Introduction
14 Principles of Management or Fayol’s Principles are a set of guiding principles by which management operates. As a part of scientific management and also a classical theorist, these principles are the cornerstone on which modern-day management theories are built.
14 Principles of Management can be jotted down as:
- Division of labor or Specialization
- Authority and responsibility
- Discipline
- Unity of command
- Unity of direction
- Subordination of individual interest to general interest
- The remuneration of personnel
- Centralization
- Scalar chain (hierarchy)
- Order
- Equity
- Stability of tenure of personnel
- Initiative
- Esprit de corps
Historical Premise
In addition to Taylor, Henri Fayol (1841–1925) was an important classical theorist. Fayol made the observation that management was an endeavor that was shared by all human activities. Taylor was the most well-known of these theorists. In his view, management is a theory that can be taught and that deals with planning, organizing, commanding, coordinating, and controlling the work process.
He articulated a number of fundamental management concepts and principles in his work. Many people consider Fayol’s theory to be the first comprehensive theory of management ever developed. He was most concerned with the duties associated with the position of chief executive officer and put his faith in the idea that there should be no division in the chain of command.
Fayol’s General and Industrial Administration is widely regarded as a seminal work in the field of business administration. This book, rather than any other body of work, is credited with having the greatest impact on the conceptualization of business management in Europe, as stated by Urwick, a prominent consultant and thinker in the field of business management in the United Kingdom.
Before exploring the 14 Principles of Management, we need to explore the activities in an organization and how these can be used to categorize activities in an industry
6 Categories of Activities in an Organization
Fayol’s 14 Principles of management assume tremendous significance when we attune the classification of the organization. Not only did he divide the organization into various activities it performs, but he also emphasized the importance and role of a manager in delivering these results
Fayol classified each and every activity carried out by an organization into one of the following six categories:
Technical Activities
Refers to the Production, Manufacturing, and adaption of goods and services. It is one of the most important functions of the organization
Commercial Activities
This relates to buying and selling of goods. The commercial activities extend to the purchase of raw materials, setting up of procurement practices, or subcontracting an activity to a third party
Financial Activities
As the name suggests it deals with the optimal management of resources, be they physical or financial. The activities seek to optimize the resources for maximum financial benefits. It can be optimally deploying capital for enhancing production or deploying optimum resources for deriving economies of scale.
Security Activities
It relates to the protection of property or personnel deployed in the organization.
Accounting Activities
It relates to the core functioning of an accounting function. Management of stock, inventory classification and management, balance sheets, and Profit and Loss statements are the major constituents of accounting activities
Managerial Activities
The Planning activities can be classified as planning, organization, command, and control of personnel. They have been discussed in detail in the 6 Managerial Activities of Henri Fayol. They are identified as 6 functions of Management
Fayols 6 Functions of Management
Forecasting
Forecasting involves predicting future events, trends, and conditions that are likely to affect an organization. It is an essential tool for planning, as it helps managers to anticipate potential problems and opportunities, and make decisions accordingly. Forecasting can be done using a variety of techniques, such as statistical analysis, trend analysis, and expert judgment. By accurately predicting future events, managers can better plan for the future and make informed decisions that will help the organization succeed.
Planning
Planning involves setting goals, developing strategies, and creating action plans to achieve those goals. It is an essential function of management, as it provides direction and purpose to the organization. Planning can be done at different levels within the organization, such as strategic planning, tactical planning, and operational planning. It involves identifying objectives, evaluating options, and making decisions that will help the organization achieve its goals.
Organizing
The process of arranging resources such as people, materials, and equipment in an efficient and effective manner to achieve the goals set in the planning phase.
Commanding
The process of giving direction and guidance to employees, and communicating expectations to them.
Coordinating
The process of harmonizing the different activities and efforts of various individuals and departments in the organization to achieve the goals set in the planning phase.
Controlling
The process of monitoring and evaluating the performance of employees and the organization as a whole, and taking corrective action when necessary to ensure that goals are being achieved.
The 14 Principles of Management Developed by Fayol
The following is a list of the fourteen principles that Fayol proposed for an organization to follow:
14 Principles of Management 1: Division of labor also known as specialization:
The goal of the specialization is to achieve better results with the same amount of effort expended. It is applicable to technical work in addition to other types of work that require the abilities of a variety of people working together. It brings about a division of labor in terms of functions and powers.
14 Principles of Management 2: Authority and responsibility
Authority and responsibility ought to be on par with one another. To put it another way, the person who is in charge of each position should have sufficient authority to carry out all of the responsibilities that have been delegated to him. The relationship between authority and responsibility is that of a corollary; responsibility is the authority’s natural consequence an essential counterpart.
14 Principles of Management 3: Discipline
Discipline is required in order to maintain discipline. This is to be done in accordance with the agreements that have been made between the company and its employees.
14 Principles of Management 4: Unity of command
An employee should only have to answer to one supervisor regardless of what action they take. In the event that this rule is broken and there are multiple bosses, the authority is weakened, the discipline is put in jeopardy, the order is disrupted, and the stability of the situation is put in jeopardy under adverse conditions.
14 Principles of Management 5: Unity of direction
Unity of direction In order to achieve unity of direction, all of the activities that are working toward the same goal need to adhere to the same plan. Unity of direction, or having one overarching plan, is a departure from the concept of unity of command (one employee to have orders from one superior only).
14 Principles of Management 6: Subordination of individual interest to general interest
In business organizations, the interests of a single employee or of a group of employees should not take precedence over those of the organization as a whole. This is known as the “subordination of individual interests to the general interest.”
14 Principles of Management 7: The remuneration of personnel
The remuneration that is paid for the services rendered should be fair, and it should provide satisfaction to both the employee and the company.
14 Principles of Management 8: Centralization
Everything that contributes to an increase in the importance of the subordinates’ role is considered to be a form of decentralization, whereas everything that contributes to a reduction in the importance of that role is considered to be a form of centralization. The concept that an organization is managed from the top down is supported by the centralization of its operations. The concept of centralization refers to the practice of assigning ultimate responsibility to the highest-ranking executive in an organization rather than dividing it among lower-level employees of that same business.
14 Principles of Management 9: Scalar chain (hierarchy)
In the process of issuing orders and resolving disputes, all communications are required to go through official channels. This is a requirement of the hierarchical structure. According to the scalar principle, the line of authority is the path that all communications take, whether they are departing from or arriving at the highest level of authority.
This path travels through each link in the chain. As a direct consequence of this, the procedure is not the quickest. It takes an interminable amount of time, which can be a catastrophe for large businesses, particularly government agencies. There are many endeavors in which the level of success is directly proportional to how quickly they are carried out. It is therefore necessary to find a balance between the need for prompt action and the requirement to respect the chain of command.
14 Principles of Management 10: Order or Placement
Order, also known as placement, refers to the logical arrangement and positioning of things and individuals.
14 Principles of Management 11: Equity
Equity: There should be a general feeling of friendliness and fair play throughout the entire organization. Justice and fair play should go hand in hand. Because of this, it is likely that the employees will demonstrate loyalty and devotion.
14 Principles of Management 12: Stability of tenure of personnel
Fayol advocated that a reasonable amount of time should be allowed to enable personnel to settle down to their jobs and adapt to the requirements of their work. This was to ensure that person would have a stable tenure.
14 Principles of Management 13: Initiative
The initiative refers to the capacity to conceive of a plan and carry it out in order to ensure that the plan is successful. It boosts zeal and energy levels among workers at every level of the organizational hierarchy. As a result, this is a significant factor that contributes to the success of businesses. Nevertheless, it should only be encouraged within the boundaries that are set by having respect for authority and being disciplined.
14 Principles of Management 14: Esprit de corps
The phrase “spirit of the corps” refers to the sense of unity or harmony that exists among the members of an organization. It is a significant contributor to the overall power of an organization. It was stated by Fayol that in order to foster esprit de corps, the principle of common law ought to be adhered to, the dangers of divide and rule ought to be avoided, and improper use of written communication ought to be avoided as well.
Contribution of 14 Principles of Management to Management Studies
It is generally agreed that Taylor and Fayol were the two individuals who laid the groundwork for the scientific management movement. While Taylor was developing the fundamentals of business management, Fayol was advocating for the formal theory of organization, which was primarily applicable at the executive level of an organization.
The ideas put forward by Fayol did not meet with instant acceptance from his own colleagues. It would appear that Fayol only considered the interests of the management, ignoring the concerns of the workers. Along the same lines as Taylor, he eventually came to receive criticism from the workforce.
However, the significance of Fayol’s contribution lies in the fact that he attempted to develop a rational theory of management. This is where the contribution’s importance lies. In addition, the study of organizations can be viewed from a more all-encompassing vantage point thanks to his expanded conception of the roles and responsibilities of managers.
These 14 Principles of Management find wide application in government and public sector organizations as well. In his seminal work, Henri Fayol quoted
“Principles and general rules which hold good for business hold good for the state too, and the reverse applies.”
– Henri Fayol
Limitations of 14 Principles of Management
The social requirements of the worker are not taken into consideration in this method, according to some critics of it. The hypothesis that the majority of people are driven primarily by the prospect of financial gain appears to be overly mechanistic and physiological. Furthermore, it ignores important organizational and motivational factors such as job satisfaction and the pursuit of self-actualization.
- Since the beginning of its implementation, the scientific management approach has been met with resistance from both the management and the employees of the organization.
- Because of the competitive nature of “more work, more pay,” it encourages individualism rather than the spirit of working together as a team.
- Because the worker is unable to perform other types of work after becoming specialized, he is at the complete discretion of his employer.
- Because of the intense competition to be more productive and efficient, it ignores or excludes the typical worker.
- The work becomes routine and uninteresting as a result of specialization. Workers are merely turned into machines that are expected to carry out the instructions that have been given, which eliminates any opportunity for initiative and innovation.
- It provides employers with access to a vast quantity of information and methods that can potentially be used to the detriment of workers. This is because not all workers are going to be able to live up to the standard that has been established.
- It is anti-democratic because it separates the manager from the worker by giving the management only the right and the prerogative to manage while imposing the obligation to work on the workers. This creates a divide between the two, which is anti-democratic. In an environment that is truly democratic, both the workforce and the management ought to collaborate in order to realize integrated individual and organizational objectives.
- Fayol’s 14 Principles of Management is specifically not viable for geographically dispersed and remote organizations of the modern-day world anymore
Samrat is a Delhi-based MBA from the Indian Institute of Management. He is a Strategy, AI, and Marketing Enthusiast and passionately writes about core and emerging topics in Management studies. Reach out to his LinkedIn for a discussion or follow his Quora Page