Henri Fayol’s 14 principles of management

Henri Fayol was the first to identify the four management function like panning, organizing, leading, and controlling, and he develop guidelines for managers to follow. These guidelines from the Henri Fayol 14 principle of management such as Division of labor, Authority, Discipline, Unity of command, Unity of direction, Subordination of individual interest to the general interest, Remuneration, Centralization, Scalar chain, Order, Equity, Stability of tenure of personnel, Initiative, and Esprit de corps.

Division of work is a principle of work allocation and specialization in order to concentrate activities to enable specialization of skills and understandings to be more focus and efficiency. It increases productivity, quality and quantity of output. Division of work means dividing the total work among individuals and groups to ensure that effort and attention are focused on the task. Specialization provides the individual to build up experience, continuous improvement in skills, and to be more productive. Work specialization as the best way to use the human resources of the organization. But, the operation of group will be difficult to reschedule if any group member is absent.

In authority, managers have authority to give orders because of their position. Experience, intelligence, integrity and leadership ability are essential complements of a manager's official authority. Managers have authority to give orders must be willing to accept responsibility for the results. For example, the production manager is asking the General Manager why production is very less. He cannot say that he has delegated the responsibility to the production engineer. People often seek of authority but fear of responsibility. The fear of responsibility spoils initiative and destroys other good qualities. Responsibility arises when the authority is used and hence authority and responsibility cannot be separated.

Discipline is “respect for agreements, sincere effort for implementation a task and external marks of respect”. The essence of discipline is obedience, diligence, and correct attitude between management and its employees. A successful organization requires the common effort of workers. Employees must obey and respect the rules that manage the organization. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the organization's rules. Management can give warnings, penalties, demotions or even dismissals to the employee who breaking the rules. Maintenance of discipline requires good supervisors at all levels, clear and fair agreements, judicial application of penalty and effective communication.

In unity of command, a subordinate should receive orders and instructions from one superior only. But it does not mean that a superior should have only one subordinate. If it is not followed, there will not be any discipline. A subordinate needs to receive orders only from one superior because multiple commands will cause confusions and conflicts. Therefore a sound management should avoid dual commands.

In unity of direction, a common objective for a group of activities is an essential condition to obtaining unity of action, coordination of strength and the focusing of effort. Each group of activities should have one head and one plan with same objectives. Similar activities should be grouped together under one manager. Only then all efforts could be directed towards the common goal. Unity of command cannot function without unity of direction. For example, if there are 10 salesmen, selling the same product in the same area, and if there are 2 sales supervisors, each in charge of 5 men, then every salesman would take orders from their respective supervisors. There will be unity of direction only when all the sales plans are coordinated at a higher level.

Subordination of individual interest to the general interest is meaning that individuals who work for an organization should sacrifice their interest for the benefit of the organization like their common interest. The interest of an organization is more important than the interest of an employee. It is necessary to maintain unity and to avoid friction among the employees. In any industry, an employee interest is to earn money to meet his personal needs whereas the organization interest is to maximize the production and develop the factory. The supervisors should set the following to others to maintain general interest such as fair agreements, effective supervision and good example.

Remuneration is the money paid to the employees for their physical and mental efforts in carrying out a work.  Fair and equitable remuneration should be provided to employees to ensure better production and satisfaction. It should be fair and satisfy for both the employees and employers. Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.

In 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 is a simple question of proportion; it is a matter of finding the optimum degree for the particular concern. For example: If the manager has strength, intelligence, experience and swiftness allow him to have a wide span of control; he will be able to carry centralization. If the manager prefers to have other alternative to the experience of his employee while reserving himself the opportunity of giving central directives, he can effect considerable decentralization. For effective management, decentralization is necessary.

Scalar chain means “line of authority”. 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 any one in the organization structure will spoil the performance of the management system. For example, the first-line manager should always inform their work activities to middle manager. The existence of a scalar chain and observance to it are necessary if the organization is to be successful.

In order, for the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible. There are 2 types of Order such as Material order and Social order. A place for everything and everything in its place “material order” and a place for every one and everyone in his place are called “social order” Scientific Selection, training and placement are necessary so that materials can be easily taken out and men can be easily located.

In organizations, equity is a combination of kindliness and justice. Both equity and equality of treatment should be considered when dealing with employees. All members of the organization should be treated equally, depending upon the performance and circumstances by fair play and justice. This would help to improve the employee’s morale, sincerity and loyalty. There will not be any friction among the employees

In Stability of tenure of personnel, people who work in an organization should not be allowed to move out quite frequently because stable and secure work force is an asset to any organization. It is better to keep a manager of average ability than a very efficient manager who simply comes and goes. The management should create favorable working conditions by providing good salary, promotion opportunities and welfare facilities. Time is required for an employee to get used to new work and succeed in doing it well, always assuming that he obtain the necessary abilities.

Initiative is the power of thinking and executing any task with enthusiasm voluntarily. Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction. Everyone should be given an equal opportunity to use their creativity and come out with better ideas of doing the work. When employees come forward with new ideas and new methods, they must be encouraged. It improves good morale among the employees. For example, the superior must sacrifice his own vanity to encourage and inspire those under him to show initiative. Subordinates should be given freedom to come up with suggestions and ideas.

For Esprit de corps, in French word it means “feeling of harmony and union among personnel” of an organization. Union is strength. Team spirit and a sense of unity and togetherness should be fostered and administrated. Management should avoid the wrong understanding of the motto “divide and rule” and the abuse such as personnel must not be split up and abuse of written communications. Personnel must not be split up, it means that dividing enemy forces to weaken them is clever, but dividing one’s own team is a grave sin against the business. Abuse of written communications is wherever possible, contacts should be verbal; there is gain in speed, clarity and harmony. Again modern IT companies can be utilized as living example of this principle. A survey looking at approval ratings for CEOs and overall employee satisfaction shows companies like Apple and Google in top positions.