14 Management Principles Henri Fayol

Prepared By: Rogelio D. Lim Jr.

Introduction

Henri Fayol (18411925) was a French management theorist whose theories in management and organization of labor were widely influential in the beginning of 20th century. He worked first as an engineer, then moved into general management and Managing Director from 1888 to 1918.

Introduction

He was the first to identify the four functions of management: planning, organizing, directing, and controlling, as known today. His original definition of management comprised of five elements: forecast & plan, organize, command, coordinate, and control.

1. Division of Work
Work should be divided and applicable/compatible 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.

1. Division of Work

Work Specialization
a. the entire job is broken down into steps, each step completed by a separate individual b. individual workers specialize in doing part of an activity c. involves repetitive performance of a few skills d. can be viewed as a means to make the most efficient use of employee's skills e. some task requires highly developed skills f. others can be performed by the

2. Authority
The right to give orders/command and the power to exact obedience for successful leadership it is also a source of legitimate power Its concept is closely related to Responsibility as it involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility

3. Discipline

Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the organization's rules, and the judicious use of penalties for infractions of the rules

4. Unity of Command
One person/boss in which employees have one manager to whom they report and to whom they are responsible This principle emphasizes that an employee should receive orders from one superior only (top to bottom) Fayol says that if it is violated, authority is undermined; discipline is in jeopardy, order distributed and stability

5. Unity of Direction

One head and one plan for a group of activities having the same objective
a. Utilizes: i. Goals and Objectives ii. Mission Statement/s iii. Vision Statement/s

6. Subordination of Individual interest to the General interest:

The interests of one person should not take priority over the interests of the organization as a whole.

7. Remuneration
Remuneration of personnel is the price of the services rendered. It should be fair and, as far as is possible, afford satisfaction both to personnel and firm (employee and employer). Three modes of payment in use for workers are:

a. Time rates b. Job rates c. Piece rates

7. Remuneration
He also mentioned about bonuses and profit-sharing and non-financial incentives There are also variables that are considered in determining a workers rate of pay:

a. b. c. d.

Cost of living Business conditions Success of Business Supply of Qualified Personnel

8. Centralization/Decentralizatio

Centralization refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralization for each situation.

9. Scalar Chain

Managers in hierarchies is part of a chain like authority scale. Each manager, from the first line supervisor to the president, possesses 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

Fayol defines the formula for order as a place for everyone and everyone in his place. He classifies two types of order as
a. Material order, which means everything must be in its appointed place b. Social order, which presupposes the most successful execution of the two most difficult managerial activities: good organization and good selection. Social order demands precise knowledge of the human requirements and resources of the concern and a constant balance between these requirements and resources.

11. Equity

Desire for equity and equality of treatment are aspirations to be taken into account in dealing with employees, when people feel fairly or advantageously treated they are more likely to be motivated; when they feel unfairly treated they are highly prone to feelings of disaffection and demotivation

12. Stability of Tenure

Time is required for an employee to get used to new work and succeed in doing it well, always assuming that he possesses the requisite abilities. If when he has got used to it, or before then, he is removed, he will not have had time to render worthwhile service. If this be repeated indefinitely the work will never by properly done.

13. Initiative

Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through selfdirection. Much tact and some integrity are required to inspire and maintain everyones initiative, within the limits imposed, by respect for authority and for discipline

14. Esprit de Corps

In order to achieve the best possible results, individual and group effort are to be effectively integrated and coordinated. Production is a team work for which the whole-hearted support and co-operation of the members at all levels is required. It refers to the spirit of loyalty, faithfulness on the part of the members of the group which can be achieved by strong motivating recognition and importance of the members for their valuable contribution, effective coordination, informal mutual social relationship between members of the group and positive and constructive approach of the management towards workers' welfare.