We know that according to Newton, “every action has an equal and opposite reaction.” Well, that’s the case in physics. When it comes to commerce we can say that every action of the management affects the outcomes of the organisation.
The principle of management are the guild lines for the organisation irrespective of which type of work is undertaken in an organisation. They are set up by experts through their practises and experiences in the business environment. Even though the principle is universally applicable its implementation may differ according to the one who exercises them.
Evolution of Principles of Management
There was an evolution in the principles of management. F.W Taylor, the father of scientific management, developed certain principles in May 1911. He developed the principles and techniques of scientific management. In this, he states that the workmen will be more productive if they are given work that optimises the production level. Taylor saw management scientifically and considered workmen and work separately. As time passed principles of Taylor were not completely applicable to modern industries. That was when Henry Fayol entered the scene.
Henry Fayol’s 14 Principles
Henry Fayol, the father of modern management theory, is also known as the father of general management. from the name itself it is clear that he approached management functions in a modern way. he developed the fundamental theories of management. even today most organisations work according to these principles.
Now let us discuss in detail the 14 principles of management.
Division Of Work:
- According to Fayol “The intent of division of work is to produce more and better work for the same effort.” From this, we can understand that once the work is divided there will be expertise and specialisation for the work provided.
- Division of work helps the work assigned to each worker suit his capacity to work and he can put in his whole effort to complete the work.
- Work is divided into smaller divisions and each division is assigned to workers who are entitled only to do this work.
- The employees become experts in the field they are assigned to as they devote their entire time to a single work.
- E.g. an employee is an expert in product designing. when work is assigned he will be assigned only the product designing work. And over a while, he will become a specialist in product designing.
Parity Of Authority And Responsibility:
- Fayol describes authority as a combination of official authority and personnel authority.
- Authority is the right of an individual to take decisions with the powers rightfully assigned to him.
- Responsibility is the obligation of an individual to perform the task assigned to him in the best way possible.
- According to Fayol authority and responsibility go hand in hand. A person who is insisted on performing a task should be given the authority to explore all the aspects of that task.
- E.g. when a superior asks his employee to perform an audit on the performance of the company that employee should have access to all the records relating to the same. He should have the authority to scrutinize all the records.
- Discipline simply means the employees should keep a professional decorum in the organisation
- The employees are supposed to follow the rules and regulations of the organisation which are laid out by the senior management.
- The supervisors are advised to make sure that there is professionalism in the organisation.
- E.g. In an organisation where there is no discipline employees work according to their wishes. The work may not be completed in the prescribed time. but when there is a discipline in an organisation the employees are bound to perform the task efficiently.
Unity Of Command:
- There should be one and only one superior for an employee
- This helps in avoiding clashes of commands and confusion regarding the task assigned to the employee.
- The employee will be accountable to only in superior and that employee should provide his maximum efficiency as he is solely responsible for the performance of the task.
- E.g., If an employer asks his employee to do data analytics and another employer asks the same employee to check the production progress the employee will be confused about what to do. This can be avoided if there is unity in command.
Unity Of Direction:
- The employees are in groups according to the task given to them and they should be led in the same direction.
- This helps the organisation to achieve its common goals of the organisation.
- E.g. MNCs have different branches. The employees in the production branch should work towards achieving maximum production and the cost department should work together to minimise the cost. They should aim at a single goal according to the task provided.
Subordination Of Individual Interest To General Interest
- An organisation comprises different individuals with different interests. this principle states that the company’s interest should be given priority over personal needs.
- The organisational objective should be attained first.
- E.g. The employees work for their remuneration but they have to remember that if only they prioritize obtaining maximum profit they will be entitled to more benefits from the organisation. So they should be given profit attainment priority.
Remuneration Of The Employees
- The remuneration should be fair and according to the capacity of the organisation to pay.
- All the workers should be provided just remuneration according to the work performed without any bias.
- E.g. A man and woman working for the same role in an organisation should be provided with the same salary.
Centralisation And Decentralisation
- The two contradictory words should go in a balanced manner in an organisation.
- The lower-level management should have the power to take decisions regarding the operations task performed by them. The power should be delegated among them.
- The top-level authority should have the authority to take major decisions of the company. As the top-level authority consists of minimum members there will not be much confusion. They are the central authority of decision-making in the same.
- E.g. A product is designed by the decision of the superiors but the process through which this product is developed is chosen by the low-level management who knows the best resources available.
- The scalar chain refers to the chain of the authorities from the top level to the lowest rank in the organisation’s management team.
- It is the clear line of authority and their relationship with their subordinates
- In a scalar chain, there will be interconnections between different superiors of the same level. E.g. The CMO of operations and the CMO of Finance are interconnected.
- In case of any emergency arising the lower-level management can directly contact the seniors. This situation is knowns as Gang Plank.
- The scalar chain helps the management to identify at which point the flow of the workforce is getting disturbed.
- There should be a systematic arrangement of what, how, and when the resources should be used.
- The materials and workforce should be appropriately and timely used to increase their efficiency.
- The individuals of the organisation should be placed according to the materials they use.
- E.g. A production manager should set up his office at the production house and the stock should be delivered where the production manager has access to analyse them.
- The organisation should be equitable to all the individuals working for the betterment of the company.
- There shouldn’t be any discrimination among the different employees.
- The organisation should ensure fair treatment to all employees.
- For eg. Nowadays women are encouraged to take up higher positions in the corporate field. This is progress which came into practice because companies ensured fair treatment irrespective of their gender.
Stability Of Personnel:
- The employees hired should be for a fixed tenure.
- Frequent employee turnover decreases the efficiency
- For eg., An employee is hired. He works with maximum efficiency and increases his potential after working with the organisation. If he suddenly quits the company has to hire another person and give all the training again to the fresher. This is a waste of resources and time as the new employee will take time to achieve the efficiency of the previous employee.
- According to Fayol “initiative is the first step of self-motivation.”
- An employee is given the freedom to take decisions regarding the authority invested in him and also give suggestions regarding the different matters of the organisation.
- He can do this within the power given to him and not violate the code of conduct.
- The employees will feel a sense of belongingness as they also take part in the different functions of the organisation.
- For eg. When the employees take the initiative to do work and they are heard out they act with more sincerity and work towards the betterment of the organisation more passionately.
Espirit De Corps:
- It is also termed a team spirit.
- The managers make sure that the employees work in a stress-free environment and that the employees have a sense of belongingness.
- They work towards teamwork and the employees work towards the upliftment of each other.
- The employees work in a group and their performance is enhanced.
- For eg., Anything done by a group of people is more perfect than individual performance. Unity is the main aim of this principle. In a product line expansion discussion when there is a group of employees we can get different ideas and even unexplored areas will be covered by them.
- Unity always improves the efficiency of individual capacity.
Henry Fayol’s principle helps management to increase the efficiency of working by all means. These principles consider the workforce as a resource and their performance is enhanced by improving their personal needs too. These principles are widely in practice in today’s scenario.
They improve efficiency, and capacity and even gives a systematic arrangement to all the activities undertaken in an organisation. The general principles of management are of utmost importance for an organisation to achieve success.