Henry Fayol’s 14 Principles of Management

20/12/2020 4 By indiafreenotes

The Administrative Theory was proposed by Henry Fayol, who studied the organizational problems from the manager’s viewpoint and found organization’s activities can be classified as Technical, Financial, Commercial, Security, Accounting and managerial.

Unit of Command: This is the principle, which states that an employee should receive orders from one superior only.

Unity of Direction: According to Fayol, the unity of direction principle implies that each group of activities having some objectives must have one head and one plan. As distinguished from the principle of unity of command, Fayol perceives unity of direction as related to the functioning of personnel.

Subordination of Individual Interest to General Interest: In any group, the interest of the group should supersede that of the individual. When the interests differ, it is the function of the management to reconcile them.

Division of Work: This is the principle of specialization, which is very well expressed by economists as being a necessary factor for efficiency in the utilization of labor.

Remuneration of Personnel: Fayol perceives that remuneration and methods of payment should be fair and also should be able to afford the maximum satisfaction to employee and employer.

Centralization: Although Fayol does not use the term, Centralization of Authority, his principle definitely refers to the extent to which authority is concentrated or dispersed in an enterprise. Individual circumstances determine the degree of centralization that gives the best overall yields.

Authority and Responsibility: In this principle, Fayol conceives authority as a combination of official authority deriving from a manager’s official position and personal authority, which is compounded of intelligence, experience, moral worth, past services, etc.

Discipline: Holding the notion that discipline is ‘respect for agreements which are directed as achieving obedience, application, energy and the outward marks of respect’, Fayol declares that discipline requires good superiors at all levels, clear and fair agreements and judicious application of penalties.

Scalar Chain: Fayol thinks of the scalar chain as a line of authority, a chain of superiors from the highest to the lowest ranks. And, because it is an error of a subordinate to depart needlessly from the lines of authority, the chain should be short-circuited.

Order: Breaking this principle into material order and social order, Fayol thinks of it as a simple edge for everything. This organization is the principle, which refers to the arrangement of things and persons in an organization.