Henri Fayol’s Principles of Management includes 14 principles that are used in managerial decision-making and organizational design. These principles were identified by Henri Fayol in the early 20th century.
Henri Fayol is credited with developing one of the earliest comprehensive management theories. His contribution to the field of management science includes six core management functions and 14 management principles. His primary emphasis was on the control aspect of management, which involves receiving feedback on business processes and taking necessary corrective action.
Fayol’s ideas have stood the test of time, and the concept of control remains a critical aspect of modern business management, particularly in the realm of financial management.
Fayol’s 14 Principles of Management
- Division of Work: According to this principle, work should be divided into smaller specialized tasks, each performed by a specialist or trained employee. It is because of this principle that in a company we have separate departments for finance, marketing, production, human resource development, etc.Positive Effects:
- Division of work leads to specialisation
- It results in more production and better work for the same effort
- Authority & Responsibility
Authority means the right to give orders and obtain obedience. “Responsibility” means obligation to perform the job assigned on time.
According to this principle there should be a balance bwteen authority and responsibility. Giving authority without fixing responsibility may lead to irresponsible use of authority. So an organisation should build safeguards against abuse of managerial power.
Discipline means obedience to organisational rules and employment agreement, which are necessary for the working of the organization. Fayol insists that discipline requires good supervisors at all levels, clear and fair agreements, and judicious applications of penalties.
- Unity of Command
According to this principle an employee should receive orders / instructions from one and only one boss or superior. Dual subordination should be avoided. This presents confusion regarding tasks to be done.
- Unity of Direction
The principles implies that there should be “One head and one plan” for a group of activities having the same objective.
All the units of an organization should be moving towards the same objectives through coordinated and focused efforts.
- Ensures unity of action
- Facilitates coordination
- Subordination of Individual interest to General Interest
According to this principle, the interest of the organisation as a whole must be given priority over the interest of the individual employees, in case of conflict between them.
- Remuneration of Employees
Remuneration payble to employees should be fair, reasonable, just and equitable so as to give maximum satisfaction to both the employees and the organisation. At the same time, it should be within the paying capacity of the company.
- Centralisation & Decentralisation
The concentration of decision making functions authority by top management is called centralisation. On the other hand, if decision-making authority is shared with lower levels, it is called decentralisation, According to Fayol, an organization should have a balance between complete centralisation & decentralisation.
- Scalar Chain
An organisation consists of supervisors and subordinates. The formal lines of authority from highest to lowest ranks are known as “Scalar Chain”. According to Fayol, organisation should have a chain of authority and communication that runs from Top to Bottom and should be followed by managers and subordinates.
According to Fayol, ‘Order’ means a place for everything (everyone) and everything (everyone) in its (his / her) place. Essentially, it means orderliness. Fayol insists that people and materials must be at suitable places at at appropriate time for maximum efficiency.
The principle of Equity implies that similar tretment is assumed to employees in similar positions. This principle emphasize kindliness and justice in the behaviour of managers towards workers.
- Stability of Personnel
According to this principle, employees once selected, should be kept at their post/position for a minimum fixed tenure. Fayol suggests that employee turnover should be minimised to maintain organisational efficiency. They should be given reasonable time to show results.
Initiative means taking the first step with self-motivation. It is thinking out and executing the plan. It is one of the traits of an intelligent person. According to Fayol, employees should be encouraged to develop and carry out their plans for improvements.
- Espirit De Corps
Espirit De Corps means ‘Union is Strength’. According to Fayol, management should promote a team spirit of unity and harmony among employees. Team spirit helps in developing an atmosphere of mutual trust and belonging among team members.
Narayanan, V. K., & Nath, R. (1993) Organization theory: a strategic approach, Irwin.
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