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Principles of Management

A good number of managers have been induced framing the principles of increasing managerial efficiency. Naturally managers have formulated principles of management differently. The great exponents of principles of management are F.W.Taylor & Henri Faol. Specially the 14 principles enunciated Fayol have still been recognized. After Fayol many others like L.Urwick, Harold Koontz, Ernest Dale etc have laid much emphasis on application of principles in cases of management. At present, a number of management experts have evolved some principles through research. But as those principles have not yet been widely recognized, the 14 principles propounded by Fayol have been briefly discussed.

Fourteen Principles of Management

Division of work

• Division of work means to divide the work among the workers according to their capacity & quality on scientific basis
• The purpose of division of work is to derive the benefits from the principles of specialization.
• Division of work produces more & better work with the same effort.

Authority & Responsibility

• Authority is the right to give orders & power to exact obedience & responsibility is corollary/outcome to authority.
• Authority is a combination of official & personal factors.
• Authority is the formal & legitimate right of the manager to make decisions, issue orders & allocate resources to achieve organizational goals. Responsibility on the other hand is the obligation to which a person is bound by reason of his status.

Discipline

• Discipline is the obedience, application, energy, behavior & outward marks observed in accordance with standing agreements between employer & employee.
• The best means of establishing & maintaining discipline are good supervisors at all levels, agreement as clear & fair as possible& penalties judiciously applied.
• It is absolutely essential for smooth running of business.

Unity of Command

• This principle means that an employee should receive orders from one superior only.
• If two superiors exercise their authority over the same person or department, it may cause uneasiness or disaster.

Unity of Direction

• It means one head & one plan for group of activities having the same objective.
• It is essential for unity of action, co- ordination of strength & focusing of effort.
• The unity of direction is different from unity of command in the sense that the former is concerned with the functioning of body corporate while the later is with functioning of personnel.

Subordination of individual interest to social interest

• The meaning of this principle is individual interest or group interest should not over power the interest of the organization.

Remuneration of personnel

• Remuneration of personnel is the price of service rendered by them.
• It should be fair & maximum possible satisfaction to employees & employers.

Centralization

• Everything which goes to increase the importance of subordinate’s role is centralization, everything which goes to reduce it is decentralization.
• The degree of centralization must vary according to different cases.
• This is determined by individual circumstances & should be based on individual circumstances & should be based on optimum utilization of all faculties of the personnel.
• In small organization there is absolute centralization, but in large concerns, there are series of intermediaries between top & bottom levels.

Scalar chain

• It is the chain of superiors ranging from the ultimate authority to the lower level.
• It implies that line of authority should be followed which comes from or lead to ultimate authority.

Order

• This is a principle relating to arrangement of things & people.
• In case of things the formula is “ a place for everything & everything in its place.” It is the same case for human order – “a place for everyone & everyone in his place” i.e. the right man in right job.

Equity

• Equity is the combination of justice & kindliness to the employees at all levels.
• The application requires good sense, experience, good nature & devotion from subordinates.

Stability of tenure

• Time is quite essential for an employee to get accustomed to a new work & succeed it in doing well. If an employee is removed when he has got not accustomed to it, he will not get enough time to render worthwhile service.

Initiative

• Is concerned with thinking out & execution of a plan.
• At all levels of organizational hierarchy, zeal & energy of employees are augmented by initiative.
• Managers should secure as much initiative as possible from the subordinates.

Espirit de corps

• This is the principle of Union is strength. Business leaders must remember this principle.
• Harmony of personnel of an undertaking is a source of great strength.

Work in progress, expect frequent changes. Help and feedback is welcome. See discussion page.