Management Principles

Henri Fayol, a managing director of a mining company, made groundbreaking advances in organization development theory by iterating his miners’ working conditions to determine the optimal environment for efficiency, productivity, and happiness.

His work culminated in a book he wrote called General and Industrial Management where he cites 14 principles of management that he leveraged to improve his organization and employess’ efficiency and culture.

Considered as the father of modern operational management theory, Fayol’s ideas still ring true today, helping countless managers boost their team’s productivity and morale.

Here follows Fayol’s 14 Principles of Management –

PRINCIPLE #1 DIVISION OF WORK

Employees must specialize in different areas as they have different skills. Specialization promotes efficiency of the workforce and increases productivity. The specialization of the workforce increases their accuracy and speed.

PRINCIPLE #2 AUTHORITY AND RESPONSIBILITY

The accompanying power or authority bestows you the right to give orders to your subordinates. These are the two key aspects of management. Authority facilitates the management to work efficiently, and responsibility makes them responsible for the work done under their guidance or leadership.

PRINCIPLE #3 DISCIPLINE

Without discipline, nothing can be accomplished. Discipline is established by providing good supervision, clearly explaining rules, and implementing a system of reward and punishment. A manager can also present a good example to staff through self discipline.

PRINCIPLE #4 UNITY OF COMMAND

This means an employee should have only one boss and follow his command. If an employee has to follow more than one boss, there begins a conflict of interest and can create confusion. Every employee should receive orders from only one superior or behalf of the superior.

PRINCIPLE #5 UNITY OF DIRECTION

A group of activities that have the same objective should be directed by one manager using one plan. In other words, there should be one plan of action for a group of activities having the same objective and there should be one manager to control them.

PRINCIPLE #6 SUBORDINATION OF PERSONAL INTEREST

The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. If a task harms a manager personally, but results in a great profit to the company, he should give priority to the interest of the company.

PRINCIPLE #7 REMUNERATION

All Workers must be paid a fair wage for their services. This plays an important role in motivating the workers of a company. Remuneration can be monetary or non-monetary. However, it should be according to an individual’s efforts they have made.

PRINCIPLE #8 DEGREE OF CENTRALIZATION

Superiors should adopt centralization instead of complete centralization or decentralization. Superiors should keep the authority of taking important decisions in their own hands, while the authority to take daily decisions and decisions of less importance should be delegated to the subordinates.

PRINCIPLE #9 SCALAR CHAIN

Refers to the formal line of authority which moves from highest to the lowest ranks in a straight line. This chain must be followed in a strict manner. It means communication must move from top to bottom and vice versa in a straight line.

PRINCIPLE #10 ORDER

This principle is concerned with systematic arrangement of men, machine, material, etc. There should be a specific place for every employee in an organization. That is 'a place for everything (people) and everything has a place’.

PRINCIPLE #11 EQUITY

Supervisors should treat their subordinates in a just and kind manner so that they develop a feeling of dedication and attachment for their work. All the employees should be treated equally and impartially. It is the responsibility of a manager that no employee faces discrimination.

PRINCIPLE #12 STABILITY OF TENURE

It is harmful to change the employees frequently as it is a reflection of inefficient management. There should be stability of tenure of the employees so that the work continues efficiently.

PRINCIPLE #13 INITIATIVE

Initiative means the capacity to work while expressing one’s thoughts. It is the duty of the manager to encourage initiative among employees for doing some work – but always within the limits of authority and discipline.

PRINCIPLE #14 ESPRIT DE CORPS

It is the responsibility of the management to motivate their employees and be supportive of each other regularly. A manager should make efforts to develop team spirit among subordinates. Developing trust and mutual understanding will lead to a positive outcome and work environment.

Honing the fundamentals of modern management isn’t easy. Fayol’s 14 principles of management are used to manage an organization and are beneficial for prediction, planning, decision-making, organization and process management, control and coordination.