Principles of Management | Henri Fayol

What is mean by Principles of Management?

We are going to discuss here the principles of management. The principles of management refer to the concept, idea, theory, and assumption that helps businesses to do their business activities for instance planning, organizing, staffing, directing, controlling, leadership and others in an effective way.

Many scholars have introduced various ‘Principle of Management. There is a very lengthy list of principles of Management. It’s not possible to mention here all the principles of Management. We are going to discuss 14 principles of Management which are introduced by Henri Fayol, who also known as the father of Administrative Management theory.

We also discuss the administrative management theory from the beginning with their 14 principles. These principles are commonly used in all types of organizational structures.

Administrative Management theory

Introduction:

Henri Fayol(1841-1925) was a French industrialist. In 1916, he published a book known as “Administration Industriell Generate” which was later translated into English as “General and industrial Administration” in 1929. In his book, he has discussed the 14 principles of management which are universally acceptable

What For You on this page

  • What is mean by Principle of Management
  • Administrative Management Theory
  • Introduction
  • Importance of Administrative Management theory
  • Principles of Management
  • Classification of Business activities
  • Fayol’s five-element of management

Importance of 14 Principle of Management (Administrative Management Theory)

Administrative management theory is given by Henri Fayol. He proposed 14 principles of management that assist the manager to determine what he has to do to perform the work effectively and also how organizational goals can attained. This theory emphasizes on improve working effectiveness. Previous theory (Scientific management theory) only focus on increasing worker efficiency, not focus on human and behavioral factors, but Administrative management theory focuses on both the human and behavioral factors. The principles develop by F.W. Tylor only helps the individual to work effectively but the principles developed by Henri Fayol help the manager to coordinate all the internal activities of business like planning, organizing, coordinating, controlling, etc. These principles are widely used in today’s modern organization.

According to Henry Fayol

“To manage is to forecast and to plan, to organize, to command, to co-ordinate and to control.”

He has suggested 14 (Fourteen) principles of management which was discussed bellows:

Principles of Management

Principles of Management

  1. Division of work
  2. Authority and Responsibility
  3. Discipline
  4. Unity of Command
  5. Unity of Direction
  6. Subordination of individual interest to general interest
  7. Remuneration of personnel
  8. Centralization
  9. Scalar chain
  10. Order
  11. Equity
  12. Stability of Tenure
  13. Initiative
  14. Esprit de corps

Division of work

Work should assign to the employee on the basis of their skills, experience, knowledge, and skills. In other words, the right man at the right work at the right time should be placed in the organization. As a result, it brings specialization in the work performance of the organization.

Authority and Responsibility

Authority and Responsibility should be balanced in the organization. In other words, it means that authority is given to the employee on the basis of the requirement of the assigned job. If authority given in greater amount than the assigned work (responsibility), there is a possibility of misuse of authority. On the other hand, if responsibility is assigned in greater amount than authority, then the employee can work effectively and efficiently.

Discipline

Discipline means obedience to the superior and their guidelines. It is also concerned with following the rules, regulations, and procedures of doing work in the organization. As a result, conflict in the organization should be reduced.

Unity of Command

According to this principle, every worker/subordinate must get order and instruction from one superior at a time. In other words, it means that subordinates should be accountable to a single superior at a time which reduces the confusion of subordinates. So, they work effectively and efficiently.

Unity of Direction

Unity of Direction implies that there should be one head/superior and also one plan for a group having common objectives. It requires for maintaining unity in action to achieve the common goals of the group.

Subordination of individual interest to general interest

This principle emphasizes that there are two types of interest in the organization i.e. individual interest and organizational interest. The individual interest should be subordinate to the organizational interest. In other words, first priority given to the organizational interest. The achievement of organizational interest, in the long run, contributes to the fulfillment of individual interest.

Remuneration of Personnel

Remuneration means the amount of value (either monetary or non-monetary value) that paid to the employee for their contribution to work. Management should pay the remuneration on the basis of responsibility, skill, and also on the basis of their knowledge. It emphasizes that remuneration is dependent on the level of responsibility, not on the cost of living and financial condition of employees.

Centralization and Decentralization

Centralization means to reserve decision-making power to the upper level and Decentralization means to decentralize the decision-making power to the lower level of management. Both Centralization and Decentralization depend on the nature, size of the organization. Generally, sole trading concern and partnership form have a centralized system of decision making power other organization such as joint-stock company have a decentralization system of decision making power.

Scalar chain

The scalar chain refers to the unbroken line of authority from the top level to the bottom level in the hierarchy. All information communicated through successive levels of management, either from top-level management to lower level of management or vice versa. But, in an emergency situation, ‘Gang Plank’ should apply to avoid delay in decision making. In this Gang Plank, employees of the same level can communicate with each other.

Order

This principle is concerned with the systematic arrangement of organizational resources. Fayol has classified order into two types; material order and social order. The placement of the material, machines, equipment, and also other physical material in a proper place, known as material order. And the placement of the right person to the right job at right time, known as social order. It is essential to ensure wastage and bring smoothness in organizational activities.

Equity

This principle of equity concentrates on kindness and justice to all employees working in the organization. It develops the feeling of responsibility among the worker and also makes all the workers loyal to the organization. It helps to increase the working efficiency of the organization.

NOTE:

The words equality and equity are not the same. Equality means treating everyone equally and equity means to ensure each person what they need. Further, we can define equity as; suppose a company has a watchman and manager. If watchman can work 14 hours a day and manager only work 10 hours a day. It does not mean, a company should give more salary and facilities to the watchman. Thus, equity means to treat employees according to their level of position

Stability of Tenure

This principle concentrates on job security and the long-term performance of employees in the organization. Managers should provide job security for taking subordinates’ full potentiality and also shouldn`t frequently transfer from one group to another group. It mentally disturbs the employee. In such conditions, employee turnover occurred at a high rate.

Initiative

Under this principle, Subordinate plans have also given priority in the organization. In other words, managers should provide reliable freedom to think about the way of doing work, solution of the normal problem, etc. Managers also make timely supervision so that they work effectively.

Esprit De Corps

Esprit De Corps is the proverb that means the ‘union is strength’. In other words, this principle mainly emphasizes team efforts. It is possible only through harmony and mutual understanding among the workers of the organization. This principle suggests that manager needs to take necessary steps to promote spirit among the group and also develop the feeling of harmony with each other.

Classification of Business Activities

According to Henri Fayol, Industries’ business activities are classified into six categories. Let’s discuss it in short, about the business activities purposed by Henri Fayol are;

  • Technical:- Activities related to manufacturing or producing goods and services
  • Commercial:– Activities related to buying, selling, and also the distribution of goods and services
  • Financial:- Activities needed for the optimization of capital
  • Security:- Activities needed for the protection of property and also the interest of employment and organization
  • Accounting:- Activities related to record the financial transaction of business in different accounting books (For instance; income statement, balance sheet, cash flow statement, etc)
  • Managerial:– Activities related to Plan, organize, coordinate, command, and also controlling.

Fayol’s Five elements of Management

Above, we are already studies about the category of business activities given by Henri Fayol. He primarily focuses on managerial activities. Managerial activities refer to all those business activities from the setting of objectives to take necessary steps to ensure for achieving organizational objectives and he also identified five elements of management that managers have mainly perform for achieving organizational objectives. They are;

Planning

Planning is the process of thinking in advance before doing anything. In other words, deciding in advance what to do, when to do it, who is going to do it. It also involves policies, procedure, and program of the organization which is implemented in the future to attain organization goals. As a result, it minimizes future uncertainties and risks.

Organizing

Organizing is the process of identification of major activities, grouping them on the basis of nature, and assigned the responsibility and also its authority to the employee. It is also concerned with the development of rules, regulations,s, and procedures for the complementation of work.

Command

The command is concerned with providing instruction, guidance, and inspiration to the worker so they perform their assigned tasks effectively and efficiently.

Coordination

Coordination is the process of proper arrangement of group efforts in unity for the attainment of common goals. In other words, different interrelated departments or units are established in the organization, the manager must be responsible for coordinating the works. The failure of one department may be the reason for the failure of all departments so proper coordination should be maintained to attain the goals.

Controlling

Controlling is the process of evaluating plan performance with the actual performance and if there is any deviation between them, then take an effective measure.

Frequent Asked Questions:

What are the Fayol’s 14 principle of Management?

The fourteen principles of management given by Henri Fayol are as follows:
Division of work
Authority and Responsibility
Discipline
Unity of Command
Unity of Direction
Subordination of individual interest to general interest
Remuneration of personnel
Centralization
Scalar chain
Order
Equity
Stability of Tenure
Initiative
Esprit de corps

Importance of 14 Principle of Management

Administrative management theory is given by Henri Fayol. He proposed 14 principles of management that assist the manager to determine what he has to do to perform the work effectively and also how organizational goals can be attained. This theory emphasizes on improve working effectiveness. Previous theory (Scientific management theory) only focus on increasing worker efficiency, not focus on human and behavioral factors. But Administrative management theory focus on both the human and behavioral factors. The principles develop by F.W. Tylor only help the individual to work effectively but the principles developed by Henri Fayol help the manager to coordinate all the internal activities of the business (for instance planning, organizing, coordinating, controlling, etc). These principles are widely used in today’s modern organization.

What is mean by Principle of Management?

The principles of management refer to the concept, idea, theory, and assumption that helps businesses to do their business activities for instance planning, organizing, staffing, directing, controlling, leadership and others in an effective way.

What do you mean by Esprit De Corps?

Esprit De Corps is the proverb that means ‘union is strength’. In other words, it emphasizes team efforts.

What do you mean by Stability of Tenure?

Stability of tenure means job security or the long-term performance of employees in the organization.

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