Management of a business is becoming more and more complex with time. There are a lot of issues with which managers need to deal from time to time and for that some basic guidelines are required. The principles of management act as guidelines that help managers to solve various business problems. The usage of such principles varies from situation to situation.

Many theorists gave their theories regarding how operations can be run efficiently and effectively in an organization. In this regard principles of management by Henri Fayol made an amazing success.

Principles Of Management (by Henri Fayol)

In the year 1916, Henry Fayol published a book “General and Industrial Management” in which he mentioned the 14 principles of management. According to Fayol, these principles can be applied in all organizations at all levels irrespective of the work done by them.

Let us discuss these principles in detail

1. Division of work (Specialization) 

 Fayol was of the viewpoint that division of total task as per person’s capability will reduce the burden and will promote specialization. If one person does only one thing then it will improve their speed, accuracy, and efficiency as well as wastages and supervision required will also be reduced.

2. Authority and Responsibility 

Authority and Responsibility are two important aspects of management. This principle states that there should be parity(balance) between the two. Authority is the power to take decisions whereas responsibility means to be responsible/ answerable for some work. If :

Authority > Responsibility then the manager may misuse their power ;

Authority > Responsibility then the manager will not be able to work properly.

3. Discipline 

Discipline is very essential for the smooth running of the business, without it, no business can flourish. It includes obedience, observance of the rules, and respect for authority by the employees. As per Fayol clarity of rules in minds of employees, proper supervision at all levels of management, and a built-in system of reward and punishment help in maintaining discipline.

4. Unity Of Command 

 This principle states that one person should be accountable to one boss i.e. one person should receive orders from one superior. If more than one boss executes authority over the same employee they will be confused as to whose orders to be followed and it will pave way for conflict.

5. Unity Of Direction 

Under this principle, it is emphasised that every employee of the organisation should be directed towards achieving the goal of the organisation. Different employees are working in different departments having different objectives but they should have organizational goals in their mind and should work towards achieving the same. This will improve the efficiency as well as productivity of the organisation.

6. Subordination of Individual to General Interest 

It is a very important principle which states that group interest prevails over individual interest. Management has to make sure that there is harmony between personal interest and common interest. Fair agreement with personnel and constant supervision are essential to prevent the promotion of individual interest at the cost of general interest.

7. Fair remuneration to workers 

Fayol was of the viewpoint that the remuneration paid to workers should be just and fair and should give maximum satisfaction to both employee and employer. The wages paid to employees are determined on the basis of various factors like cost of living, general economic conditions, demand for labour, the value of an employee, prevailing wage rate, etc. Such fair wages will help in promoting a harmonious relationship between employer and employee.

8. Centralisation and Decentralisation 

Centralisation means concentration of authority in the hands of a few i.e. top management whereas decentralisation means such power is disbursed to all levels of management. Fayol emphasised on effective centralisation which varies according to the circumstances of a particular case. Generally, large organisations have more decentralisation than small organisations.

9. Scalar Chain 

Scalar chain shows the chain of authority and communication which flows from the ultimate top authority to the lowest ranks. Fayol was of the viewpoint that this hierarchical chain should be followed for effective communication. 

For example - Let’s assume that A is the ultimate top authority who is having two divisions under him/her i.e. B-C-D and P-Q-R. Now if R wants to communicate with D who is at the same level of authority so then he/she has to transverse through the route R-Q-P-A-B-C-D. This is represented in figure 1 .

However for ensuring fast and quick communication Fayol also provided for one other thing, i.e., Gang Plank where subordinates with the same level of authority can directly communicate with each other. In figure 1 gangplank was created between D and R as shown by a dotted line. 

10.  Order 

Under this principle, Fayol emphasised orderliness by stating that there is a proper place for everything and it should be placed at that right place. This implies not only for material or resources but also for the human resources of an organisation . They should be posted to different divisions according to their capabilities. It will help in the optimum and effective utilization of available resources in the organisation.

11.  Equity 

This principle focuses on kindliness and justice in the behavior of managers towards the workers. The manager should avoid favoritism, nepotism, or any other sort of discrimination on basis of religion, sex, caste, etc. while dealing with employees. However, Fayol suggested that equity does not mean a total absence of force or harshness. Sometimes it becomes necessary for sake of equity itself. 

12.  Stability in tenure of personnel 

Usually employees take time to get used to working and with time their performance improves. Fayol was of the viewpoint that instability in the tenure of personnel is the cause as well as the effect of bad management. Any sort of temporariness will create insecurity and instability in the minds of employees and it can affect their efficiency negatively. Along with that if the labour turnover rate is high then organisations need to bear the cost of recruitment, selection, and training of new employees. Therefore stability of personnel is good for the business.

13.  Initiative 

Initiative means taking the first step or action to a matter. Fayol suggested that managers should encourage or inspire the subordinates so that they brought forward plans, share their ideas and new methods of work. This will motivate employees, increase workforce satisfaction and stability, and improves the efficiency of the workforce.

14.  Esprit De Corps 

 Esprit De Corps emphasised the importance of cooperation and teamwork among the members of the organisation for its success. The management should make constant efforts to promote harmony, unity and belongingness of employees towards the company, like - during meetings with the workers the word ‘We’ should be used in place of ‘I’ to promote team spirit.