2 Principles of Management.doc
- 1. PRINCIPLES OF MANAGEMENT BY HENRI FAYOL (To be written in the same order) 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individual interest and to general interest 7. Remuneration 8. Centralization 9. Scalar chain 10. Order 11. Equity 12. Stability of employment 13. Initiative 14. Espirit-de-corp Henri Fayol has given the 14 principles of management, which are universally accepted. These principles are as follows: 1. Division of work: This is 1st principle of management. According to this principle the entire work is to be divided into several parts and different persons should perform each part. It permits specialization, large-scale production and leads to economies in operation. It reduces cost of production due to which prices become competitive. Such division of work is necessary in technical and non-technical work and it should be implemented at all levels of management. 2. Authority and Responsibility: Management is the art of getting things done through the efforts of other people. Therefore every manager needs authority to get things done from his subordinates. Authority is power and every manager must have this power to extract work from his subordinates. A manager gets power due to his official position, maturity, experience and ability to lead. However every manager should be made answerable and accountable for the authority given to him. Authority flows from top to bottom whereas responsibility flows from bottom to top. There has to be a perfect party between authority and responsibility. In fact “authority without responsibility is meaningless and responsibility without authority is impossible.” 3. Discipline: It is defined as “obedience and outward mark of respect” shown by an employee. Discipline is absolutely essential for smooth conduct of business. It indicates observation of certain rules and regulations by all the employees in the organization. Self-discipline is more important than imposed discipline. Effective control and proper supervision brings perfect discipline in the organization.
- 2. 4. Unity of command: It is one of the fundamental principles of management indicating that a person should receive orders only from one superior and not from many bosses. “One man cannot serve two masters”. Therefore dual command leads to perpetual conflict. It is the duty of the management to see that unity of command is followed in the organization to avoid confusion and misunderstanding. In fact without unity of command, it is not possible to maintain discipline in the organization. Business atmosphere gets polluted and stability of the organization is threatened. Therefore every organization must follow the principle of unity of command. 5. Unity of direction: This principle indicates one group one leader, one company one c hairman. It avoids duplication of direction and possible confusion. However unity of direction is different from unity of command. The unity of command pertains to the function of one person whereas unity of direction pertains to the entire corporate body. Therefore unity of command is not possible without unity of direction. 6. Subordination of individual interest to general interest: This principle indicates that primary importance should be given to organizational interest and secondary importance to personal interest. In fact personal interest should be ignored to look after the interest of the organization. 7. Remuneration: It is the monetary reward given to the employees for rendering their services. The remuneration paid must be fair, reasonable, competitive and acceptable, otherwise people will leave the organization and there will be problem of labour turnover. Besides remuneration other facilities should also be provided to maintain good relationship between superior and subordinates. 8. Centralization: Centralization means superiors enjoy all powers whereas decentralization means powers are delegated to subordinates. According to Fayol all important and confidential work must be centralized but routine, regular and unimportant can be decentralized to enjoy the benefits of division of work. Anything that increases the importance of the subordinate is decentralization and anything that reduces their importance is centralization. 9. Scalar chain: It is the chain of superiors ranging from highest rank to the lowest rank. It represents line of authority for the purpose of communication from top to lowest level. This chain is also used in the military forces. So it is also called the military or vertical chain. This chain represents the superior subordinate relationship. It represents authority and position of every individual working in the organization. It permits unity of command and brings discipline in the organization.
- 3. 10. Order: The principle of order relates to things and people. There should be place for everything and everything should be in its proper place. If there is no order, it leads to confusion and it becomes difficult to achieve organizational objectives. 11. Equity: This principle indicates no discrimination should be made on the basis of caste, creed, language or religion. People doing same job and having same productivity must get same remuneration. 12. Stability: This principle represents the stability of tenure of people working in the organization. Competitive remuneration, good working conditions, welfare facilities permits stability of employment in the organization. 13. Initiative: In an organization subordinate should be given adequate authority to introduce new ideas, new techniques so that with minimum efforts, maximum result can be achieved. It includes activities and encouragement due to which healthy relationship can be maintained between management and workers. 14.Espirit-de-corp: It is a French phrase which means union is strength. According to this principle team efforts are required and not individual performance. Team spirit should be developed for achieving the objective, divided rule policy should be avoided and team performance should be put up for achieving objectives. Henri Fayol in his work on his book “General & Industrial Administration” presented these principles of management in the year 1916. But these principles were published in English by 1930 and today these principles are universally applicable. According to Henri Fayol these principles are not rigid but flexible and should be used according to the changing situations in business.