The bedrock of modern management theory is essentially the 14 principles of management put forward by French engineer Henri Fayol in the early 20th century. The principles have ensured a comprehensive framework for understanding effective organizational management since their inception. They are, therefore, the guiding light for managers in all industries in ensuring smooth operation and organizational success. The essence of these principles revolves around the handling of efficient authority, unity, discipline, and other important management-related activities.
Henri Fayol was a French mining engineer and director who created a general theory of business administration. His concept is the basis of most modern management techniques, based on organizational efficiency and people and task management. He believed that management could be taught, and his ideas were that management should be approached with a structured method. In his 1916 book “Administration Industrielle et Générale” he presented his 14 principles of management.
Fayol’s 14 principles of management describe the main ingredients and practices by which managers are supposed to hold themselves to achieve organizational efficiency. His principles include some of the most crucial issues like division of labor, authority, discipline, unity of command, and centralization. He also added that management must not only look after the workers but should also take care of the coordination of tasks, communication, and getting the organizational goals met suitably.
Let’s dive deeper into each of these 14 principles and how they contribute to effective management:
Division of labor, or specialization, refers to the assignment of different tasks to workers according to skill and competence. In essence, the division of labor enables workers to perform specialized functions that enhance productivity and efficiency.
Example: In an automobile assembly line, different workers are assigned specific tasks like engine assembly, painting, and final inspection, ensuring quicker production.
Fayol emphasized the balance that is at work between authority, being the power to issue orders, and responsibility, that is, the obligation to fulfill work. Managers must have the power to give orders, bearing the responsibility of ensuring work gets done properly.
Example: A project manager has the authority to assign tasks to team members but is also responsible for meeting project deadlines.
Discipline is the enforcement of rules and agreements in the organization. According to Fayol, good discipline leads to respect for both the employees and managers and is highly necessary for effective smooth functioning in an organization.
Example: A company implementing regular performance reviews and clear consequences for tardiness ensures discipline.
Each employee should receive orders from one superior only. This prevents confusion and ensures that instructions are clear and manageable.
Example: In a retail store, a cashier reports to one store manager rather than receiving conflicting instructions from multiple supervisors.
Unity of direction ensures that all employees are working towards the same objective under a single plan. This principle is essential for organizational unity and consistency.
Example: A marketing team working on launching a new product should follow a unified strategy rather than pursuing individual goals.
The interests of one employee should not take precedence over the interests of the organization. Fayol argued that organizational goals must always come first.
Example: An employee may prefer flexible working hours, but they must adhere to fixed schedules if it benefits overall company productivity.
Remuneration refers to the fair compensation of employees for work done. It covers rewards that are monetary and non-monetary, including a salary, bonuses, or benefits that boost employee satisfaction.
Example: A company offering performance-based bonuses in addition to regular salaries motivates employees to exceed expectations.
This principle governs the degree to which authority is centralized or concentrated at the top levels, or decentralized and dispersed to many levels. A just right balance ensures appropriate decisions.
Example: In a small startup, decisions are likely centralized with the CEO, while larger corporations may decentralize decision-making to different departments.
The scalar chain is a simple straight line of authority from the top to the bottom. Fayol insisted on a scalar chain but permitted occasional lateral communication to speed things up.
Example: In a large corporation, employees follow the chain of command to escalate issues but may communicate directly with colleagues in emergencies.
Order is the sequencing or alignment of human and material resources to achieve the utmost efficiency. This term presumes proper placement of the right people in the right jobs, with maximal utilization of resources.
Example: Organizing an office workspace so that supplies are easily accessible contributes to better time management.
Managers should treat employees fairly and with kindness. Fayol believed that equity fosters loyalty and motivation, leading to better performance.
Example: A manager ensuring equal opportunities for promotions based on performance, not favoritism, maintains equity.
Fayol believed that job security and employee retention are crucial for organizational efficiency. High employee turnover leads to instability and decreased productivity.
Example: Offering career development programs and benefits to encourage long-term employment boosts organizational stability.
Initiative among employees encourages innovation and makes the organization more responsive to change. Fayol also supported the idea of allowing employees to voice their ideas and be included in the decision-making process.
Example: Allowing employees to suggest improvements in workflow or procedures fosters a culture of innovation.
Esprit de corps, or team spirit, is crucial for maintaining harmony within the organization. It emphasizes the need for teamwork and communication to achieve a unified goal.
Example: Organizing team-building activities and promoting open communication helps foster a sense of belonging and collective responsibility among employees.
While Fayol’s 14 principles of management are widely regarded as foundational, they are not without criticism:
The Henri Fayol 14 principles of management have been very effective in the management of any organization and have influenced greatly the development of modern theories of management. Though these principles might need some alteration to fit the needs of present-day business, they have remained the backbone of many organizations that ensure efficiency in teamwork and success.
Henri Fayol was a French engineer and director known for developing a general theory of business administration and outlining the 14 principles of management.
Division of labor refers to the assignment of specific tasks to individuals based on their expertise, which enhances productivity.
Unity of command ensures that each employee reports to only one superior to prevent confusion and conflicting instructions.
Remuneration is the compensation provided to employees in the form of salaries, bonuses, and other benefits for their work.
Centralization refers to the degree to which decision-making authority is concentrated at the top levels of the organization.
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