Usedgol

The 14 Principles of Management were first introduced in 1916 by Henry Fayol. Fayol was managing director of a mining company responsible for over 1,000 employees and based his theories on his observations he made in this capacity.

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: -

1. On the basis of observation and analysis i.e. practical experience of managers.
2. By conducting experimental studies.

There are 14 Principles of Management described by Henri Fayol.

1. Division of Labor

   1. Henri Fayol has stressed on the specialization of jobs.
   2. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area.
   3. Subdivision of work makes it simpler and results in efficiency.
   4. It also helps the individual in acquiring speed, accuracy in his performance.
   5. Specialization leads to efficiency & economy in spheres of business.

2. Party of Authority & Responsibility

   1. Authority & responsibility are co-existing.
   2. If authority is given to a person, he should also be made responsible.
   3. In a same way, if anyone is made responsible for any job, he should also have concerned authority.
   4. 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.
   5. There should be a balance between the two i.e. they must go hand in hand.
   6. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.

3. Principle of One Boss

   1. A sub-ordinate should receive orders and be accountable to one and only one boss at a time.
   2. 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
      
   3. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential.
   4. Unity of command provides the enterprise a disciplined, stable & orderly existence.
   5. It creates harmonious relationship between superiors and sub-ordinates.

4. Unity of Direction

   1. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives.
   2. 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.
   3. According to this principle, efforts of all the members of the organization should be directed towards common goal.
   4. Without unity of direction, unity of action cannot be achieved.
   5. In fact, unity of command is not possible without unity of direction.

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. Equity

   1. Equity means combination of fairness, kindness & justice.
   2. The employees should be treated with kindness & equity if devotion is expected of them.
   3. It implies that managers should be fair and impartial while dealing with the subordinates.
   4. They should give similar treatment to people of similar position.
   5. They should not discriminate with respect to age, caste, sex, religion, relation etc.
   6. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate.
   7. But equity does not mean total absence of harshness.
   8. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”.

6. Order

   1. This principle is concerned with proper & systematic arrangement of things and people.
   2. Arrangement of things is called material order and placement of people is called social order.
   3. 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.
   4. 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. Discipline

   1. According to Fayol, “Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise”.
   2. This principle applies that subordinate should respect their superiors and obey their order.
   3. It is an important requisite for smooth running of the enterprise.
   4. Discipline is not only required on path of subordinates but also on the part of management.
   5. 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. Initiative

   1. Workers should be encouraged to take initiative in the work assigned to them.
   2. It means eagerness to initiate actions without being asked to do so.
   3. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work.
   4. It helps in developing an atmosphere of trust and understanding.
   5. People then enjoy working in the organization because it adds to their zeal and energy.
   6. To suggest improvement in formulation & implementation of place.
   7. They can be encouraged with the help of monetary & non-monetary incentives.

9. Fair Remuneration

   1. The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts.
   2. As far as possible it should accord satisfaction to both employer and the employees.
   3. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc.
   4. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work.
   5. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

10. Stability of Tenure

    1. 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.
    2. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served.
    3. 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”.
    4. As a result, the time, effort and money spent on training the worker will go waste.
    5. 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 Chain

    1. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate authority to the lowest”.
    2. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain.
    3. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.
    4. 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.

    5. 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 Interest

    1. An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances.
    2. As far as possible, reconciliation should be achieved between individual and group interests.
    3. But in case of conflict, individual must sacrifice for bigger interests.
    4. 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)

    1. It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members.
    2. Spirit De’ Corps inspires workers to work harder.
    3. 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.
    4. 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.
    5. 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-Centralization

    1. 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.
    2. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization.
    3. 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.
    4. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization.
    5. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.

Authorship/Referencing - About the Author(s)

Henri Fayol is claimed to be the real father of modern management. He was a Frenchman born in 1841 and was working as an engineer with a mining company. He improved the condition of the company from virtual bankruptcy to high success. From his practical experience, he developed some techniques. He brought out some 14 basic management principles, which he felt, could be used in all management situations, irrespective of the organizational framework.

He wrote a book entitled, General and lndustrial Management, in French that was later on translated into English. It is now considered as one of the classics of management literature. The book mainly covers the aspects of the immutable and repetitive character of the management process and the concept that management can be taught in the classroom or the workplace. He also laid down the principles of management, which he deemed important for any organization.

Henri Fayol’s 14 Principles of Management

Henri Fayol suggested the following 14 principles as the general principles management:

Division of Work: This is the principle of specialization, which is very well expressed by economists as being a necessary factor for efficiency in the utilization of labor.

Authority and Responsibility: In this principle, Fayol conceives authority as a combination of official authority deriving from a manager’s official position and personal authority, which is compounded of intelligence, experience, moral worth, past services etc.

Discipline: Holding the notion that discipline is ‘respect for agreements which are directed as achieving obedience, application, energy and the outward marks of respect’, Fayol declares that discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Unit of Command: This is the principle, which states that on employee should receive orders from one superior only.

Unity of Direction: According to Fayol, the unity of direction principle implies that each group of activities having the some objectives must have one head and one plan. As distinguished from the principle of unity of command, Fayol perceives unity of direction as related to the functioning of personnel.

Subordination of Individual Interest to General Interest: In any group, the interest of the group should supersede that of the individual. When the interests differ, it is the function of the management to reconcile them.

Remuneration of Personnel: Fayol perceives that remuneration and methods of payment should be fair and also should be able to afford the maximum satisfaction to employee and employer.

Centralization: Although Fayol does not use the term, Centralization of Authority, his principle definitely refers to the extent to which authority is concentrated or dispersed in on enterprise. Individual circumstances determine the degree of centralization that gives the best over all yields.

Scalar Chain: Fayol thinks of the scalar chain as a line of authority, a chain of superiors from the highest to the lowest ranks. And, because it is an error of a subordinate to depart needlessly from the lines of authority, the chain should be short-circuited.

Order: Breaking this principle into material order and social order, Fayol thinks of it as a simple edge for everything. This organization is the principle, which refers to arrangement of things and persons in an organization.

Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from personnel with a combination of kindliness and justice in managers while dealing with subordinates.

Stability of Tenure of Personnel: Finding that instability is both the cause and effect of bad management, Fayol points out the dangers and costs of unnecessary turnover.

Initiative: Initiative is conceived as the process of thinking out and executing a plan. Since it is one of the keenest satisfactions for an intelligent man to experience, Fayol exhorts managers to sacrifice personal vanity in order to permit subordinates to exercise it.

Esprit de corps: This principle implies that union is strength and an extension of the principle of unity of command. Fayol here emphasizes on the need for teamwork and the importance of communication in obtaining it.

References:

Fayol Theory Of Management Pdf

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Principles Of Business Management Pdf

Fayol's 14 Principles Of Management

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