A project report on “, Sambalpur

Netaji Subash Chandra Bose Higher Secondary School,

Sambalpur

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the Student the External the Internal
Sl. No Topic Pg. No.
1 Introduction
2 Functions of management
3 Background and history of henry fayol
4 Henry fayol’s principle of management
5 Conclusion
6 Bibliography

CONTENT
 INTRODUCTION

Henry Fayal was born in France 1841, he got degree in mining engineering in
1860 and started working as a engineer in a coal mining company. In 1888 he
was promoted as the managing director of the company at that time company
was in the situation of insolvency. He accepted the challenge and applied his
managerial technique to bring out the company from this situation and he
succeeded, when he retired after 30 year. The company was a leading
coalmining company with strong financial background.
This principle of management came to notice of public when he published in a
book in 1916.
Major contribution made by Henry Fayal
Henry Fayal made following contribution to management :-
 (father of He identified all activities in 6 categories.
 He made clear distribution between technical and managerial activities.
 He classified managerial activities in functions such as planning,
organizing, staffing, directing, controlling
 Fayal developed 14 principle of management which act like as a
guidelines for mangers in performing their managerial activities.
Henry fayol become famous as father of principle of management
studies and thought principle of management).
Functions of Management

There are five managerial function:-

1. PLANNING

Planning is a basic managerial function . It helps in determining the course of

action to be followed for achieving various organisational objectives . Planning
is a process which involves 'thinking before doing'. It is concerned with a
mental state of the manager.

Features:-

•Planning is a mental exercise.

•Primacy of planning

•Planning is continuous

•Planning is forward looking , etc

2. ORGANIZATION

Organization is a process of identifying and grouping of various activities in the

organisation and assigning then to various persons ,working together for
achieving specific organisational goals.

Features:-

•Group of persons

• Common objectives

• Division of Work

•Co-ordination ,etc
3. COMMANDING

Staffing basically involves matching jobs and individuals. Staffing is concerned

with filling and keeping filled positions in the organisation . Staffing involves
finding the right persons for the right jobs having right qualifications

Features:-

• Managerial Function

• Concerned with human resources.

• Continuous Function

• Undertaken in all levels

4. CO-ORDINATION

This function refers to instructing , guiding, communicating , inspiring and

motivating employees to work for the achievement of organisational goals .This
function helps in placing right type of persons are proper positions in the
organisation.

Features:-

• Directing initiates action

• Continuing function

• Directing takes place at Energy level

• Directing flows from top to bottom ,etc.

 5. CONTROLLING

Controlling is the process of checking whether plans are followed or not,

keeping a record of progress and then taking corrective action if there is any
deviation .

• Controlling is goal oriented

3 • Control is all pervasive function.

• Controlling is continuous activity

• Forward looking , etc
Henry Fayal’s Principle Of Management

Background and history of Henry Fayal

Henry Fayal was born in France 1841, he got degree in mining engineering in
1860 and started working as a engineer in a coal mining company. In 1888 he
was promoted as the managing director of the company at that time company
was in the situation of insolvency. He accepted the challenge and applied his
managerial technique to bring out the company from this situation and he
succeeded, when he retired after 30 year. The company was a leading
coalmining company with strong financial background.

This principle of management came to notice of public when he published in a

book in 1916.

Major contribution made by Henry Fayal

Henry Fayal made following contribution to management :-

 (father of He identified all activities in 6 categories.

 He made clear distribution between technical and managerial activities.

 He classified managerial activities in functions such as planning,

organizing, staffing, directing, controlling

 Fayal developed 14 principle of management which act like as a

guidelines for mangers in performing their managerial activities.
Henry fayol become famous as father of principle of management
studies and thoughtprinciple of management).
 Henry Fayal’s principle of management

Fayal suggesed 14 principle of management for running the business

efficiently they are as follows
1. Principle of division of work
According to this principle whole work must be divided into small task (unit of
task) and instead of assigning the whole work to one person. One task or one
unit of task experience and knowledge of the person whe a person is performing
a part of job again and again he will become perfect and specialized in doing
that work and the efficiency level will improve.

5
Positive effect

 Specialization.

 Improve efficiency.

Limitation/drawbacks

 Lack of efficiency

 There will be specialization.

2. Principle of parity between authority and responsibility

authority means power to take decisions responsibility means obligation means
to complete the job assigned on time, This principles states that there must be
parity between the authority and responsibility excess of authority without
matching responsibility may bring negative results and excess of responsibility
without matching authority will not allow the workers to complete the job on
time. There is a need to bring parity between both for best results.

Positive effect

 No misuse of authority.

 Helps in meeting responsibility on time without any delay.

 Limitation/drawbacks

 Misuse of authority due to excess of authority.

 Overburden with work due to excess responsibility.

3. Principle of discipline
Discipline refers to general rules and regulations for systematic working in the
organization, discipline does not only mean rules and regulations but also mean
developing communication in the employees towards the organization as well as
each other. Fayal insist that discipline is required at superior as well as sub
ordinate level. The disciplinary rule shall not be applicable only on sub-ordinate
but discipline required at superior.

Positive effect

6
 Systematic working in the organization.

 Improves efficiency.

Limitation/drawbacks

 Disorder, confusion and chaos.

 Wastage of resources in absence of discipline.

 Delay in work due to absence of rules &regulation.

4. Principle of unity of command

According to this principle an employee should received order from one
boss only because if he is receiving order from more than one boss their
will not be understand that, whose order must be executed first and on
the other hand if employee is receiving orders from more bosses he gets
chance to give excuse by saying that he was busy in executing the orders
 of other bosses, to avoid confusion and give no chance of excuses to
employees, the order most come from one boss only.

Positive effect

 No confusion in the mind of sub-ordinate.

 No ego problem.

 Improves efficiency.

Limitation/drawbacks

 Confusion in the mind of employees.

 Ego clashes among the different superiors.

5. Principle of unity of direction

According to this principal one unit means one plan that is the efforts of all
the members and employees of the organisation must be directed towards
One Direction that is achievement of common goal. If this principle is
applied it lead to coordination.

Positive effect

 achievement of organisation goal.

7  coordination efforts.

Limitation/drawbacks

 difficulties in achieving organization.

 goal wastage of efforts and resources by working in different directions.

6. Principle of subordinates of individuals interest to general
interest
 According to this principal the interest of organisation must suppressed
the interest of individual or employees. In the organisation the
employees are working with some objective and their is always an
objective of organisation. If the objective of individual are in same
direction of organisation then there is no problem but if the objective of
both the group are in different direction then manager must try to
counsel individual interests with organisational goal and if it is not
possible then individual must be sacrificed for achieving organisational
goal.

Positive effect

 achievement of organisation goal.

 coordination between individual and organisational goal.

Limitations/drawbacks

 no achievement of organisational goal.

 even employees will also suffer in long run. No achievement of

individual interest of goal.

7. Principle of fair remuneration

According to this principal employees in the organisation must be paid

fairly or adequately. To give the maximum satisfaction the
remoderation must be just and fair because if employees are underpaid
they will not be satisfied and unsatisfied person can never contribute
his maximum. This satisfaction will lead to increase in employees
turnover. So to have stability in organisation and to get maximum
efforts from employees the employees must be paid fairly.

Positive effect
8
 employees get motivated.

 devotion and commitment of employees improvement.

Limitations/drawbacks

 increase in turnover of employees.

 dissatisfaction and demotivation of employees.

Principle of effective centralisation and decentralization

Centralisation refers to concentration of authority or power in few

hands at the top level. Decentralization means distribution of power at
every level of management. According to fayol as company must not be
completely centralised or completely decentralized but their must be
combination of both depending upon the nature and size of
organisation. Small organisation can be well organised and manage with
centralisation technique but in a large organisation there is need for
decentralization. Secondly if employees are efficient and Competent
then they can be trusted by having decentralization but if employees are
not fully developed and are less in number then their must be
centralisation.

Positive effect

 benefits of both centralisation and decentralization.

 first decision at operational level and strict Central by top level.

Limitation/drawbacks
  complete centralization will result in delay on decision3.

 complete decentralisation will result in misuse of authority.

8. Principle of scalar chain

Scalar chain means line of authority or chain of superior from highest to

lowest rank. Fayol insist that this chain must be followed strictly in the
organization . Every information must pass through every key of the
chain. No skipping of anyone key should be allowed.

According to scalar chain principle if 'E' wants to contact 'O' he has to

9 move through

E-D-C-B-A-L-M-N then O

If these chain is broken then there are chances of communication gap in

the organization . But sometimes following scalar change become a long
process and if some important information has to be passed it get
delete. So in case of emergency and urgent information fayol permitted
a shortcut in the chain which is called 'Gang plank'. Gang plank permits
direct communication between the employee working at the same level
of authority without following the scalar chain.

Positive effect

 systematic flow of information.

 no communication gap in the organization.

 quick information through gang plank.

Limitations/drawbacks
  there maybe communication gap.

 no clearity in authority, responsibility, relationship.

9. Principle of order

In this principle order doesn't mean command but it refers to orderly

arrangement of men and material that is a fixed place for everything
and everyone in the organisation. Fayol insist that their must be a fixed
place to keep every material and think used in the organisation and
fixed place or seat or cabin for every employee of the organisation. So
that no time and energy is wasted in such a any material or any person.

Positive effect

 smooth and systematic working in the organization.

 no wastage of time in search of man or material.

Limitations/drawbacks

 wastage of time and energy in search of man and material.

 not able to contact the people at the right time.

10 10. Principal of equity

Equity refers to kind, fair and just treatment to employees. Employees

will put their maximum efforts only when they are treated with kindness
and justice. If a manager is biased in dealing with Employees then
Employees will get dissatisfied and will not contribute to their maximum
capacity. Equity doesn't mean equal salary to a peon as superior but
equity means application of same disciplinary rule, leave rule in the
same way irrespective of their grade, position and gender.
 Positive effect

 Employees get satisfied.

 Motivate the employees and boost the moral( thinking capacity)of

employees towards organizations.

Limitations/drawbacks

 Dissatisfaction to employee.

 Increase in employees turnover.

11.Principle of stability in tenure of personal

It refers to no frequent termination and transfer. According to these

principle, management must provide the feeling of jo security among
the employees because with the feeling of job insecurities for the
employees can't contribute their maximum effort. Frequent turnover of
employees is bad for organization. Such decision must be taken when
they are almost unavoidable.

Positive effect

 Improves efficiency levels of management.

 No wastage of time and resources.

Limitation/drawbacks
  wastage of resource in learning new job.

 frustration and dis-satisfaction among employees.

 Spoil the image, reputation and Goodwill of organization.

12.Principle of initiative
11

Initiative refers to the power of thinking put plan and ensuring its
successful implementation. The manager should encourage or inspire
the confidence of his subordinate. So that they will show initiative.
Manager must welcome the idea and suggestions of employees before
framing the plans. Once decisions are taken by management then every
employee must follow it. Whether it is according to them or not.

Positive effect

 Develops feeling of belongingness in employees.

 Employees achieve the target on time, if they are set up with their
consultation.

Limitation/drawbacks

 Employees will not work to the best of their ability

 Demotivation among Employee .

13. Principle of e-spirit de corps

 E-spirit de corps means union is strength. Fayol emphasize on the team
work. He suggested that every employee in the organization must
consider him as a part or member of a team and try to achieve the team
goal because team contributions is always better and more than
individual contribution. Management must develop a feeling of
belongingness among the employees as they must feel themselves as a
member of organization or team and contribute maximum to achieve
goal.
Positive effect

 Develop team spirit.

 Improves performance.

Limitations/drawbacks

 Team goal may not achieved.

 No team spirit and more stress on individual.

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 CONCLUSION

Henry fayol’s principles have helped in systematising management . These

principles are very effective and their application will depend upon the persons
appling them . Fayol has clarified that since management is related to human
beings, there may not be sense of finality . It is the decision of the manager to
use these principles . He will decide the use with reguard to the situation and
need . The principles of fayols have an element of flexibility .
 BIBLIOGRAPHY

Business studies and management

Written by :-
R.K. Sharma
Shashi K. Gupta
Rahul Sharma

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