CERTIFICATE

This is to certify that ______________________ of class XII of

________________________ , ______________ has
completed her project file under my guidance. she has taken
proper care and shown the utmost sincerely in completing
this project. I certify that this project is up to my expectations
and as per the guidelines issued by CHSE.
_____________ _____________
(Commerce Department) (Signature)
I would like to convey my sincere thanks to ……………………………, my
accountancy teacher, who always gave me valuable suggestions
and guidance during the project. She/he has a source of inspiration
and helped me understand and remember important details of the
project. She/he gave me an amazing opportunity to do this
wonderful project ‘………………………………………………………………’. I also
thank my parents and friends for their help and support in finalising
this project within the limited time frame.

Place : ________ Date : ________

Name : ________ Signature
 INDEX
• Certificate
• Henry Fayol
• Acknowledgement
• Biography of Fayol
• Principles of Management
1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Sub-ordination Of Individual Interest
7. Remuneration of Employees
8. Centralization and Decentralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Personnel
13. Initiative
14. Esprit de Corps
Henri Fayol
Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a
French mining engineer and director of mines who deve loped a general
theory of business administration that is often called Fayolism. He and his
colleagues developed this theory independently of scientific management
but roughly contemporaneously. Like his contemporary, Frederick Winslow
Taylor, he is widely acknowledged as a founder of modern management
methods.

Biography of Fayol
Fayol was born in 1841 in a suburb of Istanbul, Ottoma n Empire. His father
(an engineer) was appointed superintendent of works to build the Galata
Bridge, which bridged the Golden Horn. The family returned to France in
1847, where Fayol graduated from the mining academy “École Nationale
Supérieure des Mines” in Saint-Étienne in 1860.
In 1860 at the age of nineteen Fayol started the mining company named
“Compagnie de Commentry – Fourchambault – Decazeville” in Commentry as
the mining engineer. In 1888 he became managing director, when the mine
company employed over 10,000 people, and he ld that position over 30 years
until 1918. By 1900 the company was one of the largest producers of iron and
steel in France and was regarded as a vital industry .

Based largely on his own management experience, he developed his concept

of administration. In 1916 he published these experience in the book
“Administration Industrielle et Générale”, at about the same time as
Frederick Winslow Taylor published his Principles of Scientific Management .
Principles of Management
• Division of Work – Fayol presented work specialization as the best
way to use the human resources of the organization. Authority –
Managers must be able to give orders.
• Authority gives them this right. Note that responsibility arises
wherever authority is exercised.
• Discipline – Employees must obey and respect the rules that govern
the organization. Good discipline is the result of effective
leadership.
• Unity of command – Every employee should receive orders from
only one superior.
• Unity of direction – Each group of organizational activitie s that
have the same objective should be directed by one manager using
one plan for achievement of one common goal.
• Subordination – The interests of any one employee or group of
employees should not take precedence over the interests of the
organization as a whole.
• Remuneration – Workers must be paid a fair wage for their
services. • Centralization – Centralization refers to the degree to
which subordinates are involved in decision making.
• Scalar chain – The line of authority from top management to the
lowest ranks represents the scalar chain. Communications should
follow this chain.
• Order – this principle is concerned with systematic arrangement of
men, machine, material etc. there should be a specific pl ace for
every employee in an organization
• Equity – Managers should be kind and fair to their subordinates.
• Stability of tenure of personnel – High employee turnover is
inefficient. Management should provide orderly personnel planning
and ensure that replacements are available to fill vacancies.
• Initiative – Employees who are allowed to originate and carry out
plans will exert high levels of effort.
• Esprit de corps – Promoting team spirit will build harmony and

unity within the organization.

Division of Work
The specialization of the workforce according to the skills of a person,
creating specific personal and professional development within the labour
force and therefore increasing productivity; leads to specialization which
increases the efficiency of labour. By separating a small part of work, the
workers speed and accuracy in its performance increases. This principle is
applicable to both technical as well as managerial work . this can be made
useful in case of project works too. Planning is to decide wha t to do
before.
We know that TATA Group is an umbrella that covers various business
industries Considering this, it only makes sense to divide work by allocating
it to different employees, thereby enabling them to build up experience and
continuously increase and improve their skills. This leads to increased
productivity and ultimately higher profits.

Authority and Responsibilit y

The issue of commands followed by responsibility for their consequences.
Authority means the right of a superior to give enhance order to his
subordinates; responsibility means obligation for performance. This
principle suggests that there must be parity between authority and
responsibility. They are co-existent and go together, and are two sides of
the same coin. and the authority must be commensurate with
responsibility.
Authority, as defined by Fayol, is the righ t to give orders and the power to
exact obedience. Tata Group realizes that MNCs decision making and conflict
resolution follow a straight line. It believes that if decisions are held up due
to conflicting viewpoints, the issue is expected to speedily trav erse up the
line for a resolution. Sometimes there is no empowerment .

Discipline
Discipline refers to obedience, proper conduct in relation to others,
respect of authority, etc. It is essential for the smooth functioning of all
organizations. This will also help shape the culture inside the
organization.

Goes without mentioning, successful organization requires the common effort

of workers, even if judicious use of penalties are required to exact this
effort.
Unity of Command
This principle states that every subordinate should receive orders and be
accountable to one and only one superior. If an employee receives orders
from more than one superior, it is likely to create confusion and conflict .
Unity of Command also makes it easier to fix responsibility for mistakes
and the authority should be commensurate with responsibilit y

Workers should receive orders from only one Manager.

Unity of Direction
All those working in the same line of activity must understand and pursue
the same objectives. All related activities should be put under one group,
there should be one plan of action for them, and they should be under the
control of one manager. It seeks to ensure unity of action, focusing of
efforts and coordination of strength .

The entire organization should be moving towards a common objective in

a common direction.
Subordination of Individual Interest
The management must put aside personal considerations and put company
objectives first. Therefore the interests of goals of the organization must
prevail over the personal interests of individuals .

He/she should ensure that any business or personal associ ation which he/she
may have does not involve a conflict of interest with the operations of the
company and his / her role therein. The Code of Conduct cites 3 areas of
actual or potential conflict of interests. One of the highlights warns
employees that the interest of the company or group cannot be compromised.
Any personal interest that may potentially influence company interest should
be disclosed. Failure to do so can lead to suitable disciplinary action.

Remuneration of Employees
Workers must be paid sufficiently as this is a chief motivation of
employees and therefore greatly influences productivity. The quantum and
methods of remuneration payable should be fair, reasonable and
rewarding of effort. Remuneration is paid to worker as per their capaci ty
and productivity. The main objective of an organization is to maximize the
wealth and the net profit as well. For this purpose, the organization has
paid wages, salary, and benefit to their staff properly and scientifically so
that organizational efficiency can be ensured.

Worker’s rate of pay is subject to several variables such as cost of living,

general business conditions et c. [The variable part of the salary was arrived
after considering business unit EVA, corporate EVA, and also individual
performance EVA.]
Centralization and Decentralization
The amount of power wielded with the central management depends on
company size. Centralization implies the concentration of decision making
authority at the top management. Sharing of authority with lowe r levels is
called decentralization. The organization should strive to achieve a proper
balance.

Scalar Chain
Scalar Chain refers to the chain of superiors ranging from top management
to the lowest rank. The principle suggests that there should be a clear
line of authority from top to bottom linking all managers at all levels. It
is considered a chain of command. It involves a concept called a “gang
plank” using which a subordinate may contact a superior or his superior in
case of an emergency , defying th e hierarchy of control. However the
immediate superiors must be infor0med about the matter.
Official Chain of Command that has to be strictly followed in an organization
According to the Tata Group’s Code of Conduct – “Every employee of a Tata
company shall promptly report to the management, and / or third -party
ethics helpline, when she/he becomes aware of any actual or possible
violation of the Code or an event of misconduct, act of misdemeanor or act
not in the company’s interest. ”

Order
According to the principle of order or order, the right person should be given
the right job. and the right object should be placed in the right place. For
example, Physical system for material resources and Social system for human
resources.

To organize material resour ces means that there should be a proper place for
everything and everything should be in its proper place.

Similarly, to organize human resources means that there should be a place

for every person and every person should be in his designated place .

Positive Effect

• Effective use of material resources and man -power. Business Studies

Class 12 Project on Principles of Management
• ‘No waste of time finding resources when needed.
• Better discipline.
• Violating Effect
• ‘Misuse of resources
Equity
According to this principle, “Managers should deal with their subordinates as
fairly as The behavior should be done so that they develop a sense of
dedication towards the work.

“For example, a worker produces 10 units of goods in a day. Another worker,

who is a relative of the manager, produces 8 units and both are paid equal
wages. This is a violation of the principle of equity. The other worker should
get less wages than before .

Employees remain satisfied.

• Increases the sense of dedication towards the organization.

Skilled employees try to increase their skills further .

• ‘Unskilled workers try to acquire skills

Stability of Personnel
According to this principle, “Stability should be created in the employees so that the

work continues efficiently.”

Positive Effect
• Increase in employee confidence. Business Studies Class 12 Project On Principles
Of Management
• Increase in the credibility of the organization. Business Studies Class 12 Project
On Principles Of Management
• Inclination of skilled employees towards the organization.

Initiative
Using the initiative of employees can add strength and new ideas to an organization.
Initiative on the part of employees is a source of strength for an organization because it
provides new and better ideas. Employees are likely to take greater interest in the
functioning of the organization.

Esprit de Corps
This refers to the need of managers to ensure and develop morale in the workplace;
individually and communally. Team spirit helps develop an atmosphere of mutual trust
and understanding.
 A work culture which stimulates innovation, team work & freedom to exc e

Reward & Growth that is performance-driven

• Most contemporary perks & other amenities.

• Continuous training and development opportunities at all levels.