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Organisation of Commerce and Management · Ch 1 — Principles of Management

Fayol's 14 Principles of Management

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Fayol's 14 Principles of Management

Henri Fayol, a French mining engineer and later a managing director, is widely regarded as the father of modern (administrative) management theory. Unlike Taylor, who studied the shop floor from the bottom up, Fayol observed management from the vantage point of top-level administration and set out fourteen general principles he believed applied to managing any organisation. These principles remain general guidelines, to be applied with judgement, not rigid laws.

#PrincipleOne-line explanation
1Division of WorkSplitting work into smaller, specialised tasks lets each person or department develop expertise and increases overall efficiency.
2Authority and ResponsibilityAuthority (the right to give orders) and responsibility (accountability for results) must always go hand in hand, in equal measure.
3DisciplineEmployees must obey and respect the rules of the organisation, and management in turn must be fair and set a good example, so that mutual discipline is maintained.
4Unity of CommandAn employee should receive orders from, and be accountable to, only one superior, to avoid confusion and conflicting instructions.
5Unity of DirectionAll activities aimed at the same objective should be grouped together under one plan and one head, so effort is not scattered in different directions.
6Subordination of Individual Interest to General InterestThe interest of the organisation as a whole must take priority over the personal interest of any one employee or group of employees.
7Remuneration of EmployeesWages paid to employees should be fair, reasonable and satisfactory to both the employees and the organisation, and should reward effort appropriately.
8Centralisation and DecentralisationThe degree to which decision-making authority is concentrated at the top (centralisation) or spread to lower levels (decentralisation) should suit the organisation's own size and circumstances, in proper balance.
9Scalar ChainThe formal line of authority runs, step by step, from the highest rank to the lowest, and this chain should normally be followed for official communication.
10OrderThere should be a fixed, well-defined place for every person and every material in the organisation, so that both people and materials can be located and used efficiently.
11EquityManagers should treat all employees with fairness, kindness and justice, without favouritism, so employees feel motivated to remain loyal and committed.
12Stability of Tenure of PersonnelEmployees should be given reasonable job security and time to prove themselves in a role, since excessive turnover wastes the time and money spent on training.
Definition 1Division of Work

Fayol's principle that splitting work into smaller, specialised tasks allows each worker or department to develop expertise, rais …

Definition 2Unity of Command

Fayol's principle that an employee should receive orders from, and be accountable to, only one superior, to avoid confusion and co …

Definition 3Scalar Chain

The formal, step-by-step line of authority running from the highest rank in an organisation to the lowest, which is normally followed fo …

Definition 4Esprit de Corps

Fayol's principle that management should actively build a genuine spirit of teamwork, harmony and unity among employees, since a united team achieves mor …