14 Management Principles by Henri Fayol
14 management principles by Henri Fayol are universally accepted guidelines for managers to do their job according to their responsibility.
Henri Fayol, a French industrialist, is now recognized as the Father of Modern Management. In 1916 Fayol wrote a book entitled “Industrial and General Administration.” In this book, he gave the 14 Principles of Management.
1. Division of Work
Dividing the full work of the organization among individuals and creating departments is called the division of work.
Division of work leads to specialization, and specialization helps to increase efficiency and efficiency, which results in improvements in the productivity and profitability of the organization.
2. Balancing Authority and Responsibility
Authority must be equal to responsibility.
According to Henri Fayol, there should be a balance between Authority (Power) and Responsibility (Duties). The right to give orders should not be considered without reference to responsibility.
If the authority is more than responsibility, then a manager may misuse it. If responsibility is more than authority, then he may feel frustrated.
Outward mark of respect in accordance with formal or informal agreements between a firm and its employees.
Discipline means respect for the rules and regulations of the organization. Discipline may be Self-discipline, or it may be Enforced discipline.
No slacking or bending of rules, not allowed in any organization. The workers must respect the rules that run the organization. To establish discipline, good supervision and impartial judgment are needed.
4. Unity of Command
According to this principle, a subordinate (employee) must have and receive orders from only one superior (boss or manager).
To put it another way, a subordinate must report to only one superior. This decreases the possibility of “Dual subordination,” which creates a problem in managers’ functions. It helps in preventing dual subordination.
5. Unity of Direction
One head and one plan for a group of activities with the same objective. One manager must direct all activities which have the same objective, and he must use one plan.
This is called the Unity of Direction.
For example, all marketing activities, such as advertising, sales promotion, pricing policy, etc., must be directed by only one manager.
He must use only one plan for all the marketing activities. Unity of direction means activities aimed at the same objective should be organized so that there are one plan and one person in charge.
6. Subordination of Individual Interests to the General Interest
The interest of one individual or one group should not prevail over the general good. The individual interest should be given less importance, while the general interest should be given the most importance.
If not, the organization will collapse. The interest of the organizational goal should not be sabotaged by the interest of an individual or of the group.
Remuneration is the price for services received. Pay should be fair to both the employee and the firm.
If an organization wants efficient employees and the best performance, then it should have a good remuneration policy.
This policy should give maximum satisfaction to both employers and employees. It should include both financial and non-financial incentives.
Compensation should be based on a systematic attempt to reward good performance.
It is always present to a greater or lesser extent, depending on the size of the company and the quality of its managers. In centralization, the authority is concentrated only in a few hands.
However, in decentralization, the authority is distributed to all levels of management. No organization can be completely centralized or decentralized.
If there is complete centralization, the subordinates will have no authority (power) to carry out their responsibilities (duties).
Similarly, if there is complete decentralization, the superior will have no authority to control the organization.
Therefore, there should be a balance between centralization and decentralization.
The degree to which centralization or decentralization should be adopted depends on the specific organization, but managers should retain final responsibility but should give subordinates enough authority to do the tasks successfully.
9. Scalar Chain
The chain of command, sometimes called the scalar chain, is the formal line of authority, communication, and responsibility within an organization.
The chain of command is usually depicted on an organizational chart, which identifies the superior and subordinate relationships in the organizational structure.
Or it is the line of authority from top to bottom of the organization. This chain implements the unity-of-command principle and allows the orderly flow of information.
Under the unity of command principle, the instructions flow downward along the chain of command, and accountability flows upward.
More clear-cut the chain of command, the more effective the decision-making process and the greater the efficiency.
A place for everything and everything in its place, the right man in the right place. There should be an Order for materials/things and people in the organization.
Order for things is called Material Order, and order for people is called ‘Social Order. Material Order refers to “a place for everything and everything in its place.”
Social Order refers to the selection of the “right man in the right place.”
Human and material resources must be in the right place at the right time. There must be an orderly placement of the resources such as men and women, money, materials, etc. Misplacement will lead to misuse and disorder.
While dealing with the employees, a manager should use kindliness and justice towards employees equally. Equity is a combination of kindness and justice.
It creates loyalty and devotion in the employees toward the organization. The equity principle suggests that managers must be kind as well as equally fair to their subordinates.
12. Stability of Tenure of Personnel
Although it could take a lot of time, employees must be given fair enough time to settle into their jobs. An employee needs time to learn his job and to become efficient.
The employees should have job security because instability leads to inefficiency. Successful firms usually have a stable group of employees.
Without limits of authority and discipline, all levels of staff should be encouraged to show initiative. Management should encourage initiative.
That is, they should encourage the employees to make their own plans and execute these plans. This is because an initiative gives satisfaction to the employees and brings success to the organization.
It allows the subordinates to think out a plan and do what it takes to make it happen.
14. Esprit De Corps
Esprit de Corps means “Team Spirit.” Therefore, the management should create unity, cooperation, and team spirit among the employees.
They should avoid dividing and rule policy. Harmony and cohesion among personnel. It’s a great source of strength in the organization. It is a quality in every successful business.
These principles are guidelines for every management function. The manager must act according to the 14 principles of management; to reach the goal and create a surplus.
These 14 management principles of Henri Fayol are universally accepted. They work as a guideline for managers to do their job according to their responsibility.