Henry Fayol (1841-1925), who was born in 1841 in France, can be rightly called the "father of modern management theory". He became an engineer and subsequently, the chief executive of a large coal and steel combine.
He developed some principles and techniques of management. He came to the conclusion from his experience that there could be a "single administrative science', the principles of which can be universally applied not only to business but also to political, religious and other undertakings. That is why he is called the "Universalist".
He developed some principles and techniques of management. He came to the conclusion from his experience that there could be a "single administrative science', the principles of which can be universally applied not only to business but also to political, religious and other undertakings. That is why he is called the "Universalist".
He has evolved 14 Principles of Management, which are as follows:
1. Division of labour:
- This refers to the division of tasks of an organisation into sub-tasks and then the allocation of these sub-tasks to individuals. This is applicable to al kinds of work including managerial and technical.
2. Authority and responsibility:
- Authority refers to the right to exercise discretion in making decisions and taking actions by virtue of the position. Authority goes with the responsibility of being accountable for actions and decisions.
3. Discipline:
- Discipline in simple terms means obedience to the rules of the organization on the part of both managers and subordinates. It includes outward marks of respect shown by the subordinates towards their superiors. Discipline is necessary in an organization if the organization is to function properly and prosper and grow.
4. Unity of direction:
- This principle prescribes that for each group of activities with the same objective, there should be one single approach and one leader to provide direction. This could be explained as the source of departmentalisation in an organisation based on activities.
5. Unity of command:
- According to this principle, an employee should receive orders only from one superior. The intention of this principle is to avoid any confusion in the organisation about whose command one should follow.
6. Scalar chain:
- This refers to the chain of command or the line of authority that flows from the top management to every subordinate position. As this chain becomes clearer, the communication within the organisation will be more effective and the authority responsible for decision making will be apparent. Fayol suggested a horizontal communication in case of urgent matters known as 'gang plank’. In the below Diagram, it is shown by the dotted line joining F and N. It permits F to communicate directly with N on urgent matters without following the chain of command. The subordinates must inform their respective superiors about the communication.
7. Subordination:
- This refers to the subordination of individual interest to the interest of the organisation and prescribes that when there are conflicts of interest, Management should reconcile them for smooth functioning.
8. Centralisation:
- This relates to the functioning of the organisation with a degree of centralisation that will give the best overall yield. Centralisation' refers to a reservation of decision-making authority at the top level of management. Decentralisation' on the other hand, means dispersal of authority from the central (top-level) point to middle and specially lower levels of management. Management must strike out a balance between centralisation and decentralisation: a rightful compromise between the two, which will lead to the most efficient and smooth functioning of the enterprise.
9. Remuneration:
- Wages and methods of payment should be fair to employees and should be acceptable to the employer and employee.
10. Order:
- This refers to the principle of organising tasks and activities of people.This is a principle relating to the arrangement of things and people. In case of things, the formula is 'a place for everything and everything in its place.' It is the same case for human order, 'a place for
everyone and everyone in his place' that is the right man in the right job.
11. Equity:
- This prescribes that management should apply justice and equity when dealing with subordinates in order to increase their loyaity to the organisation.The concept of 'equity' implies a sense of 'fairness and justice' to all working in an enterprise. All the employees of the organisation are treated equally by the managers. Observance of equity alone would
make personnel loyal and devoted to the organisation.
12. Stability of tenure:
- In the interest of the efficiency of organisation and management, it is imperative that personnel must stay in the organisation for as long a period as possible. This might be called the principle of stability of tenure. Unnecessary labour turnover (movement of people into and out of an enterprise) is both the cause and effect of bad management.
13. Initiative:
- Fayol advised that managers should permit subordinates to take an initiative in exploring and planning the execution of their jobs and duties, and should not allow personal vanity to stand in their way.
14. Esprit de corps:
- This is the principle of 'union is strength', and emphasises the need for teamwork and communication in the organisation. Fayol termed it as Esprit de corps. As a principle of management, esprit de corps (Union is strength) indicates a lesson to management to take steps for promoting team-spirit among the groups; as it will greatly facilitate the most effective attainment of common objectives.
