Henry 14 principles of management

1. 14 PRINCIPLES OF
MANAGEMENT
(HENRY FAYOL)

2. Management principles are statements of
fundamental truth. These principles serve as
guidelines for decisions and actions of managers.
They are derived through observation and analysis
of events which managers have to face in practice.
 Henry Fayol is the father of management
theory.
 He has used the term ‘administration’
instead of management.
His administrative science can be
applied equally well to public and private affairs.
Therefore, management is a universal
phenomenon.

3. According to Fayol the activities of an industrial organization
could be divided into six categories.
1. Technical activities: Production, manufacture, adaptation.
2. Commercial activities: Buying, selling and exchange.
3. Financial activities: Search for and optimum use of capital.
4. Security activities: Protection of property and persons.
5. Accounting activities: Stock-taking, balance sheet, cost, and
statistics.
6. Managerial activities: Planning, organisation, command, co-
ordination and control.
These six functions had to be performed to operate
successfully any kind of business.

4. Fayol has divided his approach of
studying management into three parts.
I. Managerial qualities and training
II.General principles of management
III.Elements of management

5. Managerial Qualities and Training
Fayol was the first person to identify the qualities
required in a manager. According to him, there are 6
types of qualities that a manager requires.
1. Physical (health, vigour and address),
2. Mental (ability to understand and learn,
judgment, mental vigour, adaptability),
3. Moral (energy, firmness, willingness to accept
responsibility, initiative, loyalty, tact and dignity),
4. Education (general acquaintance with matters
not belonging exclusively to the function
performed),
5. Technical , commercial, financial, managerial
etc.(peculiar to the function being performed)
and
6. Experience (arising from the work).

6. General principles of management
Henry Fayol's 14 Principles of Management
1. Division of work:
Division of work or specialization alone can give maximum productivity and efficiency.
By separating a small part of work, the workers speed and accuracy in its performance
increases.
Specialization tends to avoid waste of time and effort caused by changes from one work to
another.
This principle is applicable to both technical as well as managerial work.

7. 2. Authority and Responsibility
The right to give order is called authority.
The obligation to accomplish is called responsibility.
Authority and Responsibility are the two sides of the management coin.
Fayol suggested that authority and responsibility should go hand-in-hand.
Authority without responsibility promotes irresponsible behaviour of the
management. Similarly, responsibility without authority makes
management ineffective.

8. 3. Discipline
The objectives, rules and regulations, the
policies and procedures must be
honoured by each member of an
organisation.
There must be clear and fair agreement
on above norms.
There must be penalties (punishment)
for non-obedience or indiscipline.
No organisation can work smoothly
without discipline - preferably voluntary
discipline.

9. 4. Unity of Command
In order to avoid any possible
confusion and conflict, each
member of an organisation
must receive orders and
instructions only from one
superior (boss).

10. 5. Unity of Direction
All members of an
organisation must work
together to accomplish
common objectives.

11. 6. Subordination of individual
interest to group interest:
In no way, the individual
interest should dominate the
group interest.

12. 7. Remuneration
Fair pay with non-financial rewards
can act as the best incentive or
motivator for good performance.
Exploitation of employees in any
manner must be eliminated.

13. 8. Centralization
Decreasing the role of subordinates in
decision-making is centralisation, increasing
their role is decentralisation.
There must be a good balance between
centralization and decentralization of
authority and power.
Extreme centralization and decentralization
must be avoided.

14. 9. Scalar Chain/hierarchy
(Hierarchy of command linking all members of the
organisation from the top to the bottom.
Scalar denotes steps).
Orders or instructions issued at higher levels flow
through intermediate managers before reaching
lower levels.
Scalar chain states superior-subordinate relationship
throughout the concern.

15. Communication takes too long a time as the order flows from the top to the
bottom in the chain.
There is a possibility of distortion of messages in the course of its
transmission.
However, a ‘gang plank’ may be created bypassing the established line of
authority to allow quick communication and swift action.
The scalar chain in an organisation is represented by 2 ladders. (a to f
and a to p).
Any communication from f to p has to flow upwards to a through e, d,
c and b then downwards through l, m, n and o.
It will obviously take a long time.
So, in order to minimise the delay involved in communication, a gang
plank between f and p may be created as shown by the dotted line.
However, the gang plank should not be a normal practice as it
undermines the established line of authority.

16. 11. Equity
Employees must be treated kindly, and justice must
be enacted to ensure a just workplace.
Managers should be fair and impartial when dealing
with employees.
(In organizations, equity is a combination of
kindliness and justice. Both equity and equality of
treatment should be considered when dealing with
employees.)

17. 12. Stability of Tenure of Personnel/stability of staff
A person needs time to adjust himself with the new
work and demonstrate efficiency in due course.
Hence, employees and managers must have job
security.
Security of income and employment is a pre-requisite
of sound organisation and management.

18. 13. Initiative
Initiative implies freedom to think and
execute a plan.
Initiative is a powerful motivator of human
behaviour and a source of strength for the
organisation.
Zeal, energy, and initiative are desired at all
levels of the organizational ladder.

19. 14. Esprit de Corps/ Esprit of Co-operation/team-spirit
All the employees of the organization are put together as a
team in order to achieve the objectives of the organization.
The management should not follow the policy of divide and
rule.
Team spirit helps develop an atmosphere of mutual trust
and understanding.
These can be used to initiate and aid the processes of
change, organization, decision making, skill management
and the overall view of the management function.

20. Elements of management
According to Henry Fayol,
“to manage is to forecast and to plan, to organize,
to command, to coordinate and to control”.
He has regarded these elements as functions of
management.
Planning, organisation, commanding, coordinating
and controlling. (poccc)

21. THANK YOU