Fayol’s Theory of Management
Fayol wrote that all activities of business enterprises could be divided into six groups: technical, commercial, financial, accounting, security, and administrative or managerial. Fayol’s primary focus, of course, was -om this last managerial activity because he felt managerial skills had been the most neglected aspect of business operations. He defined -management in terms of five functions: planning,. organizing, commanding, coordinating and controlling. On the basis of his own experience in the field, Fayol set forth fourteen principles of management.
These are as follows——
- Division of work—Man acquires greater skill when he specializes in single operation. Division of work makes it possible to specialize in a single thing rather than doing everything by oneself. According to Fayol, the principle of division of work should be applied to all kinds of work-technical as well managerial.
- Authority and Responsibility—responsibility is closely related to authority and it arises wherever authority is exercised. An individual who is willing to exercise authority, must also be prepared to bear the responsibility to perform the work in the manner desired.
- Discipline—discipline is absolutely essential for the smooth running of business. By discipline we mean, obedience to authority, observance of the rules of service and norms of performance, respect for agreements, sincere efforts for completing the given job, respect for superiors; etc. The best means of maintaining discipline are (a) good Supervisors at all levels, (b) clear and (air agreements between the employees and the employer, and (c) Judicious application of penalties. In fact, discipline is what leaders make it.
- Unity of Command—This requires that each employee should give instructions about a particular work from one superior only. Fayol believed that if an employee was to report to more than one superior, he would be confused due to conflict in instructions, and also it would be difficult to pinpoint responsibility to him.
- Unity of Direction—Unity of direction means that efforts of all members of the organization should be directed towards the achievement of common goals. Without unity of direction, ‘ ‘unity of action, coordination of strength and focusing of effort’ ‘ cannot bé achieved.
- Subordination of individual interest to general interest—Interests of the group, be it a family or a business undertaking, should be accorded priority over the interests of its individual members. Due to ignorance, ambition, selfishness, laziness, weakness, or suchlike human passions general interests may sometimes be ignored in favor of individual interests. Whenever ‘tach a conflict appears, actions should immediately be taken to restore the supremacy of general interests.
- Remuneration—In Fayol’s. view, remuneration of employees should be fair and ought to afford satisfaction to both- employer and employees. Fair remuneration increases worker’s efficiency and morale and fosters good relations between them and the management.
- Centralization—If subordinates are given more role and importance in the management and organization of the firm, it is ‘decentralization but if they are given less role and importance it is centralization: To what extent a manager can centralize authority in his hands will depend on his intelligence, experience and decision-making ability.
- Scalar Chain—Fayol defines the scalar chain as the chain of superiors ranging from the ultimate authority to the lowest ranks. The general principle is that every communication should follow the prescribed route, i.e., the proper channel.
- Order—To put things in an order needs effort. Management should obtain?in orderliness in work through suitable organization of men and materials. The principle of “the right place for everything and for every man ” should be observed by the management.
- Equity—Equity means a combination of fairness, kindliness, and justice. It is the duty of the chief executive himself to ensure that managers at all levels apply equity in their dealings with their Subordinates.
- Stability of Tenure of personnel—In order to motivate workers to do more and better work, it is necessary that they should be assured the security of job by the management. Therefore, Fayol advocates stability of tenure for all,-particularly the managerial personnel. Frequent change of personnel should be avoided at all costs.
- Initiative—initiative is the power of thinking out a plan and ensuring its successful implementation. It stimulates human endeavor, adding to zeal and energy. In an organization, Initiative on the part of its employees can become a great source of strength to it.
- Esprit de Corps—This means team spirit. Since “Union is strength” the management should ‘create team spirit among the employees.