Maharashtra State BoardHSC Commerce 12th Board Exam
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Write Short Note On Henri Fayol'S Principles of Management - Organisation of Commerce and Management

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Answer in Brief

Write short note on Henri Fayol's Principles of Management? (14 Principles)

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Solution

Introduction: - Henry Fayol was a French mining engineer. He worked as the director of mines also. After conducting many experiments in management, he developed 14 principles of management. These principles are explained in his famous book 'General and Industrial Administration'. Due to his contribution to management, he is called 'the father of Modern Management'.

The Principles laid down by Fayol are explained below:

  1. Principle of Division of Work: -According to this principle the total work should be divided into small sub parts. The divided work should be assigned to different employees, as per their capacities, skills and interests. Fayol says the division of work leads to specialization.
  1. Principle of Authority and Responsibility: -When the work is assigned to a person, he should be given proper authority to carry out that work. E.g. a manager should be given authority is always accompanied by responsibility. When a person is given the authority, he should be held responsible for the same task. Authority and responsibility always go hand in hand. If the manager is given the authority to complete the task within a given time, he should be held responsible if he does not do that in time.
  1. Principle of Discipline: -According to Fayol, discipline is the most essential thing in the organization. Employees must obey and respect the rules that govern the organization. Discipline helps to achieve the goals set in the organization. Good discipline is the result of effective leadership. For that there must be a clear understanding between the management and workers regarding the organization's rules.
  1. Principle of Unity of Command: -In any organization, every employee should receive orders from the superior (boss) only. This is applicable from top management to bottom. The principle of unit of command tries to avoid confusion. If an employee receives orders from more than one superior he will be confused and will not be able to work with concentration. The work will not be performed properly. Whereas if he gets orders from only one person, he will finish his work accurately.
  1. Principle of Unity of Direction: -Unity of command explains about single person getting directions from a single person. But the unity of direction explains about a group working with the same objective under the directions of a single person. According to this principle, each group in the organization should have the same objective. The group should be directed by one manager using one plan. Thus this principle explains about group working in the organization.
  1. Principle of subordination of individual interest to general interest: -According to this principle the interest of an individual must be given less importance than the interest of the whole organization. While taking decision in the organization the manager should always consider the interest of the whole group rather than the interest of a single employee. Similarly, the employee should also protect the interest of the organization and consider his interests subordinate. If the organization prospers automatically the employee will prosper.
  1. Principle of Remuneration: -This Principle states that the employees must be paid a fair wage for their services. While paying remuneration the skill, expertise, knowledge, tenure etc. of the employee should be taken into account. When the employees are paid fair remuneration they show greater productivity and give more output.
  1. Principle of Centralization: -Centralization refers to the concentration of power or authority. In some organizations, this power is vested in one hand or few hands. This situation occurs in small organizations. But if the size of the organization is large then centralization becomes difficult. According to this principle, there must be a proper balance between centralization and decentralization in the organization. This is to be done according to the size of the organization, nature of the activity etc.
  1. Principle of Scalar Chain: -Usually in the organization, there is a particular system of communication. It is through a chain, e.g. the manager will inform about a decision to the departmental head, the departmental head will inform the supervisor, the supervisor will inform the foreman and the foreman will inform the workers. On the other hand, the communication can flow from the worker to the manager in the upward direction also. It is known as scalar chain. However, this type of communication is very time-consuming. Therefore sometimes cross-communication i.e. communication not exactly following the chain, should be allowed. This is known as 'Gang Plank'. It avoids delays; Gang Plank must be done with proper permission of the authorities.
  1. Principle of Order: -According to this principle people and materials should be in the right place at the right time. It means there must be proper arrangement of material. It must have right place. Similarly there must be proper placement of personnel. They must be appointed to do right work at right place. This principle emphasizes on the proper utilization of physical and human resources.
  1. Principle of Equity: -This principle is about fair and equal treatment to all employees. Managers should be kind and fair to their subordinates. There should not be any discrimination between the employees. E.g. the employees working on the same level but in the different department should be paid same wages. their wages should not depend on the department but the level at which they are working.
  1. Principle of Stability of Tenure: -While appointing an employee the manager should assure the stability of tenure or job security to the employee. This creates a sense of belonging among the employees. There should not be any uncertainty in the mind of the employees regarding the stability of the job. 
  1. Principle of Initiative: -Initiative refers to taking the first step. It also means thinking of new ideas. According to this principle, the manager should encourage the employees to take the initiative. The employees should come up with new ideas and the manager should welcome their ideas. This principle creates a sense of belonging about the organization in the minds of the employees.
  1. Principle of Esprit de Corps: -Esprit de corps means the union is strength. Management is a group activity. Human resource is a great asset of the organization. The manager should create a spirit of teamwork among the employees. The manager should build a sense of togetherness among the employees. If the workers work with unity the goal can be achieved easily.
Concept: Fayol’s Principles of Management
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