Home Management 14 Principles of Management by Henri Fayol (Explained with Examples)

14 Principles of Management by Henri Fayol (Explained with Examples)

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14 Principles of Management was given by Henri Fayol. He is called the Father of 14 principles of management and Administrative Management. He believed that management was an activity common to all businesses, governments, and even the home. This belief led him to develop 14 principles of management.

Today in this article, we have shared Henry Fayol’s 14 Principles of management and its meaning explained with suitable examples.

Topics Covered in this Article

  • Henry Fayol’s Contribution in Management
  • Managerial Activities
  • Functions of Management
  • 14 Principles of Management (In Nutshell)
  • 14 Principles of Management (in Summery)
  • 14 Principles of Management (Explained in detail)

So let’s start with Henry Fayol’s contribution to Management.

► Henry Fayol’s Contribution in Management

Henri Fayol is known as the father of Administrative Management. He was born in France in 1841. He was a French industrialist who owns a large coal mining company in France.

Fayol’s greatest contribution is considered to be his theory of management principles and elements. He gave 14 principles of management in his Administrative theory.

His 14 Principles of Management are concerned with management efficiency and these 14 Principles Of Management are universally applicable. He got a degree in mining engineering in 1860 and then he started working as an engineer in a coal mining company. He was promoted as managing director in the company at the time of insolvency in 1888.

He has made the distinction between management principles and management elements. Management principles are a fundamental truth and show a cause-effect relationship. The management element refers to the function performed by a manager.

Managerial Activities (14 principles of Management)

Management principles are statements of fundamental truth. These principles act as guidelines for the decisions and actions of managers. They are derived through observation and analysis of events that managers have to face in real-life practice.

Fayol made his mark as an industrialist with the French coal and mining company where he spent his entire working life.

According to Fayol, an industrial organization could be divided into six categories based on their activities as shown below:

  • ✔️ TECHNICAL – (Production & Manufacturing)
  • ✔️ COMMERCIAL – (Buying, Selling & Exchange)
  • ✔️ FINANCIAL – (Acquiring & using capital)
  • ✔️ SECURITY – (Protection of Property & Person)
  • ✔️ ACCOUNTING – (Stock-taking, Balance sheet, cost & statistics)
  • ✔️ MANAGERIAL – (Planning, Organizing, Command, Control)

Functions of Management given by Henry Fayol

Henry Fayol is famous as the father of the Principle of management “Studies and Thought”. He defined/identified major functions of management.

Functions of management are as follows;

  • Planning,
  • Organizing,
  • Staffing,
  • Directing or Leading and
  • Controlling.

Sometimes managerial functions are also known as POLC – Planning, Organizing, Leading, and Controlling.

Must Read :What is Management?

Henri Fayol’s 14 principles of management and his administrative theory are often called Fayolism. He developed general principles of business management.

14 Principles of Management by Henri Fayol

There are 14 Principles of Management described by Henri Fayol.

  1. Division of work
  2. Authority and Responsibility
  3. Discipline
  4. Unity of command
  5. Unity of direction
  6. Subordination of personal/individual interests to the general interest.
  7. Remuneration
  8. Centralization
  9. Scalar chain
  10. Order
  11. Equity
  12. Stability of tenure of personnel
  13. Initiative
  14. Esprit de corps

Must Read :Steps in Planning Process

► 14 Principles of Management (in Summery)

14 principles of management

Let’s discuss briefly all these 14 principles of management.

1. Principle of Division of work

  • Specialization of work and department increases output by making employees more efficient for the organization.
  • This division of work can be applied at all managerial levels of the organization.

2. Principle of Authority and Responsibility

  • Managers must be able to give orders to their subordinates, and authority gives them this right.
  • Henri Fayol finds authority as a continuation of official and personal or individual factors.
  • Official Authority is derived from the position of a managerial role and personal authority is derived from personal qualities such as intelligence, knowledge, and experience.
  • Responsibility arises out of the assignment of activity.
  • In order to discharge the responsibility properly, there should be uniformity of authority and responsibility.

3. Principle of Discipline

  • Employees should be disciplined; they must obey and respect the rules that govern the organization.
  • Discipline may be of two types. Self-imposed and command discipline.
  • Self-imposed discipline springs from within the individual. It is in the nature of the spontaneous response to a skillful leader.
  • Command discipline comes from a recognized authority. This ensures compliance with the desired action by established customs, rules, and regulations of the organization.

4. Principle of Unity of command

  • principle of Unity of command states that one employee should receive orders from one boss only. More than one superior can not give an order to an employee at a time.
  • More specifically an individual has a reporting relationship to a single superior or boss.
  • This makes the problem of conflict in instructions very less. It also increases the feeling of personal responsibility for results.

5. Principle of Unity of direction

  • The organization should have a single plan of action to guide managers and all the workers.
  • Unity of direction provides better coordination among various activities in different departments to be undertaken by an organization.

6. Subordination of individual interests to the general/common interest

  • Common organizational interest is above the individual interest of an employee.
  • The personal interests of any employee should not take precedence over the interests of the business organization as a whole.
  • Ambition, laziness, weakness, etc., are factors that reduce the importance of general interest.
  • There should be constant vigilance and supervision to maintain agreement between employers and employees.

7. Principle of Remuneration (14 principles of Management)

  • The principle of remunerations simply means that employees and workers must be paid a fair salary or wage for their services.
  • Remuneration of employees should provide maximum possible satisfaction to employees and employers.

Must Read :Levels of Management

8. Principle of Centralization

  • Centralization is a term used to refer to the degree to which subordinates are involved in decision-making.
  • If the importance of a subordinate’s role is increasing then it is known as decentralization. And when his importance is reducing then it is called centralization.
  • Centralization is very common in small firms but in large firms, a series of intermediaries and conciliators are required.

9. Principle of Scalar Chain

  • This line of authority from top management to the lowest position is the scalar chain.
  • There should be a scaler chain of authority and communication on every level of management from the highest to the lowest.
  • It is important that communication must flow systematically through each level and position in the line of authority.

10. Principle of Order

  • People and materials (Human resources) should be in the right place at the right time.
  • This kind of order demands precise knowledge of the human requirement and resources of the organization and a constant balance between these requirements and resources.
  • Normally, the bigger the size of the organization, the more difficult this balance is.

11. Principle of Equity

  • Every Manager should be kind and fair to their subordinates.
  • Equity is known as the combination of justice and kindness.
  • The application of equity requires optimistic thinking, experience, and good nature for soliciting loyalty and devotion from subordinates.

12. Principle of Stability of tenure of personnel

  • Management should provide orderly human resource planning and ensure that replacements are available to fill vacancies whenever required.
  • No employees should be removed within a short time. There should be reasonable security of a job role.
  • Stability of tenure of personnel is very important to get new employees accustomed to new work and attain set standard performance.
  • Unnecessary turnover of employees is both cause and effect of bad management.

13. Principle of Initiative (14 principles of Management)

  • Employees should be allowed to innovate ideas and plans and it requires high levels of effort to make this happen.
  • Managers should encourage their employees for taking initiative in group meetings within the limits of authority and discipline. The initiative is concerned with thinking out and executing a plan.

14. Principle of Esprit de corps (14 principles of Management)

  • Esprit de corps simply means promoting team spirit and increasing unity within the organization.
  • This is the principle of ‘Union is Strength’ and the advanced stage of unity of command for establishing teamwork.
  • Every manager should encourage esprit de corps among his subordinate employees.

Must Read :Roles of Manager

► 14 Principle of Management (Explained in detail)

Henri Fayol’s 14 principles of management are followed by almost all business and non-business organizations. He introduced Administrative management theory which is based on the classical approach of performing managerial tasks.

Fayol’s principles of management help managers in performing managerial roles and responsibilities in an organization.

So let’s know all 14 principles of management one by one in detail.

✔ 1. Division Of Work (management principle)

According to this principle in every organization, the whole work should be divided equally to everyone according to their qualification, Capability, and Experience. Because if a person will do again and again same work he will be specialized in that work.

If the whole workload will be in one person only then he is not able to perform that task and there are the chances of duplication of work.

Example:

There is a family wedding and everyone is involved in different preparation like one is seeing the food counter, one is seeing the arrangement of where people will sit, another one is seeing decoration, etc…

Advantages of Division Of Work

  • There will be specialization.
  • It improves the efficiency of the organization.

Disadvantages of Division Of Work

  • There will be no specialization.
  • Lack of efficiency.
  • Chances of duplication of work.

✔ 2. Authority and Responsibility (management principle)

Authority refers to the power that has been legal by the organization.

Responsibility means an obligation to complete the job assigned on time.

In an organization there should be a balance between authority and responsibility if in an organization anyone has more authority then he will misuse his authority and if anyone has more responsibility without any authority then he will make excuses for not completing the work on time. So if anyone is giving any work he should also give authority.

Example:

If a person is given the responsibility to produce 200 units in 10 days but is not given authority to purchase the raw materials. If there is no raw material available in the storeroom as a result he could not complete the target of producing 100 units on time. Then an organization cannot blame the worker for not completing the given task on time because he was having excess responsibility and less authority.

Advantages of Authority and Responsibility

  • There will be no misuse of authority.
  • It will help in completing the given work on time.

Disadvantages of Authority and Responsibility

  • Misuse of authority due to excess of authority.
  • Due to more or excess responsibility, there will be an overburden of work.
  • Employees will make excuses for not completing work on time due to less authority.

✔ 3. Discipline (management principle)

Discipline refers to the following code of conduct, rules regulations of the organization. There should be good superior at all the levels.

According to Fayol discipline is required at superior as well as subordinate levels. The disciplinary rules shall not be applicable for subordinates only it is required for superiors also.

Advantages of Discipline (14 principles of Management)

  • There will be systematic working in an organization.
  • It improves the efficiency of an organization.

Disadvantages of Discipline

  • There will be missed conflicts, chaos, and confusion among all.
  • If there will be no discipline then there will be a wastage of resources.
  • Delay in work.

✔ 4. Unity of Command (management principle)

According to this principle in every organization, there should be one boss for giving orders to the employees and employees should only work for that boss. Because if there will be more than one boss and everyone will give orders so employees will also get confused for whom they should work. And they will not complete on time.

Advantages of Unity of Command

  • No ego clashes between different bosses.
  • Improves effectiveness in working.

Disadvantages of Unity of Command

  • Lots of confusion in the mind of employees.
  • Ego clashes between different bosses.
  • Difficulty in maintaining discipline in the organization.

✔ 5. Unity of Direction (management principle)

1 organization 1 goal means that the organization and the employees should have some goals to achieve for completing the organizational goal.

Advantages of Unity of Direction

  • It will help in achieving organizational goals.
  • Coordination among the superior and subordinate.

Disadvantages of Unity of Direction

  • Lack of coordination.
  • Difficulty in achieving organizational goals

✔ 6. Subordinate of individual interest to the general interest.

According to this principle, an organization should take the interest of everyone with the organization’s interest. In the organization, all the employees are working with some objective and there is always an objective of the organization. If the objectives of individuals are in the same direction of the organization then there is no problem.

Example:

Before buying raw materials the manager must compare the prices and qualities of all the suppliers and give orders to the best rather than giving orders to his relative by misusing his power.

Advantages of Subordination of Individual Interest to General Interest

  • Achievement of organizational goal.
  • Coordination between superior and subordinate.

Disadvantages of Subordination of Individual Interest to General Interest

  • Even employees will suffer in the long run.

✔ 7. Remuneration of Person (management principle)

According to this principle, the employees should get fair salaries and wages according to their work which could satisfy the need and wants of the employees. The wages and salary should be provided according to the wage employment act of government and salary should be provided according to the salary provided by the other companies.

Advantages of Remuneration

  • Employees get motivated.
  • The commitment of employees improves.

Disadvantages of Remuneration

  • Increase in turnover of employees.
  • Dissatisfaction and demotivation among employees.

✔ 8. Centralization & Decentralization (management principle)

Centralization refers to the concentration of authority or power in the hands of the top-level.

Decentralization refers to the distribution of power at every level of management.

There should be a balance between both of them. An organization should not be fully centralized and should not be fully decentralized.

Example:

INDIA is a country that is both centralized and decentralized.

Advantages of Centralization and Decentralization

  • Benefits of both centralization as well as decentralization.
  • Strict control by top-level management.

Disadvantages of Centralization and Decentralization

  • Fully centralization will result in a delay in decision.
  • Fully decentralization will result in misuse of authority.

✔ 9. Principle of Scalar Chain (management principle)

A scalar chain means a line of authority.

According to this principle, every information should pass from highest to lowest level. from top-level to lower level everyone should get the information no one should be left without getting the information may be the important person don`t know about the information and he cannot complete the work on time due to lack of information

Example:

If E wants to connect O he has to move through E-D-C-B-A-L-M-N and then O.

In case of emergency if other department employees want to connect the employees of another department they can directly contact the employees this is known as a gangplank.

In another scenario, If E wants to connect O he can directly contact O.

Advantages of Scaler Chain (14 principles of Management)

  • The systematic flow of information.
  • No communication gap in the organization.

Disadvantages of Scaler Chain

  • There may be a communication gap.
  • No clarity in the authority responsibility relationship.

✔ 10. Principle of order (14 principles of management)

According to this principle, it does not mean giving command it means there should be an orderly arrangement of men and material. There should be a fixed place for each and everything.

Advantages of Principle of Order

  • No wastage of time in search of men or material.
  • Smooth and systematic working of the organization.

Disadvantages of Principle of Order

  • Wastage of time and energy in search of men and material.
  • Not able to contact the people at the right time.

✔ 11. Principle of Equity (14 principle of management)

According to this principle, there should be equal, kind, and fair treatment with all the employees. Not based on caste, gender, religion, and color.

If the treatment will be based on these things then the employees will get demotivated and dissatisfied.

Advantages of Principle of Equity(14 principles of Management)

  • Satisfaction among employees.
  • Boost up the morale of the employees.

Disadvantages of Equity

  • Dissatisfaction among employees.
  • Increase in the turnover of employees.
  • Bad relation between superior and subordinate.

✔ 12. Stability of Tenure of Personnel

According to this principle, the organization must provide the feeling of job security among the employees because with the feeling of insecurity of job the contribution of employees will be less. So in an organization, the employees should also involve in decision-making.

Advantages of Stability of Tenure of Personnel

  • Improves efficiency level of employees.
  • No wastage of time and resources.

Disadvantages of Stability of Tenure of Personnel

  • Wastage of resources in learning the new job.
  • Dissatisfaction among employees.

✔ 13. Initiative (14 principles of management)

According to Fayol employees in the organization must be allowed to take some initiative in making and executing plans. It gives satisfaction to employees. So managers must welcome the suggestions and ideas of employees before framing the plan. But once the plan is made every employee must follow it.

Advantages of Initiative(14 principles of Management)

  • Develops a feeling of belongingness in employees.
  • the target is achieved on time.

Disadvantages of Initiative

  • Demotivation among employees.
  • Employees will not work to their best ability.

✔ 14. Esprit De Corps (14 principles of management)

To bring better coordination and corporation in the organization the management must encourage and promote team spirit, unity, and harmony. The manager should replace it with ‘I’ and ‘We’. This will raise the trust and belongingness among team members.

Advantages of Esprit de corps(14 principles of Management)

  • Develops Team spirit.
  • Achievement of group goals.

Disadvantages of Esprit de corps

  • Team goals may not be achieved.
  • More stress on individualism.