Any organization that wishes to be efficient and achieve its goals needs good management. Management has four basic functions - planning, organizing, leading, and controlling, also called the POLC framework in management. Without these in place, there would be little to no structure and focus in an organization. One classic theory on the principles of management was written by Henri Fayol in his 1916 book, "Administration Industrielle et Générale”. By placing the focus on managerial skills over technical skills, these principles give us a foundation for what we call “good management”.
Henry Fayol’s 14 Principles of Management
Henry Fayol’s 14 principles of management look at an organization from a top-down approach to help managers get the best from employees and run the business with ease. Let’s take a look at them and understand them in detail.
1. Division of Work
The first principle of management is based on the theory that if an employee is given a specific task to do, they will become more efficient and skilled in it. This is opposed to a multi-tasking culture where an employee is given so many tasks to do at once. In order to implement this principle effectively, look at the current skill sets of each employee and assign them a task that they can become proficient at. This will help them to become more productive, skilled, and efficient in the long run.
This principle states that a manager needs to have the necessary authority in order to ensure that his instructions are carried out by the employees. If managers did not have any authority, then they would lack the ability to get any work done. However, this authority should come along with responsibility. According to Henri Fayol, there should be a balance between authority and responsibility. If there is more authority than responsibility, the employees will get frustrated. If there is more responsibility than authority, the manager will feel frustrated.
This principle states that discipline is required for any organization to run effectively. In order to have disciplined employees, managers need to build a culture of mutual respect. There should be a set of organizational rules, philosophies, and structures in place that should be met by everyone. Bending rules or slacking should not be allowed in any organization. In order to achieve this, there is a need for good supervision and impartial judgment.
4. Unity of Command
This principle states that that should be a clear chain of command in the organization. The employees should be clear on whose instructions to follow. According to Fayol, an employee should receive orders from only one manager. If an employee works under two or more managers, then authority, discipline, and stability are threatened. Moreover, this will cause a breakdown in management structure and cause employees to burn out.
5. Unity of Direction
This principle states that the work to be done should be organized in such a way that employees work in harmony towards the same objective, using one plan, under the direction of one manager. For example, if you have a range of marketing activities such as advertising, budgeting, sales promotion, etc., there should be one manager using one plan for all the marketing activities. The different activities can be broken down for different sub-managers, but they should all work towards a common goal under the direction of one main person in charge of the whole thing.
6. Collective Interest Over Individual Interest
This principle states that the overall interest of the team should take precedence over personal ones. The interest of the organization should not be sabotaged by the interest of an individual. If anyone goes rogue, the organization will collapse.
This principle states that employees should be paid fair wages for the work that they carry out. Any organization that underpays its workers will struggle to motivate and keep quality workers. This remuneration should include both financial and non-financial incentives. Also, there should be a structure in place to reward good performance to motivate employees.
Centralization refers to the concentration of power in the hands of the authority and following a top-bottom approach to management. In decentralization, this authority is distributed to all levels of management. In a modern context, no organization can be completely centralized or decentralized. Complete centralization means that people at the bottom have no authority over their responsibilities. Similarly, complete decentralization means that there will be no superior authority to control the organization. To use this effectively today, there should be a balance of centralization and decentralization. The degree to which this balance is achieved will differ from organization to organization.
9. Scalar Chain
A scalar chain refers to a clear chain of communication between employees and their superiors. Employees should know where they stand in the hierarchy of the organization and who to go to in a chain of command. To implement this in the workplace, Fayol suggests that there should be an organizational chart drawn out for employees to see this structure clearly.
This principle states that there should be an orderly placement of resources (manpower, money, materials, etc.) in the right place at the right time. This ensures the proper use of resources in a structured fashion. Misplacement of any of these resources will lead to misuse and disorder in the organization.
Equity is a combination of kindness and justice. This principle states that managers should use kindliness and justice towards everyone they manage. This creates loyalty and devotion among the employees towards the organization they work for.
12. Stability of Tenure of Personnel
This principle states that an organization should work to minimize staff turnover and maximize efficiency. Any new employee cannot be expected to get used to the culture of an organization right away. They need to be given enough time to settle into their jobs to become efficient. Both old and new employees should also be ensured job security because instability can lead to inefficiency. There should also be a clear and effective method to handle vacancies when they arise because it takes time and expense to train new ones.
This principle states that all employees should be encouraged to show initiative. When employees have a say as to how best they can do their job, they feel motivated and respected. Organizations should listen to the concerns of their employees and encourage them to develop and carry out plans for improvement.
14. Esprit de Corps
Esprit de Corps means “Team Spirit”. This principle states that the management should strive to create unity, morale, and co-operation among the employees. Team spirit is a great source of strength in the organization. Happy and motivated employees are more likely to be productive and efficient.
That was all about principles of management.
Are These Principles of Management Still Relevant Today?
Henry Fayol’s 14 principles of management are universally accepted and continually used as a guideline for managers across the world. Though these principles of management are more than 100 years old, without them, it would push us back hundreds of years back when technical skills reigned supreme and people lacked managerial responsibility. If you are interested in diving into the field of management, Simplilearn’s Post Graduate Diploma in Management will groom you to become a business leader. You will learn core management concepts along with an industry-aligned specialization of your choice - Digital Marketing, Operations, Business Analysis, and Data Analytics. Get started with this course today and kickstart your journey to a happy and successful career.