Many different contribution of writers and practitioners have resulted in different approaches to

management, and these make up a “management theory jungle”. In the below table will try to

In the below section we will discuss about the thoughts what management thinkers have offered
and how they are still relevant in today’s organizational enviourment.

PRINCIPLE OF MANAGEMENT BY HENRY FAYOL

Hanri fayol a French industrialist, known as the father of modern management theory. He
introduce a general theory that can be applied to all levels of management and every
department. In the year 1956 fayol wrote a book entitled Industrial and General
Administration in this book he gave 14 principles of management. He concentrated on
accomplishing managerial efficiency

Division of work:
Henri Fayol believed that segregating of work in the work force amongst the worker will
enhance the quality of the product and similarly, he also concluded that the division of work
improves the productivity, efficiency, accuracy and speed of the workers. This principle is
appropriate for both managerial and technical work level.
Work is divided into small task or job
A trained specialist who is competent
The intent of division of work is to get better productivity with same effort
For eg: A company dealing with FMCG goods the various jobs will be divided in to separate
department like production, finance, marketing, human resource, the work in each of these
department is assigned accordance to their potential so the work can be performed in the
best possible manner and at the same time all the department collectively strive to achieve a
desired goal for the organization as a whole.
Effects of principle of division of work:

 Leads to specialization
 Increase the work efficiency
 Ensure optimum utilization of resources
 Reduce the need of supervision

Authority and responsibility

These are two key aspects of management. Authority facilitates the management to work
efficiently and responsibility makes them responsible for the work done under their
guidance or leadership.
 Authority refers to the right person to give orders and exact obedience by the word show
the once position in the organization.
Responsibility refers to the obligation to the sub ordinated to perform the assigned task at
the best of their ability and skills
If authority assigned to a person is more than the responsibility the EXCESS authority is likely
to be misuse and with only responsibility without authority then the person may be unable
to complete the work in desired manner or non-completion of the work.
For eg: rakesh, production manager has been asked to increase the production of jackets
from 300 to 700 units per day but at the same time he has not given sufficient authority to
get the extra raw materials from the store.as result rakesh will not be able to rise the
production the desired level. Here Rahul should not responsible for non-attainment of the
desired target. This is because the authority which was given to him was less than what was
required by him to fulfill the responsibility created on him.
Effects of this principle

 Minimize the misuse of authority

 Ensure efficient and effective realization of goal
 Easy to impose accountability ensure smooth working of the organization.

DICIPLINE
The core value of any management is DICIPLINE no goal can be achieved without discipline.
Good performance and sensible behaviors makes the management job easy and
comprehensive. Employee’s good behavior also helps them build and progress in their
career.
Order to maintain the discipline in an organization it is necessary
That the rules and regulations are clearly communicated to the employees.
Their behavior is closely monitored by the superiors in all levels
There are judicial application of penalties is even ever needed.
Discipline is necessary for the systematic working of both management and workers of any
organization.
For eg: MacDonald’s employees are required to sanitize their hand in every 30 min that gives
brand a good reputation and one hygiene assurance among the customers.
Like in Tata group Ethics committee is very strict. And strong action is taken where code of
conduct is violated by any employer and they are strongly monitored.
Sports team management must have strong disciplinary rules. We have many instances of
Pakistan cricket players taking bribes and fixing matches which is result of negligence of
discipline of the PCB. on the other hand BCCI as a management is a very good example, how
strong discipline measures make the management one of the most respected, successful and
one of the richest sports management in the world .
Effects of this principle of Discipline

 Systematic working of an organization

 Ensure the effective and effective realization of goal
 From modes well defined flow of communication through scalar chain
 Develops sense of commitment among both management and employees
 If discipline is not there an organization can lead to chaos, confusion, desired goal
may not be achieved properly and in time may lead to wastage resources.

UNITY OF COMMAND
Employee should have only one boss and follow his command. If an employee has to
follow order from more than one boss .there begins a conflict of interest and create
confusion
for eg: Rakesh – salesman of a cement company is allowed to give, maximum 15% discount
by marketing managers as to persuade the prospective buyer to finalize the deal, however
every time he strikes a deal for the company by offering such discount the financial manager
express his unhappiness and insists on not to offer more than 10% discount in future. This
contradiction in instructions always creates confusion in the mind of an employee and affect
his performance adversely.
Effects of the principle

 It leads to systematic working of an organization.

 Increases effectiveness and efficiency of superior’s ad subordinated
 Facilitated coordination and communication
 Easy to fix responsibility for mistakes
 If any organization violates this principle then it may be confusable situation for the
sub ordinates and lead to ego clashes among the superiors, may lead to wastage of
resources.

UNITY OF DIRECTION
Whoever is engaged in the same activity should have unity of goal. This means all the
persons working in the company should have one goal should have one common goal and
motivation which will make the work easier and achieve the set goal smoothly.
Each group of activities having same objective must have one head and one plan.
In the absence of unity of direction it will be difficult to integrate the group effort towards
the realization of desired goal.
For eg: A company is manufacturing food products and handicrafts .in such situation, it is
advisable that working of the company should be divided in to two such separate division an
there should be separate plan for each division for the allotment of resources and have
individual divisional head. This practice ensures there should not be any overlap in the
organizational functions
Effects of this principle

 Leads to systematic working condition in an organization

 Increase work efficiency and effectiveness
 Facilitates coordination and communication
 Easy to fix responsibility for mistakes.

SUBORDINATION OF INDIVIDUAL INTEREST

According to Fayol the interest for all the time interest of an organization should take
priority over an interest of an individual employee. This indicates company should work
unitedly towards interest of the company rather the personal interest.

For eg: rakesh procurement manager of a construction project has to buy concretes for his
project, and his brother in law is a vendor of the same, has a budget of 55000 per truck.
When rakesh asked him about the coast and his brother in law quoted 50,000 per truck. But
when rakesh announce a tender he got a quotation of 42,000 from another vendor who is
not at all related to him. So rakesh here should give priority to the company benefit more
than his personal relationship, and should purchase from the second vendor.

 Effects of this principle

 Promote unity of action
 Helps to curb undesirable behavior of an employee
 Develop a sense of commitment among the employee

REMUNERATION
According to fayol over all pay and compensation should be fair to both employee and the
company. Employee should have fair wages at least reasonable standard of living, at the
same time it should have with in the paying capacity of the organization.
For eg: As per chief labor commission central minimum wage rate is in India including the
basic wage and daily allowances is 383 rs for unskilled workers. 420 rs for semi-skilled
workers and 504 rs for highly skilled workers per day.
Effects of this principle

 Helps to create a congenial working enviourmnent and foster a good relationship

between workers and the management.
 Ensure smooth running of the organization
 Reduce labor turnover an promote stability

Centralization and Decentralization

Fayol has the opinion that there must be an appropriate balance between centralization and
de centralization. Depending on the size, nature and the location of the business.
Centralization – where decision making authority is concentrated in the hands of the top
management.
Decentralization- systematic dispersal of authority at all the levels of management in order
to enable the managers at all levels to take decisions appropriate to their level.
There is a need to balance sub ordinate involvement through de centralization with
manager’s retention to final authority through centralization
For eg: in order to smooth running of an UNIVERITY both the centralization and
decentralization applies judiciously. Like dates of the nomination may be central decided by
the top level management from rising of the chairman. Director and so on, however the
decision about the syllabus and framing of the question papers requires subject expertise
therefore the work needed to be de centralized at the professor levels.
For eg. Military has centralized organization structure this is because the higher up orders
those below them and every one should follow their order.

Effects of application of centralization and de centralization:

 Ensure faster decision making

 It reduce burden of managers
 If we do not apply this principle insufficient authority may lead to disruption of an
work in an organization

SCALAR CHAIN
Organization should have a chain of authority and communication that runs from top level
to bottom level of an organization should be followed by subordinates and by the managers.
The chain specifies the roots by which information should be communicated to the desired
person.
Fayol principle highlights the hierarchy steps should be from the top to the bottom. This is
necessary so that every employee should know their immediate senior they should be able
to contact if needed.
For eg. When VODAFONE and Idea Company was merged, then they have to fire some of the
employees, then this news is first conveyed by the CEO to the managers then to the
supervisors and to the employee who will be fired

Effects of this principle:

 Smooth systematic flow of communication

 Leads to systematic working of an organization
 Facilitates control and communication.

ORDER
A company should maintain a well-defined work order to have a favorable work culture.
This positive atmosphere will boost more positive productivity.
This principle refers to the aspects of
MATERIAL ORDER –special place should be fixed for each of the physical resources available
in the organization. For eg- file, Amirah, desk in an office.
SOCIAL ORDER- order of the employee is called social order. For eg selection of a team
leader. Or in office places are allotted for specific places for specific members.
For eg. TATA PLAY office has voted as the most happiest and fun working corporate places in
India.
Effects of this principle:

 Facilitates coordination
 Optimum utilization of resources
 Systematic working

EQUITY
All the employees should be treated equally and respectfully.it is the responsibility if the
managers that no employee should face discrimination on the basis of caste, creed, gender,
language, belief or nationality.
Through this principle fayol urges to the managers to practice kindness and justice in their
behaviors towards the workers.
For eg: in an MNC people of various nation work together in an environment which is free
from any kind of discrimination. Equal opportunity of growth and development for every
employee in an organization.
At the time of the yearly rating manager should not be biases towards any employee an
darting should be done purely on the merit.
Effects of this principle:

 Ensure loyalty and devotion of the employee

 Job satisfaction of the employee
 Helps to create cordial and healthy work enviourment.

STABILITY OF PERSONEL
An employee delivers the best if they feel secure in their job. This is the duty of the
management to offer join security to their employees
Employee’s turnover should be minimized to maintain organizational efficiency.
Personnel should be selected and appointed after due and rigorous procedure, but once
selected they should be kept at their position for a minimum tenure.
Stability enables employees to show their talent and avoid high training cost of the
organization.
For eg: rakesh one new joinnee in a well-known Hotel quit his job within a year due to
frustration that he felt for being shifted 5 times from one branch to the other.
In a survey it has come out that INDIAN OIL has one of the lowest employee turnover rate in
india.
Effects of this application:

 Instills a feeling of job opportunity

 Optimization of resources
 Enhance the job satisfaction
 And low training cost for new joinee for the organization

INITIATIVE
This principle states taking the first step with self-motivation. The workers should be
encouraged to develop and carry out their plans for improvement.it will help them to
increase their interest and make them worth.
Initiative should be encouraged but it doesn’t mean going against establishment practice of
company for sake of being different.
Foe eg:-Tata groups conducts several projects where employees take part and shares their
ideas and the ones which are selected got rewards.
Town hall activities are also designed to share common platform with CEO and among all
the employees where they are free to speak their mind give new ideas which boos their sense
of belonging ness for the organization.

Effects of this principle

 Increase the self-confidence and moral of the employee

 Enhance job satisfaction
 Helps to develop the sense of belonging ness to the organization
 Improve the creativity of the employee and healthy relationship between employee
and the management.

Esperit de Crops
Management should promote spirit of unity and harmony among employees.
A manager should always replace I with WE in conversation with their employees so as to
promote feeling of togetherness and team work. Developing trust and mutual understand
will lead to a positive outcome and work enviourment.
For eg: when India won the world cup in 2011 , in the prize giving ceremony captain of the
Indian team MS DHONI has given the world cup to hold to the newest member of the team
that time , VIrat Kohli. And later kohli expressed that this gesture motivates him to the core
and eventually he ha became one of the greatest cricketer of all team making whole country
proud. Same we can observe in all the business leaders always gives credit to his team for
the success rather taking applauded for themselves.

Effects of this principle

Helps develop feeling of trust and team spirit
Helps to create a cordial relationship and healthy work enviourment

This 14 principle of management are used to manage an organization and are beneficial
for prediction, planning, decision making, organization and process management, control
and contribution.