Written by Henry Fayol, a French industrialist and author of the book “Administration Industrielle et Générale,” is widely regarded as the father of the general administrative theory of management.
According to Fayol, the success of any organization is more dependent on the administrative ability of its managers.
He came to this conclusion after reflecting on his own experience as the managing director of Compagnie de Commentry Fourchambeau Decazeville.
One of Fayol’s notable contributions was the identification of five essential functions of management: planning, organizing, controlling, commanding, and coordinating.
These functions serve as the foundation for effective management practices and are still widely recognized today.
In addition to these five management functions, Henry Fayol also developed fourteen management principles, which are: Division of work; Authority and Responsibility; Discipline; Unity of command; Scalar chain; Equity; Espirit De Corps; Unity of direction; subordination of individual interest to the general interest; Remuneration; order; Centralization and decentralization; initiative; and stability of tenure of personnel.
He believes that these fourteen principles will assist organizations in achieving effective management, and many of them have now become standard practices in organizations.
Division of work( or labour)
Division of work, also known as division of labour, involves breaking down a task or activity into smaller components or parts, which are then assigned to different units or departments within a company.
According to Fayol, dividing work enables employees to develop expertise and specialization in specific areas, thereby increasing their efficiency and productivity.
He believes that as workers focus on tasks they are specialized in, they become more proficient, resulting in improved output.
In essence, division of labour entails assigning tasks to individuals who are best suited to perform them, fostering specialization and enhancing overall efficiency.
Authority and Responsibility
Authority is the right bestowed upon managers to give orders and expect obedience from subordinates.
According to Henry Fayol, “Authority is the right to give orders and power to exact obedience”.
It is the manager’s right to give commands and receive obedience from subordinates.
Along with this authority goes responsibility, which is the accountability of authority.
Responsibility is also defined as the obligation of an individual to fulfil the duties and tasks assigned to them.
Fayol emphasized the importance of maintaining a balance between authority and responsibility within an organization as they go hand in hand.
The authority to give orders should align with the responsibility for those orders. If a manager has more authority than responsibility, he or she is more likely to misuse it.
Conversely, if he has more responsibility than authority, he will become frustrated.
Discipline
Discipline, according to Calhoon, ” is the force that prompts individuals or groups to observe rules, regulations, and procedures which are deemed to be necessary for the effective functioning of an organization”.
Discipline, as described by Calhoon, refers to the force that prompts individuals or groups to observe rules, regulations, and procedures that are necessary for the effective functioning of an organization.
Discipline is a vital component of any management system, as it helps maintain order and promote good behaviour within the workplace.
When discipline is effectively enforced, it establishes a framework for consistency, accountability, and adherence to established norms.
Henry Fayol recognized the importance of discipline and advocated for the use of penalties as a means to incentivize compliance and reinforce discipline.
Unity of Command
Every employee should have only one superior and should receive orders from him only.
The principle of unity of command asserts that every employee within an organizational structure should have a single superior to whom they report and from whom they receive orders.
If an employee is required to report to multiple bosses or serve two masters, it could result in dual subordination as different superiors may provide contradictory instructions or have competing priorities.
Henry Fayol considered the unity of command to be the most fundamental principle of management.
He believed that it serves as the foundation for other management principles to function effectively.
Violating the unity of command principle undermines authority, jeopardizes discipline, and threatens the stability of the organization.
Unity of Direction
The principle of unity of direction emphasizes the importance of aligning the efforts and actions of individuals within an organization towards a common goal.
According to this principle, all members of the organization should work together in one direction to achieve the overarching objectives of the organization.
Instead of pursuing individual goals or working towards conflicting objectives, Henry Fayol advocated for a unified approach where everyone in the organization is directed towards a single common goal or objective.
This ensures that the collective efforts of the organization are channelled towards the accomplishment of shared goals.
Subordination of individual interest to the general interest
The principle of subordination of individual interest to the general interest highlights the importance of prioritizing the collective interests of the organization over personal or individual interests.
It is closely related to the principle of unity of direction.
According to the principle, individuals’ interests should be subordinated to organizational interests to avoid a conflict of interest.
Stated differently, the organizational interest should be given precedence over any personal interest.
That is, no individual’s interests should take precedence over that of the organization. Otherwise. Management would be a failure.
However, it is important to note that there may be situations where the broader social or national interests conflicts with organizational interests.
In such cases, when there is a conflict between organizational and social/national interests, the latter should take precedence.
Remuneration
Salaries and pay are, without doubt, the most significant motivator for working.
As per this principle, workers should be remunerated sufficiently and adequately so as to increase their work satisfaction and workers’ productivity.
In short, remuneration means workers should be paid fairly and equitably. By fairness, we mean the employee should get the payment he deserves.
By equitable, we mean employees of the same level should be compensated equally, regardless of their race, gender, or any status differences.
In today’s competitive environment, this principle is so important that it is now handled by a special department called the human resource management department.
Centralization and Decentralization
Centralization and decentralization refer to the distribution of decision-making power within an organization.
Centralization implies that authority and decision-making are concentrated in the hands of a few individuals, typically in top or middle management positions.
In contrast, decentralization involves delegating authority and decision-making to personnel at different levels of the organization.
Henry Fayol highlighted the importance of striking a balance between centralization and decentralization.
He advocated for neither extreme, but rather a combination of both approaches.
A partly centralized and partly decentralized structure allows employees to demonstrate initiative and take ownership of their work while ensuring that individuals with the necessary expertise and knowledge have the authority to make informed decisions.
Scalar chain
Communication is critical in any organization, regardless of its size. There must, therefore, be a clear line of communication and authority in an organization.
The scalar chain is the line of communication and authority that runs from top management to lower management.
It refers to the hierarchical structure. It depicts the flow of communication and authority from top management to lower levels.
The scalar chain is essentially the organization’s chain of command, outlining the reporting relationships and levels of authority within the organization.
It provides employees with a clear understanding of their position in the hierarchy, who their superiors are, and who they should approach if they have any problems or suggestions.
If there is no scalar chain, there will be confusion and chaos in the organization as subordinates will not know who to report to or approach for suggestions or questions.
Order
For the sake of efficiency and coordination, Fayol believes that there should be a place for everything and everything should be in its place. He called this order.
As per this principle, resources such as men and materials must be at the right place and at the right time so as avoid or reduce wastage.
The principle of order extends beyond the physical organization. It also involves placing the right person in the right job so that the skills, expertise, and qualifications of the person match the requirements of the position.
Equity
The principle of equity in emphasizes the fair and just treatment of all employees within an organization.
It is based on the idea that rights, responsibilities, and opportunities should be distributed evenly and impartially among subordinates within an organization.
Equity, in essence, means that managers should treat all employees with fairness, respect, and impartiality.
Fayol argued equitable treatment of employees is a prerequisite for effective management. If employees are not treated equally, they are bound to be ineffective.
Stability of Tenure of Personnel
Any organization that wants to achieve its goal successfully must be able to reduce labour turnover.
At the risk of oversimplifying, labour or employee turnover is the rate at which employees leave an organization and are replaced by new employees.
Stability of tenure refers to the management task of reducing labour turnover in the organization.
To ensure effectiveness and efficiency, there must not be frequent entry and exit of personnel in the organization.
Frequent turnover of employees not only wastes valuable company resources but also disrupts the overall output and productivity.
It results in the loss of institutional knowledge, decreased team cohesion, and increased recruitment and training costs.
To achieve stability of tenure, Henry Fayol argued that management should make every effort to retain productive workers.
Initiative
No manager is an island unto himself. As a result, subordinates’ initiative is required.
Employees should be encouraged to present and implement their ideas or suggestions for the organization to function effectively.
This will increase employee interest in the work while also creating a sense of belonging because employees will feel that their opinions and ideas are highly valued and appreciated in the organization.
Espirit De Corps
Esprit de corps is a French term that means “team spirit”. It is a feeling of camaraderie and unity that exists among members of a group.
In order to create team spirit, Fayol emphasized that teamwork and communication should be encouraged.
When a group has esprit de corps, its members are motivated to work together towards a common goal.
