory & Cases: An Integrated Approach. Cengage Learning.

IESE(2016) Ethical Challenges in Strategic Management[online]. Available from: https://www.iese.edu/Aplicaciones/upload/IESECallPapers19SymposiumEthics.pdf [Accessed 12^th March, 2018].

Kolb, D.A. (2015) Experiential Learning: Experience as the Source of Learning and Development. Pearson Education.

Lo, B. (2013)Resolving Ethical Dilemmas: A Guide for Clinicians. Lippincott Williams & Wilkins.

Mbalamula, Y.S., Suru, M.H. and Seni, A.J.(2017) Utility of Henri Fayol’s Fourteen Principles in the Administration Process of Secondary Schools in Tanzani. International Journal of Education and Research.5(6),pp. 103-116.

Peaucelle, J.L. (2015) Henri Fayol, the Manager. Routledge.

Uzuegbu, C.P. and Nnadozie, C.O.(2015) Henry Fayol’s 14 Principles of Management: Implications for Libraries and Information Centres. Journal of Information Science Theory and Practice. 3(2), pp. 58-72.