14 Principles of Management by Henri Fayol Explained with Real-Life Examples
Table of Contents
- jaro Education
- 2, April 2024
- 10:00 am
Management is critical to an organization because it contributes to its effectiveness and the attainment of its goals. Organizations looking for ways to imprdove the productivity of their employees frequently implement systems that project a positive work environment. Learning more about the 14 principles of management will enhance your ability to organize, plan, make decisions, and manage operational and process tasks.
In this article, we will discuss Henri Fayol’s 14 principles of management, as well as why they are important.
Who Was Henri Fayol ?
Henri Fayol was a French mining engineer. He worked in a French mining company from the late 19th century to the mid-20th century. He began as an apprentice engineer. He rose to general manager and then to director. When Henri Foyal first became a manager at the mining company, he focused on his skills. He wanted to organize the human resources, not just use his technical skills.
Henri Fayol became an expert on managerial nuances. He wrote a book on management theories and work organization. Successful companies worldwide still use Henri Fayol’s 14 management principles. They do this to ensure an efficient, productive work environment.
Henri Fayol’s 14 principles of management emerged as the Industrial Revolution faded. Most management experts in the Western hemisphere thought the timing was perfect. The world had seen remarkable changes. New and excellent working styles were being recognized. The 14 principles of Henri Fayol are still important today. They are the basis for management courses at top institutions.
Henri Fayol's 14 Principles of Management
What are the 14 principles of management introduced by Henri Fayol? 14 principles evaluate a business organization from the perspective of a stepwise design and stepwise refinement to allow managers to extract the best possible knowledge and expertise from the workforce and run the business with the bare minimum challenges. The following are Henri Fayol’s 14 Principles of Management indicating the relevance of these theories to aspiring management students who want to attain their coveted career objectives.
1. Division of Work
Henry Fayol’s 14 Principles of Management:
One of the foremost 14 principles of management contradicts the modern practice of multitasking scenarios, where an employee must handle several tasks within a designated time. Fayol says managers should assess the existing skill sets of all in-house staff members and assign them tasks they can complete on schedule. This strategy will help employees to become more efficient, productive, and skilled in the long run.
Example: A bank must follow several procedures. These include opening accounts, handling cash, issuing chequebooks, approving loans, and holding deposits. Fayol argues that the manager must assign these tasks to the available workers. Fayol says that dividing work is key to quality and quantity. Specialization is the most productive way to do the tasks at hand.
2. Authority
It is one of the most notable of Henri Fayol’s 14 principles of management. It recommends that any factory manager have the requisite authority to confirm that workers and supervisors follow their instructions. A manager must have the authority to transform ideas into action. But this authority corresponds directly to responsibility. Fayol says there should be a perfect balance between authority and responsibility. Anything in excess or shortfall is harmful to the running of the business. If authority surpasses responsibility, subordinates will become frustrated. If responsibility exceeds authority, the manager will experience a sense of defeat.
Example: An employee of a design firm manages the design and decoration for event planning. He will become frustrated if he has no authority over the assignments he is supervising. This includes making design decisions and connecting with vendors to ensure timely completion. So, it will hamper work efficiency and ultimate productivity.
3. Discipline
One of the significant 14 principles of management documented by Henri Fayol is the stress on discipline in the organization for a successful business. The company managers should inculcate an ambiance of mutual respect and admiration. The management must implement a set of work regulations, philosophies, and frameworks on the company premises that should attract the attention of concerned staff members. Violating enforced rules is highly detrimental to the running of a business entity. There must be adequate supervision by superiors to make impartial judgements.
Example: The HR and Personnel department charts out some rules and regulations for the company workforce, including working hours, promotions, increments, probation, assessments, etc. Employees should follow these rules and maintain a disciplined attitude in the workplace for seamless business.
4. Unity of Command
It is the 4th principle out of Henri Fayol’s 14 principles of management. It states that the chain of command in an organization should be evident and apparent. The workers should know to whom they should report. According to Fayol, an employee should have a single boss. If there is more than one superior, there will be a notable split among authority, stability, and discipline. Besides, it will contribute to a breakdown in the management framework, and there will be enormous stress on concerned employees, affecting productivity.
Example: Suppose in a factory, the supervisor instructs the subordinate to complete a job within five to six hours. However, the factory manager clarified that the entrusted subordinate had to wrap it within two hours. This clash in command can create confusion and unnecessary tension in the workforce, resulting in a loss of productivity and timely delivery.
5. Unity of Direction
Unity of direction comes fifth in the order of Henri Fayol’s 14 principles of management. It signifies that any given work should have a proper mode of organization so that employees can collaborate towards attaining the same goal with an identical strategy and under one supervisor. The management can break down multiple business activities for different departmental heads. However, all stakeholders should work toward a common goal under the supervision of a single authority who will take overall responsibility.
Example: A company can have various marketing activities, including budgeting, advertising, product launching, sales promotions, etc. In this scenario, a single manager should implement a uniform marketing plan for all the subordinates.
6. Subordination of Individual Interest to General Interest
Henri Fayol’s 14 principles of management also include the aspect of collective interest in a business organization. The 6th principle explains that team interest should come first rather than individual interest. Organizational motives and purposes are a must to run an organization successfully. If personal interests dominate, the company might face dire consequences.
Example: If you’ve worked in an MNC, you might have seen a staff member getting paid more for doing minor tasks. Another employee on the same pay scale might have earned less. This could be despite exceptional performance. The management must find this gap and act. Stakeholders’ interests are more important than those of any individual employee.
7. Remuneration
14 Principles of Management by Henri Fayol also affirms that the workforce should receive fair salaries and wages for the designated work. Any business entity or company that underpays its in-house talent will need help to survive the competition, as there will be colossal job diversion. Quality workers will take chances to be absorbed in high-paying organizations. The staff remuneration should comprise both financial incentives and nonfinancial rewards and recognitions. A company’s HR should set up a systematic structure to achieve this.
Example: Company management must be impartial regarding remuneration policies and packages. It should ensure that all workers get what they deserve, irrespective of qualifications, experience, gender, and other pertinent factors.
8. Centralisation
Henri Fayol’s 14 principles of management also include the element of centralization. The centralization refers to the concentration of power in the hands of the controlling authority, combined with a top-down approach to management. In decentralization, the authority is distributed to the defined levels of management. In today’s environment, a company has a mixed management outlook. An organization needs to be more centralized and decentralized. In total centralization, the bottom-level staff has no authority over their imposed responsibilities.
Example: The element of complete centralization usually exists in small- and medium-scale industries (sole proprietorships and partnerships) where there is insignificant work delegation with limited strength, and the owners or partners have the freedom to make business decisions.
9. Scalar Chain
Henri Fayol also mentions the scalar chain in his book, which contains Henri Fayol’s 14 principles of management. According to him, a scalar chain explicitly communicates between staff and management. Employees should realize their position in the company hierarchy and whom to approach for business communication in the chain of command. For effective implementation of the scalar chain, Foyal has suggested that an organizational chart should ideally be on a display board to have enough transparency on this matter.
Example: Every profit and non-profit organization has a founder or CEO (the highest level of the hierarchy), making an apparent chain of authority. It cascades down to the lowest level of subordinates in line with the hierarchy for delivering maximum output.
10. Order
Henri Fayol’s 14 principles of management also mention the order or sequence of business functions. It relates to a reasonable, timely, and orderly placement of resources or inputs (financial capital, human capital, materials, etc.). It guarantees the optimal utilization of resources in a structured manner. Any potential gap in deploying these resources will undoubtedly lead to chaos and squandering of business opportunities.
Example: The factory supervisors should arrange for a designated place (shed, shop floor) and the appropriate tools and appliances for the workers to perform their work seamlessly.
11. Equity
Henri Fayol’s 14 principles of management also consider the term ‘Equity’. Equity combines traits such as benevolence and justice. This principle conveys that company managers should demonstrate humanity and justice towards the workforce. This unique gesture triggers loyalty and commitment for the organization.
Example: All staff and workers, regardless of gender, race, or religion, feel safe and secure. There should be instant redressal of grievances and equal opportunities to grow based on performance metrics within the organization.
12. Employee Stability
Henri Fayol’s 14 principles of management are vital for employee stability in the organization. High attrition raises doubts about the company’s intentions toward its staff. A profit-making organization should cut turnover and maximize efficiency. It must keep its competent staff. No employee can contribute immediately after joining the organization. They must have enough on-the-job training before the org. inducts them into the ops. Both old and new employees should have job security. Instability will harm their convictions and efficiency. The HR team must also foresee the gaps and fill the job vacancies on time.
Example: After absorption, all employees should get a proper induction to familiarise themselves with the company profile, like technical aspects, the work culture, and the office environment. It will remove their hesitations and encourage them to work efficiently. Besides, old employees should get alumni awards for completing a specific tenure. This gesture will be a morale booster for them.
13. Initiative
Henri Fayol’s 14 principles of management also constitute the element of ‘initiative.’ The company management expects all employees to show initiative. It means they should proactively plan and strategize how to complete the work on schedule without committing errors. When employees have the freedom to express themselves, they feel motivated, and in turn, it boosts their productivity. The management should, therefore, listen to the employees’ concerns and encourage them to go ahead with their plans for the company’s sake.
Example: It would be ideal if the management decided to make suggestions regarding their specific departments and work progress. The employees will feel that they are in an authoritative position, and they will get the motivation to contribute to the organization.
14. Esprit de Corps (Existence of Common Spirit)
This French term signifies “Team Spirit”. While incorporating one of the critical 14 principles of management, viz., esprit de corps, Fayol clarifies that company management should strive to bring unity, morale, and mutual support to employees. Team spirit conveys immense strength and solidity in the business organization. Contented and motivated company staff members have the potential to become competent and productive.
Example: The organizational hierarchy should chalk out a fresh plan of action for achieving monthly targets, using the word ‘We’ rather than ‘I,’ which ushers in an indomitable team spirit for the workforce.
Significance of the 14 Management Principles
This is essential where an organization is concerned with regard to its management structure. Effective and willing-to-help parents are good role models who usually produce the same tone towards the rest of the workers. The reasons why the 14 management principles are significant are as follows:
- Structure: Management concepts entail the introduction of a structure in the organization. All the principles assist in making sure that managers clarify where they need to go, that the employees understand what they are to do, and also who the individual is who will take charge of making decisions.
- Loyalty: The management principles embrace loyalty among the employees through practices like stability and remuneration.
- Communication: The 14 principles of management ensure an open line of communication between the employees and the managers and work to ensure that the employees are confident in the chain of command.
- Efficiency: The 14 principles of management enable efficient utilization of the resources and provide the employees with definite responsibilities.
- Development: Managers can discover changing technologies and identify new technologies through the division of work and the rest of the principles.
- Guidance: The application of the 14 principles enables the manager to review the appropriateness of his/her choice and to put into words his/her managerial undertakings in realistic terms. The principles make it easier to tell the managers what they ought to do at certain times and in certain situations.
- Leadership: Management concepts are capable of creating and promoting leadership that favors the whole organization. Management principles are used to ensure that managers adopt innovative leadership strategies.
Are These Principles of Management Still Relevant in Today's Business World?
Are traditional Henri Fayol’s principles of management relevant today?
Although business practices are changing fast, some old principles still matter. They shape effective leadership and drive organizational success.
Henri Fayol’s 14 principles of management are widely accepted. They are a global guideline for managers. These management principles are over 100 years old. Without them, we’d be back to a time when technical skills reigned and managers had no responsibility. For advanced management skills, please see the Executive Certificate Program in General Management. The course is apt to train students to manage efficiently and job-fit the corporate world.
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Conclusion
Henri Fayol is genuinely the ‘Father of Modern Management Principles’ and showcased a dynamic perception of the conception of business management. Henri Fayol brought about a general postulate conducive to all levels of management and every functional wing. Henri Fayol’s principles of management are popular with contemporary management professionals and students alike.
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