Fayol’s 14 Principles of Management
Henry Fayol (1841-1925) was a French mining engineer ; director of mines who developed general theory 0 business administration. He was the most influential contributor to modern concept of management. He proposed the five primary functions of management (Planning, Organising, Controlling, Directing, Coordination) and also given the 14 principles of Management.
1. Division of Work
- Division of work in the management process produces increased and improved performance with the same effect.
- Different functions of management cannot be performed by a single manger efficiently.
- So, different works should be allocated to different different managers who are specialist in that.
2. Authority and Responsibility
- Formal authority is derived from the official position of a manager. It refers to the power to give the commands to the subordinates.
- Responsibility refers to be responsible for the effects of decision taken or activities performed by a manager.
- Discipline is necessary for the smooth functioning of a business.
- These are rules and regulation established for smooth functioning of organisation.
- The measures of maintaining discipline are transparency, regularity, unbiased and rational approach.
4. Unity of Command
- Every employee should receive orders only from one superior. There should be clear cut chain of command.
- There may be hierarchy of management level but a manager at superior level should not give commands directly to the worker.
- It must be given through proper channel.
5. Unity of Direction
- Unity of directions means complete congruence between individual and organisational goals on the one hand whereas between departmental and organisational goals on the other.
6. Subordination of Individual Interest to General Interest
- In a firm, an individual is concerned with making the most of his own satisfaction through more money, recognition, status, etc. but Fayol told that organisational or general interest are more important.
- If something is more beneficial for organisational point of view that must be considered.
- The remuneration paid to the employees of the firm should be fair and with no discrimination in terms of sex, colour, caste, creed or region.
- It should be based on general business conditions, cost of living, productivity and efficiency of the concerned employees and the capacity of the firm to pay.
- Just fair and adequate remuneration increases employee effectiveness and confidence which maintains good relations between them and the management.
- If the compensation is not sufficient, it will lead to dissatisfaction and employee relinquishment.
- Centralisation refers to concentration of decision -making power at the top level of management, whereas decentralization refers to giving decision making power at low level of management.
- If subordinates are given a great role and importance in the management and organisation of the firm, it is known as decentralisation but if they are given a small role and importance, it is known as centralisation.
- The management must decide the degree of a centralisation or decentralisation of authority based on the nature of the circumstances, size of the undertaking, the category of activities and the characteristics of the organisational structure.
- The objective should be to make optimum utilization of all the human resource available.
9. Scalar Chain
- This principle states that the orders or communications should pass through proper channels of authority in a hierarchy along the scalar chain.
- Gang Plank – Fayol has suggested that in case of emergency, an employee can communicate with another employee in the same rank to avoid delay in communication. This is known as gang plank. It is supposed to be an exception of gang plank. A is at the top having B and L as immediate subordinate . B and L are having immediate subordinate C and M and so on. The communication flows from A to B to C to D while coming from top to bottom. Now if information has to be communicated from C to M it must flow from C to B to A to L and them to M. Fayol suggested that the scalar chain system take time and therefore it must be substituted by gang plank which is shown in the form of dotted line in the figure below. So, Gang plank is temporary arrangement between 2 different points to facilitate quick and easy communication.
- It takes time to put things in order. So, the management must bring about order, harmony and regulation in work through appropriate organization.
- The principle “Right place for everything and for every man” and everything should be at its place has to be observed. To follow this principle it is important to select competent personnel, right assessment of duties to employees and good organization.
- Equity is combination of justice and kindness. Equity in treatment and behavior is liked by everyone and it brings loyalty in the organization.
- The application of equality requires good sense, experience, and good nature for soliciting loyalty and devotion from subordinate.
12. Stability of Tenure of Personnel
- Fayol suggested that the employees must be given sufficient time to prove their ability and their jobs or roles which should not be changed frequency.
- In order to motivate workers to perform additional and improved quality and quantity of work, it is necessary to assure them of their jobs.
- If they have a fear of insecurity of their job, their morale will be low and they cannot deliver sufficient quality and quantity of work.
- Within the limits of authority and discipline, managers should encourage their employees for taking initiative. In Initiative is concerned with thinking out and execution of a plan.
- Initiative increases zeal and energy on the part of human beings.
14. Espirit de’ Corps
- This is the principle of “union is strength” and extension of unity of command for establishing team work.
- The manager should encourage esprit de corps among his employees.
- The erring employees should be set right by oral directions and not by demanding written explanations. Written explanations complicate the matters.