HENRI FAYOL'S PRINCIPLES OF MANAGEMENT

In 1916, Henri Fayol provided a list of 14 principles in his book titled 'Administration Industrielle et Generate' (written in French, later trans­lated in English as 'Industrial and General Administration). Fayol was of the opinion that all managers in all organizations, whether large or small, need to follow the principles or guidelines in managing business affairs.
The 14 principles are as follows:
1. Division of work:
The work in an organization must be divided among individuals and departments. Division of work leads to specialization. It results in accuracy, speed and neatness in work. Specialization also leads to innovation.
Henri Fayol advocated division of work, because every change of work requires adaptation or adjustment which reduces output. How­ever, division of work has it own limits which should not be exceeded.
2. Authority and Responsibility:
Fayol stressed that authority should be equal to responsibility. If authority is in excess of responsibility, then the manager may be tempted to misuse it. On the other hand, if a person is held responsible without giving him adequate authority, then he may feel frustrated.
In other words, authority should not be more and less responsibility. Again, responsibility should not be more and less authority. There should be a proper balance between authority and responsibility.
3. Discipline:
Fayol stressed the need for discipline in an organization. Discipline involves not only obedience to rules and regulations of the organization, but more importantly it involves application and dedication on the part of the employees. It also involves outward marks of respect.
Fayol wrote that the best means of maintaining discipline is to have:
Disciplined superiors at all levels,
Clear and fair agreements, and
Judicious use of all penalties.

4. Unity of Command:
It means a subordinate should receive orders from only one superior. There should not be multiple bosses. The subordinate should not be made to report to several bosses.
Fayol observed that if one subordinate receives orders from more than one superior, then everything will be in disorder. Lack of unity of command is like "Too many cooks spoil the soup."
5. Unity of Direction:
There should be 'one head, and one plan' for a group of activities having the same objective. There cannot be different plans for the same group of activities having the same objective.
For instance, if there are 10 salesmen, selling the same product in the same area, and if there are 2 sales supervisors, each in charge of 5 men, then every salesman would take orders from their respective supervisors. There will be unity of direction only when all the sales plans are coordinated at a higher level.
6. Subordination of individual interest to general interest:The interest of one employee or a group of employees should not prevail over that of the entire organization. Every employee or a group should work in the interest of the organization and not for their own self interest.
In other words, the interest of the organization should come first and then individual or group interest. This can be ensured by:
Good example on the part of superiors,
Having fair agreements, and
Constant supervision.
7. Remuneration:
Wages and salaries should be fair. It should depend on circumstances, such as cost of living, ability of the company to pay, prevailing wage rates in the industry, etc. Also, the value of the employee must be taken into consideration.
Fayol stressed that apart from financial benefits, non-financial benefits be provided such as good working conditions, canteen facilities, recreation facilities, etc.
8. Centralization:
Fayol stated that certain matters are to be centralized and others to be decentralized. There is a need to have a proper balance between centralization and decentralization. He advised that extreme centralization or decentralization is to be avoided, especially in large companies.
9. Scalar Chain:
It refers to the line of command from top level to the lowest level. He felt that scalar chain needs to be followed, but not at all times.
He stressed that the scalar chain can be short-circuited or broken if the situation so demands in the interest of the organization. He advocated the 'Gang-plank Principle'. Gangplanks should be used to prevent the delay of action. This can be explained with the help of a diagram taken from his book.




In the diagram 'A' represents the top authority (superior), who is in charge of 'B' and 'L'. 'B' is the immediate superior of 'C. 'L' in turn is the superior of 'M', and so on. Suppose if 'F' wants to communicate to 'P', then he would have to go all the way up to 'A' and then down to 'P' (if the scalar chain principle is to be followed in the strict sense). This will result in a lot of paper work and time consuming, which in fact will delay action.
To avoid distortion in communication and delay in action, Fayol suggested that with the help of the 'gangplank/bridge' (dotted line,) 'F can directly communicate with 'P', provided both of them inform their immediate superior of any action taken.
10. Order:
Fayol stated that there should be order in the organization. He stressed that there should be a place for everything, and everything must be in its place. Again, there must be a place for everyone, and everyone .must be in his place
Thus, this principle requires the orderly organization and placement of men, machines and other resources. Misplacement would lead to misuse and disorder.
11. Equity:
All members of the organization should be treated equally, depending upon the performance and circumstances. In other words, there must not be any partiality in transfers, promotions, etc. Fayol stressed that managers must exercise justice and kindness while dealing with their subordinates.

12. Stability of Tenure:
Fayol pointed out that managers as well as non-managers need time to learn and understand their jobs. If they leave or are removed within a short period of time, the learning time will be wasted.
In other words, employees should not be kept temporary for a long period of lime. Employees should be made permanent so that they do not leave the organization. However, incompetent persons need to be removed or replaced and those who perform well must be rewarded
13. Initiative:
The superior must sacrifice his own vanity to encourage and inspire those under him to show initiative. Subordinates should be given freedom to come up with suggestions and ideas. This will not only add to the success of the organization but will also boost the morale of the subordinates.
14. Esprit de Corps:
The superior must encourage esprit de corps (team spirit) among his subordinates. It is the team spirit that results in loyalty, and dedication and commitment of the employees.
Fayol warned of the consequences of (a) divide and rule, and (b) abuse of written communications. It is the team spirit that often brings success to the organization.