Henry Fayol's Principles of Management

Henry Fayol's Principles of Management

1.      Division of Work
According to Henry Fayol under division of work, "The worker always on the same post, the manager always concerned with the same matters, acquire an ability, sureness and accuracy which increases their output. In other words, division of work means specialization. According to this principle, a person is not capable of doing all types of work. Each job and work should be assigned to the specialist of his job. Division of work promotes efficiency because it permits an organizational member to work in a limited area reducing the scope of his responsibility. Fayol wanted the division of work not only at factory but at management levels also.

Example:  Wal-Mart is so huge, it has unprecedented power to shape labor divisions 

 

2.      Authority and Responsibility
Authority and responsibility go together or co-existing. Both authority and responsible are the two sides of a coin. In this way, if anybody is made responsible for any job, he should also have the concerned authority. Fayol's principle of management in this regard is that an efficient manager makes best possible use of his authority and does not escape from the responsibility. In other awards when the authority is exercised the responsibility. In other awards when the authority is exercised the responsibility is automatically generated.

Example:                                      Terra Cycle

Top management at TerraCycle will most likely face obstacles related to supervisors, subordinates and the organization. As it relates to supervisors, TerraCycle hires mostly recent college graduates into their supervisory positions. As mentioned in the clip, these individuals do not know anything about the business world and must be trained, mentored, and guided. As for subordinates, challenges are faced with personal problems such as alcohol and drug use, and work ethics. Finally, in regards to the organization, this is a very small organization and there is little authority to delegate. Plus, it is important for all managers and supervisors with authority to share in the vision of the CEO and founder. Internet Activity Go to TerraCycle’s Web site: www.TerraCycle.net. Combining what you view on TerraCycle’s history, story, and CEO with the information provided on the video clip, list three tasks that the chief executive officer might delegate to other top managers. To which managers would the tasks be delegated? Why? Tom Szaky has already delegated several key tasks to other managers. The human resource tasks have been delegated to Elaine Gaughran, VP of Human Resources. The development of products has been delegated to Dr. Bill, VP of R&D; the sales function for recyclable juice pouches has been delegated to Chris Lynn, Director of the Drink Pouch Brigade. And finally, some of the production tasks have been delegated to Milton, Assistant Production Manager. So, although this is a small company, CEO, Tom Szaky appears to have successfully delegated some of the responsibility and authority to other individuals on his management.

3.      Discipline
According to Henry Fayol discipline means sincerity about the work and enterprise, carrying out orders and instructions of superiors and to have faith in the policies and programmes of the business enterprise, in other sense, discipline in terms of obedience, application, energy and respect to superior. However, Fayol does not advocate warming, fines, suspension and dismissals of worker for maintaining discipline. These punishments are rarely awarded. A well disciplined working force is essential for improving the quality and quantity of the production.

Example:                                      Microsoft Corporation

a)      In Microsoft we find good supervisors at all the levels,

b)     There are clear and fair agreements between employees and employer, and

c)      Here is judicious application of penalties. 

4.      Unity of Command
A subordinate should take order from only one boss and he should be responsible and accountable to him. Further he claimed that if the unit of command is violated, authority is undermined, disciplined in danger, order disturbed and stability threatened. The violation of this principle will face some serious consequences. In this way, the principle of unity of command provides the enterprise disciplined, stable and orderly existence. It creates harmonious relationship between officers and subordinates, congenial atmosphere of work. It is one of the Fayol's important essential principle of management.

 

Example:   

Unity of command is part of the incident command system for emergencies and disasters. It means that one person only has to report to one boss. 

 

 

5.      Unity of direction
Fayol advocates "One head and one plan" which means that group efforts on a particular plan be led and directed by a single person. This enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way the principle of direction create dedication to purpose and loyalty. It emphasizes the attainment of common goal under one head.

 

Example:  Google

            In Google, there is complete identity between individual and organizational goals on the one hand and between departmental goals inter se on the other hand. They are not pulled in different directions.

6.      Subordination of individual interests to general interests
The interest of the business enterprise ought to come before the interests of the praise individual workers. In other words, principle of management state that employees should surrender their personnel interest before the general interest of the enterprise. Sometimes the employees due to this ignorance, selfishness, laziness, carelessness and emotional pleasure overlook the interest of the organisation. This attitude proves to be very harmful to the enterprise.

7.       Remuneration
According to Fayol wage-rates and method of their payment should be fair, proper and satisfactory. Both employees and ex-employers should agree to it. Logical and appropriate wage-rate and methods of their payment reduces tension and differences between workers and management, create harmonious relationship and a pleasing atmosphere of work. Further Fayol recommends that residential facilities be provided including arrangement of electricity, water and facilities.      

Example: In New Cloth Market, if in a particular year the organisation has earned more profit than apart from giving extra profit to shareholders and owners, some part of profit must be given to employees also in the form of bonus. This will encourage and motivate to put more efforts and increase the profit of the company.

8.      Centralization
There should be one central point in the organisation which exercises overall direction and control of all the parts. But the degree of centralization of authority should vary according to the needs of situation. According to Fayol there should be centralization in small units and proper decentralization in big organisation. Further, Fayol does not favor centralization or decentralization of authorities but suggests that these should be proper and effective adjustment between centralization and decentralization in order to achieve maximum objectives of the business. The choice between centralization and decentralization be made after taking into consideration the nature of work and the efficiency, experience and decision-making capacity of the executives.
Example: Fast-food businesses like Burger King, Pizza Hut and McDonalds use a predominantly centralized structure to ensure that control is maintained over their many thousands of outlets.  The need to ensure consistency of customer experience and quality at every location is the main reason.

 

9.      Scalar chain
The scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. An employee should feel the necessity to contact his superior through the scalar chain. The authority and responsibility is communicated through this scalar chain. Fayol defines scalar chain as "the chain of superiors ranging from the ultimate authority to the lowest rank." The flow of information between management and workers is a must. Business opportunities must be immediately avoided of. so we must make direct contact with the concerned employee. Business problems need immediate solution, so we cannot always depend on the established scalar chain. It requires that direct contact should be established.

Example: For example, if E wants to pass some urgent information to О then instead of following the long route of scalar chain, he can directly communicate with О by constructing a gang-plank, but no gang-plank can be constructed between the people working at different levels, i.e., no gang plank between D and L.

 

10.  Order:
According to Fayol there should be proper, systematic and orderly arrangement of physical and social factors, such as land, raw materials, tools and equipments and employees respectively. As per view, there should be safe, appropriate and specific place for every article and every place to be used effectively for a particular activity and commodity. In other words, principles that every piece of land and every article should be used properly, economically and in the best possible way. Selection and appointment of the most suitable person to every job. There should be specific place for everyone and everyone should have specific place. This principle also stresses scientific selection and appointment of employees on every job.
Example:

In production department of car making industry, if a worker is in need of a tool he must know in which box or tool-room it will be found and if he needs guidance from supervisor he must know the fixed cabin of supervisor. If no fixed place is given then worker will waste his time and energy in search of tools or supervisor.  

11.  Equity
The principle of equality should be followed and applicable at every level of management. There should not be any discrimination as regards caste, sex and religion. An effective management always accords sympathetic and human treatment. The management should be kind, honest and impartial with the employees. In other words, kindness and justice should be exercised by management in dealing with their subordinates. This will create loyalty and devotion among the employees. Thus, workers should be treated at par at every level.
Example: In Facebook company,there are two kind of equalities :

a)      Equality of Opportunity

b)      Equality of Welfare

 

12.  Stability of Tenure of Personnel
Principle of stability is linked with long tenure of personnel in the organisation. This means production being a team work, an efficient management always builds a team of good workers. If the members of the team go on changing the entire process of production will be disturbed. It is always in the interest of the enterprise that its trusted, experienced and trained employees do not leave the organisation. Stability of job creates a sense of belongingness among workers who with this feeling are encouraged to improve the quality and quantity of work.
Example: An example of this fact can come from early industrialization, namely the Fordmotor company. In order to motivate workers to do more and better work, this company assures security of job by the management.

 

13.  Initiative
Under this principle, the successful management provides an opportunity to its employees to suggest their new ideas, experiences and more convenient methods of work. The employees, who has been working on the specific job since long discover now, better alternative approach and technique of work. It will be more useful, if initiative to do so is provided to employees. In simple, to ensure success, plans should be well formulated before they are implemented.
Example:                                      TATA Company

Before setting up of plan the manager of TATA Company welcomes the suggestions and ideas of employees to allow their maximum participation and the company creates various kind of new programs for the benefit of the employees.  

 

14.  Esprit de corps (Spirit of Co-operation)
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. Everyone should sacrifice his personal interest and contribute his best energies to achieve the best results. 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.

Example: If the production manager assigned a target of manufacturing 100 units to a group of 10 members, divided the target among themselves to produce 10 units each, principle of team spirit says that each member of the group should not concentrate only on achieving his individual target of 10 units but they must concentrate on achieving group target of 100 units so if two workers of that group fall sick, then the other eight members must divide their individual target among themselves and try to achieve the target of their group.