PRINCIPLE OF MANAGEMENT DEVELPOED BY "HENRY FAYOL".

Henry Fayol is also known as "Father of Management Studies and Thoughts".  

Henry Fayol developed 14 management principles. 

FAYOL'S PRINCIPLES OF MANAGEMENT:- 

1. Division of Work: According to this Principle the whole work must be divided into small tasks or units and Instead of entrusting all the work to one person,

one task or unit of work should be assigned to one person looking at the ability, qualification, and experience of that person. 

For example, In Bank one person is receiving cash, one is giving cash, one is making entry in pass book, one is giving loan, one is doing F.D., etc. So work is divided and bank operates efficiently.

2- Authority and Responsibility: Authority means power to take decisions and responsibility means an obligation to complete the job or work assigned on time.

According to this principle there must be balance between authority and responsibility because excess of authority over responsibility may bring negative results and excess of responsibility over authority will not allow the worker to complete his job on time.

For example, If a person is given responsibility to produce 500 units in one month but he is not given authority to purchase raw materials. If there is no raw materials available in stock as a result he could not complete the target on time.

3- Discipline: Fayol insists that discipline is required at superior as well as subordinate level both. 

Discipline requires:

• good superiors at every level

• clear and fair agreement between superior and subordinate 

• Judicious application of penalties.

For example, The employees must loyal towards the organisation by working effectively and efficiently. On the other hand, superiors must also meet their commitments by fulfilling their promise of increments, promotions, etc.

4- Unity of Command: According to this principle, one employee should receive orders from one superior only if he will receive orders from more than one superior then he will get confused and will not be able to understand that whose orders must be executed first.

For example, If a sales person is asked to finalize a deal with customer and the marketing manager allows him to give a discount of up–to 10% but the Finance Manager allows him to give a discount of up–to 25%. In this situation employee will get confused as to whose instructions must be followed by him.

5- Unity of Direction: According to this principle, the efforts of all members of organisation must be directed to one direction that is achievement of common goal. "One unit means one plan".

6- Subordination of Individual Interest to General Interest: According to this principle, the organizational goal should be placed above the individual or employer goal. If the objective of both group are in different directions then manager must try to reconcile individual interest with organisational interest and if it is not possible then individual goal must be sacrificed for achieving organisational goal.

For example, A Finance Manager of a company should attend an important meeting for company's benefit rather than attend a family function on that date.

7- Remuneration of Persons: According to this principle, employees should be paid fair wages and salaries, which would give at least a reasonable standard of living.

At the same time it should be with in the paying capacity of company.

For example, If in a particular year the organisation has earned more profit than a part from giving extra profit to shareholders and owners, some part of profit must be given to employees also in the form of bonus.

8- Centralisation and Decentralisation: 

'Centralised' means giving the power or authority only in few hands at the top level. 'Decentralised' means giving power or authority at every level of management.

According to Fayol a company must not be completely centralised or decentralised but there must be combination of both according to the environment of organisation.

For example, The important decisions of making plans, policies, strategies, can be centralised but the activities of routine work such as purchase of raw materials, etc. can be decentralised.

9- Principle of Scalar Chain: Scalar Chain means line of authority or line of superior from highest to lowest rank. Fayol insists that every information in an organisation must be pass through every member of this chain, no skipping of any one key is allowed.

But sometimes following scalar chain becomes a long process and if some important information has to be passed, it gets delayed so in case of emergency, Fayol allowed a short cut in the chain which is called "Gang–Plank". Gang Plank permits direct communication between the employees working in different position without following the scalar chain.

10- Principle of Order: In this principle order refers to orderly arrangement of men and material. Fayol insists that there must be a fixed place for everything and everyone in the organisation so that no time and energy is wasted in search of any material or any person.

For example, If a worker needs guidance from supervisor, he must know the fixed cabin of supervisor.

11- Principle of Equity: Equity refers to fair and kind treatment to employees. Manager should not be biased with employees so that employees will get dissatisfied and not contribute to their maximum capacity. They will put their maximum effort only when they are treated with kindness and justice.

For example, In multinational companies people of various nationalities work together without any descrimination.

12- Stability of Tenure of Personnel: It refers to no frequent transfer of employees. According to this principle the management must provide the feeling of job security among the employees because it takes some time to a person to learn and get settled on a job and by the time he gets settled, he receives the transfer order then it will be wastage of resources and employees will not be able to contribute his best for organisation.

13- Initiative: Initiative refers to taking the first step with self–motivation. Fayol suggested that employees in the organisation must be given an opportunity to take some step in making a plan. So, managers must welcome the suggestions and ideas of employees before framing the plan if their suggestions can be beneficial for the organisation. 

For example, before setting up of plan a manager should encourage employees to give suggestions and welcome their ideas but once the plan is made every employee must follow it and implement it.

14- Esprit DeCorps: In this principle, Fayol suggested that management must 

encourage and promote team work, unity. This will bring coordination and cooperation in organisation. 

A manager should replace 'I' with 'We'.

All principles and techniques developed by F.W. Taylor with examples