1.2 Principles of Management

Principles of management are statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions.There are 14 Principles of Management as described by Henri Fayol:

1. Division of Labor – According to Fayol work of all kinds should be divided & subdivided and allotted to various persons according to their expertise in a particular area. This results in specialization that leads to increased efficiency, accuracy and economy in spheres of business.
2. Party of Authority & Responsibility – Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned. Authority assigned to a person must be adequate to enable performance of the task they are responsible for. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.
3. Principle of One Boss (Unity of command) – this principles states that a subordinate must receive directions and commands from one and only one superior. failure to observe this principle may lead to insubordination, duplication of roles, confusion, weak discipline and inefficiency.
4. Unity of Direction – Efforts of all the members of the organization should be directed towards common goal. According to the principle, activities that are related must be grouped together, have same plan and managed by one superior. Unity of direction is a prerequisite for unity of command, but that does not mean unity of command comes from the unity of direction.
5. Equity – All employees should be treated with fairness, kindness and justice. Subordinates must be treated similarly in respect to their position. Equity does not mean total absence of harshness, in fact, at times force and harshness might become necessary for the sake of equity.
6. Order – Fayol emphasized the need of having things and people at the right place and at the right time. Arrangement of things is called material order and placement of people is called social order. Material order requires things to be at a safe, appropriate and specific place, while social order requires selection and appointment of suitable persons for a certain job, as well as people being at the right place.
7. Discipline – subordinate should respect their superiors and obey their order. Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise.
8. Initiative – Initiative is the eagerness to take actions without prompting be another person. Workers should be encouraged to take initiative in the work assigned to them, thus employees can suggest ideas, experiences & new methods to carry out a task. Monetary & non-monetary incentives can be used to encourage initiative.
9. Fair Remuneration – Workers compensation should be fair, reasonable, satisfactory and rewarding of the efforts. However satisfaction of remuneration to an employee may not be satisfactory to the employer. As such, the satisfaction conflict can be diffused by using logical and appropriate wage rates and methods of payment.
10. Stability of Tenure – Fayol suggests that employees should be given a fixed period of service in a job before being moved to another job. This time should be long enough to allow the worker to learn the new task and succeed in doing it. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.
11. Scalar Chain – This refers to the chain of superiors ranging from the ultimate authority to the lowest. This principle states that all communication b has to pass through Scalar chain. However in some circumstances, this path can be cut short, a situation known as Gang Plank. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication.
12. Sub-Ordination of Individual Interest to General Interest – Closely related to the unity of direction principle, this principle states that organization’s interest should prevail in all circumstances over those of individuals that constitute that organization. However, reconciliation of individual and group interests should be undertaken to ensure no conflict exist.
13. Espirit De’ Corps (can be achieved through unity of command) – This principle refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. To foster the team spirit, Fayol discourages setting up of competitive grouping and encourages use of face-to-face communication.
14. Centralization & De-Centralization – Centralization means concentration of decision making authority at the top level of an organization. While as, decentralization refers to disposal of decision making authority to lower levels of the organization. The Level of centralization or decentralization in an organization should be set in consideration of several factors such as, the size of the organization, experience of superiors, dependability & ability of subordinates, and so on.