Henry Fayol’s principles of management are as follows:

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. Centralisation 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13. Initiative 14. Espirit De Corps.

Henry Fayol’s 14 Principles of Management

Henry Fayol’s 14 Principles of Management

There is no exhaustive list of management principles. However, the list of fourteen principles of management given by Henry Fayol is widely accepted.

These principles are given below:


1. Division of Work:

Division of work or specialisation of labour belongs to the natural order. It helps a person to acquire an ability and accuracy with which he can do more and better work with the same effort. Therefore the work of every person in the organisation should be limited as for as possible to the performance of a single leading function.

2. Authority and Responsibility:

The responsibility is the natural consequence of and a cor­ollary to authority. Authority is the right to give orders and the power to exact obedience. Responsibility implies the obligation to perform the work in a manner desired and directed by the superior. Authority is not to be conceived apart from responsibility and wheresoever authority is exercised responsibility arises.


3. Discipline:

Discipline is defined as ‘respect for agreements which are directed at achieving obedience, application energy and outward marks of respect.’ It must prevail throughout an organisation as it is essential for smooth running of the enterprise and depends upon good supervision clear and fair agreements and judicious application of penalties or sanctions.

4. Unity of Command:

Every subordinate should secure orders and be accountable to only one superior. Dual or multiple command is perpetual source of conflict. It undermines authority, puts discipline ill jeopardy, disturbs order and threatens stability of organisation and it helps in fixing responsibility.


5. Unity of Direction:

According to this principle each group of activities having the same objective must have one head and one plan. The principles of unity of direction seeks to ensure unity of action. Unity of command pertains to the functioning of the personnel while unity of direction refers to the functioning of the body corporate, the departments or divisions comprising the organisation. Unity of command cannot exist without unity of direction but does not flow from it.

6. Subordination of Individual to General Interest:

Efforts should be made to reconcile individual interest with common interest and it requires continuous and exemplary supervision and fair arguments.


7. Remuneration of Personnel:

The amount of remuneration and the methods of payment should be just and fair and should provide maximum possible satisfaction to both employees and employers.

8. Centralisation:

The question of centralisation and decentralisation is a matter of finding the optimum degree for the particular concern. The degree of concentration of authority should be based upon optimum utilisation of all faculties of the personnel and it should be determined on the basis of individual circumstances in each case.


9. Scalar Chain:

Scalar Chain refers to the chain of superiors ranging from ultimate authority to the lowest level in the organisation. There should be a clear line of authority ranging from top to bottom of the organisation. Every subordinate should know who his superior is and to whom policy matters beyond his own authority must be referred for decision.

All upward and downward communicated should flow through each position of authority along the scalar chain. To prevent the scalar chain bogging down action, Fayol gave the concept of ‘gangplank’. This gang plank allows the two employees to deal directly with each other. But each must inform his superior of any action taken by him.

10. Order:


This principle is concerned with the arrangement of things and the placement of people. In material order and social order there should be an appointed place for everyone. This kind of order requires precise knowledge of human requirements and resources of the concern so that a proper balance may be created between them.

11. Equity:

Equity implies that employees should be treated with justice and kindness. Managers should be fair and impartial in their dealing with subordinates and should adopt a sympathetic and unbiased attitude towards workers which are essential for the successful functioning of every enterprise.

12. Stability of Tenure of Personnel:


Employees cannot work efficiently unless job security is assured to them. Time is required for an employee to get used to new work and succeed in doing it well. An employee cannot render worthwhile service if he is removed from the job before the gets accustomed to it. Frequent changes in staff should, therefore, be avoided.

13. Initiative:

Employees at all levels should be given the opportunity to take initiative and exercise judgement in the formulation and execution of plans. Initiative refers to the freedom to think for one-self and use discretion in doing work. It develops the interest of employees in their jobs and provides job satisfaction to them.

14. Espirit De Corps:

This refers to harmony and mutual understanding among the members of an organisation. Union is strength and unity in the staff is the foundation of success in any organisation it should strive to maintain team spirit and co-operation among employees so that they can work together as a team for the accomplishment of common objectives.

Principles of Management by Henry Fayol: Business Activities Classification and Subdivision of Managerial Function

Henri Fayol, a French industrialist, developed a general theory of management through his long practical experience.


He classified all business activities into a set of six categories like:

(a) Manufacturing

(b) Selling

(c) Financial

(d) Accounting

(e) Security

(f) Managing

He further sub-divided the managerial function into the following:

(a) Forecasting and planning

(b) Organising

(c) Coordinating

(d) Controlling

(e) Commanding

He went on to call for certain traits and characteristics in a managerial person such as technical and educational qualifi­cation, work experience, physical, moral and mental charac­teristics.

He advocated not a few but fourteen principles of management which are defined below:

1. Division of Work:

Fayol was of the opinion that each worker should concen­trate on one type of job. In this way he would gain skills and bring about efficiency in his work. He was not in favour of workers being transferred from one type of job to another.

2. Authority and Responsibility:

Both authority and responsibility go hand in hand. There should be parity between the two. People given authority must also be made accountable. There could be a lack of responsibility if the accountability part was missing. Taylor advocated a balance between responsibility and accountability.

3. Discipline:

This is seen as responsible for the smooth running of the organisa­tion. System of penalties should exist and rules and regulations must be observed for the smooth running of the organisation. There must be a healthy respect for rules and regulations in the entire organisation.

4. Unity of Command:

This implies that every employee must be accountable to just one superior from whom he must get all instructions. Man cannot take instructions from more than one master. Absence of the unity of command weakens the authority, divides loyalty and will create confusion in an otherwise disciplined organisation.

5. Unity of Direction:

This implies that one set of activities must have one plan, and just one head or superior to whom the group will look up for directions. In other words, it means that the instructions to perform a set of activities must come from one person only; there should be one plan for one activity or set of activities. This principle must not be confused with unity of command. Unity of command relates to the functioning of the workforce, whereas unity of direction refers to the way activities are to be performed.

6. Prioritising Organisational Interest over Personal Interest:

The personal interests will have to be sacrificed for the sake of the larger organisational interest. Personal interests must not be promoted at the cost of organisational interest.

7. Just and Fair Wages:

The workers must be fairly and justly compensated for their efforts in the process of production. This will motivate the workers to put in more efforts. They will feel rewarded for their efforts. The organisation will also benefit from the higher inputs by the workforce.

8. Initiative:

All employees must be encouraged to take initiative in the imple­mentation of the production plans. They must be made to feel that they are valuable and their suggestions are valued by the management. This initiative will be a source of strength for the organisation.

9. Balance between Centralisation and Decentralisation:

There should be a careful balance between centralisation and decentralisation of authority and control. The right balance, according to Fayol, will be seen by the workers and lower management as increasing their importance in the organisation and it will boost their morale, thereby adding to the efficiency of the organisation.

10. Equity:

Fair Treatment to Workers. Employees should be treated justly and fairly and there should be no discrimination of any sort. Favoritism, injustice and victimisation must not be allowed to rear their head in the organisation.

11. Stability of Tenure:

Service security will go a long way to promote loyalty to the organisation. The longevity of the tenure will help the worker acquire expertise in the work process. Where there is constant change in the workforce, workers do not get the opportunity to familiarise themselves with the methods of production, and thus, they cannot acquire skills. Inducting new workers means increasing training costs and more financial strain to the organisation and a loss.

12. Order:

This principle is concerned with systematic arrangement of men, machinery and material. There should be a specific place for every employee in an organisation. Fayol explains that there is no fixed order of doing things; but any form of disorder is unacceptable. Disorder results in loss of time and increased mistakes, which in turn, hamper productivity and increased cost of production.

Fayol believed that if the right person is doing the right job, the production would increase, as would the revenue of the organisation. Fayol also said that if employees are allotted tasks that maximize their skills, it would result in accomplished workers, more productivity and higher profit margins.

13. Esprit De Corps:

The management should promote team spirit to bring about harmony and good feelings among the employees.

14. Scalar Chain:

In management hierarchy, the managers are part of an invisible chain like authority scale. Right from the first line supervisor to the president, every member of the company has certain amount of authority. While the President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and obedience to it are necessary if the organisation aims to be successful.

This concept is explained as below. Suppose, in an organisation there are employees A, B, C, D, E, F, and G serving at various levels. If employee ‘D’ has to communicate with employee ‘E’ using the scalar chain, the route would be like D to C and all the way up to A and then all the way down to E. Thus, it will take a long time to communicate.

The drawback of this process is that it is too time consuming and thus ineffective where time is precious. To overcome this limitation of scalar chain, Fayol introduced the concept of ‘Gang Plank’. This concept enables two executives of the organisation of different departments at the same level to communicate directly in case of emergency, so that speedy decisions and actions can be taken. In this case D can communicate directly with E using the “Gang Plank” denoted by the line at the bottom of the pyramid DE m the given figure.

Taylor and Fayol – A Comparison of Doctrines:

Let us compare the doctrines of Taylor and Fayol. Taylor propounded his theory in or around 1911, while Fayol came up with his version in 1914. Fayol looked at the issues dogging the management and tried addressing issues from the top to bottom, whereas Taylor looked at things from the shop floor level.

Taylor focused on increasing output by expecting the worker to perform better in the face of better training and intensive division of work. This was to be supplemented by an incentive system to reward and recognise increased output. Fayol believed in bolstering management to increase output by division of management on the basis of nature of managerial work.

Both Taylor and Fayol took a different approach. Fayol looked at things from a manager’s point of view, whereas Taylor saw it as an engineer that he actually was. Both of them were accordingly affected and this can be seen in what they propounded. Though both emphasised on the division of work, they differed in their focus of action. Taylor advocated for differential payment to workers based on their output while Fayol favoured profit sharing.


1. Objective of both the propounders are same. They strive to bring about an improve­ment in management practices.

2. Both stress upon the performance of human resource as very important.

3. Both stress upon the fact that an environment of mutual cooperation and under­standing is essential.


1. Taylor’s principles of scientific management advocate the maximisation of profit for the entrepreneur; but Fayol looks at management as comprising five distinct functions which together constitute the process of management and stresses that the manager must receive feedback in order to be in a position to address issues.

2. Taylor’s principles work themselves from the bottom, from the shop floor, focus on the worker, and moves up the industrial hierarchy. This is in contrast to Fayol’s principles that start from the top and move down the management hierarchy.

3. Fayol presents a theory of management that is universally applicable; whereas Taylor proceeds to address issues such as how to enhance worker productivity while reducing wastage. Taylor fails to take into consideration the fact that workers have social needs, they value recognition and they must be motivated in more than one way to put in more efforts.

Difference between Taylor and Fayol:

Frederick Winslow Taylor:

1. American Scientist.

2. Shop floor level.

3. Emphasised on time and motion study.

4. Recognised as an engineer’s approach.

5. Confined to production management.

6. Scientific based management.

7. Advocated differential payment system.

8. Scientific observation management.

Henri Fayol:

1. French Industrialist.

2. Managerial level.

3. Gave importance to planning and control­ling.

4. Recognised as a manager’s approach.

5. Confined to overall managerial job.

6. Laid stress on administration.

7. Emphasised on profit sharing for managers.

8. Personal experience translated into univer­sal truth.

Principles of Management by Henry Fayol: The Father of Modern Theory of Management

Henry Fayol, “the Father of Modern Theory of Management”, has put forward fourteen principles of management.

These basic principles may be briefly described as follows:

1. Division of Labour- The principle of division of labour is known as specialisation. It consists in dividing the work among the various individuals in the organisation according to their aptitude, skill, qualification and ability. When a person performs the same work again, he becomes a specialist in that work. Division of labour leads to efficiency reduces cost and increases productivity.

2. Authority and Responsibility- Authority means the right to give orders and the power to extract obedience. Without proper authority management cannot discharge its duties. It is always accompanied by responsibility. Responsibility refers to the obligation to perform the assigned task.

3. Discipline– It means the willingness on the part of the employees to obey the rules and procedures of the organisation. Good discipline promotes team work among the workers. It helps them to achieve the common objectives of the concern.

4. Unity of Command– This principle means that each worker shall have only one supervisor. He shall receive orders from him alone and he shall be accountable to him only. No worker can do his best under two superiors. If there is unity of command, effective control can be exercised in the organisation.

5. Unity of Direction– It means that there should be “only one head and one plan for groups of activities having the same objectives.” That is, there should be only one plan of action for each category of work. It should be carried out under the control of a single authority.

6. Subordination of Individual Interest to the General Interest– The management should give greater importance to the general interest of the concern than to the interest of individuals. This can be achieved by eliminating personal interest from the work of the concern. Thus, the common interest should always prevail over individual interest.

7. Remuneration– If employees are paid fair wages they will be satisfied. Then, they will be ready to co-operate with the management. This improves the efficiency of labour also.

8. Centralization- Management may be centralised or decentralised. If the authority is retained by the higher management it is centralisation. On the other hand, if there is delegation of authority to the subordinates it is decentralisation. Fayol advocated a centralised management.

9. Scalar Chain– Scalar chain refers to the unbroken line of authority that exists from the top executive to the lowest one. If the chain is clear from the top to the bottom, it will ensure the smooth functioning of the concern. Every concern should have such a superior – subordinate relationship. Then, it can identify the person who issues orders and fix the responsibility upon the subordinate.

10. Order– This principle refers to the arrangement of things and persons. If the right man is placed in the right place and the right thing in the right place the management can achieve the best result from the concern.

11. Equity– It means that the management should be just and fair in its dealing with the employees. This will ensure a cordial relationship between the management and the employees.

12. Stability of Tenure of Personnel– Every worker should have security of job tenure. Tenure represents the terms and conditions upon which a worker is appointed in the concern. It is the duty of the management to create a feeling of security in the minds of the workers. It will lead to better performance on the part of the employees.

13. Initiative– Initiative means the ability to formulate original plans and execute them with free mind and intellect. Management must encourage the workers to exercise their initiative and intelligence.

14. Esprit de Corps– This principle refers to the development of a team spirit among the workers. It also includes creating a feeling of ‘loyalty’ among the staff to achieve the objectives of the concern. It promotes unity, increases loyalty and raises the efficiency of the employees. This principle denotes the well-known rule that “union is strength”.

Principles of Management by Henry Fayol: 14 Principles

1. Division of work – Division of work and specialization produces more and better work with the same effort.

2. Authority and responsibility – Authority is the right to give orders and the power to exact obedience. A manager has official authority because of her position, as well as personal authority based on individual personality, intelligence, and experience. Authority creates responsibility.

3. Discipline – Obedience and respect within an organization are absolutely essential. Good discipline requires managers to apply sanctions whenever violations become apparent.

4. Unity of command – An employee should receive orders from only one superior.

5. Unity of direction – Organizational activities must have one central authority and one plan of action.

6. Subordination of individual interest to general interest – The interests of one employee or group of employees are subordinate to the interests and goals of the organization.

7. Remuneration of personnel – The price of services rendered by employees in the form of salary should be fair and provide satisfaction both to the employee and employer.

8. Centralization – The objective of centralization is the best utilization of personnel. The degree of centralization varies according to the dynamics of each organization.

9. Scalar chain – A chain of authority exists from the highest organizational authority to the lowest ranks for the purpose of communication. Order of communications should pass through the proper channels of authority along the scalar chain. But in case there is need for swift action, the proper channels of authority may be short-circuited by making direct contact, called as gang plank with the concern authority.

10. Order – Organizational order for materials and personnel is essential. The right materials and the right employees are necessary for each organizational function and activity. “The right place for everything and for every man.”

11. Equity – In organizations, equity is a combination of kindliness and justice. Both equity and equality of treatment should be considered when dealing with employees.

12. Stability of tenure of personnel – To attain the maximum productivity of personnel, a stable work force is needed.

13. Initiative – Thinking out a plan and ensuring its success is an extremely strong motivator. Zeal, energy, and initiative are desired at all levels of the organizational ladder.

14. Esprit de corps – Teamwork is fundamentally important to an organization. Work teams and extensive face-to-face verbal communication encourages teamwork. “Union is strength”.

Principles of Management by Henry Fayol: with Notes

Henri Fayol, graduated as a mining engineer in 1860. He joined as an engineer in a famous mining company in France. In 1888, he was appointed as a General Manager of that company. At that time, the company’s financial position was critical and the loss was more.

Before his retirement (1918) he developed the company into an extremely prosperous and one of the most famous coal mines in France. He published a book on “General and industrial Administration” of a large scale organisation.

Principles of Management:

Fayol devoted his concentrations mostly on the managerial activities.

Fayol evolved the following fourteen 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. Centralisation

9. Scalar chain

10. Order

11. Equity

12. Stability of tenure of personnel

13. Initiative, and

14. Espirit de corps.

1. Division of Work:

This principle leads to specialisation in any field of activity. If a worker concentrates his efforts on a particular task, he will become more skilled in that activity. It increases productivity, quantity and quality of output. This leads to better work with the same effort.

It has got some disadvantages:

i. Worker suffers boredom because of repetition of the same type of work.

ii. Difficult to reschedule if any worker is absent.

2. Authority and Responsibility:

Authority is the power given to a person to extract work from his subordinates. Responsibility is the obligation of a person to perform his duties towards a job. Authority may be delegated whereas responsibility cannot be delegated. For example, the production manager is answerable to the General Manager if the production is very less. He cannot say that he has delegated the responsibility to the production engineer.

People often seek of authority but not responsibility. The fear of responsibility spoils initiative and destroys other good qualities. Authority without responsibility and responsibility without authority are the major defects of any organisation. Therefore, management should clearly arrange and distribute the Authority and Responsibility.

3. Discipline:

Discipline is very much essential for the smooth running of any organisation. Discipline is “respect for agreements, sincere effort for completing a given task and outward marks of respect.”

Maintenance of discipline requires:

(i) Good supervisors at all levels

(ii) Clear and fair agreements

(iii) Judicial application of penalty, and

(iv) Effective communication.

4. Unity of Command:

For any action, an employee must receive orders and instructions from the supervisor only. If it is not followed, then there will not be any discipline. Multiple commands will cause confusions and conflicts. Therefore a sound management should avoid dual commands.

5. Unity of Direction:

This means that there should be one head and one plan for each group of activities having the same objectives. All the groups work together to achieve the common goal, unity of command cannot function without unity of direction.

6. Subordination of Individual Interest to General Interest:

In any industry, an employee’s interest is to earn money to meet his personal needs whereas the organisation interest is to maximize the production and develop the factory. The interest of an organisation is more important than the interest of an employee. It is necessary to maintain unity and to avoid friction among the employees.

Therefore, supervisors should set the following to others to maintain general interest:

i. Fair agreements

ii. Effective supervision

iii. Good example

7. Remuneration of Personnel:

Remuneration is the money paid to the employees for their physical and mental efforts in carrying out a work. It should be fair and satisfy both the employees and employers.

8. Centralisation:

If most of the power and responsibilities are retained at top level management, the organisation is centralised. All the decisions are taken only by the top executive at the centre. It has more span of control. If the power is delegated to the subordinates, the organisation is decentralised. For effective management, decentralisation is necessary. It means that the delegation of authority to subordinates helps to take a quick decision on all important problems. Decentralisation will have shorter span of control.

9. Scalar Chain:

Scalar chain means “line of authority.” This principle states that any instructions and orders should be sent from top level to the bottom level only through the line of authority. There should be an unbroken line of power and command from top level to bottom level. Over lapping anyone in the organisation structure will spoil the performance of the management system.

10. Order:

This principle deals with the arrangement of things and persons. This is of two types “Material order” and “Social order”. A place for everything and everything in its place is “Material order” and a place for every one and everyone in his place is “Social order”. Scientific selection, training and placement are necessary so that materials can be easily taken out and men can be easily located.

11. Equity:

The manager should treat the employees equally and kindly. When this principle is followed, the employee’s morale, sincerity and loyalty will be improved. There will not be any friction among the employees.

12. Stability of Tenure of Personnel:

Stable and secure work force is an asset to any organisation. It will take some time for an employee to work efficiently in his job even if he has the required skill and knowledge. Therefore the management should create favourable working conditions by providing good salary, promotion opportunities, welfare facilities etc. It is better to keep a stable manager of average ability than a very efficient manager who merely comes and goes.

13. Initiative:

Initiative is the power of thinking and executing any task with enthusiasm voluntarily. When employees come forward with new ideas, new methods etc., they must be encouraged. It improves good morale among the employees.

14. Espirit De Corps:

It is a French word which means “feeling of harmony and union among personnel” of an organisation. Union is strength. Management should treat the employees kindly and equally to develop co-operation among them. Management should avoid the policy of “divide and rule.”

Principles of Management by Henry Fayol that are Vital to organise and manage the Business

The principles of management are vital to organise and manage the business. Henry Fayol has suggested 14 principles of management in order to make the job of management more effective and efficient.

These are as follows:

1. Division of Work:

The division of work makes it possible to specialise in a single thing rather than doing everything. The person specialise, the more efficiently he can perform his work. The specialisation increases productivity by making workers more efficient. This principle should be applied to all kind of work, that in technical as well as managerial.

2. Authority and Responsibility:

Authority is the key to a managerial job which enables a manager to command subordinates to work towards the attainment of organisational objectives. It should commensurate with responsibility because without authority, the responsibility will make a person in­effective.

A manager might use both official as well as personal authority during getting things done. A good manager has the courage to accept responsibility and inspires the employees around him. There should be purity between authority and responsibility.

3. Discipline:

As per views of Fayol, “Discipline is obedience, energy, application, behaviour and outward mark of respect shown by employees”. Good discipline is the result of effective leadership. A clear understanding between management and workers is necessary in the organisation, if the organisation function properly and prosper. Therefore, it should be equally important on the part of the workers as well as the management.

Discipline can be maintained at all levels with the help of:

(a) Good supervision;

(b) A clear and fair agreements as far as possible; and

(c) Judicially applied sanctions.

4. Unit of Command:

An employee should receive orders from only one superior because this helps in maintaining discipline and controlling the activities. The situation of two or more superiors is not faithful because the subordinate would not be able to decide which superior orders are too carried out and confusion of authority would result. It order to establish fair and proper unit of command in the organisation it is essential that the relationships in the organisation structure are clearly defined and functions of different departments are clearly laid down.

5. Unity of Direction:

This principle is based on ‘one manages one plan having the same objectives’. The efforts of all members of the organisation should be directed towards the achievement of common goals. The unity of direction is essential for achieving unity of action, in the pursuit of common objectives by a group of persons.

6. Subordination of Individual Interest to General Interest:

The organisation interest is over and above the personal interest. This can be achieved when manager set an example through his good conduct and behaviour. The agreement between the employers and employees should be fair and there should be constant vigilance and supervision.

7. Remuneration of Personnel:

According to Fayol view remuneration of employees should be fair reasonably in accordance with their contribution and need to satisfy both the employer and employees. He did not favour profit sharing plan for workers but advocated it for manager.

During determination of remuneration to the employees, the following should be taken into account:

(a) Assurance of fair remuneration;

(b) Encouraging keenness by rewarding well directed effort; and

(c) Should not read to over payment beyond reasonable limits.

8. Centralisation:

Centralisation means the decision making power in hand of managers and top management while decentralisation refers a dispersal of power from top management to middle and specially lower level of management.

Fayol felt that managers should retain final authority for decisions but also decentralise to some extent to do the jobs properly. The optimum balance between centralisation and decentralisation should be maintained as per needs of the organisation.

9. Scalar Chain:

It is the chain of superiors ranging from the ultimate authority to the lowest ranks as per (Fig. 2.). It in unbroken line of command from top to bottom of the organisation structure, for example in Fig.2 as between Band C, B is superior and C his subordinate, as between C and D, C is superior and D his subordinate and so on for all other links in the chain.

As per Fayol scalar chain must be strictly observed in the Chain usual course of the functioning of the organisation, except in the emergency situations when its strict observance might be detrimental to the interests of the organisation. Gang Plank theory may be adopted whenever it is required that is cross communication if agreed by all parties and superiors are kept informed.

10. Order:

The order means a systematic arrangement of things and personnel. According to Fayol, there are two aspects to an order.

They are:

(a) Material Order – There should be a place for everything and everything should be in its place. The purpose of this is to avoid loss of material.

(b) Social Order – There should be a place for everyone and everyone should be in his place, in other words, there should be right person in the right place.

11. Equity:

Equity means a sense of fairness and justice to all employees working in the organisation. Management should treat all employees with justice and kindness.

12. Stability of Tenure of Personnel:

A reasonable security of job should be provided to all employees in the interest of the efficiency of organisation and management. An employee can work confidently and comfortably when he feels secured in the organisation. A minimum rate of labour turnover is inevitable. However unnecessary labour turnovers must be avoided at all costs.

13. Initiative:

As per this principle, employees should be provided an opportunity to develop and use initiative for solving work related problems. The proper care should be taken during developing policies and decision making power. The opportunity to perform independently is an essential component of employee growth and development.

14. Esprit De Corps (Union is Strength):

This point states that union is strength. It refers a lesson to management to take steps for promoting team spirit among the group. Promoting team spirit will give a sense of unity to the organisation. It will greatly facilitate the most effective attainment of common objectives.

Principles of Management by Henry Fayol (Diagram)

Fayol has given fourteen principles of management. Management principle is a fundamental truth establishing cause-effect relationship and provides guidelines for managerial actions. Fayol’s principles of management are known as general principles of management because these principles can be applied in any type of organization- business or non-business, public sector or private sector.

Fayol’s principles of management are as follows:

1. Division of Work:

Division of work involves dividing whole work into relevant number of tasks or units. Instead of assigning the whole work to a person, only a task/unit of work is assigned to him based on his competence. Adoption of this principle results in specialization of work. In its absence, there is lack of specialization and chances of duplication of work increase.

2. Authority and Responsibility:

Authority is the right to make decisions and get these implemented by the subordinates. Responsibility is the duty of a person to complete an assigned work. There should be parity between authority and responsibility. Adoption of this principle results in quick decision making and action taking and no misuse of authority. Violation of this principle results in delay in decision making and overburden of responsibility or chances of misuse of authority.

3. Discipline:

Discipline means engaging in desirable behaviour prescribed by the organization. Such prescription may be through rules and regulations known as enforced or command discipline or through practices like commitment to organization, work, etc. known as self-discipline. In an organization, both types of discipline are relevant for all persons.

This principle also suggests that there should be judicious application of penalties by management in case of breach of discipline by any one. Adoption of this principle results in systematic working in the organization and mutual trust among people. Violation of this principle results in chaos in the organization, wastage of resources, and delay in work performance.

4. Unity of Command:

Unity of command means an employee should get orders and instructions from only one superior. This principle is against Taylor’s functional foremanship with which Fayol was aware but still he has maintained that unity of command is an important principle because if a person has a reporting relationship to a single superior, problem of conflicts in instructions is less and feeling of responsibility for results is high.

Adoption of this principle leads to clarity about what a subordinate has to do and fast communication of work performance. Violation of this principle results in confusion about what to do and what not to do and escaping of the subordinate from his responsibility of work performance.

5. Unity of Direction:

In short, unity of direction means ‘one plan, one boss’. According to this principle, each group of activities having the same objectives must have one plan and one head. For example, product promotion involves various activities like advertising through various media (TV, radio, newspapers, magazines, etc.), personal selling (demonstration or selling of products through personal contact), and sales promotion (offering of specific occasion discounts).

However, all these activities have the same objective, that is, increasing customer awareness about products. Therefore, all these activities should be put under one plan and one head for better performance. Adoption of this principle results in better coordination between different related activities and unity of efforts of all employees concerned. Violation of this principle results in unnecessary duplication of activities and lack of coordination in performing various activities.

6. Subordination of Individual Interest to General Interest:

This principle implies that individual interest must be subordinate to general interest if there is any conflict between the two. General interest is in the form of common purpose of a next higher entity. For individuals, the next higher entity is the group of individuals; for groups of individuals, the department; for departments, the organization as a whole.

Conflict of interest at any level should be solved by referring to the interest of the next higher entity and, ultimately, organizational interest will prevail over all other interests. Adoption of this principle results in emphasis on achieving organizational goads and coordination among goals at all levels. Violation of this principle results in frequent interest conflicts and emergence of organizational politics leading to self- serving behaviours.

7. Remuneration of Employees:

This principle implies that remuneration (wages/salaries) of employees should be fair and provide maximum possible satisfaction to employees and employers. This principle also includes provision of non-financial incentives. Adoption of this principle results in satisfaction of employees and their commitment to satisfactory work performance. Violation of this principle results in conflict between owners and employees and high rate of employee turnover (leaving an organization).

8. Centralization and Decentralization:

This principle shows the degree of centralization or decentralization of authority in an organization. Centralization means concentration of authority at upward and decentralization means widespread distribution of authority. Share of authority of a manager depends on his character, mental worth, reliability of his subordinates and, also, on conditions or nature of business.

However, since both absolute and relative values are constantly changing, it is desirable that the degree of centralization and decentralization may itself vary constantly — leaning towards decentralization. Adoption of this principle leads to determination of appropriate level of centralization or decentralization and appropriate use of authority. Violation of this principle results in either high centralization causing undue delay in decision making or high decentralization leading to coordination and control problems.

9. Scalar Chain:

Scalar chain is the chain of superiors ranging from the highest level of authority to the lowest level in an organization. In an organization, except persons at the highest and lowest levels, all persons are both superiors as well as subordinates. Any communication going up or coming down should follow this chain. Thus, communication passes through a number of superior-subordinate relationships.

However, this system results in undue delay in communication. In order to overcome this problem, Fayol has suggested gang plank which is the system of direct communication between two employees not in the same chain for timely horizontal communication flow in special circumstances. Scalar chain and gang plan have been presented in Figure 2.2.

In Figure 2.2, A is the top man having immediate subordinates B and L. In turn B and L are having immediate subordinates C and M. This continues to the level of G and Q. Ordinarily, the communication must flow from A to B to C to D, and so on while coming from the top to down.

Similarly, it must flow from G to F to E, and so on while going up. It means if any communication is going from F to P, it will flow from F to A via E, D, C and B and coming down to P via L, M, N and O. Fayol suggests that this scalar chain system takes time and, therefore, can be substituted by gang plank (dotted line) without weakening the chain of command.

In order to maintain authority, it is desirable that superiors of F and P authorize them to deal directly provided each informs his superiors of any action taken. Fayol suggested that this system allows F and P to deal in a few hours with some questions or other which via the scalar chain would pass through twenty transmissions, inconvenience people, involve masses of paper, lose weeks or months to get to a conclusion, less satisfactory than the one which could have been obtained via direct contact.

10. Order:

This principle implies that there should be a place for everything and everything should be on its place and there should be the right person at the right place. Essentially, it means orderliness in the organization. Adoption of this principle results in procurement resources at right time and optimum utilization of resources. Violation of this principle results in non-availability of resources at the required time and ineffective utilization of resources.

11. Equity:

Equity is the combination of justice and kindness. This principle implies that employees should be given kind, just, and fair treatment. There should not be any discrimination on account of sex, religion, language, caste, nationality, etc. Equity also involves that all organizational rules should be followed by everyone irrespective of the positions people hold. Adoption of this principle leads to uniformity in behavioural patterns of people resulting in high morale of employees. Violation of this principle results in class conflict in the organization and feeling of harassment.

12. Stability of Personnel:

Stability of personnel means reasonable security of jobs. Employees should be kept at their positions at least for a minimum fixed period and no employee should be removed within a short period of time. Stability of personnel is essential to get an employee accustomed to new work and succeeding in doing it well. This principle also involves that personnel should be selected after due and rigorous procedure.

Adoption of this principle results in providing reasonable job security to employees saving them from unnecessary anxiety and enabling them to fully concentrate in their work. Violation of this principle results in wastage of time in learning the job by a new employee and unhealthy work environment.

13. Initiative:

Initiative refers to taking steps ahead of others in doing a work or introducing a new method of doing a work in a better way. This principle says that managers should encourage employees for taking initiative. The organization should have employee suggestion system whereby suggestions which result in substantial cost/time reduction should be rewarded.

Adoption of this principle results in encouragement for creativity in an organization which helps in finding out new ways of doing better and high satisfaction to employees. Violation of this principle results in old ways of working which might be obsolete and demotivation of employees.

14. Esprit de Corps:

Esprit de corps is a French term which means ‘union is strength’. Esprit de corps principle states that management should promote team spirit among employees. The word “I” should be replaced by the word “We” in all communications to employees. Adoption of this principle results in development of team spirit, belongingness, and focus on group working. Violation of this principle leads to lack of group harmony and focus on individualism.

Elements of Management:

Fayol holds that management should be viewed as a process consisting of five elements. He has regarded these elements as functions of management. These are planning, organization, commanding, coordination, and controlling.

Relevance of Fayol’s Principles:

According to the classification of era of management development, Fayol’s principles are treated as classical while present-day management adopts systems and contingency approach. This approach suggests that while managing an organization, it should be treated as a system and management action should be based on the contingent factors both within and outside an organization.

However, this does not mean that Fayol’s principles are not relevant to modern management; in fact, they have relevance to modern management and many principles of Fayol are being applied today. However, it can be said that not all principles of Fayol can be applied in all organizations in the same way.

In fact, Fayol also recognized this fact and suggested that management principles are not rigid but flexible and their use requires intelligence, experience, and proportion.

Principles of Management by Henry Fayol: – Guiding the Management Process and the Management Practices

He presented many principles of management, guiding the management process and the management practices.

Some of them are as follows:

i. Unity of command – In this, every employee should receive order from his superior only about his particular work to avoid confusion, delays and misunderstanding.

ii. Unity of direction – He was very firm that each ground of activity, having the same objective, must have one and only one head and one plan.

iii. Subordination – Efforts must always be made to reconcile the individual interest with common interest. That is, the interest of a group must always supersede the interest of the individual. Individual interests should not be encouraged at the cost of a team interest or a group interest or an organisational interest.

iv. Superior scalar change – Such a change refers to superiors ranging from the lowest level to highest ultimate level. This states the superior subordinate relationship as well as the authority of superior with respect to subordinate at different levels. The chain must be used for communication.

v. Stability – Instability among personnel is necessarily the cause and the effect of bad management. Fayol advocates the dangers of high labour turnover that results into unnecessary costs. He advocates stability among personnel as an important factor.

vi. Remuneration – He recommends just and fair remuneration that will provide maximum satisfaction to both employees and employers.

vii. Initiative – A manager should keep his ego aside to permit his subordinates the freedom to think and the freedom to execute.

viii. Order – He stressed on maintaining orderliness in work through suitable organisation of men, machines and materials. Disorder, in his interpretation does not need any effort.

ix. Discipline – According to him, discipline means obedience to authority, observance of service rules, performance norms, agreements, etc.

He believed the best means to maintain high orders of discipline are:

a. good supervision at all levels,

b. clear and fair agreements between employees and employer and

c. judicious use of penalty.

x. Division of work – More and better work with same efforts are possible by division of work in the management process. One single individual cannot properly perform with efficiencies in the various management functions. They must be, therefore, entrusted to specialist in respective fields. Division of work results into specialization.

xi. Equity – This means equal and fair treatment to all. This ensures good industrial relations between management and labour required for successful working of the organisation.

xii. Authority and responsibility – Responsibility is a natural consequence of and corollary to authority. Therefore, clarity should be maintained between the two. Wherever the authority is exercised, responsibility follows.

xiii. Centralization – The importance of subordinates when reduced, results in centralization and vice versa. But, the degree of it should be determined on the basis of individual circumstances.

Fayol’s management had significant contribution to the management thought.

The theory emphasized three important aspects, namely:

1. The concept that management, as a separate body of knowledge, is applicable to all forms of group activity.

2. This was a first comprehensive theory of management.

3. His concept of teaching and developing management in colleges and universities had firm grounds.

In short, Fayol’s main concern was to improve the management of the entire organisation, whereas Taylor concentrated on improving the management of jobs.

What are the 14 Principles of Management?

Henry Fayol emphasized that “the soundness and good working order of the body corporate depend on a certain number of conditions termed indiscriminately principles, laws, and rules.” Whilst adopting the term “principle”, he made it dear that “there is nothing rigid or absolute in management affairs”, it all being a question of proportion.

He stressed that principles are flexible and capable of adaptation to every need. The important thing was “Knowing how to make use of them, which is a difficult art requiring intelligence, experience, decision and proportion”.

He listed and reviewed fourteen principles of management on the following aspects, namely:

1. Division of work,

2. Authority and Responsibility,

3. Discipline,

4. Unity of command,

5. Unity of direction,

6. Subordination of individual interest to the general interest,

7. Remuneration,

8. Centralization,

9. Scalar chain (line of authority),

10. Order,

11. Equity,

12. Stability of tenure of personnel,

13. Initiative, and

14. Esprit de corps.

These are now briefly explained below, particularly because, despite the great time lay, his observations are basically valid even today.

1. Division of Work:

He emphasizes the production of more and better work with the same effort as the object of division of work. He stresses that each change of work, whether of the worker or the manager, brings in its train an adaptation which reduces output. Whilst advocating specialization and division of work as the best means of making use of individuals and groups of people, he warns that division of work has its limits which must not be exceeded.

2. Authority and Responsibility:

He explains authority as “the right to give orders and the power to exact obedience”. He distinguishes between a manager’s official authority which is derived from his office and personal authority which is “compounded of intelligence, experience, moral worth, ability to lead, past services, etc.”

He observes responsibility as a corollary of authority, as its natural consequence and essential counterpart. An interesting observation make is his stress on responsibility being feared as much as authority is sought after which required the good leader to infuse in persons around him “courage to accept responsibility”.

3. Discipline:

He believes discipline is “absolutely essential for the smooth running of business” and describes discipline as “respect for agreements which are directed at achieving obedience, implication, energy, and the outward marks of respect”.

He concludes that the best means of establishing and maintaining discipline are:

(i) Good superiors at all levels,

(ii) Agreements as clear and fair as possible, and

(iii) Sanctions (penalty) judiciously applied.

4. Unity of Command:

Here he advocated that an employee must receive orders from one superiors only for any action whatsoever. Uneasiness is felt immediately two superiors wield their authority over the same person or department. He feels that dual command is a jK-rpetual source of conflicts.

5. Unity of Direction:

This is explained as “one head and one plan for a group of activities having the same objective”. This is essential for “unity of action, coordination of strength and focusing of effort”. Unity of direction refers to “one head, one plan” whilst unity of Command emphasizes “one employee to have orders from one superior only”.

6. Subordination of Individual Interest to General Interest:

The interest of one employee or group of employees must not prevail over that of the concern. He stresses that although this is so obvious, it is lost sight of because of ignorance, ambition, selfishness, laziness and weaknesses. All human passions tend to cause the overlooking of the general interest.

7. Remuneration of Personnel:

Remuneration being the price of services rendered by personnel, should be fair and must, as far as possible, afford satisfaction to both the personnel and the firm.

8. Centralisation:

He explains this as “everything which goes to increase the importance of the subordinate’s role is decentralization, everything which goes to reduce it is centralization”. A certain extent of centralization or decentralization automatically exists and it is more a matter of finding the “optimum degree for the particular concern”.

9. Scalar Chain:

He looks upon the scalar chain as “a chain of superiors ranging from the ultimate authority to the lowest ranks”. Thus the line of authority is routed via every link in the chain by all communications which commence from or reach the ultimate authority. This path is “disastrously lengthy in large concerns, notably in governmental ones”. One should not depart needlessly from the line of authority but it is even a greater error to stick to it when detrimental to the business.

10. Order:

The formula given here is “a place for everything and everything in its place” (for material things) and “a place for everyone and everyone in his place” (for human order). It is a principle of organization for arrangement of material things mil human beings. It is a must for both material order and uncial order.

11. Equality:

He feels that the head of the business must strive “to instill a sense of equity throughout all levels of the scalar chain”. To evoke devotion and loyalty from the personnel, it is necessary in treat them with kindliness. Equity results from kindliness and justice.

12. Stability of Tenure of Personnel:

He feels that instability of tenure constitutes the cause and effect of bad management. Time is required for an employee to succeed in his new work assuming he possesses the requisite qualities. He opines that often “a mediocre manager infinitely preferable to outstanding managers who merely nine and go”.

13. Initiative:

He stresses the need to encourage and develop to the fullest extent initiative or the power of thinking out and executing. He advocates that the manager should even “sacrifice some personal vanity” to provide this satisfaction to his subordinates.

14. Esprit de Corps:

As “union is strength”, harmony and union among the personnel constitute the great strength of a concern. The dangers to be avoided are a misunderstandings caused through poor communication. The principles enunciated are not aimed at being exhaustive but are the ones to which Fayol had recourse most often. He stresses the universality of such principles and their application not only to business but also for the success of all associations of individuals.

Principles of Management by Henry Fayol – that are applicable to all systems, situations and are capable of adoption to every need

Fayol evolved fourteen principles of management that are applicable to all systems, situations and are capable of adoption to every need.

Therefore, Fayol’s 14 principles are termed as universal principles of management which may be briefly stated as follows:

1. Division of Work – The object of division of work is to derive the benefits from the principle of specialisation which can be applied not only in technical work, but in all other work as well. Unlike Taylor, Fayol pointed out that division of work has its obvious limits.

2. Authority and Responsibility – Authority and responsibility are correlated terms; responsibility is the essential counterparts of authority and they go hand in hand. An ideal manager is expected to have official authority arising from official position as well as his inherent personal authority. Such personal authority is “compounded of intelligence, experience, moral worth, ability to lead, past services, etc.”

3. Discipline – “Discipline is in essence obedience, application, energy, behaviour, and outward marks of respect” shown by employees. “Discipline is what the leaders make it” through the observance of agreements, because agreements spell out the formalities of discipline. Three requisites of discipline are (a) good supervisors at all levels, (b) clear and fair agreements, and (c) judicious application of penalties or sanctions.

4. Unity of Command – This principle requires that an employee should receive orders from one superior only. Dual command wreaks havoc in all concerns, “since authority is undermined, discipline is in jeopardy, order disturbed and stability threatened.”

5. Unity of Direction – Fayol discussed this principle of unity of direction in a different way from that of unity of command. While unity of direction is concerned with the functioning of the body corporate, unity of command is only concerned with the functioning of personnel at all levels. For the accomplishment of a group of activities having the same objective, there should be one head and one plan. “A body with two heads is in the social as in the animal sphere a monster, and has difficulty in surviving.”

6. Subordination of Individual Interest to General Interest – Common interest must prevail over individual interest, but some factors like ambition, laziness, weakness, and others tends to reduce the importance of general interest.

7. Remuneration of Personnel – As the price of services rendered remuneration should be fair and satisfactory to both the parties.

8. Centralization – “Everything which goes to increase the Importance of the subordinate’s role is decentralization, everything which goes to reduce it is centralization.” The question of centralization or decentralization holds the key to the utilization of all faculties

9. Scalar Chain – It is the chain of superiors or the line of authority from the highest executive to the lowest one for the purpose of communication. The need for swift action should be reconciled with due regard to the line of authority by using “gang plank” or direct contact.

10. Order – This is a principle of organization relating to things and persons. Material order requires “a place for everything and everything in its place” and social order demands the engagement of “the right man in the right place.”

11. Equity – Equity is greater than justice, since it “results – from the combination of kindliness and justice.” The application of equity requires much good sense, experience and good nature with a view to securing devotion and loyalty from employees.

12. Stability of Tenure of Personnel – Stability of tenure is essential to get an employee accustomed to doing a new work and to enable him in performing it well. Instability of tenure is an evidence of bad running of affairs.

13. Initiative – The freedom to propose a plan and to execute it is what is known as initiative that increases zeal and energy on the part of human beings. Since initiative is one of “the keenest satisfactions for an intelligent man to experience”, Fayol advised managers to secure as much initiative from employees as possible.

14. Esprit de Corps – This is an extension of the principle of unity of command whereby teamwork is ensured. To maintain proper esprit de corps in the organization, personality politics and abuse of written communications are to be guarded against.