Henry Fayol: Administrative theory and 14 Principles of Management

Henry Fayol was a French scholar. He was a mining engineer who worked for a French mining company Commentry-Fourchamboult-Decazeville. In his career he attained the highest managerial position of CEO.

He wrote a famous book - 1916 book Administration Industrielle et Generale in French which was translated in 1949 in English. In this classic book he popularized the famous fourteen principles and five managerial functions.

1. Division of Labour

This principle states that work can be performed more efficiently and productively if it is divided into smaller elements and assigning these specific elements to specific workers. This is similar to one best way of doing job as in scientific management and job specialisation in Bureaucracy. Each employee or a group of employee performs a specific task. Division of labour according to job specialisation is the main function.

2. Authority

Authority is the given power ( based on legitimate rule by organization) to an official to issue orders to subordinates and take work from them. This principle states that managers require authority to perform their managerial responsibilities.

3. Discipline

Discipline is related with regulation of behaviour of employees at workplace. Without discipline, authority has no meaning; there should be someone to obey the orders.

This principle suggests that there is requirement of a set of rules and procedures aimed at attaining good employee discipline and obedience.

4. Unity of command

This is the “one man one boss rule”. An employee should receive orders from only one boss only.

If a worker will receive orders from several bosses he will be confused and over burdened. Also there will be a problem regarding reporting.

So this principle emphasizes on only one boss for a worker.

5. Subordination of individual interests to the organizational interest.

Employees must sacrifice their interests for the good of the organization. The organizational goals/ tasks/work would be preferred over interest of worker or group of workers.

Thus an organization should employ only those individuals who are fully committed to its objectives and are willing to readily follow the organization’s mandates/rules.

6. Unity of direction

This principle supposes that there should be only one plan and only one boss for each group of activities having same objectives. This is to ensure that the organization is pursuing it all activities not in contradictory directions but there is alignment between activities.

7. Remuneration of personnel

Fair wages work as a good motivation for employees. Compensation for work done should be reasonable to both – employees and organization and it should be sufficiently motivational, neither overpaid nor underpaid.

8. Centralization

Too much centralization leads to ineffectiveness and so does the decentralization. There should be a balance of centralization and decentralization in organizations.

The best approach to get the balance is top management designs the broader strategy, policies and middle level and lower level of managers interpret and operationalise them to work.

9. Scalar chain

This principle assumes that there should be clear hierarchy in organization from top to down. The flow of communication must follow the hierarchy that it should be strictly vertical.

Horizontal communication is needed only when there is urgent need and permission from superiors has been obtained.

10. Order

Order means doing things in rational and logical manner. There should be a place for everything and everything should be in its place.

An organization’s materials/resources should be at right place at right time, and its employees should be assigned to the jobs best suited to them.

11. Equity

Equity means being kind, fair and just to your subordinates or employees. Equal and fair treatment, impartiality and bias free environment promotes employee motivation commitment and loyalty.

12. Stability of personnel tenure

Employees perform well when their job is secured; they are protected from arbitrary dismissals. It is necessary to retain employees with organization because high turnover rate may result high cost to organization and leads to inefficiency.

13.  Initiative

Organizations require managers who possess ability to conceive and implement new ideas. They should be having ability to  self start and take on the risk independently.

14. Esperit de corps

The maintainance of high moral and unity among employees is an essential thing for success of organization.