Henry Fayol didn’t know that his work (14 Principles of Management) would be recognised by the future management students. As of now, these marvellous principles are taught in CBSE Class 12th (Business Studies) particularly in the Commerce section.
Let’s read about each principle in a descriptive way with real-world examples.
Table of Contents
Henry Fayol’s 14 Principles of Management
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Division of Work
The Division of Work states that work should be divided into small tasks and each task should be assigned to a person who has appropriate skill and knowledge about it.
When people perform the same activity on a daily basis:
Their skills are upgraded
They can perform the work quickly
Real-world example:
A hospital will operate smoothly when a doctor checks patients, nurses provide medicines, and lab technicians perform tests.
Easy understanding:
If one person tries to do everything alone, work becomes slow and confusing.
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Authority and Responsibility
Authority means the power to give orders.
Responsibility means the duty to complete the work properly.
According to Fayol’s Authority and Responsibility principle, authority and responsibility should go together. In an organisation, a manager requires authority to make decisions to complete the work.
Real-world example:
A school principal is responsible for discipline in the school. So the principal must also have the authority to make rules and take action when needed.
Easy understanding:
Power and duty should be balanced.
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Discipline
Discipline is the utmost element that is required in every organisation. At the workplace level, it simply means:
Obeying rules
Following agreements
Behaving properly with everyone
According to Henry Fayol, discipline needs good leadership, clear agreements, and fair penalties when rules are broken.
Real-world example:
In a company, employees must come on time, complete work before deadlines, and follow office rules. If everyone behaves seriously, the company performs better.
Easy understanding:
Without discipline, no organisation can run properly.
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Unity of Command
Unity of Command means one employee should receive orders from only one boss at the workplace. If one worker receives instructions from multiple managers or bosses, then confusion starts and it will lead to a loss of productivity.
Real-world example:
A sales employee should report only to the sales manager. If the finance manager and sales manager both give different instructions, the employee will not know whom to follow.
Easy understanding:
One person, one boss.
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Unity of Direction
Another Henry Fayol management principle is Unity of Direction. This means all activities with the same objective should move under one plan and one head. Basically, it is about one common direction for a group..
Real-world example:
If a company sells both clothes and shoes, each product line can have its own department and plan. But all activities related to clothes should follow one single plan made by one department head.
Easy understanding:
People working for the same goal should follow the same plan.
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Subordination of Individual Interest to General Interest
While working in a company, employees can keep their goals/benefits above the organisation's objectives.
Therefore, Henry Fayol prepared a management principle (Subordination of Individual to General Interest) that clearly states that the interest/goals/objectives of the workplace are more important than employee’s.
Real-world example:
Suppose a manager wants to hire a relative even when a more deserving person is available. This may help the manager personally, but it harms the company. So personal interest should not come before company interest.
Easy understanding:
The company’s good is more important than one person’s benefit.
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Remuneration
Remuneration means fair payment to employees for their work. Fayol believed employees should receive fair wages, and at the same time the payment should be within the paying capacity of the organisation.
Real-world example:
If workers in a factory are paid properly and on time, they stay motivated and work honestly. But if salaries are too low or delayed, employees may feel unhappy and less productive.
Easy understanding:
Fair pay brings satisfaction and better work.
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Centralisation and Decentralisation
Centralisation means decision-making power stays at the top level. Decentralisation means decision-making power is shared with lower levels. According to this principle, there should be a proper balance between the two, depending on the situation.
Real-world example:
In a small shop, the owner may take all decisions alone. But in a big company with many branches, branch managers are often allowed to make local decisions quickly.
Easy understanding:
Some decisions can stay at the top, and some can be shared.
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Scalar Chain
Scalar Chain means the line of authority from top to bottom in an organisation. Communication should generally follow this line. In case of following a shorter route during an emergency, Fayol suggested to the gang plank to avoid delay.
Real-world example:
In a school, a student usually speaks to the class teacher, then the coordinator, and then the principal. This is the proper chain. But in an emergency, direct communication may be allowed.
Easy understanding:
There should be a clear chain of communication.
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Order
Order means everything and everyone should be in the right place at the right time. Fayol described this as proper arrangement of people and materials for efficiency.
Real-world example:
In a library, books are kept in fixed sections like Accountancy, Business Studies, and Science. Because of this order, students can easily find the book they need.
Easy understanding:
A place for everything, and everything in its place.
Learn about differences between Henry Fayol and F.W. Taylor by clicking here.
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Equity
Equity means managers should be equal to everyone if employees are doing the same work.
Generally, this principle allows fairness and respect in treatment.
Real-world example:
If two employees do the same work, both should be treated equally. A manager should not favour one person because of friendship, family connection, gender, religion, or background.
Easy understanding:
Treat everyone fairly.
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Stability of Personnel
This principle means employees should not be removed or changed too quickly. When there is high employee turnover in a company, it reduces efficiency and increases cost.
Real-world example:
If a school changes teachers every month, students suffer because they cannot adjust. But if teachers stay for a reasonable period, students learn better and the school becomes more stable.
Easy understanding:
Stable staff leads to stable performance.
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Initiative
Initiative means employees should be encouraged to think, suggest ideas, and take the first step for improvement. All these steps increase motivation and can help the organisation improve.
Real-world example:
A worker in a factory suggests a new packing method that saves time and reduces waste. If the company accepts such ideas, employees feel valued and become more creative.
Easy understanding:
Let people think and contribute new ideas.
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Esprit de Corps
Esprit de Corps means team spirit. Fayol said management should create unity, harmony, trust, and a feeling of togetherness among employees.
Real-world example:
A cricket team performs best when players support each other instead of fighting among themselves. The same happens in a business. A team with unity works better than a team filled with internal conflict.
Easy understanding:
Team spirit makes the organisation stronger.
Conclusion
Henry Fayol’s principles are still applied by worldwide companies to increase their productivity. Furthermore, these organisations can work in a disciplined, fair, and organised way.
Try to learn Henry Fayol’s 14 Principles of Management from the real-world, such as hospitals, schools, and offices to easily understand them.
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