Principles of management:
Henry Fayol, a French industrialist is known as father of modern management theory. He gave fourteen principles of management six industrial activities and five functions of management.
Principle is a fundamental truth and establishes cause effect relationship. General principles are as follows.
- Division of Work: There should be division of work to take advantage of specialization. The organization should be set up in such a way that every individual should be assigned a duty according to his skill and qualification. The person should continue the same work to become expert in the work and increase efficiency.
- Authority and Responsibility: In order to discharge given duty or assigned responsibility there should be equality of authority and responsibility. The authority and responsibility are related to each other. Official authority is derived by manager’s position and personal authority is derived from personal qualities like intelligence experience moral worth etc.
- Discipline: All persons in organization should be in discipline. Discipline is obedience application and respect shown by the employees towards the agreement between them and organization. If agreement is fair and superiors are good more discipline can be achieved.
- Unity of command: Unity of command means that a person should get orders from only one superior. If an employee gets work from two or more superiors there would be more confusions and conflicts. Excuses for work not completed would increase.
- Unity of Direction: All the activities in the organization having same plan or objective should be grouped together. There should be one head and one plan for these activities.
- Subordination of Individual to General Interest: The interests of any one employee or group of employees should not take primacy over the interests of the organization as a whole, like personal goals should not conflict with the group or team you are working with.
- Remuneration: Remuneration of the employees should be fair and provide maximum satisfaction to them. Financial and non financial benefits should be given to employees.
- Centralisation: Centralisation refers to the degree to which subordinates are involved in decision making. Whether decision making is centralised (to management) or de-centralised (divided in subordinates), is a matter of proper proportion. The task is to find the optimum degree of centralisation for each situation.
- Scalar chain: The line of authority from top management to the lowest ranks represents the scalar chain. Communication should follow the sequence given by the chain. However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed.
- Order: Everything should be placed in a proper manner in organization whether it is human being, machinery or anything else. We can say that there should be place f or everything and everything in its place. Right person for right job and right place for materials.
- Equity: According to Fayol to secure loyalty and devotion there should be combination of kindness and justice. Everyone should be treated equally for example there should be no discrimination based on gender age and position in giving medical leave.
- Stability of Tenure: There should be no frequent changes in personnel in organization and stability should be aimed. Instability in tenure is cause and effect of bad management and leads to unnecessary turnover cost. Employee should be informed that for how many time he is hired for.
- Initiative: All employees should be encouraged to initiate within limits of authority and discipline. Initiative is thinking and execution of plan according to the situation. It increases zeal and energy on the part of employees.
- Esprit de Corps: This is principle of union is strength and extension of unity of command for establishing team work. The manager should encourage team spirit in workers.