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Dr.G.KARTHIKEYAN
Assistant Professor of Commerce
A.V.C.College (Autonomous)
Mannampandal – 609 305
Mayiladuthurai
Henri Fayol’s
“14 Principles of Management”
Principles of Management
Principles of
Management
Mr.Henri Fayol
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
8. Centralization & Decentralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure of Personnel
13.Initiative
14.Esprit de Corps
The Father of Modern
Management
1. Division of Work
 Dividing work among the workforce
- better understanding
- easier handling and operation
- focused observation on a fixed set of goals
 Employees are specialized in different areas and they have
different skills.
Workforce
Generalist Specialist
Specialization promotes
 Efficiency of the workforce
 Increase productivity
 Increase accuracy and speed
It is applicable to both
- Technical activities
- Managerial activities
The principle of division of work can be applied at all levels in the
organisation
For example, in furniture manufacturing
company one person can be asked to cut the
wood pieces, one to join them, one to polish, one
to give finishing touch to furniture.
2. Authority and Responsibility
- The two sides of a coin
- Go together or co-existing
- Helps in meeting responsibilities on time without any delay
There must be a balance
Authority (power to take
decision)
Responsibility (obligation
to complete the job
assigned on time)
 Excess of authority without matching responsibility may bring
negative results
 Excess of responsibility without matching authority will not allow
the worker to complete his job on time
For example, if a person is given responsibility to produce 100
units in one week time but he is not given authority to
purchase the raw materials. If there is no raw material
available in the store-room as a result he could not complete
the target of producing 100 units on time
3. Discipline
- General rules, regulations for systematic working in an organisation
- Obedience behaviour
- Developing commitment in the employees towards organisation
- Systematic working in the organisation
- Discipline is required at superior as well as subordinate level
- Improves efficiency
For example, the employees must honour their commitments towards the
organisation by working effectively and efficiently. On the other hand,
superiors must also meet their commitments by meeting their promises of
increments, promotions, wage revisions etc.
4. Unity of Command
- each subordinate should receive orders and be accountable to one and only one superior.
- employee should receive orders from one boss only
- Dual or multiple command is a perpetual source of conflict
- Avoids conflicting orders and ensures order and stability in the organisation
- No confusion in the mind of subordinate.
- No ego clashes.
- Improves effectiveness in working.
For example, if employee of production department is asked to go
slow in production to maintain quality standard by the
production in-charge and sales in-charge instructs the employee
to fasten the production to meet the pending orders. In this
situation employee will get confused as to whose instructions
must be followed by him.
5. Unity of Direction
- “one unit means one plan”
The efforts of all the members and employees of organisation
must be directed towards one direction that is the achievement
of common goal.
- It leads to coordination
- Achievement of organizational goal.
For example, if an organisation is producing different lines of products — cosmetics, medicines and confectionery item each
product have its own market and its own business environment. Each division must plan its target and every employee of
that division must put his efforts towards the achievement of plan of their division under the direction of one head only.
All related activities should be put under one group, there
should be one plan of action for them, and they should be under
the control of one manager.
6. Subordination of Individual Interest to General Interest
• The management must put aside personal considerations and
put company objectives firstly.
• Therefore the interests of goals of the organization must
prevail over the personal interests of individuals.
For example, if individual’s objective is to earn more
remuneration and organisation is going through the situation of
financial crisis and has the objective of cutting down the
expenses. In this situation the individual must sacrifice his
interest as when organisation will come out from financial crisis
then he can achieve his objective.
7. Remuneration
• Employees in the organisation must be paid fairly or
adequately to give them maximum satisfaction.
• Employees get motivated.
• Greatly influences productivity
• Devotion and commitment of employees improves.
• Dissatisfaction will lead to increase in employee’s turn-over.
For example, if in a particular year the organisation has earned
more profit than apart from giving extra profit to shareholders
and owners, some part of profit must be given to employees also
in the form of bonus. This will encourage and motivate to put
more efforts and increase the profit of the company.
8. Centralization & Decentralization
 Centralization refers to concentration of authority or power in few
hands at the top level.
 Decentralisation means evenly distribution of power at every
level of management.
 According to Fayol a company must not be completely
centralized or completely decentralized but there must be
combination of both depending upon the nature and size of the
organisation.
For example, the major decisions and activities of setting up
organisational goals, plans, policies, and strategies can be
centralised but there can be policy of decentralisation for the
activities of routine work such as purchase of raw materials,
fixing targets of workers etc.
9. Scalar Chain
 line of authority or chain of superiors from highest to lowest
rank
 This chain must be followed strictly in the organisation
 Every information must pass through every key of this chain, no
skipping of any one key should be allowed.
 Systematic flow of information.
 If this chain is broken then there are chances of communication
gap in the organisation
 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 and urgent information, Fayol permitted a
short cut in the chain which is called “Gang-Plank”. Gang-plank
permits direct communication between the employees working
at the same level of authority without following the scalar chain.
10. Order
 Orderly arrangement of men and material that is a fixed place
for everything and everyone in the organisation.
 Fixed place or seat or cabin for every employee of the
organisation so that no time and energy is wasted in search of
any material or any person.
For example, if a worker is in need of a tool he must know in
which box or tool-room it will be found and if he needs guidance
from supervisor he must know the fixed cabin of supervisor. If no
fixed place is given then worker will waste his time and energy in
search of tools or supervisor.
11. Equity
- Kind, fair and just treatment to employees
- Equity does not mean equal salary to a peon and supervisor but
equity means application of same disciplinary rules, leave rules in
the same way irrespective of their grade, position and gender.
- Employees get satisfied.
- Motivate the employees and boost up the morale of the employees.
- Dissatisfaction in employees
- Increase in turnover.
- Unhealthy relation between superior and subordinates.
12. Stability of Tenure of Personnel
- No frequent termination and transfer
- Management must provide the feeling of job security
among the employees.
- Improves efficiency level of employees.
- No wastage of time and resources
- Frustration and dissatisfaction among employees.
13.Initiative
- Employees in the organisation must be given an
opportunity to take some initiative in making and
executing a plan.
- Managers must welcome the suggestions and ideas of
employees before framing the plan
- It gives immense satisfaction to employees
- Employees achieve the target on time if they are set up
with their consultation
- Employees will not work to the best of their ability.
- Demotivation among employees
For example, before setting up of plan the manager must
welcome the suggestions and ideas of employees to allow their
maximum participation. But once the plan is made every
employee must follow it and implement it.
14. Esprit de Corps
- Union is strength
- Team work
For example, if the production manager assigned a
target of manufacturing 100 units to a group of 10
members, divided the target among themselves to
produce 10 units each, principle of team spirit says that
each member of the group should not concentrate only
on achieving his individual target of 10 units but they
must concentrate on achieving group target of 100 units
so if two workers of that group fall sick, then the other
eight members must divide their individual target
among themselves and try to achieve the target of their
group.
The 14 principles of management can be used to manage organizations
and are useful tools for forecasting, planning, process management,
organization management, decision-making, coordination and control.
Conclusion
18
ThankYou

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Fayol's 14 Principles of Management Explained

  • 1. Dr.G.KARTHIKEYAN Assistant Professor of Commerce A.V.C.College (Autonomous) Mannampandal – 609 305 Mayiladuthurai Henri Fayol’s “14 Principles of Management”
  • 2. Principles of Management Principles of Management Mr.Henri Fayol 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 8. Centralization & Decentralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13.Initiative 14.Esprit de Corps The Father of Modern Management
  • 3. 1. Division of Work  Dividing work among the workforce - better understanding - easier handling and operation - focused observation on a fixed set of goals  Employees are specialized in different areas and they have different skills. Workforce Generalist Specialist Specialization promotes  Efficiency of the workforce  Increase productivity  Increase accuracy and speed It is applicable to both - Technical activities - Managerial activities The principle of division of work can be applied at all levels in the organisation For example, in furniture manufacturing company one person can be asked to cut the wood pieces, one to join them, one to polish, one to give finishing touch to furniture.
  • 4. 2. Authority and Responsibility - The two sides of a coin - Go together or co-existing - Helps in meeting responsibilities on time without any delay There must be a balance Authority (power to take decision) Responsibility (obligation to complete the job assigned on time)  Excess of authority without matching responsibility may bring negative results  Excess of responsibility without matching authority will not allow the worker to complete his job on time For example, if a person is given responsibility to produce 100 units in one week time but he is not given authority to purchase the raw materials. If there is no raw material available in the store-room as a result he could not complete the target of producing 100 units on time
  • 5. 3. Discipline - General rules, regulations for systematic working in an organisation - Obedience behaviour - Developing commitment in the employees towards organisation - Systematic working in the organisation - Discipline is required at superior as well as subordinate level - Improves efficiency For example, the employees must honour their commitments towards the organisation by working effectively and efficiently. On the other hand, superiors must also meet their commitments by meeting their promises of increments, promotions, wage revisions etc.
  • 6. 4. Unity of Command - each subordinate should receive orders and be accountable to one and only one superior. - employee should receive orders from one boss only - Dual or multiple command is a perpetual source of conflict - Avoids conflicting orders and ensures order and stability in the organisation - No confusion in the mind of subordinate. - No ego clashes. - Improves effectiveness in working. For example, if employee of production department is asked to go slow in production to maintain quality standard by the production in-charge and sales in-charge instructs the employee to fasten the production to meet the pending orders. In this situation employee will get confused as to whose instructions must be followed by him.
  • 7. 5. Unity of Direction - “one unit means one plan” The efforts of all the members and employees of organisation must be directed towards one direction that is the achievement of common goal. - It leads to coordination - Achievement of organizational goal. For example, if an organisation is producing different lines of products — cosmetics, medicines and confectionery item each product have its own market and its own business environment. Each division must plan its target and every employee of that division must put his efforts towards the achievement of plan of their division under the direction of one head only. All related activities should be put under one group, there should be one plan of action for them, and they should be under the control of one manager.
  • 8. 6. Subordination of Individual Interest to General Interest • The management must put aside personal considerations and put company objectives firstly. • Therefore the interests of goals of the organization must prevail over the personal interests of individuals. For example, if individual’s objective is to earn more remuneration and organisation is going through the situation of financial crisis and has the objective of cutting down the expenses. In this situation the individual must sacrifice his interest as when organisation will come out from financial crisis then he can achieve his objective.
  • 9. 7. Remuneration • Employees in the organisation must be paid fairly or adequately to give them maximum satisfaction. • Employees get motivated. • Greatly influences productivity • Devotion and commitment of employees improves. • Dissatisfaction will lead to increase in employee’s turn-over. For example, if in a particular year the organisation has earned more profit than apart from giving extra profit to shareholders and owners, some part of profit must be given to employees also in the form of bonus. This will encourage and motivate to put more efforts and increase the profit of the company.
  • 10. 8. Centralization & Decentralization  Centralization refers to concentration of authority or power in few hands at the top level.  Decentralisation means evenly distribution of power at every level of management.  According to Fayol a company must not be completely centralized or completely decentralized but there must be combination of both depending upon the nature and size of the organisation. For example, the major decisions and activities of setting up organisational goals, plans, policies, and strategies can be centralised but there can be policy of decentralisation for the activities of routine work such as purchase of raw materials, fixing targets of workers etc.
  • 11. 9. Scalar Chain  line of authority or chain of superiors from highest to lowest rank  This chain must be followed strictly in the organisation  Every information must pass through every key of this chain, no skipping of any one key should be allowed.  Systematic flow of information.  If this chain is broken then there are chances of communication gap in the organisation  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 and urgent information, Fayol permitted a short cut in the chain which is called “Gang-Plank”. Gang-plank permits direct communication between the employees working at the same level of authority without following the scalar chain.
  • 12. 10. Order  Orderly arrangement of men and material that is a fixed place for everything and everyone in the organisation.  Fixed place or seat or cabin for every employee of the organisation so that no time and energy is wasted in search of any material or any person. For example, if a worker is in need of a tool he must know in which box or tool-room it will be found and if he needs guidance from supervisor he must know the fixed cabin of supervisor. If no fixed place is given then worker will waste his time and energy in search of tools or supervisor.
  • 13. 11. Equity - Kind, fair and just treatment to employees - Equity does not mean equal salary to a peon and supervisor but equity means application of same disciplinary rules, leave rules in the same way irrespective of their grade, position and gender. - Employees get satisfied. - Motivate the employees and boost up the morale of the employees. - Dissatisfaction in employees - Increase in turnover. - Unhealthy relation between superior and subordinates.
  • 14. 12. Stability of Tenure of Personnel - No frequent termination and transfer - Management must provide the feeling of job security among the employees. - Improves efficiency level of employees. - No wastage of time and resources - Frustration and dissatisfaction among employees.
  • 15. 13.Initiative - Employees in the organisation must be given an opportunity to take some initiative in making and executing a plan. - Managers must welcome the suggestions and ideas of employees before framing the plan - It gives immense satisfaction to employees - Employees achieve the target on time if they are set up with their consultation - Employees will not work to the best of their ability. - Demotivation among employees For example, before setting up of plan the manager must welcome the suggestions and ideas of employees to allow their maximum participation. But once the plan is made every employee must follow it and implement it.
  • 16. 14. Esprit de Corps - Union is strength - Team work For example, if the production manager assigned a target of manufacturing 100 units to a group of 10 members, divided the target among themselves to produce 10 units each, principle of team spirit says that each member of the group should not concentrate only on achieving his individual target of 10 units but they must concentrate on achieving group target of 100 units so if two workers of that group fall sick, then the other eight members must divide their individual target among themselves and try to achieve the target of their group.
  • 17. The 14 principles of management can be used to manage organizations and are useful tools for forecasting, planning, process management, organization management, decision-making, coordination and control. Conclusion