Decoding Henri Fayol's 14 Principles Of Management

Introduction

Needless to say, the quality of management can make or break an organization. But, if you aspire to become a manager, you will always strive to be the best of your kind, won't you? This is why you should learn about the most effective, tried, and true 14 principles of management by Hanry Fayol. So, who is Henri Fayol? And what link does he have with the 14 principles of management? Rest assured, we will get you answers to all these questions along with a detailed explanation. So, without further ado, Let’s start learning about these principles that significantly help modern management experts and trainees today.

What are the Principles of Management?

The principles of management help formulate general human behavior and several other decision-making guidelines. These essential principles direct managers to take appropriate actions and decisions in the interest of a particular company. Usually, any principle of management does not necessarily coincide with the scientific principles because they fluctuate with the changing scenarios of an enterprise. Managers implement these principles with creativity in mind, depending on the needs and demands of the prevailing situations. 

The year 1916 witnessed a paradigm shift towards the interpretation of principles of management. This happened when Henri Fayol published his book General and Industrial Management. It highlights the superiority of managerial skills over technical skills by showcasing 14 principles of management.

Principles of management encompass a process that involves achieving business goals through various steps. This often includes planning, organizing, coordinating and controlling. It further involves working with people and resources to achieve organizational objectives. 

The Henri Fayol 14 principles of management evaluate a business organization from the perspective of stepwise designs and refinements. This further enables managers to extract the best possible knowledge and expertise from their respective workforce, which means they can run the business with the bare minimum of challenges.

The Evolution of Management Theories

Management theories help organizations focus, communicate, and evolve over time. Using any management theory in the workplace enables leaders to focus on their main goals. The next section will get into the nitty-gritty behind the history of management theory and its eventual modern outlook with advanced theories.

1. Historical Background

Management theories have their roots in the early 20th century with the advent of industrialization. Frederick Taylor's Scientific Management was introduced in the 1910s. It aimed to improve labor productivity through time and motion studies. This was followed by Henry Fayol's Administrative Theory, which emphasized the importance of organizational structure and management principles. 

The Human Relations Movement, led by Elton Mayo, shifted the focus toward the social aspects of work in the mid-20th century. This highlighted the significance of employee satisfaction and motivation. Such foundational theories laid the groundwork for understanding organizational behavior and the dynamics of management.

2. Modern Management Theories

Modern management theories build upon the historical foundations while incorporating advancements in technology and a deeper understanding of human behavior. Here are some instances:

• The Systems Theory views organizations as complex systems composed of interrelated parts. It emphasizes the need for a holistic approach to management. 
• Contingency Theory suggests that there is no one-size-fits-all management style. This means the best approach depends on the specific circumstances and environment.
• The decision theory of management examines the process of making choices under conditions of uncertainty within a workplace. It employs mathematical, philosophical, and psychological tools to analyze how decisions are formed. The goal of this theory is to facilitate rational decision-making that maximizes organizational value, thereby improving overall effectiveness and efficiency.
• Management Science Theory, also referred to as Operations Research or the Quantitative Approach, is a methodology for solving problems using mathematical and statistical techniques to tackle intricate business issues. It focuses on optimizing processes, improving decision-making, and effectively allocating resources. This theory enhances other management approaches, enabling managers to make well-informed decisions through data analysis and numerical evaluation.
• Contemporary theories like Total Quality Management (TQM) and Lean Management focus on continuous improvement, efficiency, and customer satisfaction. These modern theories enable organizations to adapt to achieve sustainable success and adapt to the current business landscape.

Though modern management theories brought a lot to the table, nevertheless, Henri Fayol's 14 management principles are widely recognized and consistently used by managers globally till date. Despite being over a century old, these principles remain crucial; without them, we would regress to a time when technical skills were paramount and managerial accountability was minimal. But who was Henry Fayol?

Who was Henri Fayol?

Henry Fayol was a French mining engineer who worked in a mining company from the end of the 19th century till the mid-20th century. He initially began his career as an apprentice engineer but later became the company’s general manager. Not only that, but Fayol was also promoted to a director position in the coming years. Henri Fayol’s primary focus was on his managerial skills when he joined the mining company as a manager. He aimed to organize human resources, apart from his technical skills. 

This is how he became an expert on managerial nuances and documented his practical experiences in his book on management theories named Administration Industrielle et Générale. He introduced what are the principles of management that he applied across all departments. Reputed companies worldwide still practice these 14 principles of management to ensure an efficient and productive work environment. 

The 14 principles of Henri Fayol came into the limelight when the impact of the Industrial Revolution was slowly receding. Even today, these principles have retained their significance and constitute the study materials for several management courses in leading management institutions worldwide.

14 Principles of Management by Henri Fayol

Principles of management are like a guide for leaders to run a particular company well. These principles help managers understand leadership vs management first, make plans, organize tasks, and even motivate teams. It means they serve as frameworks for the leadership to deal with the difficulties of leading people and achieving goals within the organization.

Now, let us look at Henri Fayol's 14 principles of management with examples for your understanding.

1. Division of Work

It is one of the foremost of Fayol's principles of management, which relates to a unique concept. So, if an employee has a specific assignment to complete at a given time, the person will become more competent and specialized in it with time. This often contradicts the modern practice of multi-tasking scenarios where a particular employee must handle several tasks in the designated time. 

According to Fayol, managers must analyze the existing skill sets of in-house staff and assign tasks to the members that they can complete on schedule. This strategy helps employees to become more productive, efficient, and skilled in the long run.

Example:

A private or public bank goes through several operational procedures. This can be related to opening accounts, issuing checkbooks, or receiving and disbursing cash. According to Fayol, the manager allocates these responsibilities among different staff members based on their strengths within the institution. He further emphasizes that division of work is essential to maintain the quality and quantity of a particular assignment. 

2. Authority and Responsibility

This principle of management states that a factory manager must have the requisite authority to confirm that the workers and supervisors follow all instructions. The same manager must have the authority to transform essential ideas into action. However, such an authority may be directly proportional to responsibility. There should be a perfect balance between responsibility and authority. Anything short or excessive is harmful to a business. The subordinates will get frustrated if authority surpasses responsibility. Conversely, the manager will feel defeated if responsibility supersedes authority. 

Example:

An employee of a design firm must manage the design and decoration tasks for event planning. The person will get frustrated without any authority over the assignments. This involves making design decisions or connecting with the vendors to complete the assignment on time. Consequently, such a situation will hamper work efficiency and productivity.

3. Discipline

It is one of the most significant principles of management by Henri Fayol. He put stress on discipline across organizations for a successful business. The company managers should ensure mutual respect and admiration across all departments. The management must also implement work regulations, philosophies, and other frameworks on the company premises. This helps attract the attention of concerned staff members. Violating such enforced rules may be detrimental to the business entity. Hence, impartial judgments by superiors are necessary in this case to ensure discipline across an organization. 

Example: 

The HR and Personnel department makes some rules and regulations for the company workforce. This includes working hours, promotions,assessments, increments, probations, etc. Employees must make sure to follow these rules and maintain a disciplined attitude in the workplace for efficient business.

4. Unity of Command

It is also among Fayol's principles of management which states that the chain of command should be evident and apparent in an organization. The workers must know who they should report to in such cases. Fayol opines that a particular employee should have a single boss. There will be a notable split among authority, stability, and discipline if there is more than one superior.  Besides, it may lead to a breakdown of the management framework. As a result, there will be enormous stress on concerned employees, which affects their productivity.

Example: 

Imagine a factory where the supervisor instructs the subordinate to complete a job within 5-6 hours. However, the factory manager asked the same subordinate to wrap it within two hours. This specific clash in command can create confusion and unnecessary tension among the workforce. This results in loss of productivity and delay in delivery.

5. Unity of Direction

It comes fifth in the order of the 14 principles of management. This particular principle signifies that any work should have a proper mode of organization. It enables the employees to collaborate towards attaining the same goal. Moreover, they must have an identical strategy and work under one supervisor. The management can break down different business activities for several departmental heads. However, the stakeholders should work under the supervision of a single authority toward a common goal.

Example: 

A company can have numerous marketing activities. These may include budgeting, advertising, product launching, and even sales promotions. A single manager should implement a uniform marketing plan for all the subordinates in such a situation.

6. Subordination of Individual Interest to General Interest

Henry Fayol’s 14 principles of management also include collective interest in a business organization. It states that team interest should come before individual interest. Organizational motives and purposes can help the leaders run an organization successfully. Otherwise, the company might face dire consequences if personal interests dominate other priorities. These are the basic facts about leadership and management. 

Example: 

You might have observed a staff member getting more remuneration despite having minor responsibilities in an MNC. On the other hand, another employee in the same role might have received less salary despite offering exceptional performance. Here, the management must make sure to pinpoint the disparity and take appropriate measures. This is because the interests of the stakeholders are more crucial than the interests of any particular employee.

7. Remuneration of Employees

It is among the 14 principles of Henri Fayol, stating that all employees should receive fair salaries and wages for their designated work. Any business entity that underpays its in-house strength needs help to survive the competition. This is because there will be colossal job diversion. Quality workers will start looking for more opportunities in organizations with high-paying jobs. The staff remuneration should comprise both non-financial rewards, financial initiatives, and recognitions. Moreover, the company HR should set up a systematic structure to achieve the same goal.

Example: 

The company management must be unbiased regarding the remuneration policies and packages. It should ensure that all employees get what they deserve irrespective of experience, gender, qualifications, and other pertinent factors.

8. Centralization and Decentralization

Centralization refers to the concentration of power in the controlling authority’s hands. This is usually combined with a top-bottom approach to management. The same authority gets distributed to the defined levels of management in decentralization. A company has a mixed management outlook in today’s business environment. That is why it needs to be more centralized and decentralized. The bottom-level staff has no authority over their imposed responsibilities in total centralization. 

Decentralization also indicates a need for top-level authority to control business operations in the same way. Hence, there must be a balance of centralization and decentralization to run the business effectively. 

Example: 

The element of complete centralization exists in small and medium-scale industries. Here, there is insignificant work delegation with limited strength. Meanwhile, the owners or the partners have the freedom to make all kinds of business decisions.

9. Scalar Chain

This principle of management communicates explicitly between staff and management. Employees should realize their respective positions in the company hierarchy. They must also know whom to approach for business communications in the current chain of command. Foyal has suggested an organizational chart on a display board for effective implementation of the scalar chain. This enables businesses to have sufficient transparency in terms of communication and management. 

Example: 

Every profit and non-profit organization has the highest level of the hierarchy. It can be the CEO or the founder. This makes it an apparent chain of authority. It also cascades down to the lowest level of subordinates for delivering maximum output, as decided in the hierarchy.

10. Order

Foyal’s 14 principles of management mention the order or sequence of different business functions. It often relates to a timely, orderly, and reasonable placement of resources or inputs. The principle further guarantees the optimal utilization of resources structurally. Any potential gap in deploying such resources may lead to chaos and losing of business opportunities.

Example: 

The factory supervisors must arrange for a designated place, including the required tools and appliances, for the workers to perform their work efficiently.

11. Equity

Equity is also among the 14 principles of management that combine traits like benevolence, emotional intelligence and justice. It conveys that company managers should showcase humanity and justice to the entire workforce. This unique gesture encourages loyalty and commitment toward the organization. 

Example: 

All staff and workers feel safe and secure, regardless of gender, race, or religion. There should be instant redressal of all kinds of grievances and equal opportunities to enhance performance metrics within a particular organization.

12. Stability of Personnel

This principle pertains to the stability of employees in the organization. The higher your attrition level is, the more doubts you will have regarding the company’s attitude toward handling staff. A profit-making organization must work intensively to maximize efficiency and minimize excess turnover while retaining competent staff. Employees cannot contribute instantly after joining the organization. They require sufficient training before being incorporated into the operations. Meanwhile, all employees should have job security, and the HR team must foresee the gaps in order to fill the job vacancies on time.

Example: 

All employees should get a proper induction to familiarize themselves with the company profile after absorption. It involves knowing about the technical aspects, work culture, and office environment. This will help remove their hesitations and encourage them to work within the organization efficiently. Besides, old employees must also get alumni awards for completing a specific tenure to boost their morale.

13. Initiative

Foyal’s principles of management also include the unique element of ‘initiative.’ The company management expects its employees to showcase some initiatives. This means they should plan and strategize how to complete the work on time without committing errors. Employees feel motivated when they have the freedom to express themselves. This, in turn, boosts their productivity. The management should listen to the employees’ concerns and encourage them to proceed with their respective plans for the company’s sake.

Example: 

It would be ideal if the organizational management decided to make suggestions regarding their departments and subsequent work progress. The employees will imagine themselves in an authoritative position, and they may also get motivated to contribute to the organization.

14. Esprit De Corps

The Esprit De Corps principle of management signifies team spirit. Fayol believes that company management should bring unity, morale, and mutual support to all its employees. Team spirit conveys immense strength within the business organization. Contented and motivated company staff members can also become competent and productive over time. 

Also read, Top 55+ Team Leader Interview Questions and Answers

Example: 

The organizational hierarchy should devise a fresh plan of action to achieve monthly targets. This involves using the word ‘We’ instead of ‘I,’ which ushers in an unbeatable team spirit for the workforce.

Key Principles of Management

Now that we know the Henri Fayol 14 principles of management, let us look at the generic principles that also matter in business and marketing activities. We have also included some real-world examples that resonate with these principles. 

1. Planning: It involves the strategies associated with decision-making.

Example: A company launching a new product conducts market research to identify customer needs and preferences. Later, it develops a strategic plan to target the right audience and achieve sales goals.

2. Organizing: It often includes appropriate coordination between planning and organizational resources.

Example: A retail chain organizing its supply chain management to ensure timely delivery of products to various store locations. This also involves optimizing inventory levels and reducing costs.

3. Leading: It involves motivating the employees of a particular organization to achieve business goals.

Example: A tech startup CEO inspires the team by setting a vision and promoting an innovative culture. This may also involve recognizing individual contributions, which leads to increased productivity and morale.

4. Controlling: It is usually related to monitoring and evaluation of business operations.

Example: A restaurant chain implements a quality control system to monitor food safety standards, customer satisfaction, and operational efficiency. This involves adjustments as needed to maintain high standards.

5. Staffing: It entails recruiting, selecting, training, and developing employees to fill various roles within the organization.

Example: A multinational corporation implements a comprehensive staffing strategy by conducting campus recruitment drives, leveraging online job portals, and using headhunting firms to attract top talent. They also invest in training programs and career development workshops to ensure employees grow and thrive within the company.

Importance of Principles of Management

The importance of the 14 principles of management can be discussed in terms of the following points:

• Providing Managers with Useful Insights: The principles of management present managers with several valuable insights into different real-world circumstances. Adherence to these policies will supplement their capability and perception of managerial conditions, education, and other circumstances.
• Optimum Utilization of resources and Efficient Management: Both material and human resources obtainable with a particular firm are restricted. The only catch is that they have to be placed to best use across organizations. It means the resources must be put into use in a way that they should give the maximum profit with minimum cost. Such principles enable managers to predict and influence the relationships of their respective choices and activities.

Criticism of Fayol’s Principles of Management

Henri Fayol's principles of management have had a lasting impact on management theory since the 20th century. However, these principles have also faced various criticisms over time. These include: 

1. Rigidity and Lack of Flexibility

The 14 principles of management are often seen as too rigid. They do not provide enough flexibility for managers to adapt to different business environments. Modern businesses require more adaptable and flexible approaches to management, which Fayol's principles do not provide adequately.

2. Overemphasis on Top-Down Control

Fayol’s emphasis on a hierarchical, top-down approach can be seen as outdated. Contemporary management practices often favor a more decentralized approach. This enables a better distribution of decision-making, after which employees can contribute to the organization’s strategy.

3. Neglect of Human and Social Factors

Fayol’s principles are criticized for focusing on management's structural and functional aspects. Most of these principles tend to neglect the human and social dimensions. Modern management theories emphasize the importance of employee motivation, team dynamics, and organizational culture to foster the best employment skills among employees. Fayol overlooked these areas in his management principles. 

4. Prescriptive Nature

The principles offer a one-size-fits-all solution to management, which means they are too prescriptive. This approach does not account for the unique challenges and contexts of different organizations. Effective management often requires customized strategies that consider the specific circumstances and environments in which businesses operate.

5. Limited Empirical Evidence

Henri Fayol’s 14 principles of management were largely based on his personal experiences and observations. It means they lacked empirical validation. This lack of scientific rigor has led to questions about the generalizability and reliability of his principles across different industries and contexts.

Are the Principles of Management Still Relevant Today?

Despite the criticisms above, Henri Fayol's 14 principles of management remain relevant today. They act as foundational guidelines to provide a structured framework for managing different organizations across industries. These principles offer valuable insights into organizational structure, leadership, and operational efficiency. 

However, modern management practices often expand upon these principles to address contemporary challenges. These include the need for flexibility, innovation, and emphasis on human and social factors in the workplace. Yet, the 14 principles of Henri Fayol still serve as a useful starting point for understanding all kinds of basic management concepts.

Difference between Principles of Management and Techniques of Management

There are some major differences between principles of management and techniques of management. You must understand these distinctions to learn more about Fayol’s principles of management, too.

Conclusion

Henri Fayol is called the ‘Father of Modern Management Principles’ for the correct reasons. He showcased a dynamic perception of the 14 principles of management and highlighted the unique things that great employees do differently. Fayol’s management principles are popular with contemporary management professionals and students alike. These principles enable managers to control and regulate an organization’s internal operations.

These principles act like a wide-ranging set of guidelines that enable prominent management executives to enhance the performance of their respective businesses. Hence, managers across the world apply the 14 principles of Henry Fayol to startups and large-scale companies.

Are you an aspiring professional who wants to learn more about the principles of management? Then look no further than JanBask Training. Here, we offer you comprehensive courses that enable you to learn more about business management principles, practices, and more. 

FAQ’s

1. What is the significance of Henri Fayol’s principles of management?

Each of the 14 principles of Henri Fayol enable managers to communicate their directions and employees to know their responsibilities. These principles also state that the person who has authority to make decisions is identified easily. Ultimately, the principles of management promote loyalty among numerous employees through practices like stability and remuneration.

2. Are the 14 principles of management still relevant today?

Yes, every principle of management devised by Henri Fayol is still relevant today. Several managers across domains use these principles, from small businesses to large corporations.

3. What is the main concept behind Fayol’s management theory?

Fayol's administrative management theory is an excellent approach to management. It emphasizes increasing productivity by focusing on organizational structure and human behavior. Fayol's theory is usually grounded in the five functions that represent business management. These include planning, organizing, commanding, coordination, and lastly, control.