Which Fayols theory principle states that activities in an organization should be planned in a way that they all come under one plan and are supervised by only one person?

Everything you need to know about Fayol’s fourteen principles of management.

Henry Fayol who is regarded in responsible quarters as the real father of management science, has evolved fourteen principles of management

The fourteen principles of management as given by Henry Fayol are:-

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 Interests

7. Remuneration 8. Centralisation 9. Scalar Chain 10. Order 11. Equality 12. Stability of Tenure of Personnel 13. Initiative 14. Esprit De Corps.

Fayol’s 14 Principles of Management

Fayol’s 14 Principles of Management

The management has to perform a number of functions such as planning, organising, co-ordinating, directing, controlling etc. for the purpose of achieving its aims of operational efficiency, financial economy, and profitable return on investment. In order to perform the management functions effectively so as to enable the business concern to achieve its aims, there is need for the business concerns to observe certain principles of management.

Henry Fayol who is regarded in responsible quarters as the real father of management science, has evolved fourteen principles of management, which may be briefly stated as follows:

Principle # 1. Division of Work:

The object of division of work is to derive benefits from the principle of specialisation. The various functions of management like planning, organisation, co-ordination control, etc., cannot be performed efficiently by a single proprietor or by a group of directors on their own and they have to be entrusted to specialists in the related fields. Division of work in the management process produces more and better work with the same effort.

Principle # 2. Authority and Responsibility:

As management consists in getting the work done through others, it implies that the manager should have the right to give orders and the power to extract obedience. Thus, the manager gives orders to his subordinates to perform the job as per his direction. A manager may exercise his official authority and also his personal authority.

Official authority is derived from his official status, while personal authority is compounded by intelligence, experience, moral worth, ability to lead, past service etc. Authority is closely related to responsibility, and it arises wherever authority is exercised. An individual to whom authority is given to exercise power must also be prepared to bear the responsibility to perform the work.

Principle # 3. Discipline:

Discipline is absolutely essential for the smooth running of business. By discipline, we mean obedience to authority, observance of rules of service and norms of performance, respect for agreements, sincere efforts for completing the given job, respect for superiors, etc. The best means of maintaining discipline are – (a) good supervisors at all levels, (b) clear and fair agreements between the employer and the employee, and (c) judicious application of penalties.

Principle # 4. Unity of Command:

This principle requires that the employee should receive orders from one superior only for any action or activity. It means workers in a department are required to be accountable to one superior for complying with the orders for performing a job. If two superiors wield authority over the same person or department, it causes uneasiness, disorder, indiscipline among employees and undermining of authority. Further, for the same job, if the workers have to report to more than one superior, they will be confused and it will be difficult to pinpoint responsibility on anyone.

Principle # 5. Unity of Direction:

It means that there should be one head and one plan for a group for activities having the same objective. While unity of command is concerned with the functioning of personnel, unity of direction is concerned with the functioning of the body corporate, the departments and sub- departments comprising the business concern. For every category of work, there should be one plan of action and it should be executed under the overall control and supervision of one head or superior.

Principle # 6. Subordination of Individual Interest to General Interests:

In a business concern, the interest of one employee or group of employees should not prevail over the common interest or should not block the fulfilment of general goals of the business concern. If there is disagreement among two superiors on any matter, the management should reconcile the differences so as to conduct the overall operation of the enterprise smoothly.

Principle # 7. Remuneration:

The remuneration that is paid to the personnel of the firm should be fair and as far as possible, afford satisfaction both to the personnel and the firm. Employees who are paid decent wages or salary will have a high morale and their efficiency will be high. Further, contented staff is an asset to the firm and also there will be good relationship between the management and the employees. The rate of remuneration paid should be based on general business conditions, cost of living, productivity of the concerned employees and the capacity of the firm to pay.

Principle # 8. Centralisation:

If subordinates are given a higher role and importance in the management and organisation of the firm, it is decentralisation whereas if they are given less role and importance, it is centralisation. Management has to decide the degree of centralisation and decentralisation’s decisive authority on the basis of the nature of circumstances, size of undertaking, the type of activities and the nature of organisational structure. The objective should be the optimum utilisation of faculties of the personnel.

Principle # 9. Scalar Chain:

Scalar principle exhibits the chain of superiors or the line of authority from the highest executive to the lowest one for the purpose of communication. It states superior-subordinate relationship and the responsibility of superiors in relation to subordinates at the various levels. According to this principle, order or communications should pass through the proper channels of authority along the scalar chain.

But in case there is need for swift action, the principle of scalar chain (proper channel of authority) may be reconciled with due respect for the line authority by making direct contact with the concerned authority instead of going through the proper channel.

A diagrammatical explanation of Scalar Chain is given. This diagram consists of double ladders and we find a hierarchy of authority from A to E and A to P. If section D wants to communicate with section O, the file should go up the ladder from D to A and then descend to O, stopping at each section. This involves a lengthy procedure and is time-consuming.

In case there is need for swift action or urgent contact, D and O may be authorised by their respective superiors (viz., C and N) to have direct contact to settle that matter. By this method, the scalar principle is safeguarded and at the same time, the subordinate officers are enabled to take swift action.

Principle # 10. Order:

Management should obtain order in work through suitable organisation of men and materials. The principle of “right place for everything and for everyman” should be observed by the management. To observe this principle, there is need for scientific selection of competent personnel, correct assignment of duties to the personnel and good organisation.

Principle # 11. Equality:

Equality means fair dealings, equality of treatment and accommodative or co-operative attitude among the personnel in the undertaking. Equality results from a combination of kindness and justice. Employees expect equity from the management. The application of equity requires good sense, experience and good nature on the part of the manager. The managerial treatment of the subordinates should be free from the influence of prejudices and personal likes or dislikes. Equity ensures healthy industrial relations between management and labour which is essential for the successful working of the enterprise.

Principle # 12. Stability of Tenure of Personnel:

In order to motivate the workers to show keener interest in their work, enterprise, initiative and turn out of better work, it is necessary that they should be assured security of job by the management. If they have fear of insecurity of job, their morale will be low and they cannot turn out better work. Further, they will not have a sense of attachment of the firm and they will always be on the lookout for a job elsewhere. Hence, the management must ensure stability of tenure of personnel.

Principle # 13. Initiative:

Initiative means freedom to think and execute a plan. The zeal and energy of employees are augmented by initiative. Innovation which is mark of technological progress is possible only where the employees are encouraged to take initiative. According to Fayol, “initiative is one of the keenest satisfactions for an intelligent man to experience” and hence, he advises managers to give its employees sufficient scope to show their initiative. Employees should be welcomed to make any suggestions regarding the formulation of objectives and plans and they should be encouraged to turn out better work with maximum versatility.

Principle # 14. Esprit De Corps:

Since ‘union is strength’, the management should clear a team spirit among the employees. Only when all their personnel pull together as a team, there is scope for realising the objectives of the concern. Harmony and unity of the staff of a concern is a great source of strength to the undertaking. The management should not follow the policy of ‘divide and rule’ and it should strive to maintain unity among the staff. If there are any differences or misunderstandings or symptoms of distrust, the management should take necessary steps.

Fayol’s Fourteen Principles of Managemen – Quick Notes

1. Division of Work – This leads to specialisation of work and organisational success.

2. Authority – The right to order should go with responsibility.

3. Discipline – Mutual respect and obedience facilitates smooth running of operations.

4. Unity of Command – Each employee should receive one order having only one boss.

5. Unity of Direction – Every employee’s effort should be channelised in one direction.

6. Subordination of individual interest to the general interest – Manager should strive hard to divert personal interest towards organizational interests.

7. Remuneration – Employee should be paid fair wage.

8. Centralisation -There should be a balance between centralization and decentralization.

9. Scalar Chain – Employees should follow formal chain of command unless otherwise expressed.

10. Order – Both people and materials should be in their places.

11. Equity – All should be treated equally with kind and justice.

12. Stability and Tenure – Allow people to stabilize in their jobs.

13. Initiative – Allow and motivate people to take initiative to design and implement plans.

14. Espirit de corps – Harmonious relationship has to be developed amongst workers.

Fayol’s 14 Principles of Management – With Criticisms

Management has some properties that make it a sci­ence; for example principles.

So, let us, now have a look at the principles of management:

1. Division of labour- It means dividing a major activity into its sub­components, and each person doing one activity, leading to specialisa­tion and increase in productivity.

2. Authority and responsibility coexist- Everyone should have specific re­sponsibility and matching authority.

3. Unity of command- One person should report to only one boss.

4. Unity of direction- All functions of an organisation should have the same direction.

5. Equity- Rewards should be in relative proportion to the contribution.

6. Order- Do things systematically and scientifically.

7. Discipline- Adhere to lines of authority, norms, rules, and regulations.

8. Initiative- Undertake actions that achieve goals better, even when a spe­cific direction is absent.

9. Fairness- Be consistent with rules and logic, and implement actions without impartiality and favouritism.

10. Stability- Have constancy of purpose, methods, rules, and procedures.

11. Scalar chain- Flow of authority and information is from top to bottom and vice versa, in a step-by-step manner.

12. Subordination of individual interest to general interest- Individuals draw their identity and livelihood from the organisation, and hence should give priority to organisational interest.

13. Esprit de corps- It refers to creating team spirit and harmony in the work group as a whole.

14. Centralisation and decentralisation- The need to accept the importance of both, and creating a balance between both.

Criticism of Henry Fayol’s Principles of Management:

Unity of command is redundant in an era of matrix organisations. Organisa­tions such as Goldman Sachs have tried joint management concept where two people concurrently head one responsibility successfully. Unity of direc­tion, as envisaged originally, is impossible today, since businesses enter many different areas.

For example, Bharti Airtel’s main business is mobile telephony, but they are also into other businesses. Stability seldom exists in organisations as they begin to thrive through continuous and disruptive changes. In a networked world, scalar chain principle does not stand scru­tiny. The principle of subordination of individual interest to general inter­est is often criticised as it is used to exploit employees and members of an organisation from time to time.

Fayol’s 14 Principles of Management (Short Notes)

Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively.

Henry Fayol synthesized fourteen principles for organizational design and effective administration.

Fayol’s 14 principles are:

1. Specialization/Division of Labour:

A principle of work allocation and specialization in order to concentrate activities to enable specialization of skills and understandings, more work focus and efficiency.

Specialization/division of labour influences the overall performance of the workers organization in the way:

i. To brings specialization.

ii. To increases work efficiency.

iii. To increases productivity.

2. Authority with Corresponding Responsibility:

Authority means the right of a superior to give order to his subordinates. Responsibility means obligation for performance. There must be parity between authority and responsibility. If responsibilities are allocated then the post holder needs the requisite authority to carry these out including the right to require others in the area of responsibility to undertake duties.

3. Discipline:

The generalization about discipline is that discipline is essential for the smooth running of a business and without it-standards, consistency of action, adherence to rules and values; no enterprise could prosper. In an essence; obedience, application, energy, behavior and outward marks of respect observed in accordance with standing agreements between firms and its employees. Obedience, proper conducts in relation to others and respect of authority.

4. Principle of One Boss:

This is known as principle unity of command. The idea is that an employee should receive instructions from one superior only. This generalization still holds; even where we are involved with team and matrix structures which involve reporting to more than one boss or being accountable to several clients. The basic concern is that tensions and dilemmas arise where we report to two or more bosses. One boss may want A, the other Band the subordinate is caught between the devil and the deep blue sea.

5. Unity of Direction:

The unity of command idea of having one head (chief executive, cabinet consensus) with agree purposes and objectives and one plan for a group of activities) is clear. All related activities should be put under one group. There should be one plan of action for them. It seeks to ensure unity of action, focusing of efforts and coordination of strength.

6. Subordination of Individual Interest to the General Interest:

Fayol’s line was that one employee’s interests or those of one group should not prevail over the organization as a whole. This would spark -a lively debate about who decides that the interests of the organization as a whole are. Ethical dilemmas and matters of corporate risk and the behavior of individual “chancers” are involved here.

Fayol’s work-assumes a shared set of values by people in the organization – a unitarism where the reasons for organizational activities and decisions are in some way neutral and reasonable. The interests and goals of the organization must prevail over the personal interests of individuals.

7. Remuneration of Staff:

The general principle is that levels of compensation should be “fair” and as far as possible afford satisfaction both to the staff and the firm (in terms of its cost structures and desire for profitability/surplus). The quantum and methods of remuneration payable should be fair, reasonable and rewarding of effort.

8. Centralization v/s Decentralization:

Centralization for Henry Fayol is essential to the organization and a natural consequence of organizing. Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.

9. Scalar Chain/Line of Authority:

The scalar chain of command of reporting relationships from top executive to the ordinary shop operative or driver needs to be sensible, clear and understood. Scalar chain refers to the chain of superiors ranging from top management to the lowest rank. A Clear line of authority, chain of command; concept called a “Gang Plank” using which a subordinate may contact a superior or his superior in case of an emergency, defying the hierarchy of control. However the immediate superiors must be informed about the matter.

10. Order:

The level of generalization becomes difficult with this principle. Basically an organization ‘should’ provide an orderly place for each individual member, who needs to see how their role fits into the organization and be confident, able to predict the organizations behavior towards them.

Thus policies, rules, instructions and actions should be understandable and understood. Orderliness implies steady evolutionary movement rather than wild, anxiety provoking, unpredictable movement. Social order ensures the fluid operation of a company through authoritative procedure. Material order ensures safety and efficiency in the workplace.

11. Equity:

Equity, fairness and a sense of justice should pervade the organization in principle and practice. 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.

12. Stability of Tenure:

Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure promotes loyalty to the organization, its purposes and values. The period of service should not be too short and employees should not be moved from position frequently.

13. Initiative:

At all levels of the organizational structure, zeal, enthusiasm and energy are enabled by people having the scope for personal initiative. Initiative on the part of employees is a source of strength for the organization because it provides new and better ideas.

14. Esprit De’ Corps:

Here, Fayol emphasizes the need for building and maintaining of harmony among the work force, team work and sound interpersonal relationships. Team spirit helps develop an atmosphere of mutual trust and understanding.

Fayol’s 14 Principles of Management – With Examples

Fayol’s beliefs and suggestions led to the development of Fayol’s 14 Principles of Management many of which are applicable today in our world and continue to be practiced across different activities in our daily lives and discussed below:

1. Division of Work:

This principle implies that every worker is assigned with one task or specialised activity in the organisation to avoid overlapping between different business units or divisions. By dividing the work into smaller elements and assigning specific elements to specific workers, the work can be performed more efficiently and more productively.

For example, for car manufacturing labour can be divided into some workers focusing on the frame of the car while some workers focused on assembling tyres and other components.

2. Authority and Responsibility:

Functional foremen or superiors have the authority to give out orders so that all tasks and activities can be accomplished. Fayol emphasised that authority is associated with responsibility and accountability from superiors and obedience from workers. For example- a foreman in the car component’s unit can order the workers to produce 100 steering wheels in 4 hours. Workers are responsible for the order completion.

3. Discipline:

To ensure smooth operation in a business, it is essential that members of an organisation respect the rules that govern it. Fayol believed that discipline can be maintained by employing superiors at all levels, by maintaining contractual agreements between workers and superiors and by penalising workers in case of errors made by them.

For example, if workers took an unauthorised break in the middle of the day from work, they would have to pay a penalty for wasting time which should be actually meant for work.

4. Unity of Command:

Unity of command implies that every worker or subordinate should receive orders from only one superior. Orders from different superiors may undermine authority and discipline of the concerned superior responsible for a particular activity. Unity of command is meant for avoiding dual subordination or possible conflicts and confusions.

For example, the workers responsible for manufactu­ring 100 steering wheels should receive orders from the foreman managing the steering wheel unit and not from the foreman managing the frame of the car in a car production plant.

5. Unity of Direction:

Unity of direction means one unit, one plan. This principle implies that all activities in a business unit should be directed towards its common objective. Common activities should have one superior and workers involved in those common activities should receive orders from that superior to avoid wastages and duplication of efforts. Unity of direction is meant for maintaining soundness in an organisation.

For example– workers responsible for manufacturing 100 steering wheels should be accountable for manufacturing only steering wheels. They cannot take up responsibility for manufacturing any other component such as engine, brakes, etc.

6. Subordination of Individual Interests:

This principle implies that the interests of one person should not take priority over the interests of the organisation as a whole but the other way around. The goals of the organisation should take precedence over the interests on individual employees. For example, the management expects production of 100 steering wheels for 100 cars but manager in-charge orders his team to produce 200 steering wheels to prepare for future demand without considering costs for storing and maintaining the extra 100 steering wheels that is against the organisation’s objectives of low storage and maintenance costs.

7. Remuneration of Personnel:

Remuneration refers to financial compensation. According to this principle, financial compensation for work done should be fair to the employees and to the organisation. Remuneration should be decided on the basis of cost of living, workers qualifications and skills, success of the business, general business/ market conditions.

For example– an HR manager may have a salary of about 11 lakh (or more) per month in a MNC in Mumbai, depending upon the manager’s experience, qualifications, city’s cost of living, etc.

8. Centralisation:

Centralisation is related to power and authority, which should be concentrated at upper levels of the organisation with superiors maintaining final responsibility. However, superiors should give their subordinates enough authority to perform their jobs properly. For example- in an organisation top management needs 100 steering wheels for production of 100 cars and powers to change the production from 100 to 200 steering wheels lies with the top management and not with the supervisors or managers.

9. Scalar Chain:

Scalar chain principle implies that a single, uninterrupted chain of authority should extend from the top level to the lowest position in the organisation. This further implies that the line of authority and communication flows from owners or board of directors to the superiors or foreman to the subordinates and workers. As an exception, Fayol introduced the concept of ‘Gang Plank’ to avoid delay in communica­tion in case of emergency between two people working on the same level but in different departments. Gang plank is a temporary arrangement between two subordinates in different departments to facilitate quick and easy communication.

As shown in Fig. 2.2, there are two scalar lines from ‘A’ to ‘G’ and ‘A’ to ‘Q’, where ‘A’ is the head of the organisation, while ‘G’ and ‘Q’ are the workers at the lowest level in an organisation. The two scalar lines depict two different departments headed by ‘A’. ‘B’ and ‘L’ are a level lower than ‘A’ and so on. An emergent communication can be made between ‘F’ and ‘P’ through a gang plank shown as a dotted line where F and P can contact each other directly. However, both ‘F’ and ‘P’ need to contact their respective superiors ‘E’ and ‘O’ regarding their communication with each other.

10. Order:

Order means that the right person is at the right place. This principle states that materials, equipment and other inputs should be in the right place at the right time and workers should be assigned to the jobs best suited to them.

For example, to produce 100 steering wheels, the foreman should ensure that suitable inputs are in order to produce the exact number of steering wheels to avoid wastage or confusion about the order.

11. Equity:

Equity principle implies that all workers should be treated equally and provided equal opportunity. Equity however does not discount for sternness and forcefulness. Superiors in the organisation should be kind and impartial and should not discriminate in terms of gender, religion, caste, etc.

For example, women and men employees should be equally treated with respect and professionalism.

12. Stability of Tenure of Personnel:

Stability of tenure refers to retention of workers by removing the feeling of job insecurity among workers. Retaining workers should be the highest priority of management that provides security, increase productivity and reduces employee turnover. High rates of employee turnover1 are inefficient and should be avoided. For example- if a hard-working employee is dissatisfied with her monotonous job, she can be retained by providing a new position (or responsibility) in another department within the company that requires her to explore and advance her capabilities.

13. Initiative:

This principle implies that workers or subordinates should be given the freedom to take initiative in carrying out the work. They feel satisfied with their jobs and in turn increase efficiency of the organisation.

For example– satisfied employees usually come on time and leave on time ensuring quality of work and maintaining time efficiency without being instructed by the management.

14. Esprit de Corps:

Esprit de corps literally means team spirit and harmony that unites the organisation thus promoting a sense of organisational unity. Esprit de corps is a French phrase which means ‘group spirit’ and every organisation should maintain group cohesion to facilitate productivity and efficiency.

For example, a worker’s injury that may lead to delay and loss in time for job completion can be managed by other workers uniting together and covering the possible time and costs lost by the injured worker.

Fayol’s 14 Principles of Management – Division of Work, Authority and Responsibility, Discipline, Unity of Command, Centralisation, Scalar Chain and a Few Others

Fayol introduced the following general principles of management:

1. Division of Work:

According to Fayol there should be clear cut division of work in the organization. Division of labour is done to cover the all activities of the organization and to avoid the overlapping of the activities. This ensures more and better work with the same effort in the organization.

2. Parity of Authority and Responsibility:

Authority and responsibility both carry together in the organization. Due to the co-existence there should be parity between these two. Authority is not to be conceived of apart from responsibility. Once authority is exercised responsibility arises.

3. Discipline:

Discipline is inherent part of the organization. It means there should be respect for agreements designed to secure obedience. Discipline prevails throughout the organization to ensure its smooth and effective functioning. Clear and fair agreements, good supervision and judicious application of penalties are maintained by discipline.

4. Unity of Command:

According to this principle a person should get orders and instructions from only one superior. This should be in practice because dual authority over any employee became the causes of confusion and indiscipline. This principle is contrary to Taylor’s functional foremanship.

Fayol told on this conflicting view that “I do not think that a shop can be well run in flagrant violation of this (unity of command). Nevertheless Taylor successfully managed large-scale concerns. I imagine in practice, Taylor was also able to reconcile functionalism with the principle of unity of command but this is the supposition whose accuracy I am not in position to verify.”

Fayol considered unity of command as an important principle of an organization. He says that “Should it (unity of command) be validated, authority is undermined; discipline is in Jeopardy, order disturbed and stability threatened.” This rule seems fundamental to me and so I have put it to the rank of a principle.

5. Unity of Direction:

There must be one head and one plan for each group of activities having the same objectives. The unit of the organization must be directed for the objectives of the unit. Unity of direction is related with functioning of the organization in respect of grouping of its activities while unity of command is concerned with personnel at all levels in the organization in terms of reporting relationship. Unity of direction ensures better coordination among various activities of the organization.

6. Subordination of Individual Interest to General Interest:

General Interest is above to individual interest. In the case of any conflict between individual and general interest the former must be subordinate. However, the importance of general interest is reduced by factors like ambition, laziness, weakness etc. Therefore, the relationship between employer and employee should be fair. A constant vigilance and supervision is required for this purpose.

7. Remuneration of Personnel:

A fair and Reasonable remuneration should be paid to the employees and it must provide maximum possible satisfaction to employees and employers. Fayol advocated profit sharing only for managers. He did not favour profit sharing for workers. He also advocated non-monetary benefits for the organizations.

8. Centralisation:

Any activity which goes to reduce the importance of subordinate’s role is centralization. Fayal refers the extent to which authority is centralized or decentralized. Centralisation is the natural order in small organizations while decentralization is regained for the large firms. Absolute centralization is not feasible in any organization. Centralisation and decentralization takes place according to the need and nature of the organization.

9. Scalar Chain:

The scalar chain of authority and of communication from top to bottom should be present in the organisation. It consists that each upward or down word communication must flow through each position in the line of authority. This role must be followed by the organisations. This takes place in the special circumstances of the organization.

In special circumstances only the rule of scalar chain may be violated. Fayol suggested the concept of ‘gang plank’ which is used to present the scalar chain from bogging down action.

In this figure A is the top man having immediate subordinates B and J. In turn B and J are having immediate subordinates C and K. This continues to the level of G and O ordinarily the communication must flow from A to C and coming from top to down. Similarly, it must flow from A to O and vice versa.

If A wants to communicate with G then it will be done via- B, C, D, E and F and upward. Communication will flow via E, F, D, C, D. This is a very time taking affair. Therefore, Fayol suggested the principle of gang plank. This system allows E to communicate with M, without following scalar chain. This process will save the time and energy.

10. Order:

There should be an order related to the arrangement of things and people. There should be a place for everything and everything should be in its places. On the same way, there should be right person in the right place. This proper order ensures efficient order demands precise knowledge of the human requirements and resource of the organization and a constant balance is required. Generally it is more difficult to make balance in the large size of organisations.

11. Equity:

It treats all peoples equal with justice and kindness. There should be no discrimination on any ground in the organization. It provides loyalty in the organisation.

12. Stability of Tenure:

There should be stability in the tenure of the employees of the organisation. Only stable employees will take initiative and they will show loyalty with the organisation. The accountability of the employees can be also ensured by stability of tenure.

13. Initiative:

Initiative is a very important feature of the organisation. Managers encourages to their employees for initiative within the limits of authority and discipline. Initiative provides better solution and understanding about the organisation.

14. Esprit De Corps:

This last principal of management is known as – ‘Union is strength”. It also extends the unity of command for team work to achieve the objectives of the organisation.

Fayol’s 14 Principles of Management in Details

A principle means a fundamental truth. It establishes cause and effect relationship between two or more variables under the given situation. They serve as a guide to thought and actions. Therefore, management principles are basically the statements of fundamental truth based on logic which provide guidelines for managerial decision-making and actions.

These principles are derived:

i. On the basis of observation and analysis, i.e., practical experience of managers.

ii. By conducting experimental studies.

Henry Fayol has given 14 principles of management as stated under:

1. Division of Labour:

Henry Fayol has stressed on the specialization of jobs. He recommended that work of all kinds must be divided and subdivided and allotted to various persons according to their expertise in a particular area. Subdivision of work makes it simpler and results in efficiency. It also helps the individual in acquiring speed and accuracy in his performance. Specialization leads to efficiency and economy in spheres of business.

2. Party of Authority and Responsibility:

Authority and responsibility coexist. If authority is given to a person, he should also be made responsible. In the same way, if anyone is made responsible for any job, he should also have the concerned authority.

Authority refers to the right of superiors to get exactness from their subordinates whereas responsibility means obligation for the performance of the job assigned. There should be a balance between the two, i.e., they must go hand in hand. Authority without responsibility leads to irresponsible behaviour whereas responsibility without authority makes the person ineffective.

3. Principle of One Boss:

A subordinate should receive orders and be accountable to one and only one boss at a time. In other words, a subordinate should not receive instructions from more than one person because –

i. It undermines authority.

ii. Weakens discipline.

iii. Divides loyalty.

iv. Creates confusion.

v. Delays and chaos.

vi. Escaping responsibilities.

vii. Duplication of work.

viii. Overlapping of efforts.

Therefore, dual subordination should be avoided unless and until it is absolutely essential. Unity of command provides the enterprise a disciplined, stable and orderly existence. It creates harmonious relationship between the superiors and subordinates.

4. Unity of Direction:

Fayol advocates “one head one plan” which means that there should be one plan for a group of activities having similar objectives. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager.

According to this principle, efforts of all the members of the organization should be directed towards common goal. Without unity of direction, unity of action cannot be achieved. In fact, unity of command is not possible without unity of direction.

Difference between Unity of Command and Unity of Direction:

Unity of Command:

i. Meaning – It implies that a subordinate should receive orders and instructions from only one boss.

ii. Nature – It is related to the functioning of personnel.

iii. Necessity – It is necessary for fixing responsibility of each subordinate.

iv. Advantage – It avoids conflicts, confusion and chaos.

v. Result – It leads to better superior subordinate relationship.

Unity of Direction:

i. Meaning – It means one head, one plan for a group of activities having similar objectives.

ii. Nature – It is related to the functioning of departments, or organization as a whole.

iii. Necessity – It is necessary for sound organization.

iv. Advantage – It avoids duplication of efforts and wastage of resources.

v. Result – It leads to smooth running of the enterprise.

Therefore, it is obvious that they are different from each other but they are dependent on each other, i.e., unity of direction is a prerequisite for unity of command. But it does not automatically comes from the unity of direction.

5. Equity:

Equity means combination of fairness, kindness and justice. The employees should be treated with kindness and equity if devotion is expected of them. It implies that managers should be fair and impartial while dealing with the subordinates. They should give similar treatment to people of similar position. They should not discriminate with respect to age, caste, sex, religion, relation, etc.

Equity is essential to create and maintain cordial relations among the managers and sub­ordinate. But equity does not mean total absence of harshness. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”.

6. Order:

This principle is concerned with proper and systematic arrangement of things and people. Arrangement of things is called material order and placement of people is called social order.

Material order – There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity.

Social order – Selection and appointment of most suitable person on the job. There should be a specific place for everyone and everyone should have a specific place so that they can easily be contacted whenever the need arises.

7. Discipline:

According to Fayol, “Discipline means sincerity, obedience, respect of authority and observance of rules and regulations of the enterprise”. This principle applies that subordinates should respect their superiors and obey their order. It is an important requisite for smooth running of the enterprise. Discipline is not only required on part of subordinates but also on the part of management.

Discipline can be enforced if –

i. There are good superiors at all levels.

ii. There are clear and fair agreements with workers.

iii. Sanctions (punishments) are judiciously applied.

8. Initiative:

Workers should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences and new methods of work.

It helps in developing an atmosphere of trust and understanding. People then enjoy working in the organization because it adds to their zeal and energy. To suggest improvement in formulation and implementation of plans. They can be encouraged with the help of monetary and non-monetary incentives.

9. Fair Remuneration:

The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory and rewarding of the efforts. As far as possible, it should accord satisfaction to both the employer and the employees. Wages should be- determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing, etc.

Logical and appropriate wage rates and methods of their payment reduce tension and differences between workers and management creates harmonious relationship and pleasing atmosphere of work. Fayol also recommended provision of other benefits such as free education, medical and residential facilities to workers.

10. Stability of Tenure:

Fayol emphasized that employees should not be moved frequently from one job position to another, i.e., the period of service in a job should be fixed. Therefore, employees should be appointed after keeping in view principles of recruitment and selection but once they are appointed, their services should be served.

According to Fayol, “Time is required for an employee to get used to a new work and succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”.

As a result, the time, effort and money spent on training the worker will go waste. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.

11. Scalar Chain:

Fayol defines scalar chain as – “The chain of superiors ranging from the ultimate authority to the lowest”. Every order, instruction, message, request, explanation, etc., has to pass through scalar chain. But, for the sake of convenience and urgency, this path can be cut short and this short cut is known as Gang Plank.

A Gang Plank is a temporary arrangement between two different points to facilitate quick and easy communication. Gang Plank clarifies that management principles are not rigid rather they are flexible. They can be moulded and modified as per the requirements.

12. Subordination of Individual Interest to General Interest:

An organization is much bigger than the individuals, it has therefore, and interest of the undertaking should prevail in all circumstances. As far as possible, reconciliation should be achieved between individual and group interests. But in case of conflict, individuals may be sacrificed for bigger interests.

In order to achieve this attitude, it is essential that –

i. Employees should be honest and sincere.

ii. Proper and regular supervision of work.

iii. Reconciliation of mutual differences and clashes by mutual agreement, for example, for change of location of plant, for change of profit sharing ratio, etc.

13. Espirit De’ Corps (Can be Achieved through Unity of Command):

It refers to team spirit, i.e., harmony in the work groups and mutual understanding among the members. Spirit De’ Corps inspires workers to work harder. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the morale of the workers and interest of the undertaking in the long run.

To inculcate Espirit De’ Corps, the following steps should be undertaken:

i. There should be proper coordination at all levels.

ii. Subordinates should be encouraged to develop informal relations among themselves.

iii. Efforts should be made to create enthusiasm and keenness among the subordinates so that they can work to the maximum ability.

iv. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance.

v. Subordinates should be made conscious of whatever they are doing is of importance to the business and society.

i.e., face-to-face communication should be developed. The managers should infuse team spirit and belongingness. There should be no place for misunderstanding. People then enjoy working in the organization and offer their best towards the organization.

14. Centralization and Decentralization:

Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision-making authority. Decentralization means disposal of decision-making authority to all the levels of the organization.

In other words, decentralization is sharing authority downwards. According to Fayol, “Degree of centralization or decentralization depends on factors like size of business, experience of superiors, dependability and ability of subordinates, etc.”

Anything which increases the role of subordinates is decentralization and anything which decreases, it is centralization. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a balance between the two.