Understand the 14 Principles of Management by Henri Fayol
Table of Contents
- jaro education
- 2, April 2024
- 10:00 am
The principles of management have a broad reach and formulate general human behavior and decision-making guidelines. These principles direct managers to take appropriate actions and decisions in the company’s interest. The principles of management do not necessarily coincide with the scientific principles as they fluctuate with the changing scenarios of an enterprise. Managers implement these principles with creativity in mind according to the needs and demands of the prevailing situations. These management principles must keep pace with the switching environment as technology and technology developers (humans) are dynamic in their thought processes.
Every management student and professional knows management is the art of getting things done (managing) through others (subordinates). This art applies to an organization’s human and non-human resources. Therefore, any company management has to execute various administrative and operational activities to attain the preset organizational goals. Managers perform these functions successfully after realizing the importance of principles of management.
Any business organization that desires to be competent and is all set to achieve business goals needs a seamless flow of operational activities from top to bottom. Any management, irrespective of the geographical boundaries, integrates four fundamental functions – planning, organizing, leading and controlling. In short, the managers have to follow the POLC structure of the management. As a manager, if you do not follow this framework, there will be negligible focus and structural changes for attaining the desired business objectives.
1916 saw a paradigm shift towards the interpretation of principles of management when Henri Fayol arrived on the scene with his book on management, viz., Administration Industrielle et Generale (General and Industrial Management). The book duly highlights the superiority of managerial skills over technical skills. Still, these principles immensely help modern management experts and trainees treat them as the learning curve for ‘good management’.
About Henri Fayol
Henri Fayol was a French citizen and a mining engineer who worked in a French mining company from the end of the 19th century till the middle of the 20th century. He began his career as an apprentice engineer but gradually rose to become the company’s general manager and was eventually elevated to a director position. When Henri Foyal took the responsibility of a manager during his initial stints at the mining company, his prime focus was his managerial skills to deal with and organize the human resources aside from his technical skills.
Henri Foyal became an expert on managerial nuances when he documented his practical experiences in his book on management theories and work organization. He introduced principles of management that applied to all levels of management and across the departments. Reputed and successful companies worldwide still practice Henri Fayol’s 14 management principles to ensure an efficient and productive work environment.
The 14 principles of management manifested by Henri Foyal had seen the daylight when the impact of the most famed industrial revolution was slowly receding. Most management experts in the western hemisphere thought the timing was perfect because the world witnessed remarkable changes, and new and excellent working styles were getting recognized. Even today, the 14 principles of Henri Fayol have retained their significance and constitute the study materials for management courses in leading management institutions.
Principles of Management by Henri Fayol
What are the principles of management introduced by Henri Fayol? 14 principles of management evaluate a business organization from the perspective of a stepwise design and stepwise refinement to allow managers to extract the best possible knowledge and expertise from the workforce and run the business with the bare minimum challenges. The following Principles of Management by Henri Fayol indicate the relevance of these theories to aspiring management students who want to attain their coveted career objectives.
1. Division of Work
One of the foremost principles of management relates to the concept that if an employee has a particular assignment to complete at a given time, he will eventually become more competent and specialized in it. It contradicts the modern practice of multi-tasking scenarios where an employee must handle several tasks in the designated time. Fayol says managers should assess the existing skill sets of all in-house staff members and assign them tasks they can complete on schedule. This strategy will help employees to become more efficient, productive, and skilled in the long run.
Example: A bank has to go through several operational procedures such as opening accounts, receiving and disbursing cash, issuing checkbooks, sanctioning loans, holding deposits, etc. Fayol contends that the manager allocates these responsibilities among different workforce strengths available within the institution. Fayol emphasizes that division of work is always appreciable to maintain the quality and quantity of a given assignment. Specialization is the most productive way to accomplish tasks at hand.
2. Authority
It is one of the most notable Henri Fayol’s 14 principles of management. It recommends that any factory manager have the requisite authority to confirm that workers and supervisors follow his instructions. A manager must have the authority to transform the ideas into action. However, this authority is directly proportional to responsibility. Fayol says there should be a perfect balance between authority and responsibility. Anything excess or shortfall is harmful to the running of the business. If authority surpasses responsibility, the subordinates will get frustrated; Conversely, if responsibility supersedes authority, the manager will feel defeated.
Example: An employee of a design firm is responsible for managing the design and decoration tasks for event planning. He will get frustrated if he has no authority over the assignments he is supervising, like making design decisions or connecting with the vendors for the timely completion of the assignment. Consequently, it will hamper work efficiency and ultimate productivity.
3. Discipline
One of the significant principles of management documented by Henri Fayol is the stress on discipline in the organization for a successful business. The company managers should inculcate an ambiance of mutual respect and admiration. The management must implement a set of work regulations, philosophies, and frameworks on the company premises that should attract the attention of concerned staff members. Violating enforced rules is highly detrimental to the running of a business entity. There must be adequate supervision by superiors to make impartial judgments.
Example: The HR and Personnel department charts out some rules and regulations for the company workforce, including working hours, promotions, increments, probations, assessments, etc. Employees should follow these rules and maintain a disciplined attitude in the workplace for seamless business.
4. Unity of Command
It is the 4th principle out of the 14 principles of Henri Fayol. It states that the chain of command in an organization should be evident and apparent. The workers should know who they should report to. According to Fayol, an employee should have a single boss. If there is more than one superior, there will be a notable split among authority, stability and discipline. Besides, it will contribute to a breakdown in the management framework, and there will be enormous stress on concerned employees, affecting productivity.
Example: Suppose in a factory, the supervisor instructs the subordinate to complete a job within five to six hours. However, the factory manager clarified that the entrusted subordinate had to wrap it within two hours. This clash in command can create confusion and unnecessary tension in the workforce, resulting in loss of productivity and timely delivery.
5. Unity of Direction
Unity of direction comes fifth in the order of Henri Fayol’s 14 principles of management. It signifies that any given work should have a proper mode of organization so that employees can collaborate towards attaining the same goal with an identical strategy and under one supervisor. The management can break down multiple business activities for different departmental heads. However, all stakeholders should work toward a common goal under the supervision of a single authority who will take overall responsibility.
Example: A company can have various marketing activities, including budgeting, advertising, product launching, sales promotions, etc. In this scenario, a single manager should implement a uniform marketing plan for all the subordinates.
6. Subordination of Individual Interest to General Interest
14 principles of management also include the aspect of collective interest in a business organization. The 6th principle explains that team interest should come first rather than individual interest. Organizational motives and purposes are a must to run an organization successfully. If personal interests dominate, the company might face dire consequences.
Example: If you have worked in an MNC, you might have observed a staff member getting more remuneration while discharging most minor responsibilities. On the other hand, another employee on the same pay scale might have received less salary despite exceptional performance. Here, the management should pinpoint this disparity and take appropriate measures, as the interests of the stakeholders are more crucial than the interests of any individual employee.
7. Remuneration
Principles of Management by Henri Fayol also affirms that the workforce should receive fair salaries and wages for the designated work. Any business entity or company that underpays its in-house strength will need help to survive the competition, as there will be colossal job diversion. Quality workers will take chances to be absorbed in high-paying organizations. The staff remuneration should comprise both financial incentives and nonfinancial rewards and recognitions. A company’s HR should set up a systematic structure to achieve this.
Example: The company management must be impartial and unbiased concerning the remuneration policies and packages. It should ensure all workers get what they deserve irrespective of qualifications, experience, gender and other pertinent factors.
8. Centralisation
Fayol’s principles of management also include the element of centralization. Centralization refers to the concentration of power in the hands of the controlling authority combined with a top-bottom approach to management. In decentralization, the authority gets distributed to the defined levels of management. In today’s environment, a company has a mixed management outlook. An organization needs to be more centralized and decentralized. In total centralization, the bottom-level staff has no authority over their imposed responsibilities.
In the same way, decentralization indicates a need for top-level authority to control business operations. So, there should be a balance of both to run the business effectively. The achievable balance will, however, depend on the nature of the business entity.
Example: The element of complete centralization usually exists in small and medium-scale industries (sole proprietorships and partnerships) where there is insignificant work delegation with limited strength and the owners or the partners have the freedom to make business decisions.
9. Scalar Chain
Henri Foyal also mentions the scalar chain in his book, which contains 14 principles of management. According to him, a scalar chain explicitly communicates between staff and management. Employees should realize their position in the company hierarchy and whom to approach for business communication in the chain of command. For effective implementation of the scalar chain, Foyal has suggested that an organizational chart should be ideal on a display board to have enough transparency on this matter.
Example: Every profit and non-profit organization has a founder or CEO (highest level of the hierarchy), making an apparent chain of authority. It cascades down to the lowest level of subordinates in line with the hierarchy for delivering maximum output.
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10. Order
Foyal’s principles of management also mention the order or sequence of business functions. It relates to a reasonable, timely and orderly placement of resources or inputs (financial capital, human capital, materials, etc.). It guarantees the optimal utilization of resources in a structured manner. Any potential gap in deploying these resources will undoubtedly lead to chaos and squandering of business opportunities.
Example: The factory supervisors should arrange for a designated place (shed, shop floor) and the appropriate tools and appliances for the workers to perform their work seamlessly.
11. Equity
Henri Fayol’s 14 principles of management also consider the term ‘Equity’. Equity combines the traits such as benevolence and justice. This principle conveys that company managers should demonstrate humanity and justice towards the workforce. This unique gesture triggers loyalty and commitment for the organization.
Example: All staff and workers, regardless of gender, race, or religion, feel safe and secure. There should be instant redressal of grievances and equal opportunities to grow following performance metrics within the organization.
12. Employee Stability
14 principles of management comprise a significant element that pertains to employees’ stability in the organization. The higher the attrition level, the more doubts about the company’s intentions toward handling staff. A profit-making organization should work intensively to minimize excess turnover and maximize efficiency while retaining competent staff. No employee can contribute instantly after joining the organization. They require sufficient on-the-job training before being inducted into the operations. Both old and new employees should have job security, as instability will dent their convictions and harm their efficiency. The HR team must also foresee the gaps and fill the job vacancies on time.
Example: After absorption, all employees should get a proper induction to familiarise themselves with the company profile, like technical aspects, work culture, and office environment. It will remove their hesitations and encourage them to work efficiently. Besides, old employees should get alumni awards for completing a specific tenure. This gesture will be a morale booster for them.
13. Initiative
Foyal’s principles of management also constitute the element of ‘initiative’. The company management expects all employees to show initiative. It means they should proactively plan and strategize how to complete the work on schedule without committing errors. When employees have the freedom to express themselves, they feel motivated, and in turn, it boosts their productivity. The management should, therefore, listen to the employees’ concerns and encourage them to go ahead with their plans for the company’s sake.
Example: It would be ideal if the management decided to make suggestions regarding their specific departments and work progress. The employees will feel that they are in an authoritative position, and they will get the motivation to contribute to the organization.
14. Esprit de Corps (Existence of Common Spirit)
This French term signifies ‘“Team Spirit”. While incorporating one of the critical principles of management, viz., esprit de corps, Fayol clarifies that company management should strive to bring unity, morale, and mutual support to employees. Team spirit conveys immense strength and solidity in the business organization. Contented and motivated company staff members have the potency to become competent and productive.
Example: The organizational hierarchy should chalk out a fresh plan of action for achieving monthly targets, using the word ‘We’ rather than ‘I’, which ushers in an indomitable team spirit for the workforce.
Final Thoughts
Henri Fayol is genuinely the ‘Father of Modern Management Principles’ and showcased a dynamic perception of the conception of business management. He brought about a general postulate conducive to all levels of management and every functional wing. Henri Fayol’s management principles are popular with contemporary management professionals and students alike. These principles still help managers control and regulate an organization’s internal operations.
These principles introduced by Henri Fayol are a wide-ranging set of guidelines that can enable prominent management executives to enhance the performance of businesses they are involved in. Managers across the world apply them to startups and large-scale companies.
Ultimately, there is always a high expectation that the abridged account narrated in this content will immensely benefit aspiring management candidates. It is undoubtedly a learning curve that will help them manage their teams, plan, strategize, organize, control, collaborate, and gain confidence to make decisions for the common welfare when they start treading on their career path.
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