Principles of Management

14 Principles of Management By Henri Fayol

The practice of management is based on specific disciplines which are known as Principles of Management. And these management principles are the facts and truths gained through observation and experiment. Simultaneously, various scholars have introduced many principles at different times through their research and investigation.

Among them, Henri Fayol has recommended fourteen principles of management which are represented in a table below:

Principles of Management
Principles of Management by Henri Fayol

PRINCIPLES OF MANAGEMENT BY HENRI FAYOL

1. Division of Work 8. Centralization and Decentralization
2. Authority and Responsibility 9. Scalar Chain
3. Discipline 10. Order
4. Unity of Command 11. Equity
5. Unity of Direction 12. Stability of Tenure
6. Subordination of Individual Interest to General Interest 13. Initiative
7. Remuneration of Personnel 14. Esprit De Corps

Division of Work

This principle is similar to the famous economist, Adam Smith’s principle of division of labor. According to this principle, every employee in an organization must be assigned only a specific type of work to increase efficiency. The development of specialization ensures simplicity and accuracy in performance.

Authority and Responsibility

Authority and responsibility are two interrelated terms in management. While authority is the power and right inherent in a managerial position through which a manager commands subordinates, similarly responsibility is the obligation to be fulfilled by the subordinates.

This principle emphasizes the balance between authority and responsibility. Authority without responsibility can make a person irresponsible and there is the possibility of misuse of power. Similarly, responsibility without proper authority makes a person ineffective.

Discipline

Discipline means obedience to superiors and their guidelines, it’s also concerned to follow the rules, regulations, and procedures of an organization. This principle applies to managers and subordinates alike because all are within the rules of the organizations. Since the discipline is a must to develop a feeling of self-responsibility among the managers has to maintain a  disciplined environment in the organization.

Unity of Command

According to this principle, every worker/subordinates must get orders and instructions only from one superior at a time. It means a subordinate should be accountable to a single superior at a time. Further, this principle is essential to fix responsibilities and avoid confusion.

For instance, when a subordinate receives orders and instructions from more than one superior at a time, he will get confused. In such a situation, he cannot fulfill his responsibilities efficiently and may commit mistakes.

Unity of Direction

Unity of direction implies that there should be one head and one plan for a group of activities having a common objective. There must be one plan for common work and one in-charge to coordinate all the members of the unit. This unity of direction, thus, is essential to maintain unity in action or operation.

Subordination of Individual Interest to General Interest

Individual interest means fulfillment of employees’ objectives, while general interest means the fulfillment of organizational objectives. This principle concentrates on the basic management philosophy that individual objectives of employees are subordinate to the common objectives because achievements of group objectives, in the long run, help to fulfill individual objectives. Hence, it is essential to reconcile individual objectives with that of group objectives.

Remuneration of Personnel

It is the reward paid to the employees for their contribution. The remuneration should be acceptable both to the management and the employees. Wages should be determined by considering both employees’ responsibilities, cost of living and financial condition of the organization. The basic wage should be fixed; besides, there should be a provision of monetary and non-monetary incentives.

Centralization and Decentralization

Centralization is the retention of decision making authority at the top-level management. On the other hand, decentralization is the systematic division of decision making authority from top to bottom in a hierarchy.

Maintaining centralization or decentralization depends upon the nature and size of the organizations and also the knowledge and capability of subordinates. Generally, in small organizations where the range of activities is limited, centralization is preferred whereas in large organization decentralization is preferred.

Scalar Chain

The scalar chain refers to the unbroken line of authority from top to bottom in a hierarchy. This principle is important for systematic and orderly communication of information in an organization. The information has to be communicated through a successive chain from top to bottom or vice versa.

According to Fayol, the scalar chain must be strictly followed, except in emergencies. Fayol also has suggested the concept of ‘Gang Plank‘  to avoid delay in communication among the same level of employees.

Order

This principle is concerned with the systematic arrangement of materials and people. Fayol has classified order into two types: material order and social order. And placing machines and other physical things in proper place and quantity is material order, and placing the right person to the right job is called social order.

The material order emphasizes that all physical resources necessary for proper functioning must be available at the right place at the right time. Similarly, social order emphasizes that all necessary members must be available in the proper place. As a result, this principle is essential to minimize the wastage of time and resources.

Equity

This principle is concerned with kindness and justice to all the employees working in an organization. Being in equity, management has to realize that loyalty and devotion can be extracted from the members-only through kindness and justice. It helps develop a feeling of responsibility among the employees. Therefore, being concerned with it, management has to avoid the concept of favoritism and partiality among the employees.

Stability of Tenure

According to this principle, employees must have a feeling of security in their job to continue the work efficiently. Instability of employees is the cause of poor management whereas the stability of employees helps to develop experience and efficiency. The feeling of job insecurity among the employees creates problems of high labor turnover, increased cost of selection, training, supervision.

Initiative

According to this principle, every employee should be given reliable freedom to exercise judgment in the formulation and execution of plans. Employees do not expect any kind of interruption or guideline from superiors for minor technical work; instead, they want to fulfill their responsibility in their own risk and knowledge. For instance, freedom provides a sense of self-motivation among the employees making them more dedicated and loyal towards the organization.

Esprit De Corps

Esprit De Corps is a proverb that means the union is strength. It is possible only through harmony and mutual understanding among the workers. According to this principle, the manager has to take the necessary steps to promote team spirit and develop a feeling of harmony among each other. Managers have to attain organizational objectives through group effort.

To do so, Fayol suggests two concepts to the mangers: firstly, the concept of divide and rule: which must be avoided; and secondly, emphasis must be given on unity of command and oral communication among the workers to improve human relations.

These 14 Principles of Management by Henri Fayol are accepted universally.

Principles of Management PDF will be available soon. 

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Reference: 

  • Pouydal, Santosh Raj – Principles of Management, Ashmita Books Publishers and Distributors – Kathmandu
  • Pradhan, Gopal Man – Principles of Management, Ashmita Books Publishers and Distributors – Kathmandu
  • Bhandari, Kedar Prasad – Principles of Management, Ashmita Books Publishers and Distributors – Kathmandu
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