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14 Principles of Management of Henry Fayol

Henry Fayol listed and reviewed fourteen principles of management on the following aspects.

Division of Work: He emphasizes the production of more and better work with the same effort as the object of division of work. He stresses that each change of work, whether of the worker or the manager, brings in its train an adaptation which reduces output. Whilst advocating specialization and division of work as the best means of making use of individuals and groups of people, he warns that division of work has its limits which must not be exceeded. (Henry Fayol General Principles of Management, 2012)

Authority and Responsibility: He explains authority as "the right to give orders and the power to exact obedience". He distinguishes between a manager's official authority which is derived from his office and personal authority which is "compounded of intelligence, experience, moral worth, ability to lead, past services, etc." He observes responsibility as a corollary of authority, as its natural consequence and essential counterpart. An interesting observation made is his stress on responsibility being feared as much as authority is sought after which requires the good leader to Infuse in persons around him "courage to accept responsibility".

Discipline: He believes discipline is absolutely essential for the smooth running of business. The best means of establishing and maintaining discipline are good superiors at all levels, agreements as clear and fair as possible, and sanctions (penalty) judiciously applied.

Unity of Command: Here he advocates that an employee must receive orders from one superior only for any action whatsoever. Uneasiness is felt immediately when two superiors wield their authority over the same person or department. He feels that dual command is a perpetual source of conflict.

Unity of Direction: This is explained as "one head and one plan for a group of activities having the same objective". This is essential for

Motivation responsible consider

"unity of action, co-ordination of strength and focusing of effort". Unity of direction refers to "one head, one plan" whilst unity of command emphasizes "one employee to have orders from one superior only".

Subordination of Individual Interest to General Interest: The interest of one employee or group of employees must not prevail over that of the concern. He stresses that although this is so obvious, it is lost sight of because of ignorance, ambition, selfishness, laziness and weaknesses. All human passions tend to cause the overlooking of the general interest.

Remuneration: Remuneration being the price of services rendered by personnel, should be fair and must, as far as possible, afford satisfaction to both the personnel and the firm.

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Centralization: He explains this as "everything which goes to increase the importance of the sub-ordinate's role is decentralization, everything which goes to reduce it is centralization". A certain extent of centralization or decentralization automatically exists and it is more a matter of finding the "optimum degree for the particular concern".

Scalar Chain: He looks upon the scalar chain as "a chain of superiors ranging from the ultimate authority to the lowest ranks". Thus the line of authority is routed via every link in the chain by all communications which commence from or reach the ultimate authority. This path is

"disastrously lengthy in large concerns, notably In governmental ones". One should not depart needlessly from the line of authority but it is even a greater error to stick to it when detrimental to the business.

Order: The formula given here is "a place for everything and everything in its place" (for material things) and "a place for everyone and everyone in his place" (for human order). It is a principle of organization for arrangement of material things and human beings. It is a must for both material order and social order.

Equity: "He feels that the head of the business must strive to instil a sense of equity throughout all levels of the scholar chain". To evoke devotion and royalty from the personnel, it is necessary to treat them with kindness. Equity results from kindliness and justice.

Stability of Tenure of Personnel: He feels that instability of tenure constitutes the cause and effect of bad management. Time is required for an employee to succeed in his new work assuming he possesses these requisite qualities. He opines that often "a mediocre manager who stays is infinitely preferable to outstanding managers who merely come and go."

Initiative: He stresses the need to encourage and develop to the fullest extent initiative or the "power of thinking out and executing". He advocates that the manager should even "sacrifice some personal vanity" to provide this satisfaction to his subordinates.

Esprit de Corps: As "union is strength", harmony and union among the personnel constitute the great strength of a concern. The dangers to be avoided are a misguided interpretation of the motto "divide and rule" and misunderstandings caused through poor communication.

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Principles of Management inShare10

A principle refers to a fundamental truth. It establishes cause and effect relationship between two or more variables under given situation. They serve as a guide to thought & actions. Therefore, management principles are the statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions. These principles are derived: -

a. On the basis of observation and analysis i.e. practical experience of managers.

b. By conducting experimental studies.

There are 14 Principles of Management described by Henri Fayol.1. Division of Labor

a. Henry Fayol has stressed on the specialization of jobs.

b. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area.

c. Subdivision of work makes it simpler and results in efficiency.

d. It also helps the individual in acquiring speed, accuracy in his performance.

e. Specialization leads to efficiency & economy in spheres of business.

2. Party of Authority & Responsibilitya. Authority & responsibility are co-existing.

b. If authority is given to a person, he should also be made responsible.

c. In a same way, if anyone is made responsible for any job, he should also have concerned authority.

d. Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned.

e. There should be a balance between the two i.e. they must go hand in hand.

f. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.

3. Principle of One Bossa. A sub-ordinate should receive orders and be accountable to one and

only one boss at a time.

b. In other words, a sub-ordinate should not receive instructions from more than one person because -

- It undermines authority- Weakens discipline- Divides loyalty- Creates confusion- Delays and chaos- Escaping responsibilities- Duplication of work- Overlapping of efforts

c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential.

d. Unity of command provides the enterprise a disciplined, stable & orderly existence.

e. It creates harmonious relationship between superiors and sub-ordinates.

4. Unity of Direction

a. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives.

b. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager.

c. According to this principle, efforts of all the members of the organization should be directed towards common goal.

d. Without unity of direction, unity of action cannot be achieved.

e. In fact, unity of command is not possible without unity of direction.

Basis Unity of command Unity of direction

Meaning It implies that a sub-ordinate should receive orders & instructions from only one boss.

It means one head, one plan for a group of activities having similar objectives.

Nature It is related to the functioning of personnel’s.

It is related to the functioning of departments, or organization as a whole.

Necessity It is necessary for fixing responsibility of each subordinates.

It is necessary for sound organization.

Advantage It avoids conflicts, confusion & chaos.

It avoids duplication of efforts and wastage of resources.

Result It leads to better superior sub- It leads to smooth running of

ordinate relationship. the enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically comes from the unity of direction.

5. Equitya. Equity means combination of fairness, kindness & justice.

b. The employees should be treated with kindness & equity if devotion is expected of them.

c. It implies that managers should be fair and impartial while dealing with the subordinates.

d. They should give similar treatment to people of similar position.

e. They should not discriminate with respect to age, caste, sex, religion, relation etc.

f. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate.

g. But equity does not mean total absence of harshness.

h. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”.

6. Ordera. This principle is concerned with proper & systematic arrangement of

things and people.

b. Arrangement of things is called material order and placement of people is called social order.

c. Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity.

d. Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for every one and everyone should have a specific place so that they can easily be contacted whenever need arises.

7. Disciplinea. According to Fayol, “Discipline means sincerity, obedience, respect of

authority & observance of rules and regulations of the enterprise”.

b. This principle applies that subordinate should respect their superiors and obey their order.

c. It is an important requisite for smooth running of the enterprise.

d. Discipline is not only required on path of subordinates but also on the part of management.

e. Discipline can be enforced if -

- There are good superiors at all levels. - There are clear & fair agreements with workers. - Sanctions (punishments) are judiciously applied.

8. Initiativea. Workers should be encouraged to take initiative in the work assigned

to them.

b. It means eagerness to initiate actions without being asked to do so.

c. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work.

d. It helps in developing an atmosphere of trust and understanding.

e. People then enjoy working in the organization because it adds to their zeal and energy.

f. To suggest improvement in formulation & implementation of place.

g. They can be encouraged with the help of monetary & non-monetary incentives.

9. Fair Remunerationa. The quantum and method of remuneration to be paid to the workers

should be fair, reasonable, satisfactory & rewarding of the efforts.

b. As far as possible it should accord satisfaction to both employer and the employees.

c. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc.

d. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work.

e. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

10. Stability of Tenurea. Fayol emphasized that employees should not be moved frequently

from one job position to another i.e. the period of service in a job should be fixed.

b. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served.

c. According to Fayol. “Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”.

d. As a result, the time, effort and money spent on training the worker will go waste.

e. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.

11. Scalar Chaina. Fayol defines scalar chain as ’The chain of superiors ranging from the

ultimate authority to the lowest”.

b. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain.

c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.

d. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two.

e. Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations

12. Sub-Ordination of Individual Interest to General Interesta. An organization is much bigger than the individual it constitutes

therefore interest of the undertaking should prevail in all circumstances.

b. As far as possible, reconciliation should be achieved between individual and group interests.

c. But in case of conflict, individual must sacrifice for bigger interests.

d. In order to achieve this attitude, it is essential that -

- Employees should be honest & sincere. - Proper & regular supervision of work. - Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc.

13. Espirit De’ Corps (can be achieved through unity of command)a. It refers to team spirit i.e. harmony in the work groups and mutual

understanding among the members.

b. Spirit De’ Corps inspires workers to work harder.

c. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run.

d. To inculcate Espirit De’ Corps following steps should be undertaken -

There should be proper co-ordination of work at all levels

Subordinates should be encouraged to develop informal relations among themselves.

Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability.

Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance.

Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society.

e. He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy

working in the organization & offer their best towards the organization.

14. Centralization & De-Centralizationa. Centralization means concentration of authority at the top level. In

other words, centralization is a situation in which top management retains most of the decision making authority.

b. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization.

c. According to Fayol, “Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc.

d. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization.

e. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.

fourteen principles of management login

characteristicsauthor: Fayol, Henri

country: France

period: 1919

type: model

role: consultant and manager

activity: analyse and reflect

topic: org. design & development and leadership & management

abstr. level: organisation

perspective: rational

status: final

module: classics I

comments: 2

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Henri Fayol, the father of the school of Systematic Management, realised that organisations were becoming more complex and required their managers to work more professionally. His motivation was to create a theoretical foundation for an educational program for managers who lacked formal training in those days. Basing his work on his experience as a successful managing director of a mining company, he developed generic 'Principles of Management' to help organisations achieve optimum performance working toward their goals.

 

Fayol described fourteen Principles of Management with the understanding that his list was neither exhaustive, nor universally applicable:

 

1. Division of labour

achieving the maximum efficiency from labour through specialisation across all aspects of organisation (commercial, financial, security, accounting, managerial) rather than just technical activities. Fayol did not provide the level of detail that Taylor's competing Scientific Management school prescribed. Scientific Management broke individual

operational tasks into its basic elements. Fayol claimed that division of labour is limited as an instrument to achieve optimum performance.

 

2. Establishment of authority

having the legitimate standing to give orders. Authority arises from two sources: official and personal. Experience, intelligence, integrity and leadership ability are indispensable complements of a manager's official authority. Managers need to act knowing that authority and responsibility are positively correlated.

 

3. Enforcement of discipline

upholding discipline is a core activity when running an organisation, although its form varies across organisations. Management can sanction employees with warnings, penalties, demotions or even dismissals.

 

4. Unity of command

an employee should receive orders from one supervisor only. Dual command generates tension, confusion and conflict, and results diluted responsibility and blurred communication.

 

5. Unity of direction

a common objective for a group of activities is an essential condition to obtaining unity of action, coordination of strength and the focusing of effort.

 

6. Subordination of individual interest to the interests of the organisation

reconciling general interest with that of the group or the individual is one of the greatest problems managers face and applies to the relationship between staff and supervisor as well. Too often, managers pursue personal interest rather than the common good.

 

7. Fair remuneration for all

Fayol determined compensation for services by considering both financial and non-financial factors and held that employee satisfaction is dependent on the composition of this mix.

 

8. Centralisation of control and authority

Fayol choose the 'living organism' as metaphor for an organisation when considering centralisation versus decentralisation. The level of centralisation is a matter of proportion as is the division of labour.

 

9. Adoption of a 'scalar chain'

the chain of supervision that connects the managing director to the lowest ranks. Fayol combined hierarchy that makes employees aware of their place and duties, with an organisation's lines of communication. When swift action is required, Fayol's grasp of the limitations of the formal organisation made him propose a system of delegated authority that facilitates horizontal communication.

 

10. A sense of order and purpose

a place for everything and everything in its place. Facilities must be tidy, materials orderly stored and staff selected according to strict procedures and clear job descriptions. Fayol advocated the creation of detailed organisational charts to support this Principle.

 

11. Equity and fairness

in dealings between staff and managers equity is the combination of justice and kindness. Managers must constantly apply the correct balance between equity and discipline.

 

12. Stability of jobs and positions

Fayol viewed personnel planning, management development and turnover as one activity. Both staff and management require suitable induction periods to familiarise themselves with new work habits and situations.

 

13. Development of individual initiative

Initiative is the power to conceive a plan and ensure its success. Although Fayol regarded management as the first responsible level, he made clear that the Principle extended to all employees through delegated authority.

 

14. Esprit de Corps

building and maintaining staff and management morale and unity. Fayol considered the management style of 'divide and rule' counter productive.

The Principles can still be used to identify structural flaws and sources of conflict within an organisation.

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Controlling a complex organisation so as to achieve desired goals resulted in the evolution of the concept management. Management include all those people who are concerned with managing an organisation. It is a sum of organised activities by a group of people. Management involves decision making at various levels of organisation for getting things done by others. It is both science and as well as an art, because the fundamentals of management are the same everywhere but the practices differ.

Definition of Management

To manage is to forecast and plan, to organise, to command, to co-ordinate and to control.

- Henry Fayol

Management is a distinct process consisting of planning, organising, activating and controlling to determine and accomplish the objectives by the use of people and resources.

- G.R. Terry

Management is the development of people and not the direction of things. Management is the personnel administration. - Lawrence A. Apply

Management is the art of getting things done through and with the people in formally organised groups.

- Horold Kanontz.

Management is simply the process of decision making and control over the action of human beings for the express purpose of attaining pre-determined goals.

- Stanley Vance.

Functions of Management

George and Jerry explained four fundamental functions of management. According to them functions of management are planning, organizing, actuating and controlling.

POSDCORB is the key word used by Luther Gullick to explain the functions of managment. In POSDCORB; P stands for planning, O for organizing, S for staffing, D for directing, Co for co-ordination, R for reporting and B for budgeting.

Newman and Summer gave the managerial functions which include organizing, planning, reading and measuring and controlling.

Koontz and O’Donnel explained five functions of management. They have become widely accepted functions of management everywhere. They are planning, organizing, staffing, directing and controlling.

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Five Functions of Management

1. Planning: Deciding in advance what to do, how to do, why to do, where to do and who will be responsible for doing is planning. Determination of the objectives of business, splitting of objectives into goals for each department of the organization and formulating policies,

programs, procedures rules and regulations and budget are the important steps involved in planning.

2. Organizing: Division of work into functions and sub-functions, grouping of activities that are closely related in their nature, assigning of duties and responsibilities to the employees and finally delegation of authority and power to each employee or the group to discharge their duties accordingly are the processes come under the function of management organizing.

3. Directing: Communication, leadership and supervision and last but not the least motivation are the elements come under the function of management, directing. Directing is nothing but guiding and leading the people in an organization. It is not just giving instructions by a superior to the sub-ordinates but also is a process of supervising, guiding and motivating the latter to achieve the organizational goals. It is a complex function of management that ensures the employees work effectively and efficiently.

4. Staffing: The process of making out, assessing, appointing, evaluating and developing the employees at work in an organization is staffing. In here the characteristics of a job are determined primarily. It is followed by ensuring of the right number of and kind of employees are placed at the right places and at the right time when organization is in need of them. Staffing function of management begins with notifying the vacancies in the organisation and selecting the best individuals as employees. Performance appraisal and man power development are the other processes involved under staffing function of management.

5. Controlling: It is the process that ensures whether the resources are obtained and used efficiently in achieving the organizational objectives. Controlling function of management is closely linked with the planning function because, it includes checking the performance of employees to see whether the planned performance is being achieved by them or not. Budgetary control, Inventory control, quality control, profit and loss control, Management audit, cost accounting and cost control, production control, financial control, break-even analysis and internal audit control are the important control devices of controlling techniques.

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Functions of Management

Planning Function of Management Planning is deciding in advance what to do and how to do.It is one of the basic managerial functions. Planning bridges the gap from where we are to where we want to go. It makes it possible for things to occur which would not otherwise happen.

Organizing Function of Management Organisation is the process of identifying and grouping of the works to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most efficiently.

Directing Function of Management Directing means giving instructions, guiding, counselling, motivating and leading the staff in an organisation in doing work to achieve Organisational goals. See Directing Definition, Importance of Directing and Elements of Direction - Supervision, M

Staffing Management Principles Staffing is the function by which managers build an organisation through the recruitment, selection, and development of individuals as capable employees.

Controlling Function of Management Controlling always maximise the use of scarce resources to achieve the purposeful behaviour of employees in an organisation. See Controlling Definition, Features of Controlling and Importance of Controlling.

AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.   (Onkar, 2008)

Bibliography

Henry Fayol General Principles of Management. (2012, March 5). Retrieved December 5, 2012, from Hub Pages Web site: http://dilipchandra12.hubpages.com/hub/General-Principles-of-Management

Onkar, M. (2008, December 8). HENRI FAYOL’S 14 Principles of Management. Retrieved December 5, 2012, from Management Innovations Web site: http://managementinnovations.wordpress.com/2008/12/04/henri-fayols-14-principles-of-management/

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