Fayol’s Principles of Management

 

The 14 principles of management given by in are: 

1)- Division of Work:

• Work is divided into small tasks/jobs. A trained specialist who is competent is required to perform each job. Thus, division of work leads to specialization.
• According to this principle the whole work must be divided into small tasks and instead of assigning the whole work to one person, one task to be assigned to one person only as per capability, qualification and experience of that person.
• When a person is performing a part of a job again and again he will become perfect and specialized in doing that and efficiency level will improve.
• According to Fayol, “The intent of division of work is to produce more and better work for the same effort. Specialization is the most efficient way to use human effort.”
• In business work can be performed more efficiently if it is divided into specialized tasks; each performed by a specialist or trained employee. This results in efficient and effective output. 
• Thus, in a company there are separate departments for finance, marketing, production and human resource development etc. All of them have specialized persons. Collectively they achieve production and sales targets of the company.
• Fayol applies this principle of division of work to all kinds of work – technical as well as managerial.
• This concept can be observed at work in any organization like a hospital or even a government office.
• It helps in improving efficiency and leads to specialization in the organization.
• However, it may also lead to duplication of work.

2)- Authority and Responsibility: 

• Authority means power to take decisions and responsibility means obligation to complete the job assigned on time. 
• There should be a balance between authority and responsibility. Mere responsibility without authority makes an executive less interested in discharging duties.
• Similarly, giving authority without assigning responsibility makes him arrogant and there is fear of misuse of power. 
• The two types of authority are official authority, which is the authority to command, and personal authority which is the authority of the individual manager.
• Managers require authority commensurate with their responsibility.
• There should be a balance between authority and responsibility. 
• An organization should build safeguards against abuse of managerial power. At the same time a manager should have necessary authority to carry out his responsibility.

3)- Discipline:

• Discipline is the obedience to organisational rules and employment agreement which are necessary for the working of the organisation.  
• According to Fayol, discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties. 
• It leads to systematic working of an organization and improved efficiency.

4)- Unity of Command:

• According to Fayol there should be one and only one boss for every individual employee. 
• If an employee gets orders from two superiors at the same time the principle of unity of command is violated.
• The principle of unity of command states that each participant in a formal organization should receive orders from and be responsible to only one superior.
• Fayol gave a lot of importance to this principle. He felt that if this principle is violated “authority is undermined, discipline is in jeopardy, order disturbed and stability threatened”. 
• The principle resembles military organization. Dual subordination should be avoided.

5)- Unity of Direction:

• All the units of an organization should be moving towards the same objectives through coordinated and focused efforts. 
• Each group of activities having the same objective must have one head and one plan. 
• This ensures unity of action and coordination. 
• For example, if a company is manufacturing motorcycles as well as cars then it should have two separate divisions for both of them. Each division should have its own in charge, plans and execution resources.

6)- Subordination of Individual Interest to General Interest: 

• The interests of an organization should take priority over the interests of any one individual employee.
• Every worker has some individual interest in working in a company. The company has got its own objectives.
• It is therefore very important for the managers of an organization to align the individual interest of employees with the overall interest of the organization.
• In simple words the organization interest should be prioritized over individual interest.

7)-  Remuneration of Employees:

• The overall pay and compensation should be fair to both employees and the organization.
• The employees should be paid fair wages, which should give them at least a reasonable standard of living. At the same time it should be within the paying capacity of the company.
• In other words, remuneration should be just and equitable. This will ensure a suitable atmosphere and good relations between workers and management. Consequently, the working of the company would be smooth.

8)- Centralization and Decentralization:

• The concentration of decision-making authority or power in a few hands at the top level is called centralization.
• Decentralization is dispersal of authority among more than one person or evenly distribution of power at every level of management is known as decentralization.
• According to Fayol, “There is a need to balance subordinate involvement through decentralization with managers’ retention of final authority through centralization.” 
• The degree of centralization will depend upon the circumstances in which the company is working.
• In general large organizations have more decentralization than small organizations.
• Fayol advised not to have complete centralization or complete decentralization but the combination of both.

9)- Scalar Chain:

• An organization consists of superiors and subordinates. 
• The formal lines of authority from highest to lowest ranks are known as scalar chains. 
• According to Fayol, “Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates.” 
• This chain should not be violated but in case of emergency employees at the same level can contact through Gang Plank by informing their immediate superiors.
  
    
• GangPlank permits direct communication between the employees working in different positions without following the scalar chain.
• However, sometimes when the scalar chain becomes too long and communicating information is urgent then Gang Plank may be adopted.
• According to the scalar chain, if E wants to communicate P he has to move through E-D-C-B-A-L-M-N-O and then P. If this chain is broken then there are chances of communication gap in the organization.

10)- Principle of Order:

• According to Fayol, “People and materials must be in suitable places at appropriate times for maximum efficiency.” 
• The principle of order states that ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. 
• Essentially it means orderliness.
• If there is a fixed place for everything and it is present there, then there will be no hindrance in the activities of business/ factory. This will lead to increased productivity and efficiency.

11)- Principle of Equity: 

• Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible.
• This principle emphasizes kindliness and justice in the behaviour of managers towards workers. This will ensure loyalty and devotion. 
• The working environment of any organization should be free from all forms of and principles of justice and fair play should be followed. No worker should be unduly favored or punished.
• Fayol does not rule out use of force sometimes. Rather he says that lazy personnel should be dealt with sternly to send the message that everyone is equal in the eyes of the management.
• There should be no discrimination against anyone on account of sex, religion, language, caste, belief or nationality etc. 
• Equal opportunities are available for everyone in such companies to rise.

12)- Stability of Personnel:

• Employee turnover should be minimized to maintain organizational efficiency.
• Personnel should be selected and appointed after due and rigorous procedure. But once selected they should be kept at their post/ position for a minimum fixed tenure.
• They should have stability of tenure. They should be given reasonable time to show results.
• Excessive employee turnover will create insecurity among employees. They would tend to leave the organization.
• Recruitment, selection and training cost will be high. So stability in the tenure of personnel is good for the business.

13)- Initiative: 

• Workers should be encouraged to develop and carry out their plans for improvements. 
• 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.
•  Initiative should be encouraged. But it does not mean going against the established practices of the company for the sake of being different.
• A good company should have an employee suggestion system whereby initiative/ suggestions which result in substantial cost/time reduction should be rewarded.

14)- Espirit De Corps:

• Management should promote a team spirit of unity and harmony among employees. 
• Management should promote teamwork especially in large organizations because otherwise objectives would be difficult to realize. 
• It will also result in a loss of coordination.
• A manager should replace ‘I’ with ‘We’ in all his conversations with workers to foster team spirit. 
• This will give rise to a spirit of mutual trust and belongingness among team members. It will also minimize the need for using penalties.