FUNDAMENTALS OF

MANAGEMENT
HENRI FAYOL:
14 Principles of Management

By:
Prof. Aastha Sawhney
Bachelors of Business Management
IMS, Ghaziabad University Courses Campus
 INTRODUCTION
 A principle refers to a fundamental truth
 It establishes cause and effect relationship between two or
more variables under given situation
 They serve as a guide to thought & actions
 These principles are derived: -
▪ On the basis of observation and analysis
▪ By conducting experimental studies
HENRI FAYOL
4 PRINCIPLES OF MANAGEMENT
-HENRI FAYOL
 DIVISION OF LABOUR
 Specialization allows the individual to build up experience, and to
continuously improve his skills. Thereby he can be more productive
 Stressed on the specialization of jobs
 Work of all kinds must be divided and allotted to various persons
 Simpler and results in efficiency
 Helps the individual in acquiring speed, accuracy in his
performance
 Specialization leads to efficiency & economy in spheres of business
 AUTHORITY & RESPONSIBILITY
 The right to issue commands, along with which must go the balanced
responsibility for its function
 Authority is given to a person, he should also be made responsible
 He should also have concerned authority, if anyone is made responsible
 Authority refers to the right of superiors. Responsibility means obligation
for the performance of the job assigned
 Should be a balanced
 Authority- Responsibility = Irresponsible Behaviour
 Responsibility- Authority= Ineffective
 DISCIPLINE
 Employees must obey, but this is two-sided: employees will only obey
orders if management play their part by providing good leadership
 Sincerity, Obedience, Respect of Authority & Observance of Rules and
Regulations of the Enterprise
 Subordinate should respect their superiors and obey their order
 Smooth running of the enterprise
 Discipline can be enforced if -
❑ Good superiors
❑ Clear & fair agreements with workers
❑ Sanctions are judiciously applied
 UNITY OF COMMAND
 A sub-ordinate should not receive instructions from more than one person
 Dual sub-ordination should be avoided
 UNITY OF DIRECTION
 People engaged in the same kind of activities must have the same
objectives in a single plan. This is essential to ensure unity and
coordination in the enterprise. Unity of command does not exist
without unity of direction but does not necessarily flows from it.
 One head one plan
 Related activities should be grouped together
 Efforts of all the members of the organization should be directed
towards common goal
 Without unity of direction, unity of action cannot be achieved
SUBORINATION OF INDIVIDUAL INTEREST TO
THE GENERAL INTEREST
 Management must see that the goals of the firms are always
paramount
 An organization is much bigger than the individual
 As far as possible, reconciliation should be achieved between
individual and group interests
 Case of conflict, individual must sacrifice for bigger interests
 In order to achieve this attitude
✓ Employees should be honest & sincere
✓ Proper & regular supervision of work
✓ Reconciliation of mutual difference
 REMUNERATION OF PERSONNEL
 Payment is an important motivator although by analysing a number of
possibilities, Fayol points out that there is no such thing as a perfect
system
 Paid to the workers should be fair of the efforts
 Satisfaction to both employer and the employees
 Determined on the basis of cost of living, work assigned, etc.
 Provision of other benefits such as free education, medical &
residential facilities to workers
 Management creates harmonious relationship and pleasing atmosphere
of work
 CENTRALIZATION

 This is a matter of degree depending on the condition of the business

and the quality of its personnel
 Centralization-concentration of authority at the top level
 De-centralization-disposal of decision making authority to all the levels
of the organization
 Increases the role of subordinate is decentralization & Decreases the
role of subordinate is centralization
 It is not feasible, organization should strike to achieve a lot between
the two
 SCALAR CHAIN
 A hierarchy is necessary for unity of direction. But lateral
communication is also fundamental, as long as superiors know that
such communication is taking place. Scalar chain refers to the number
of levels in the hierarchy from the ultimate authority to the lowest
level in the organization. It should not be over-stretched and consist
of too-many levels
 The chain of superiors ranging from the ultimate authority to the
lowest
 Every orders, instructions, etc. has to pass through Scalar chain
 For the sake of convenience & urgency, this path can be cut this short
cut - Gang Plank
 Temporary arrangement between two different points to facilitate
quick & easy communication
 Modified as per the requirements of situations
 ORDER
 Both material order and social order are necessary. The former
minimizes lost time and useless handling of materials. The latter is
achieved through organization and selection.
 Concerned with proper & systematic arrangement of things and people
 Arrangement of things is called material order
 Placement of people is called social order
 Material order-should be safe, appropriate and specific place for every
article
 Social order-Selection and appointment of most suitable person on
the suitable job
 EQUITY

 In running a business a ‘combination of kindliness and justice’ is needed.

Treating employees well is important to achieve equity

 Manager should encourage workers to fulfil their duties with devotion and
loyalty; management should deal with equality

 Fayol says that equity does not mean a total absence of harshness, rather
suggests that these might become necessary sometimes for the sake of
equity itself
 STABILITY OF TENURE OF PERSONNEL

 Employees work better if job security and career progress are assured
to them. An insecure tenure and a high rate of employee turnover will
affect the organization adversely
 Employees should not be moved frequently from one job position to
another
 Once they are appointed their services should be served
 Time is required for an employee to get used to a new work – Fayol
 Money spent on training the worker will go waste
 Stability of job creates team spirit& a sense of belongingness among
workers
❖ ultimately increase the quality as well as quantity of work
 INITIATIVE

 Allowing all personnel to show their initiative in some way is a source

of strength for the organization. Even though it may well involve a
sacrifice of ‘personal vanity’ on the part of many managers
 Encouraged to take initiative in the work assigned to them
 Initiate actions without being asked to do
 Management should provide opportunity to its employees
 Helps in developing an atmosphere of trust
 Enjoy working in the organization because it adds to their zeal and
energy
 Suggest improvement in formulation & implementation place
 ESPRIT DE CORPS
(UNION IS STRENGTH)
 Management must foster the morale of its employees. He further suggests
that: “real talent is needed to coordinate effort, encourage keenness, use
each person’s abilities, and reward each one’s merit without arousing possible
jealousies and disturbing harmonious relations.”
 It refers to team spirit
 Inspires workers to work harder
 Interest of the undertaking in the long run
 The managers should infuse team spirit & belongingness
 Espirit De’ Corps following steps should be undertaken
❖ Proper co-ordination
❖ Should be encouraged to develop informal relations among themselves.
❖ Create enthusiasm and keenness among subordinates
❖ Employees should be rewarded
THANK YOU