Henri Fayol also is known as the founder of Modern Management Methods, is a French mining engineer, executive, director, and author along with his colleagues who have developed the theory of Business Administration, Scientific Management which is popularly known as Fayolism. Fayol’s work was one of the first exhaustive theories of Management which suggested five prime functions of management and these functions were identified as Planning, Organising, Staffing, Directing, and Controlling.
Management has existed in the world since the beginning of Civilization. Modern Management came into the picture with the growth of social economics and scientific institutions. Modern Management Theory not only focuses on monetary rewards but also the satisfaction and happiness of organizational stakeholders.
Henri Fayol belief that practices of management as distinct from other organizational functions and hence develop 14 Principles of Management that are applied to all organizational situations. They are –
Division of Work – In practice every employee has a different set of skills and expertise in different areas and it is expected that the output can be increased when the work assigned to workers is according to their expertise. According to Fayol, specialization increases the accuracy and speed of the workforce. Hence the division of work into smaller elements becomes paramount.
Authority and Responsibility – The concept of authority and responsibility are the two sides of the same coin. Authority comes with responsibility and according to this principle, the manager should have a right to give orders to the subordinate. Along with authority, the manager is accountable for his actions and performance.
Discipline – This principle advocate for clearly defined rules and regulations aimed at achieving good employee discipline and obedience. The management should strictly endorse the discipline for the smooth functioning of the organization.
Unity of Command – According to this principle, the subordinate should receive orders and should be accountable to one superior. If the responsibilities are given by more than one manager it may lead to confusion and conflicts among the subordinates as well as superiors.
Unity of Direction – For an Organisation to be united and successful it must have common goal and plan. All the team activities must focus on the accomplishment of the common goal of an organization. These activities must be described in a plan of action. The manager is responsible to monitor whether the actions are in synchronization with the plan activities.
Subordination of Individual Interests to the General Interest – According to this principle for an organization to function well it is important that the personal interest should be subordinate to the interest of the organization. The foremost focus should be on the attainment of organizational goals rather than prioritizing the individual motives. This principle applies to the entire organization including the top managerial personnel, middle-level managers, and employees. In other words, employees must sacrifice their personal interests in order to attain a common goal.
Remuneration – Motivation and productivity go hand in hand. For the smooth functioning of the organization, it is important to motivate and encourage the employees. Employee satisfaction depends on fair remuneration including both the financial and non-financial compensation. The management should give fair remuneration to the staff in form of both monetary benefits (compensation, bonus, allowances) and non-monetary benefits (recognition, opportunity to learn and improve, good working condition).
Centralization – This principle suggests that the decision making authority should be centralized and concentrated at the top level. The decision should come from the top-level management to the middle level where the decision would be converted into strategies and assign to the line staff to execute them. Sharing the decision making authorities with the middle and lower-level management is known as decentralization and an organization should have a good balance between the two.
Scalar Chain – In every organization, it is important to have a hierarchy that specifies a clear line of authority and responsibility. It varies from the senior management to the lowest levels in the organization and can be viewed as a type of management structure. Every person in an organization should know where he stands in the scalar chain so as to have a clear area of authority and accountability. According to the scalar chain, decisions move from the top-level management to the lowest level and the feedback, complaints, and suggestions move from a lower level to the top-level management.
Order – For maintaining efficiency and coordination it is important that all material and people related to a particular work should be treated equally. Employees must have the right source and it is important so that they can function properly in an organization. Along with the social order (responsibility of the managers), the work environment should be clean, safe, and tidy along with adherence to business ethics.
Equity – The principle of equity takes place in the core value of an organization which states that every employee should be treated equally and kindly. Fairness is often substituted as equity. Every employee in an organization should be in the right place to do the right things. It is the responsibility of a manager to supervise the performance of employees fairly and treat them impartially.
Stability of Tenure of Personnel –
Personal planning should be the priority of every organization. A manager should strive to minimize employee turnover. Employee turnover not only increases the cost of recruitment, selection, training but also hampers the smooth functioning and goodwill of the company. Employees should be designated at the right place and at the right time and an opportunity of learning and improvement with timely training and seminars.
Initiative – An opportunity and freedom to express new ideas, suggestions, and feedback to the top-level management should be given to the employees. This will encourage the worker to take initiative and bring value to the company. This will also give them a sense of belonging and involvement in the management of an organization.
Esprit de Corps – It is a responsibility of management to encourage harmony, involvement, and unity among employees. Managers are responsible for the development of morale in the workplace. Esprit de corps bestow an element of culture and atmosphere of mutual understanding and trust.
Article Written by-
Naina Rupani, Management Trainee- TVC
FOSTIIMA Business School