8/11/2019 fayol-140705081339-phpapp01

http://slidepdf.com/reader/full/fayol-140705081339-phpapp01 1/3

Fayol's 14 Principles of Management

Fayol's principles are listed below:

1.  Division of Work   –  When employees are

specialized, output can increase because they

 become increasingly skilled and efficient.

2.  Authority  – 

 Managers must have the

authority to give orders, but they must also

keep in mind that with authority comes

responsibility.

3.  Discipline  –  Discipline must be upheld in

organizations, but methods for doing so can

vary.

4.  Unity of Command  –  Employees should

have only one direct supervisor.

5.  Unity of Direction  –  Teams with the same

objective should be working under the

direction of one manager, using one plan.

This will ensure that action is properly

coordinated.

6.  Subordination of Individual Interests to

the General Interest  –  The interests of one

employee should not be allowed to become

more important than those of the group. This

includes managers.

7.  Remuneration  –  Employee satisfaction

depends on fair remuneration for everyone.

This includes financial and non-financial

compensation.

8.  Centralization  – 

 This principle refers tohow close employees are to the decision-

making process. It is important to aim for an

appropriate balance.

9.  Scalar Chain  –  Employees should be aware

of where they stand in the organization's

hierarchy, or chain of command.

10.  Order  –  The workplace facilities must be

clean, tidy and safe for employees.

Everything should have its place.

11.  Equity  –  Managers should be fair to staff at

all times, both maintaining discipline as

necessary and acting with kindness whereappropriate.

12.  Stability of Tenure of Personnel –  

Managers should strive to minimize

employee turnover. Personnel planning

should be a priority.

13.  Initiative  –  Employees should be given the

necessary level of freedom to create and

carry out plans.

14.  Esprit de Corps  –  Organizations should

strive to promote team spirit and unity.

He suggested the following 14 principles as

the general principles management:

1. Division of work: This principle is basically

the same with Adam Smith’s “Division of

Labour” which means “specialization“.

 According to Fayol, the object of division of work

is to produce more and better work with the

same effort.

2. Authority and Responsibility: Authority

is the right to give orders and the power to exact

obedience. Distinction must be made between a

manager’s official authority deriving from office

and personal authority. (Note: Later in 1959,

social psychologists John French and Bertam

Raven, defined five sources of power as: coercive

power, reward power, legitimate power, referent

power and expert power).

 According to Fayol, authority is not to be

conceived of apart from responsibility, that is

apart from sanction – reward or penalty – which

goes with the exercise of power. Responsibility

is a corollary of authority , it is its natural

consequence and essential counterpart,

and wheresoever authority is exercised

responsibility arises.

3. Discipline: Discipline, being the outcome of

different varying agreements, naturally appears

under the most diverse forms; obligations of

obedience, application, energy, behaviour, vary,

in effect from one firm to another, from one

group of employees to another, from one time to

another. Nevertheless, general opinion is deeply

convinced that discipline is absolutetly essential

for the smooth running of business and that

 without discipline no enterprise could prosper.

4. Unity of command: This principles

emphasizes that an employee should receive

orders from one superior only. Fayol says that if

it is violated, authority is undermined, discipline

is in jeopardy, order distributed and stability

threatened. (Note: matrix organizations are in

contrast to Fayol’s unity of command principle). 

5. Unity of direction: One head and one plan

for a group of activities having the same

objective. (Note: Organizations write and

announce vision and mission statements,

8/11/2019 fayol-140705081339-phpapp01

http://slidepdf.com/reader/full/fayol-140705081339-phpapp01 2/3

objectives and strategies so that the

organizations align and go in the same

direction).

6. Subordination of individual interest to

the general interest: This principle calls to

mind the fact that in a business the interest of

one employee or group of employees should not

prevail over that of the concern, that the interest

of the home should come before that of its

members and that interest of the state should

have pride of place over that of one citizen or

group of citizens. (Note: What about the

“invisible hand” concept of Adam Smith?) 

7. Remuneration

(payment/compensation) of

personnel: 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 :

Time rates, job rates and piece rates. Fayol also

mentioned about bonuses and profit-sharing

and non-financial incentives.

8. Centralization: Everything which goes to

increase the importance of the subordinate’s role

is decentralization, everything which goes to

reduce it is centralization. The question of

centralization or decentralization is a simple

question of proportion, it is a matter of finding

the optimum degree for the particular concern.

The degree of centralization must vary according

to different cases:

  If the moral worth of the manager, his

strength, intelligence, experience and

swiftness of thought allow him to have a

 wide span of activities he will be able to

carry centralization.

  If conversely, he prefers to have greater

recourse to the experience of his colleagues

 whilst reserving himself the privilige of

giving central directives, he can effect

considerable decentralization.

9. Scalar Chain (line of authority): The

scalar chain is the chain of superiors from the

ultimate authority to the lowest ranks.

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 material order, which means everthing

must be in its appointed place and social

order, which presupposes the most succesful

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. (Note: In

motivation theories of organizational behaviour

equity is important. John Stacey Adams,

(behavioral psychologist) asserted that

employees seek to maintain equity between the

inputs that they bring to a job and the outcomes

that they receive from it against the perceived

inputs and outcomes of others in 1963. Please

follow the link  for a visual representation of

 Adams theory) 

12. Stability of tenure of personnel: 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

indefinetly the work will never by properly done.

8/11/2019 fayol-140705081339-phpapp01

http://slidepdf.com/reader/full/fayol-140705081339-phpapp01 3/3

Generally the managerial personnel of

prosperous concerns is stable, that of

unsuccessful ones is unstable. Instability of

tenuer is at one and the same time cause and

effect of bad running. In common with all the

other principles, therefore, stability of tenure

and personnel is also a question of proportion.

13. Initiative: Much tact and some integrity are

required to inspire and maintain everyone’s

initiative, within the limits imposed, by respect

for authority and for discipline. The manager

must be able to sacrifice some personal vanity in

order to grant this sort of satisfaction to

subordinates.

14. Esprit de corps: Means “Union is

strength“. Harmony, union among the

personnel of a concern, is great strenght in that

concern. The principle to be observed is unity of

command; the dangers to be avoided are (a) a

misguided interpretation of the motto “divide

and rule”, (b) the abuse of written

communications.

(a) Personnel must not be split

up. Dividing enemy forces to weaken them is

clever, but dividing one’s own team is a grave sin

against the business.

(b) Abuse of written

communications. Wherever possible, contacts

should be verbal; there is gain in speed, clarity

and harmony.

The hierarchical effect

A key aspect of the model is the

hierarchical nature of the needs. Thelower the needs in the hierarchy, themore fundamental they are and the more

a person will tend to abandon the higherneeds in order to pay attention to

sufficiently meeting the lower needs. Forexample, when we are ill, we care littlefor what others think about us: all wewant is to get better.

Maslow called the first four needs 'D-need' as they are triggered when we havea deficit. Only self-actualization is a needthat we seek for solely positive reasons.

Maslow also called them 'instinctoid' asthey are genetically programmed into usas essential for evolutionary survival.

Loss of these during childhood can lead totrauma and lifelong fixation.

Click on the needs in the diagram below

for more detail, or read below for a quicksummary of each.

Note that in practice this hierarchy is only

approximate and you do not have to haveyour physiologically needs fully satisfied

before going on to seeking higher needs.In their global survey, for example, Tayand Diener (2011) found that people canbe living in hazardous poverty and yetstill derive much satisfaction from havingsocial needs (belonging and esteem)

fulfilled.

The five needs

  Physiological needs are to do withthe maintenance of the human

body. If we are unwell, then littleelse matters until we recover.

  Safety needs are about putting a

roof over our heads and keepingus from harm. If we are rich,strong and powerful, or have good

friends, we can make ourselvessafe.

  Belonging needs introduce ourtribal nature. If we are helpful andkind to others they will want us asfriends.

  Esteem needs are for a higherposition within a group. If peoplerespect us, we have greaterpower.

  Self-actualization needs are to

'become what we are capable ofbecoming', which would our

greatest achievement.