Management Principles by Fayol

Fayol outlined the following fourteen principles of management.

1. Division of work: 

Work specialization results in improving the efficiency of operations.  The concept of division of work can be applied to both managerial and technical functions. Division of Work improves productivity, efficiency, accuracy, and speed. It applies to organizations that have many employees as well as those that have few. The principle states that work should be divided amongst people that are capable of doing the job and not be overloaded with a concentrated few. This principle also denotes that, work should not be diluted by giving the same work to too many people. It helps ensure proper utilization of labor, keeps them focused, and industrious.

2. Authority and responsibility:

Authority is defined as "the right to give orders and the power to exact obedience." Authority can be formal or personal. Formal Authority is derived from factors like intelligence and experience. Authority and responsibility go hand-in-hand. When a manager exercises authority, he should be held responsible for getting the work done in the desired manner. Authority and responsibility result in the efficient delivery of work with defined responsibility. Fayol suggests that only a few people should have the power and responsibility to give orders. One of the common errors of large companies is that management encompasses too many people, thereby giving rise to conflict. When few selected people have the power to vote, the authority is carried down the chain and the process gets implemented. With such authority comes responsibility. Fayol believed that since a manager must be responsible for his duties, he should as well have authority backing him up to accomplish his duties. This is vital for any organizational success.

3. Discipline: 

Discipline is vital for running an organization smoothly.  It involves obedience to authority, adherence to rules, respect for superiors, and dedication to one's job. Discipline makes the management job easy and managers can make progress towards achieving business objectives. Fayol observed that there exist natural human tendencies to lawlessness and that can result in the level of organizational disorder. These tendencies can erupt if employees are not strictly guided by rules, norms, and regulations from management

4. Unity of command: 

Each employee should receive orders of instructions from one superior only. Fayol believes that subordinates/employees should have only one boss. If an employee gets orders from two superiors at the same time, then the principle of unity of command is breached. It simply puts that employees should receive orders from and report directly to one boss only. Fayol found this principle to be very important. “He felt that if it was violated, then authority is dented, discipline is in peril, directive disturbed and stability threatened”.

5. Unity of Direction:

Activities should be organized in such a way that they all come under one plan and are supervised by one person. Fayol observed that an organization will naturally have central objectives that need to be followed and as well departmental and unit goals which also need to be reached to meet the unified objective.

6. Subordination of the individual interest to the general interest:

Individual interests should not take precedence over the goals of the organization. Company interests should be considered first before personal interest and employees should respect the chain of command. This means there is a need for employees to sacrifice their interests for the organization’s good. In other words, if any staff goes against the objectives of the organization and fails to establish a positive civic virtue of the organization, such staff should not be tolerated

7. Remuneration:

The compensation paid to employees should be fair and based on factors like business conditions, cost of living, the productivity of employees, and the ability of the firm to pay. Fayol insists that there is nothing like a perfect system, employees always have a motivator when involved in work wages is one vital motivator. Fayol suggests that the significant process of remuneration paid to employees should be fair, reasonable, satisfactory to both employer & employees, and rewarding their efforts

8. Centralization: 

Depending on the situation, an organization should adopt a centralized or decentralized approach to make optimum use of its personnel. Most large companies always have several Business Units or departments and functions which in a way form some sought of decentralization. Therefore, there is a need to strike a balance between centralization and decentralization because these units are given their decision-making power

9. Scalar chain:

This refers to the chain of authority that extends from the top to the bottom of an organization. The scalar chain defines the communication path in an organization. Organizations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates. Scalar chain depicts there should be a clear line of authority in an organization so that when one sees the need to “Escalate things” then you know the line of authority.

10. Order:

This refers to both material and social order in organizations. Material order indicated that everything is kept in the right place to facilitate the smooth coordination of work activities. Similarly, social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization). According to Fayol, “People and materials must be in suitable places at the appropriate time for maximum efficiency.” This principle however states that every material in an organization should be put in its right position in the organization and the right job be assigned to the right employee.

11. Equity:

The principle of equity demands all should be treated equally and respectfully. All employees should be treated fairly. A manager should treat all employees in the same manner without prejudice. According to (Mtegenzo, 2009), Equity means a combination of fairness, kindness & justice towards employees. It simply means for commitment and loyalty to be expected from employees, they should be treated fairly and similarly to people of their level of position and authority, most importantly, their Managers should be less impartial.

Fayol believed that managers should be fair to their staff but at times exhibiting power and harshness might come in handy for the sake of equity.

12. Stability of tenure of personnel:

A high labor turnover should be prevented and managers should motivate their employees to do a better job. This principle is established based on the belief that a staff with a secured long-term tenure will use his experience and knowledge gotten from working in the organization to initiate innovation, productivity, help with the organization's growth, and further increase the organization's profit.

13. Initiative:

Employees should be encouraged to give suggestions and develop new and better work practices. Managers must support and encourage employees to take initiatives. It is practiced in modern-day organizations especially those rendering services, they urge employees to apply their initiatives in rendering quality services to their customers. However, there are always processes, procedures, and policies in place to guide the employees to ensure successful implementation and prevent abuse of the privilege (Okpara, 2015).

14. Esprit de corps:

This means "a sense of unity". Management must inculcate a team spirit in its employees. Managers should develop trust and mutual understanding. Fayol suggested that for an organization to be successful there should be team spirit amongst employees of the organization of which all of them must consider themselves as members of the organization further maintaining high morale and unity amongst themselves.