HENERY FAYOL’S PRINCIPLES OF MANAGEMENT

Background and history of Fayola

Henery Fayol was born in France in 1841.He joined as a junior

engineer in a mining company in 1860 and rose to the position of
Managing in Director in 1888.The company was in the situation of
bankruptcy when he took its charge. HE used his managerial
techniques to bring out company from a worst situation and made it a
most successful company. When he retired after 30 years, the
company was a leading coal-steel company with strong financial
background.

His principles of management came to the notice of public when he

published them in a book in 1916.

LIFESTYLE STORES

Lifestyle stores are managed by lifestyle International (p) Limited

Company which is a part of Dubai based US $ 3 billion Landmark
Group.It is headquartered in Banglore.The first lifestyle store was
opened in Chennai in 1999.Since then it has come to be known as a
leading retail chain in India. It has opened its stores in all major cities
of India. The company provides friendly, colourful, vibrant,
convenient and one stop enjoyable shopping experience to the
customers with a choice of about 250 brands. It offers case of
shopping.
Major Contributions of Fayol Henry Fayol made contributions to
management thought:

(i) He identified all activities into five categories and

distinguished between technical and managerial activities.
(ii) He classified Managerial activities into functions such as
planning, organizing, staffing directing & controlling.
(iii) Fayol developed fourteen principles of management which
act as a guide for managers for performing their managerial
activities.

FAYOL’S PRINCIPLES OF MANAGEMENT

Fayol suggested 14 principles of management for running the
business efficiently .These principles are given as follows:-

1. Principles of Division of Work:-

Division of work implies division of the total task
in order to lighten the total burden the promote specialization in such
a way that one person does only one thing rather than doing
everything himself. This helps to avoid the waste of time and effort
caused by changes from one work to another.
Fayol has opined that, these principles of division of work&
specialization should be applied to all kinds of work –technical as
well as managerial.
For example, in a furniture manufacturing industry, one person may
be asked to cut pieces of wood, another may be asked to join them,
the third one to paint the furniture and so on. When one person
repeats the same work again and again he will become a specialist in
that work and his efficiency also improve, instead of one person
undertaking of all the stages of the work.
Advantages: When a person repeats the same work again and again
he will become specialized in that work. He will be able to handle the
same very well.
Disadvantages: While doing the same work again and again, one
starts feeling monotonous.
2. Principle between Authority and Responsibility:
These principles states that authority and responsibility should go
side by side. A person can be accountable for certain activities only if
he has been given authority should be commensurate with each other.
Fayol viewed that people seek authority and fear responsibility. But a
good leader most has courage to accept responsibility. Authority
without responsibility leads to irresponsible behavior while
responsibility without authority makes a person ineffective.
For example, if a foreman is given a target to produce 500 units in a
week, he should be given authority to employee persons as a per
needs and procure materials required for the target object.
Advantages:-When authority and responsibility are matched then to
result will be better. Nobody will be able to complain of lake of
authority for getting thing done.
Disadvantages: There may be a fear that authority may not be
misused. A person may also lake ability to use authority.

Fayol’s 14 Principles

3. Principles of Discipline:-The rules of organization should be

obediently followed the employees should also abide by the terms of
their employment agreement. This is necessary for the proper working
of an organization. There should be good superior at all levels. They
should be very fair towards their subordinates. Both superior and
subordinates must abide by the rules and regulations of the
organization.
For example, The employees should meet their commitments towards
the organization and help it in achieving the objectives. The superiors
should also take care of employees and meet their of fair wages,
increments, incentives promotions etc.
Advantages:-When workers obey discipline and follow rules and
regulations properly, their efficiency will improve.
Disadvantages:- In the absence of disciplines, there will be chaos and
confusion in the organizations.
4. Principles of unit of command:- There should be one and only
one boss whose command should prevail over every individual
employee. There should be not dual subordination. This principle is
violated if an employee gets order from to or more supervisors at the
same time for the same work. As a consequence the authority will be
under mined. This will also lead to in discipline and in efficiency.
For example, when more than one person gives orders to
subordinates then there is a possibility of giving contradictory orders.
If boss Asks his subordinate to complete a particular work today and
boss be given another assignment to the same subordinate. The sub
ordinate will be confused and will not be able to decide to whom to
follow it will create a problem of lake of direction among
subordinates.
Advantages:- when one person directs the activites then there will
not be any confusion about the command.
Disadvantages:- Unit of command brings centralization of power and
brings delays in decision making.
5. Principles of unit of Direction:-The principles of unit of direction
means that there should be one head and one plan for a group of
activities having to the same objectives. Each group of activities with
the same objectives must have one plan to activity and must be under
the control of one supervisor. This principle will lead to co-ordination
among different activities.
For an example, If a textile unit is dealing with ginning, weaving and
spinning activities should have common goals and be directed to
achieve be objectives, in order to have unit of direction among three
segments of the business, there should be separate supervisors looking
after and coordinating their own activities.
Advantages:-Direction helps in achieving organizational goals in
better way. The efforts of all employees are directed in same direction
for achieving targeted results.
Disadvantages:-Since everybody has to act according to the given
directions, individual initiatives are not encouraged even if these may
being good results.

6. Principle of Subordination of Individual Interest to General

Interest:-The general interest of the organization should have priority
over the interest of any one individual employees. Individual do have
their own interest. The organization also has its own interest an
objective. In case of any conflict of interest, organization interest with
prevail and will supersede all other individual interest.

For example, the organization may be improving the quality of

products for better image and workers may be interested to produce
more and more produces for earning more wages, sacrificing quality
standards for increasing their output.

Advantages:-

(i) When a organizational goals have priority over individual

goals then it will he easy to achieve them.
(ii) There will be a co-ordination between organizational and
individual goals are former will get priority.

Disadvantages:-

(i) It is very difficult to curb personal priorities in a real

situation.
(ii) Individual try to achieve personal goals by ignoring
organizational goals.

7. Principle of Fair Remuneration to Workers:- The overall pay

and remuneration should be fair to both employees And the
organization. The employees should be paid fair wages to ensure
reasonably good standard of living on the other hand it should be
within the paying capacity of the organization. A nice balance should
be maintained between the two situations.
 For example, If the organization earns higher profits than it should
distribute some of it to the workers in the shape of production bonus,
it will motivate workers to further improve their work.

Advantages:- When employees get fair remuneration for their work,

they will be motivated to work more and more.

Disadvantages:- The employees will raise hopes for getting more and
more wages if the management is not able to satisfy the employees
hopes then they will fill demoralized and their performance will be
adversely affected.

8. Principles of Centralization and Decentralization:-

‘Centralization’: The concentration of authority at the top level. On

the other hand, Delegation of authority thought all levels of
management is
‘Decentralization’: There should be a decent balance between two for
an organization to work efficiently.

For example, There may be centralization for deciding plans, polices

and major decisions but decentralization may be allowed for day to
day activities and routine activities such as fixing of target for
workers etc.

Advantages:- Since decision making is at top level decision making

will be quick, operational decisions will be taken quickly at
decentralization.
Disadvantages:- There is a likely hood of misuse of authority at
differential levels people may use on authority with they are not
authorized to used.

9. Principles of Scalar Chain: It refers to the chain of superiors

ranging from the ultimate authority to the lowest ranks. Fayol felt that
a hierarchic channel called the scalar chain is necessary to ensure unit
of command & effective communication. Communication should
follow through the established chain of command. However, a ‘gang
plank’ may be created by passing the established line of authority to
facilities quick communication.

For example,

Advantages :- The information follows in proper hierarchical way to

first upward at the top and then lower where it is to be sent.
Disadvantages:- Communication through scalar chain is timed
consuming and causes delays.

10.Principles of Order:- According to Fayol the people working in

the organization and the material should be in suitably right place
search that there traced as and when there needed for achieving
maximum efficiency.

For example, If a worker needs some guidance from a supervise, he

should know where supervisors is so that he should go to that place
without wasting any time for searching for supervisors.

Advantages:- When mean and materials are properly arranged, their

will be a smooth working in the organization.

Disadvantages:- there is a tendency to avoid proper order for men

and materials.

11.Principles of Equity:-Equity means justice and kindliness. This

principles emphasizes justice in the behavior of manager towards
those working under them . There should be no discrimination for
account of caste, colour, religion, etc.

For example, All the employees should be treated similarly while

applying various rules and regulations.

Advantages:- The employees will feel motivated and their moral will
be boosted.
Disadvantages:- The equity among employees may discourage some
of them and labour turn over may increases

12. Principles of Stability Tenure of Personnel:- According to

Fayol, Employees once selected must be kept at the position for
which they are selected, for a fixed period. This will reduce the labour
turn over and the efficiency of the organization will be maintained.

For example, if there is a regular turnover of workers, The employees

will take time in understanding the environment and adjusting the
new situation, there will be loss of production due to frequent changes
of workers.

Advantages:- The stability of tenure of employees will improve their

efficiency and performance.

Disadvantages:-The same employees may having new having new

ideas and initiatives.

13. Principles of Initiative:- Initiative is the eagerness to initiate an

action without being asked to do the same. It involves self-motivation
on the part of the employees to take the first step.

For example, Before deciding a plan if the manager ask for

suggestion for sub-ordinates employees and discusses their pros and
cons before final reaching a conclusion, the employees will feel
encouraged and motivated.

Advantages:- When a employees suggestion of employees are not

accepted then they may feel of belongingness to the organization.
Disadvantages:- If the suggestion of employees are not accepted then
they may feel discourage and dissatisfied.

14. Principles of Esprit de Corps:- The principles implies that there

should be co operation and team-work among the member of an
organization. Literally speaking, esprit de corps means the spirit of
loyalty and devotion to the group to which one belongs. The manager
most always make a constant effort to ensure harmony, Fayol
suggested to discard two temptations for this (i) to divided the rules,
and (ii) abuse of written communication.

Management should try to develop a sense of belongingness

among the employees and work with a team sprit to achieve
organizational goal.

For example, If a group is assigned a task to achieve, the group may

divided the work among group members, the spirit should be that the
work is to be achieved by the group and not by individuals.

Advantages :- (i) This principles helps in developing in team spirit of

under taking various tasks.

(ii) A work done in a team sprit will bring better result an improves
performance.

Disadvantages:-

(i) When work is done collectively, then some person may

not contribute wholeheartedly while other may have to
work more.
 (ii) Efficient person may feel discouraged since the credit the
good performance to all and not to individual.

Conclusion :

Henery Fayols principles have helped in systematizing management.

These principles very effective and their application will depend upon
the persons applying them. Fayol has clarified that since management
is related to human beings, there may not be a sense of finality. It is
the decision of manager to use these principles. He will decide the use
with regard to the situation and need. The principles of Fayol have an
element of flexibility. The employees work to their maximum
potential which leads to the growth of the organization. That is why
the Lifestyle stores have expanded all over the country with in a
period of 18 years.