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HENRI FAYOL’S 14 Principles of Management:


Henri Fayol (1841-1925)

A greater sense of practical realism can be seen in the work of Henri Fayol (1949) who outlined a series of 'principles of management' by which an organization might be effectively controlled.
Management Principles developed by Henri Fayol:
  1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.
  2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.
  3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.
  4. UNITY OF COMMAND: Workers should receive orders from only one manager.
  5. UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a common direction.
  6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person should not take priority over the interests of the organization as a whole.
  7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay.
  8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.
  9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.
  10. ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.
  11. EQUITY: All employees should be treated as equally as possible.
  12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.
  13. INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.
  14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among employees.

Functions of Management
The elements of management process are known as functions of management. However various authors have classified these differently. Henry Fayol classified the major functions of management into five:
  1. Planning
  2. Organizing
  3. Commanding
  4. Coordinating and
  5. Controlling
Luther Gullick has given the word ‘POSDCORB’ which stands for
  1. Planning (P)
  2. Organizing (O)
  3. Staffing (S)
  4. Directing (D)
  5. Controlling (CO)
  6. Reporting (R) and
  7. Budgeting(B)
Koontz and O’Donnell have suggested
  1. Planning
  2. Organizing
  3. Staffing
  4. Directing and
  5. Controlling
The important functions of management is explained below:
Planning:
  • The first function of the Manager is planning. It is also the foremost and the essential function. Planning equips the Manager mentally to meet his tasks.
  • To plan for the organization the Manager should first understand the culture and creed of the Organization, what it stands for what are its objectives.
  • The Manager should study the resources available within the organization, as also the strength and weakness of the Organization.
  • In the next phase the Manager should perceive the environment outside the organization and assess correctly the opportunities it provides and the challenges it poses.
  • Planning involves selecting missions and objectives and the actions to achieve them.
  • It also consists of policies, procedures, methods, budgets, strategy and programmes that are needed to achieve the goals set. Decision-making is the most important and integral part of planning
Organizing:
  • Organizing is the process of arranging and allocating work, authority, and resources among an organization’s members so that they can achieve the organization’s goals.
  • Organizing is to give a proper shape to the structure that should execute the plan smoothly to achieve its success.
  • It is the function of grouping together different parts forming an enterprise to carry out defined operations.
  • Various activities to fulfill the goals have to be grouped and these are to be assigned to people in-groups or departments.
  • The authority, responsibility, accountability needed at each level to execute the plan is to be defined and delegated.
Staffing:
  • The staffing function involves identifying/selecting the right person for executing each task planned.
  • The staffing function includes all the jobs connected with recruitment, selection, training, placement, remuneration appraisal, promotion, career planning of the human resources in the organization to accomplish the task effectively and efficiently
Directing:
  • It is the duty of the Manager to guide his subordinates by training coaching, instructing and indicating what to do, when to do and how to do.
  • Thereafter closely monitor the team at work to ensure high standard and efficiency.
  • Function of Directing embraces the following activities:
  1. orders and instructions
  2. supervising (overseeing) people at work
  3. motivation, i.e. creating the willingness to work for certain objectives,
  4. communication, i.e. establishing understanding with employees regarding plans and their implementation, and
  5. leadership or influencing the behavior of employees
Controlling:
  • Controlling is the process of ensuring that actual activities conform to the planned activities
  • The process of controlling involves the following steps:
  1. establishing standards for measuring work performance
  2. measurement of actual performance and comparing it with the standards
  3. finding variances between the two and see the reasons therefore
  4. taking corrective action for rectifying deviations so as to ensure attainment of objectives
  5. It helps the manager to keep the organization on track



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