Fayols 14 Principles of Management

1.

2.

DIVISION OF WORK: Work should be divided among individuals and groups

to ensure that effort and attention are focused on special portions of the
task. Fayol presented work specialization as the best way to use the human
resources of the organization.

AUTHORITY: The concepts of Authority and responsibility are closely

related. Authority was defined by Fayol as the right to give orders and the
power to exact obedience. Responsibility involves being accountable, and is
therefore naturally associated with authority. Whoever assumes authority also
responsibility.
3.
DISCIPLINE: A successful organization requires the common effort of
workers. Penalties should be applied judiciously to encourage this common
effort.
4.
UNITY OF COMMAND: Workers should receive orders from only one
manager.
5.
UNITY OF DIRECTION: The entire organization should be moving towards a
common objective in a common direction.
6.
SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS:
The interests of one person should not take priority over the interests of the
organization as a whole.
7.
REMUNERATION: Many variables, such as cost of living, supply of qualified
personnel, general business conditions, and success of the business, should
be considered in determining a workers rate of pay.
8.
CENTRALIZATION: Fayol defined centralization as lowering the importance
of the subordinate role. Decentralization is increasing the importance. The
degree to which centralization or decentralization should be adopted depends
on the specific organization in which the manager is working.
9.
SCALAR CHAIN: Managers in hierarchies are part of a chain like authority
scale. Each manager, from the first line supervisor to the president, possess
certain amounts of authority. The President possesses the most authority; the
first line supervisor the least. Lower level managers should always keep
upper level managers informed of their work activities. The existence of a
scalar chain and adherence to it are necessary if the organization is to be
successful.
10.ORDER: For the sake of efficiency and coordination, all materials and people
related
to a specific kind of work should be treated as equally as possible.
11. EQUITY: All employees should be treated as equally as possible.
12.STABILITY OF TENURE OF PERSONNEL: Retaining productive employees
should always be a high priority of management. Recruitment and Selection
Costs, as well as increased product-reject rates are usually associated with
hiring new workers.
13.INITIATIVE: Management should take steps to encourage worker initiative,
which is defined as new or additional work activity undertaken through self
direction.
14.ESPIRIT DE CORPS: Management should encourage harmony and general
good feelings among employees.

I.
II.

Classical theory of management Taylor, Fayol

The Hawthorne Studies
People work better when they are being observed
Work better when given a reward
Even with rewards, still being the same work
Still being the same work

THEORIES: Human Relations and Human Resources

HUMAN RELATIONS THEORY
The human relations theory of management began development in the early
1920's during the industrial revolution. At that time, productivity was the focus of
business. Professor Elton Mayo began his experiments (the Hawthorne Studies),
to prove the importance of people for productivity - not machines.
The human relations management theory is a researched belief that people
desire to be part of a supportive team that facilitates development and growth.
Therefore, if employees receive special attention and are encouraged to
participate, they perceive their work has significance, and they are motivated to
be more productive, resulting in high quality work. The following human relations
management theory basics became evident during human relation studies:
1. Individual attention and recognition aligns with the human relations
theory.
2. Many theorists supported the motivational theory.
3. Studies supported the importance of human relations in business.
-

It was created in 1930 as a direct response to the Hawthorne Studies.

Human Relations theorists assumed that under other right conditions
employees worked better.

Criticisms of Human Relations

-

Too much emphasis on the employee

Managers misunderstood and misused the theory
o Manipulated employees by offering the tory
o Contra-productive by offering superficial praise: misused diluted the
theorys impact.

HUMAN RESOURCES THEORY

The notion of Human Resources as a general category for a variety of

management related theories was originally proposed by Raymond Miles. First and
foremost, Miles human resource theories posits that all workers are reservoirs of
untapped resources. Miles believed that each and every worker comes into an
organization with a variety of resources that management can tap into if they try.
These resources include not only physical skills and energy, but also creative
ability and the capacity for responsible, self-directed, self-controlled behaviour.
-

Resulted from critical assessment of Human Resources Theory by Raymond

Miles.
Miles argued that although

Assumptions of Human Resources Theory

-

Employees are as capable as management in making meaningful

contributions in the workplace.
Managers have the responsibility to cultivate a climate that will facilitate
employee contributions instead of just acknowledging the contributions as
way to gain cooperation.
Human Relations

Human Resources

Worker
Needs

Workers need to belong, be

liked, and be respected.

While workers need to belong, be liked,

and be respected, workers also want to
creatively and effectively contribute to
worthwhile goals.

Worker
Desires

Workers really desire to feel as

though they are a useful part
of the organization.

Workers really desire to exercise initiative,

responsibility, and creativity, so
management should allow for these.

Outcomes

If worker needs and desires are

Management should tap into worker
filled, they will willingly
capabilities and avoiding wasting
cooperate and comply with
untapped resources.
management.

When employee needs and

Job
desires are met, theyll be
Satisfaction
more satisfied.

When employees feel that they have selfdirection and control and are able to freely
use their creativity, experience, and
insight they will be more satisfied.

Job satisfaction and reduced

resistance to formal authority
Productivity
will lead to more productive
workers.

When employees feel that they have selfdirection and control and are able to freely
use their creativity, experience, and
insight they will be more productive.

Manageme
nt Goal

Managers should strive to

ensure that all employees feel
like they are part of the team.

Managers should help employees discover

hidden talents and ensure that all workers
are able to fully use their range of talents
to help accomplish organizational goals.

Decision
Making

Management should allow

employees to offer input on
routine decisions and be willing
to discuss these decisions, but
management should keep
important decisions to
themselves.

Management should allow and encourage

employees to freely participate in the
decision making process with all types of
decisions. In fact, the more important the
decision is, the more the manager should
seek out his employee resources in the
decision making process.

Human Relations

Human Resources

Information
Sharing

Information sharing is a useful

tool when helping employees
feel like they are part of the
group.

Information sharing is vital for effective

decision making and should include the full
range of creativity, experience, and insight
from employees.

Teamwork

Management should allow

teams to exercise moderate
amounts of self-direction and
control.

Management should encourage teamwork

and continually look for greater areas
where teams can exercise more control.

OTHER THEORIES
Decision Making: Douglas McGregors Theory X and Theory Y
As we discussed earlier, the classical perspective felt that leadership should
control and order subordinates. Then, in the human relations approach, we learned
that superiors needed to cultivate and support their employees.
Douglas McGregor, management professor at the Massachusetts Institute of
Technology in the 1950s and 1960s, felt that there are two different perspectives,
which he termed as Theory X and Theory Y. These theories were based on
assumptions that managers have about their workers.
McGregor defined a Theory X manager who believes that most people do not like
work. Workers are not smart or creative. People do not care about the
organization, and will adequately work when there are promises for rewards and
potential punishments. Moreover, Theory X manager believes that people want to
have direction in order to evade responsibility.
On the other hand, Theory Y managers feel that people want to do what is best
for the organization and can direct themselves under the right conditions.
Theory X

Theory Y

People dislike work and find ways to avoid People perceive work as natural and
it
find it enjoyable
Workers want to avoid responsibility

People want responsibility

Want direction

Prefer self-direction

Resists change

Wants to work toward organizational

goals

Not intelligent

Have the potential to develop &

adapt

Not creative

Are intelligent

Managers must control, reward, and/or

punish employees to maintain
performance

Are creative
Work conditions need to be set to
achieve worker & organizational

Theory X

Theory Y
goals

Motivation Theories: Abraham Maslows Hierarchy of Needs

Many other theorists tried to explain the importance of the human resources
approach. One of these individuals was Abraham Maslow. He is widely known for
his creation of Maslows Hierarchy of Needs. In order to get employees to work, he
tried to understand what motivates people. He came up with five needs that need
to be satisfied at one stage before moving on to another stage. Maslow felt that
needs vary from person and person and that individuals want their need fulfilled.
One must determine what is the motivational factor.
1. Physiological Needs. The first level of Maslows Hierarchy of Needs is
psychological, which means that physical needs such as food and water
need to be met before moving to the next level. If workers do not make
enough money to buy food and water, then it will be hard for them to
continue working.
2. Safety Needs. The second level is called safety. Workers need to be in a
safe environment and know that their bodies and belongings will be
protected. If workers dont feel secure, then they will find it hard to work
efficiently.
3. Love, Affection, and Belongingness Needs. The third layer is called love,
affection, and belongingness needs. Maslow believed that if an individual
met the basic physiological and safety needs, then that individual would
start attempting to achieve love, affection, and belongingness needs next.
Maslow believed that organizations would have better worker retention and
satisfaction if they kept their employees in a cohesive environment.
Furthermore, if a worker feels isolated or ostracized from their environment,
then he or she would feel less motivated to work, which will lead to a
decrease in overall productivity.
4. Esteem Needs. The fourth layer is called esteem, and is represented by two
different sets of needs according to Maslow. First, individuals are motivated
by the desire for strength, for achievement, for adequacy, for confidence
in the face of the world, and for independence and freedom. If employees
do not feel that their input is valued at the organization, they will seek out
other places of employment that will value their input, because humans
have an intrinsic need to be appreciated for their efforts.
5. Self-Actualization Needs. The fifth layer is called self-actualization, and it is
the hardest to attain. Self-actualization refers to the desire for selffulfilment, namely, to the tendency for [a person] to become actualized in
what he [or she] is potentially. This tendency might be phrased as the
desire to become more and more what one is, to become everything that
one is capable of becoming