Management Principles developed by Henri Fayol: 1.

DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization. 2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility. 3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort. 4. UNITY OF COMMAND: Workers should receive orders from only one manager. 5. UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a common direction. 6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person should not take priority over the interests of the organization as a whole. 7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a workers rate of pay. 8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working. 9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful. 10. ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible. 11. EQUITY: All employees should be treated as equally as possible.

12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers. 13. INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction. 14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among employees.

14 Principles of Management - Henri Fayol

About three years ago I wrote an article on Henri Fayol, a management theorist. The net at the time had about 14 posts about the man, but very little about his theories on management. I posted the article and I'm glad to report that there are 43,000 posts about him today. ************************************************** ************************************************ Henri Fayol (1841-1925) was a French management theorist whose theories in management and organisation of labour were widely influential in the beginning of 20th century. He was a mining engineer who worked for a French mining company Commentry-Fourchamboult-Decazeville, first as an engineer, then moved into general management and Managing Director from 1888 to 1918. During his tenure as MD he wrote various articles on administration and in 1916 The Bulletin de la Socit de l Industrie Minrale, printed his Administration, Industrielle et Gnrale Prvoyance, Ogranisation, Commandement, Coordination, Contrle. In 1949 the first English translation appeared and titled 'General and Industrial Management' by Constance Storrs. Fayol was the first to identify the four functions of management: planning, organizing, directing, and controlling, as known today. His original definition of management comprised of five elements: forecast & plan, organise, command, coordinate, and control. His 14 principles are: Division of work - specialisation provides the individual to build up experience, continuous improvement in skills, and thereby be more productive. Authority - the right to issue commands, along with which must go the balanced responsibility for its function Discipline - which is two-sided, for employees only obey orders if management play their part by providing good leadership. Unity of Command - each worker should have only one boss with no other conflicting lines of command. Unity of direction - people engaged in the same kind of activities must have the same objectives in a single plan Subordination of individual interest to general interest - management must see that the goals of the firms are always paramount. Remuneration - payment is an important motivator although by analysing a number of possibilities, Fayol points out that there is no such thing as a perfect system

Centralisation or decentralisation - this is a matter of degree depending on the condition of the business and the quality of its personnel Scalar chain (line of Authority) - a hierarchy is necessary for unity of direction but lateral communication is also fundamental as long as superiors know that such communication is taking place. Order- both material order and social order are necessary. The former minimises lost time and useless handling of materials. The latter is achieved through organisation and selection. Equity - in running a business a 'combination of kindliness and justice' is needed in treating employees if equity is to be achieved. Stability of tenure - this is essential due to the time and expense involved in training good management. Initiative - allowing all personnel to show their initiative in some way is a source of strength for the organisation even though it may well involve a sacrifice of 'personal vanity' on the part of many managers Esprit de corps - management must foster the morale of its employees. He further suggests that, "real talent is needed to coordinate effort, encourage keenness, use each person's abilities, and reward each one's merit without arousing possible jealousies and disturbing harmonious relations." Harmony and pulling together among personnel. Although the principles are 90 years old, I believe that they still apply today.

Henri Fayol
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Henri Fayol

Henri Fayol (Istanbul, 29 July 1841Paris, 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration[1] often known as Fayolism. He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. He was one of the most influential contributors to modern concepts of management.

Contents
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1 Biography 2 Work o 2.1 Fayolism 3 See also 4 Publications 5 References

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Fayol was born in 1841 in a suburb of Istanbul, Turkey, where his father, an engineer, was appointed superintendent of works to build a bridge over the Golden Horn[1] (Galata Bridge). They returned to France in 1847, where Fayol studied at the mining school "cole Nationale Suprieure des Mines" in Saint-tienne. When 19 years old he started as an engineer at a mining company "Compagnie de CommentryFourchambeau-Decazeville" in Commentry. He became director in 1888, when the mine company employed over 1,000 people, and held that position over 30 years until 1918. By 1900 the company was one of the largest producers of iron and steel in France and was regarded as a vital industry.[1] In 1916 he published his experience in the book "Administration Industrielle et Gnrale", only a few years after Frederick Winslow Taylor had published his Principles of Scientific Management.

Henri Fayol, (1841-1925) a French mining engineer, developed 14 principles of management based on his management experiences. These principles provide modern-day managers with general guidelines on how a supervisor should organize her department and manage her staff. Although later research has created controversy over many of the following principles, they are still widely used in management theories. Division of work: Division of work and specialization produces more and better work with the same effort. Authority and responsibility: Authority is the right to give orders and the power to exact obedience. A manager has official authority because of her position, as well as personal authority based on individual personality, intelligence, and experience. Authority creates responsibility. Discipline: Obedience and respect within an organization are absolutely essential. Good discipline requires managers to apply sanctions whenever violations become apparent. Unity of command: An employee should receive orders from only one superior. Unity of direction: Organizational activities must have one central authority and one plan of action. Subordination of individual interest to general interest: The interests of one employee or group of employees are subordinate to the interests and goals of the organization. This is necessary to maintain unity and to avoid friction among the employees Remuneration of personnel: Salaries - the price of services rendered by employees - should be fair and provide satisfaction both to the employee and employer. Centralization: The objective of centralization is the best utilization of personnel. The degree of centralization varies according to the dynamics of each organization. Scalar chain: A chain of authority exists from the highest organizational authority to the lowest ranks. Order: Organizational order for materials and personnel is essential. The right materials and the right employees are necessary for each organizational function and activity. Equity: In organizations, equity is a combination of kindliness and justice. Both equity and equality of treatment should be considered when dealing with employees. Stability of tenure of personnel: To attain the maximum productivity of personnel, a stable work force is needed. Initiative: Thinking out a plan and ensuring its success is an extremely strong motivator. Zeal, energy, and initiative are desired at all levels of the organizational ladder. Esprit de corps: Teamwork is fundamentally important to an organization. Work teams and extensive face-to-face verbal communication encourages teamwork.

Henri Fayol was an industrialist of the early twentieth century. He developed fourteen principles of management that are still taught today. The definition of management is taken as "The process of coordinating and integrating work activities so that they are completed efficiently and effectively with and through other people." The principles are the universal truths of management that can be taught.

Principles of Management
1. Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialisation increases output by making employees more efficient. 2. Authority. Managers must be able to give orders. Authority gives them this right. Note that responsibility arises wherever authority is exercised. 3. Discipline. Employees must obey and respect the rules that govern the organisation. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the organisation's rules, and the judicious use of penalties for infractions of the rules. 4. Unity of command. Every employee should receive orders from only one superior. 5. Unity of direction. Each group of organisational activities that have the same objective should be directed by one manager using one plan. 6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organisation as a whole. 7. Remuneration. Workers must be paid a fair wage for their services. 8. Centralisation. Centralisation refers to the degree to which subordinates are involved in decision making. Whether decision making is centralised (to management) or decentralised (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralisation for each situation. 9. Scalar chain. The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed. 10. Order. People and materials should be in the right place at the right time. 11. Equity. Managers should be kind and fair to their subordinates. 12. Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

13. Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort. 14. Esprit de corps. Promoting team spirit will build harmony and unity within the organisation.

1. Division of work: The work in an organization must be divided among individuals and departments. Different departments differing jobs 2. Authority and Responsibility: There should be a proper balance between authority and responsibility. Higher up the ladder should have more responsibility 3. Discipline: The best means of maintaining discipline is to have: Disciplined superiors at all levels, Clear and fair agreements, and Judicious use of all penalties. 4. Unity of Command: It means a subordinate should receive orders from only one superior. There should not be multiple bosses. 5. Unity of Direction: There should be 'one head, and one plan' for a group of activities having the same objective. For instance, if there are 10 salesmen, selling the same product in the same area, and if there are 2 sales supervisors, each in charge of 5 men, then every salesman would take orders from their respective supervisors. There will be unity of direction only when all the sales plans are coordinated at a higher level. 6. Subordination of individual interest to general interest: In other words, the interest of the organization should come first and then individual or group interest. This can be ensured by: Good example on the part of superiors, Having fair agreements, and Constant supervision. 7. Remuneration: Wages and salaries should be fair. It should depend on circumstances, such as cost of living, ability of the company to pay, prevailing wage rates in the industry. Apart from financial benefits, non-financial benefits be provided such as good working conditions, canteen facilities, recreation facilities, etc. 8. Centralization: Certain matters are to be centralized and others to be decentralized. There is a need to have a proper balance between centralization and decentralization.

9. Scalar Chain: It refers to the line of command from top level to the lowest level. the scalar chain can be short-circuited or broken if the situation so demands in the interest of the organization. 10. Order: This principle requires the orderly organization and placement of men, machines and other resources. Misplacement would lead to misuse and disorder. 11. Equity: All members of the organization should be treated equally, depending upon the performance and circumstances. 12. Stability of Tenure: Managers as well as non-managers need time to learn and understand their jobs. If they leave or are removed within a short period of time, the learning time will be wasted. In other words, employees should not be kept temporary for a long period of lime. Employees should be made permanent so that they do not leave the organization. However, incompetent persons need to be removed or replaced and those who perform well must be rewarded 13. Initiative: The superior must sacrifice his own vanity to encourage and inspire those under him to show initiative. Subordinates should be given freedom to come up with suggestions and ideas. 14. Esprit de Corps: The superior must encourage esprit de corps (team spirit) among his subordinates. It is the team spirit that results in loyalty, and dedication and commitment of the employees.

Fayol (1841-1925) Functions and Principles of Management Henri Fayol, a French engineer and director of mines, was little unknown outside France until the late 40s when Constance Storrs published her translation of Fayol's 1916 " Administration Industrielle et Generale ".

Fayol's career began as a mining engineer. He then moved into research geology and in 1888 joined, Comambault as Director. Comambault was in difficulty but Fayol turned the operation round. On retirement he published his work - a comprehensive theory of administration - described and classified administrative management roles and processes then became recognised and referenced by others in the growing discourse about management. He is frequently seen as a key, early contributor to a classical or administrative management school of thought (even though he himself would never have recognised such a "school"). His theorising about administration was built on personal observation and experience of what worked well in terms of organisation. His aspiration for an "administrative science" sought a consistent set of principles that all organizations must apply in order to run properly. F. W. Taylor published "The Principles of Scientific Management" in the USA in 1911, and Fayol in 1916 examined the nature of management and administration on the basis of his French mining organisation experiences.. Fayol synthesised various tenets or principles of organisation and management and Taylor on work methods, measurement and simplification to secure efficiencies. Both referenced functional specialisation. Both Fayol and Taylor were arguing that principles existed which all organisations - in order to operate and be administered efficiently - could implement. This type of assertion typifies a "one best way" approach to management thinking. Fayol's five functions are still relevant to discussion today about management roles and action.
1. to forecast and plan - prevoyance examine the future and draw up plans of action 2. to organise build up the structure, material and human of the undertaking 3. to command maintain activity among the personnel 4. to co-ordinate bind together, unify and harmonise activity and effort 5. to control see that everything occurs in conformity with policy and practise

Fayol also synthesised 14 principles for organisational design and effective administration. It is worthwhile reflecting on these are comparing the conclusions to contemporary utterances by Peters, Kanter and Handy to name but three management gurus. Fayol's 14 principles are:

specialisation/division of labour A principle of work allocation and specialisation in order to concentrate activities to enable specialisation of skills and understandings, more work focus and efficiency. authority with corresponding responsibility If responsibilities are allocated then the post holder needs the requisite authority to carry these out including the right to require others in the area of responsibility to undertake duties. Authority stems from: y that ascribed from the delegation process (the job holder is assigned to act as the agent of the high authority to whom they report - hierarchy) y allocation and permission to use the necessary resources needed (budgets, assets, staff) to carry out the responsibilities. y selection - the person has the expertise to carry out the responsibilities and the personal qualities to win the support and confidence of others.

The R = A correspondence is important to understand. R = A enables accountability in the delegation process. Who do we cope with situations where R > A? Are there work situations where our R< A? "judgement demands high moral character, therefore, a good leader should possess and infuse into those around him courage to accept responsibility. The best safeguard against abuse of authority and weakness on the part of a higher manager is personal integrity and particularly high moral character of such a manager ..... this integrity, is conferred neither by election nor ownership. " 1916 A manager should never be given authority without responsibility--and also should never be given responsibility without the associated authority to get the work done.
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discipline The generalisation about discipline is that discipline is essential for the smooth running of a business and without it - standards, consistency of action, adherence to rules and values - no enterprise could prosper.

"in an essence - obedience, application, energy, behaviour and outward marks of respect observed in accordance with standing agreements between firms and its employees " 1916
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unity of command The idea is that an employee should receive instructions from one superior only. This generalisation still holds - even where we are involved with team and matrix structures which involve reporting to more than one boss - or being accountable to several clients. The basic concern is that tensions and dilemmas arise where we report to two or more bosses. One boss may want X, the other Y and the subordinate is caught between the devil and the deep blue sea. unity of direction The unity of command idea of having one head (chief executive, cabinet consensus) with agree purposes and objectives and one plan for a group of activities) is clear. subordination of individual interest to the general interest Fayol's line was that one employee's interests or those of one group should not prevail over the

organisation as a whole. This would spark a lively debate about who decides that the interests of the organisation as a whole are. Ethical dilemmas and matters of corporate risk and the behaviour of individual "chancers" are involved here. Fayol's work - assumes a shared set of values by people in the organisation - a unitarism where the reasons for organisational activities and decisions are in some way neutral and reasonable. remuneration of staff

" the price of services rendered. " 1916 The general principle is that levels of compensation should be "fair" and as far as possible afford satisfaction both to the staff and the firm (in terms of its cost structures and desire for profitability/surplus).
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centralisation Centralisation for HF is essential to the organisation and a natural consequence of organising. This issue does not go away even where flatter, devolved organisations occur. Decentralisation is frequently centralisaed-decentralisation !!! The modes of control over the actions and results of devolved organisations are still matters requiring considerable attention. scalar chain/line of authority The scalar chain of command of reporting relationships from top executive to the ordinary shop operative or driver needs to be sensible, clear and understood. order The level of generalisation becomes difficult with this principle. Basically an organisation "should" provide an orderly place for each individual member - who needs to see how their role fits into the organisation and be confident, able to predict the organisations behaviour towards them. Thus policies, rules, instructions and actions should be understandable and understood. Orderliness implies steady evolutionary movement rather than wild, anxiety provoking, unpredictable movement. equity Equity, fairness and a sense of justice "should"pervade the organisation - in principle and practice. stability of tenure Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure promotes loyalty to the organisation, its purposes and values. initiative At all levels of the organisational structure, zeal, enthusiasm and energy are enabled by people having the scope for personal initiative. (Note: Tom Peters recommendations in respect of employee empowerment) esprit de corps Here Fayol emphasises the need for building and maintaining of harmony among the work force , team work and sound interpersonal relationships.

In the same way that Alfred P Sloan, the executive head of General Motors reorganised the company into semi-autonomous divisions in the 1920s, corporations undergoing reorganisation still apply "classical organisation" principles - very much in line with Fayol's recommendations.