Fayol's Principle of Administrative Management - The 14 Principles of Management

Fayol’s Principle of Administrative Management – The 14 Principles of Management

Henry Fayol (1841-1925) was a French engineer who worked for a coal mining company and retired after 30 years of being Managing Director of the company. He was given the responsibility as the Managing Director when the company was in a state of insolvency. He applied his thought and principles and improved the company management immensely to make it a leading company in coal mining.

Henry Fayol viewed management distinctly than science and human involvement. He coined the term “Administrative Management” in the field of management. He identified the distinction between technical and managerial skills and also clarified the different functions of management. He gave his 14 principles of management which acted as a base of development for management and guideline for managers. Due to such a significant contribution, Henry Fayol is said as “Father of Modern Management”. These principles suggested by Henry Fayol are universally accepted and considered as true principles of management. The 14 principles given by Henry Fayol have been explained below:

Division of Work: According to this principle, a person cannot do all types of work. That’s why work should be divided into small tasks or jobs. Managers should assign each to employees based on their capabilities. According to Fayol, division of work facilitates specialization and brings organizational efficiency.
Authority and Responsibility: Authority and responsibility are closely related. Authority refers to the right to order and get exactly what has required from subordinates. On the other hand, responsibility refers to being accountable. According to this principle, managers should be given adequate authority to discharge their responsibilities. If a person is given authority without responsibility, there is a great chance of unmindful use of such authority. Similarly, a person given responsibility without authority becomes ineffective. Hence, there should be a balance in the level of authority and responsibility given to any person.
Discipline: Discipline is the obedience to organizational rules and employment agreements necessary for working in the organization. This principle emphasizes that subordinates should respect their superiors and obey their orders. On the other hand, superiors should and honor their subordinates’ contributions without prejudice. If such discipline is observed and maintained, there will be no chance of industrial disputes.
Unity of Command: This principle of unity of command states that each employee in a formal organization must receive an order and be responsible to only one superior. An employee receiving orders from more than one superior at a time may lead to confusion regarding the task to be done. Hence, the command for work should come from one uniform source.
Unity of Direction: According to this principle, there should be only one head and plan for a set of group activities done for a specific objective. For this, it is necessary to direct all efforts of each group member towards one direction under one head. Managers should promote this principle to ensure good coordination of activities, efforts and resources towards a common goal.
Subordination of Individual Interest to General Interest: Every worker working in a company has some individual interest and the company also has objectives of making the worker work. According to this principle, an individual’s interest must be subordinated to the general interest of the organization. This ensures the welfare of workers as well as the organization.
Remuneration of Employees: Fayol recommends that overall pay and compensation should be fair for both employees and the organization. This means employees should be paid fairly within the paying capacity of the organization. This reduces tension and differences between employees and the organization. With this, harmonious relationships exist between employees and the organization with spreaded happiness in a working environment.
Centralization and Decentralization: The concentration of authority to make a decision in one person is called centralization. On the other hand, the dispersal of authority among more than one person is called decentralization. According to Fayol, an organization must maintain proper and effective adjustments between centralization and decentralization. Only this can ensure the achievement of organizational objectives in an effective and efficient way.
Scalar Chain: An organization consists of superiors and subordinates. The formal chain of authority from higher to lower rank is known as the scalar chain. According to Fayol, a formal chain of authority and communication flows from top to down in an organization. Such a chain should be followed by all superiors and subordinates. According to this principle, this formal scalar chain should not be violated during the normal course of operation and communication. However, in case of emergency, gangplank can be used so that communication is not delayed.
Order: According to the principle of order, there should be a proper, systematic and orderly arrangement of physical and social factors in an organization. This includes factors such as land, materials, equipment and tools, employees etc. Employees should be given work for which they are best suited. Similarly, materials should be properly purchased and stored which can make production easy and efficient.
Equity: The principle of equity emphasizes kindliness and justice in the behavior of managers towards their employees. There should not be any discrimination on the basis of caste, creed, religion, sex etc. This principle should be used and is applicable at all levels of an organization and should be strictly followed by everyone. Only with equity and fair treatment, an organization can ensure devotion and loyalty from its workers.
Stability of Personnel: The principle of stability of personnel states that employee turnover should be minimized for the efficiency of the organization. Employees should be provided stability and continuity of the tenure of employment. This could be done through fair and attractive remuneration as well as honorable treatment of employees.
Initiative: Initiative means taking the first step with self-motivation. It is thinking out and executing a plan. Under this principle, management should encourage its employees to develop and carry out their plans for improvements. But the employees should not go against existing practices in the organization to show them differently through their initiations.
Esprit De-corps: Esprit de-corps refers to team spirit According to this principle, managers should promote a team spirit of unity and harmony among employees to realize its objectives. Individual and group effort should be integrated in such a way that the best possible results can be obtained.

Key Contribution of Fayol’s Principle of Administrative Management

Classification of business activities as technical, commercial, financial, security accounting and administrative
Classification of managerial functions as planning, organizing, commanding, co-ordinating and controlling
Classification of qualities of managers as physical, mental, moral, educational, technical or professional and experiences
A first comprehensive and complete theory of management applicable to all firms and endeavors
Development of management as academic curriculum in universities and colleges

Limitations of Fayol’s Principle of Administrative Management