The document outlines Henri Fayol’s 14 principles of management, emphasizing concepts such as division of work, authority, discipline, unity of command, and the importance of employee morale. It also covers Fayol's definition of management roles, consisting of planning, organizing, commanding, coordinating, and controlling. Furthermore, it introduces Peter Drucker's management by objectives approach, highlighting key result areas for managers and the SMART criteria for setting objectives.

1. Henri Fayol’s 14
Henri Fayol’s 14
Principles Of
Principles Of
Management
Management

2. 1. Division Of Work
1. Division Of Work
Specialization allows the individual to
Specialization allows the individual to
build up experience, and to
build up experience, and to
continuously improve his skills.
continuously improve his skills.
Thereby he can be more productive.
Thereby he can be more productive.

3. 2. Authority
2. Authority
The right to issue commands, along
The right to issue commands, along
with which must go the balanced
with which must go the balanced
responsibility for its function.
responsibility for its function.

4. 3. Discipline
3. Discipline
Employees must obey, but this is two-
Employees must obey, but this is two-
sided: employees will only obey orders
sided: employees will only obey orders
if management play their part by
if management play their part by
providing good leadership.
providing good leadership.

5. 4. Unity Of Command
4. Unity Of Command
Each worker should have only one boss
Each worker should have only one boss
with no other conflicting lines of
with no other conflicting lines of
command.
command.

6. 5. Unity of Direction
People engaged in the same kind of
People engaged in the same kind of
activities must have the same
activities must have the same
objectives in a single plan. This is
objectives in a single plan. This is
essential to ensure unity and
essential to ensure unity and
coordination in the enterprise. Unity of
coordination in the enterprise. Unity of
command does not exist without unity
command does not exist without unity
of direction but does not necessarily
of direction but does not necessarily
flows from it.
flows from it.

7. 6.
6. Subordination of individual
Subordination of individual
interest
interest
Management must see that the goals
Management must see that the goals
of the firms are always paramount.
of the firms are always paramount.

8. 7. Remuneration
7. Remuneration
Payment is an important motivator
Payment is an important motivator
although by analyzing a number of
although by analyzing a number of
possibilities, Fayol points out that there
possibilities, Fayol points out that there
is no such thing as a perfect system
is no such thing as a perfect system

9. 8. Centralization (Or
8. Centralization (Or
Decentralization)
Decentralization)
This is a matter of degree depending
This is a matter of degree depending
on the condition of the business and
on the condition of the business and
the quality of its personnel.
the quality of its personnel.

10. 9.
9. Scalar chain
Scalar chain (Line of Authority)
(Line of Authority)
A hierarchy is necessary for unity of
A hierarchy is necessary for unity of
direction. But lateral communication is
direction. But lateral communication is
also fundamental, as long as superiors
also fundamental, as long as superiors
know that such communication is taking
know that such communication is taking
place. Scalar chain refers to the number
place. Scalar chain refers to the number
of levels in the hierarchy from the
of levels in the hierarchy from the
ultimate authority to the lowest level in
ultimate authority to the lowest level in
the organization. It should not be over-
the organization. It should not be over-
stretched and consist of too-many levels
stretched and consist of too-many levels

11. 10. Order
10. Order
Both material order and social order are
Both material order and social order are
necessary. The former minimizes lost
necessary. The former minimizes lost
time and useless handling of materials.
time and useless handling of materials.
The latter is achieved through
The latter is achieved through
organization and selection.
organization and selection.

12. 11. Equity
11. Equity
In running a business a ‘combination
In running a business a ‘combination
of kindliness and justice’ is needed.
of kindliness and justice’ is needed.
Treating employees well is important
Treating employees well is important
to achieve equity.
to achieve equity.

13. 12.
12. Stability of Tenure of
Stability of Tenure of
Personnel
Personnel
Employees work better if job security
Employees work better if job security
and career progress are assured to
and career progress are assured to
them. An insecure tenure and a high
them. An insecure tenure and a high
rate of employee turnover will affect
rate of employee turnover will affect
the organization adversely.
the organization adversely.

14. 13. Initiative
13. Initiative
Allowing all personnel to show their
Allowing all personnel to show their
initiative in some way is a source of
initiative in some way is a source of
strength for the organization. Even
strength for the organization. Even
though it may well involve a sacrifice
though it may well involve a sacrifice
of ‘personal vanity’ on the part of
of ‘personal vanity’ on the part of
many managers.
many managers.

15. 14. Esprit de Corps
14. Esprit de Corps
Management must foster the morale of
Management must foster the morale of
its employees. He further suggests that:
its employees. He further suggests that:
“real talent is needed to coordinate
“real talent is needed to coordinate
effort, encourage keenness, use each
effort, encourage keenness, use each
person’s abilities, and reward each
person’s abilities, and reward each
one’s merit without arousing possible
one’s merit without arousing possible
jealousies and disturbing harmonious
jealousies and disturbing harmonious
relations.”
relations.”

16. What Is Management?
What Is Management? (According
(According
To Fayol)
To Fayol)
Fayol's
Fayol's definition of management roles and actions
definition of management roles and actions
distinguishes between
distinguishes between Five Elements
Five Elements:
:
 Prevoyance
Prevoyance.
. (Forecast & Plan). Examining the future and drawing
(Forecast & Plan). Examining the future and drawing
up a plan of action. The elements of strategy.
up a plan of action. The elements of strategy.
 To organize
To organize.
. Build up the structure, both material and human, of
Build up the structure, both material and human, of
the undertaking.
the undertaking.
 To command
To command.
. Maintain the activity among the personnel.
Maintain the activity among the personnel.
 To coordinate
To coordinate.
. Binding together, unifying and harmonizing all
Binding together, unifying and harmonizing all
activity and effort.
activity and effort.
 To control
To control.
. Seeing that everything occurs in conformity with
Seeing that everything occurs in conformity with
established rule and expressed command.
established rule and expressed command.

17. Application Of Fayol’s Principles
Application Of Fayol’s Principles
 Change and Organization.
Change and Organization.
 Decision-making.
Decision-making.
 Skills. Can be used to improve the basic
Skills. Can be used to improve the basic
effectiveness of a manager.
effectiveness of a manager.
 Understand that management can be
Understand that management can be
seen as a variety of activities, which can
seen as a variety of activities, which can
be listed and grouped.
be listed and grouped.

18. Peter Drucker’s
Peter Drucker’s
Management By Objectives
Management By Objectives

19. 8 Key Result Areas Where Managers Must
Pursue Clear Objectives - Kotelnikov, 2008
•Marketing
Marketing
In order for a business to create a customer, there needs to be a
market.
•Innovation
Innovation
New ideas are required by a business in order to create a demand
for a product.
•Human organization
Human organization
•Financial resources
Financial resources
•Physical resources
Physical resources
According to Drucker, 2007 the above three Key Result Areas are
interlinked and all businesses depend on them. These are known
as the factors of production.

20. 8 Key Result Areas Where Managers Must
Pursue Clear Objectives Continued….
 Productivity
Productivity
Resources must be used productively and the productivity must grow in
order for the business to survive.
 Social responsibility
Social responsibility
A business exists in a society therefore it has certain obligations towards
the community and is responsible for its impact on the environment.
 Profit requirements
Profit requirements
Profit is essential for a business to succeed. It is one of the main reasons
behind the existence of a business and without it there would be no way
of covering the risk of potential losses, financing future projects and
most importantly none of the other above areas would exist without
profit.

21. Management By Objectives -
Management By Objectives -
Principles
Principles
 Cascading of organizational goals and
Cascading of organizational goals and
objectives.
objectives.
 Specific objectives for each member.
Specific objectives for each member.
 Participative decision making.
Participative decision making.
 Explicit time period.
Explicit time period.
 Performance evaluation and feedback.
Performance evaluation and feedback.

22. SMART Method
SMART Method
 S
Specific
pecific
 M
Measurable
easurable
 A
Achievable
chievable
 R
Realistic
ealistic
 T
Time-related
ime-related
Management by Objectives also
Management by Objectives also
introduced the SMART method for
introduced the SMART method for
checking the validity of the
checking the validity of the
objectives
objectives.

23. Bibliography
Bibliography
 14 Principles of Management.
14 Principles of Management. (2008, Aug 29).
(2008, Aug 29).
Retrieved 10 2008, from www.12manage.com:
Retrieved 10 2008, from www.12manage.com:
http://www.12manage.com/methods_fayol_1
http://www.12manage.com/methods_fayol_1
4_principles_of_management.html
4_principles_of_management.html
 Drucker, P. (2007).
Drucker, P. (2007). Management Tasks,
Management Tasks,
Responsibilities, Practices.
Responsibilities, Practices. New Jersey:
New Jersey:
Transaction Publishers.
Transaction Publishers.
 Kotelnikov, V. (2008).
Kotelnikov, V. (2008). Management by
Management by
Objective.
Objective. Retrieved 10 2008, from
Retrieved 10 2008, from
www.1000ventures.com:
www.1000ventures.com:
http://www.1000ventures.com/business_guid
http://www.1000ventures.com/business_guid
e/mgmt_mbo_main.html
e/mgmt_mbo_main.html