What are the 14 management principles of Henri Fayol?

Who is Henri Fayol?

Henri Fayol, commonly known as the founder of the modern management method, was a French mining engineer and director. Fayol has written several articles on mining and management.

The 14 principles developed by Henri Fayol along with his colleagues in 1949, were documented in the book Administration Industrielle et Générale, and later translated to English as "General and industrial administration". These principles gave rise to Fayolism.

What are the 14 Principles of Management?

1. Division of Work

2. Authority

3. Discipline

4. Unity of Command

5. Unity of Direction

6. Subordination of Individual interests to the general interest

7. Remuneration

8. Centralization

9. Scalar Chain ( Line of Authority )

10. Order

11. Equity

12. Stability of Tenure of Personnel

13. Initiative

14. Espirit de Corps

Division of Work

Just like well-developed living beings have well-developed organs each organ catering to a different function of the body, a corporate, or an organization needs to have well-defined organizations that cater to a specific function. That organs manager only concerned about its matters and focusing on issues related to the functioning, and their workers always focused on developing and improving the function on all measures of success, constantly trying to remove hurdles on their path of achievement. Tracking and maintenance of work become much easy on modularity. Hence, we have so many divisions such as Sales, Marketing, Development, Product Management, etc., and many further divisions in bigger organizations for maintainability.

Authority

Authority is the right to give order and the power to exact obedience. Authority and responsibility are not different but are essential counterparts. With immense responsibility, emerges authority, in order to accomplish the former. While general workmen focus on the technical aspects of the work, they do not own responsibilities. It is the responsibility of the manager to get the work done. Hence, it is for that pressure on the individual and the responsibility that he/she holds that accounts for the huge pay. However, the authority has its limitations and cannot go overboard to achieve their goals. This can in turn be witnessed through his/her reporters' personal integrity.

Discipline

Discipline is an ingredient that is always highly appreciated in the military. It is followed by everyone at armed forces but is essentially due to great leadership. Likewise, behind any organization's success, there would be great leadership that has driven discipline between its employees. Discipline can be of any form. It can be clearly defined in the company's regulations, or not be stated at all. It can be preached from time to time or could have not been spoken of at all. However, discipline is the respect for agreements that are directed at achieving obedience, application, energy, and respect.

The best ways of implementing discipline in an organization are:

1. Good superiors at all levels

2. Agreements as clear and fair as possible

3. Penalties judiciously applied.

Unity of Command

An employee should always receive command only from one superior. Dual commands or more than that are always harmful to the organization. If commands from more than one person are received by an employee, one would be violated, and the authority undermined. Discipline, order, and stability would be threatened. Hence, the outcome from such an act would either be:

a. One of the superiors would be defeated and the organization's well-being established, or,

b. it would be an organizational failure.

Either way is a bad position. Though the disasters are well-known, the practice of unity of Command is still not practiced at many companies. Some of the reasons being:

1. In the hope of being better understood and to lessen the communication time, one senior may bypass another to give orders to the latter's reporters.

2. Sometimes procrastination in dividing the authority in a circle of friends, or members of a family, can arise the circumstance of dual commands.

3. In startups, the imperfect splitting up of roles and functions can arise to receiving commands from more than one superior.

Unity of Direction

Just like how a body with two brains or heads gets confused about what impulse to be taken for execution, an organization with two heads or thinking will demolish soon. Hence, it is necessary to establish a vision for your company and drive everyone on the same path. The direction will act as a pivot to making decisions and framing organizational practices.

Subordination of Individual interests to the general interest

A country's interests should be put before the individual citizen's interests. Likewise, an organization's interest must be put before it's individual employees' interests. This is because, an individual can be influenced by various factors such as laziness, greed, procrastination, weakness, etc. These factors would make his decisions biased, and would not serve the whole company good. Hence, an organization's interests always precede its' individual employees' interests, and hence, unity of direction.

Remuneration

Employees' salaries must be paid fairly. He/she must neither be overpaid nor underpaid. But, this price is not just decided based upon the employer's will or the employee's worth. There are more factors to consider while fixing a salary such as:

1. Cost of living

2. The employee's personnel expenditure

3. business prosperity, and

4. market conditions

Once these issues are sorted out, the employer may add more based on his will that is in turn based on the employee's worthiness. If the employee is satisfied with the remuneration, then they discuss the mode and method of payment.

Centralization

Imagine, our body didn't function only by the brain's command or impulses, but each organ gave its own commands. The functions would be disrupted and the whole body would remain in chaos, with dispaired productivity.

Likewise, centralization is very important for any organization. It should be clear on who makes the final decisions and who executes it. In a small organization, where a manager's words are taken as such and implemented by subordinates, the centralization clearly lies with the top management.

However, in bigger organizations with scalar reporting structures, it can cause more overheads. When a command is passed down from one level to another, it gets altered and added based upon the morals and perspectives of the one passing it. That's why it is important to have trustworthy people in management. Simply everything that gives more importance to the subordinates' role is decentralization, and vice-versa.

Scalar Chain ( Line of Authority )

In order to preserve the Unity of Command, there is generally a scalar chain until the top. Imagine there are 14 levels in an organization such as Level 1 reporting to (junior to) Level 2, and henceforth, Level 14 being the CEO of the company. Now, employees need to adhere to the command of their immediate reporter in order to preserve the unity of command. It may not always be the fastest route to getting things done, but is the least chaotic and best-policy for the long run of a company.

However, most of the time, issues cannot be taken up to CEO for resolution for different paths of the organizational tree. That's why we use the concept of "Gang Plank". If two employees or managers of Level 6 have discrepancies in the command, and contradict to the commands given by the Level 7 seniors, they can directly escalate the issue to their managers. These Level 7 managers with the notice of the Level 8 managers can resort to sorting out the issue without any hassles. If sorted out, the same can be implemented. This generally escalated until it is tallied out at a certain point.

Order

"Right man in the Right Place." For a company's success, good organization and a good selection of employees is very important. This in turn comes with right requirements and responsibilities defined for each role. Hence, once the selection is done for the role, he/she must be put in the right place and assigned the right manager and subordinates to put his full service to effect.

Equity

Most of the time, you cannot predict the future of the business and guarantee a salary hike or bonuses. At the same time, you cannot run a smooth business without good remuneration, which would not be fair. Hence, companies resort to equities to instill ownership in employees to ensure they are loyal to the workplace and contribute much more of their talents for the benefit of the organization. In doing so, when the company grows and the price of equity increases, employees get the fruit of the efforts.

Stability of Tenure of Personnel

For any professional, it takes time for one to settle in an organization and then put their skills to the best use. For a manager, especially entering bigger companies, takes much more time to get to know the people, the well-built processes, and their sub-ordinates to actually implement their work. Hence, if you are going to keep changing the staff quite often, it can be very costly to the organization and the work would never get completed. Hence, think while you hire, and not immediately after you do so.

Initiative

The ability to bring up an idea and putting it to execution is called an initiative. Many initiates are taken especially at start-ups to establish a great company. This comes out of the will of the employee rather than by order. The employee's curiosity and learning interests help them push their initiatives to success.

Sometimes, managers should let go of their vanity to help their employees in accomplishing their initiatives. Great initiatives are rewarded. However, if an organization lacks financial resources to do so, they reward their employees with credibility and awards for the same.

Espirit de Corps

"United we stand, divided we fall."

Espirit de Corps means "Union is Strength." To succeed in business it is important to establish harmony and togetherness between your workforce. In order to do so, two things that need to be avoided. They are:

1. Personnel must not be divided: While it is clever to divide your enemy army to defeat them, it may not be wise to divide your own army. Hence, preach unity and take measures to keep your workforce united for maximum productivity.

2. Abuse of Written Communication: It is always better to communicate in person whenever possible. Words and gestures in person harm lesser than they do in a text, especially when the information conveyed is controversial.