Everything you need to know about the principles of management by Henry Fayol. A number of principles of management have been developed to aid managers in performing their function well.

A management principle is a statement of a general truth about organization or management. These act as a guiding rule of laws for managerial action. It establishes a cause and effect relationship between two or more variables.

Today, there is a very lengthy list of management principles and it is not possible to give an exhaustive of these principles.

Fayol suggested fourteen principles of management which he found most frequently to apply in his work. He, however, recognised that there was no limit to the number of principles of management and the principles laid down by him were flexible and capable of adaptation to every need.


The fourteen principles of management given by Henry Fayol are:-

1. Division of Work 2. Authority and Responsibility 3. Discipline 4. Unity of Command 5. Unity of Management 6. Suitable and Adequate Remuneration of Personnel 7. Centralisation 8. Sub-Ordination of the Individual Interest 9. Chain of Communication 10. Execution of Orders 11. Equal Treatment 12. Stability of Personnel 13. Initiative 14. Espirit de Corps.

Henry Fayol’s 14 Prnciples of Management

Principles of Management by Henry Fayol – 14 Principles of Management

Fayol was of this view that any effective management should be based on the following fourteen principles:

(1) Division of Work:


Division of work should be according to work, department, job etc., is one of the most important contributions of Henri Fayol to modern management. He advocated division of work at every stage and in every sphere. Even minutest division he advocated. With division of work he thought that unit production would increase. This would help the enterprise to grow and prosper.

(2) Authority and Responsibility:

In any management process, delegation of power, utilisation of authority and fixation of responsibility are the key to success. The manager has to get the work done. He should be adequately authorised for the purpose. Similarly, the manager should be made answerable to a proper authority.

A provision for adequate reward and suitable punishment is the essence of a good management which should be properly looked into. Rules should be framed taking into various aspects of enterprise and problems of management into full consideration. Every minutest-detail should be debated, checked and finalised.


(3) Discipline:

Discipline is the very core of administration. Discipline comes from within but for indiscipline the administration is always held responsible. Both the analogies have to be reconciled. Administration imposes discipline. Imposition of discipline does not augur well but if it is not coming from within the administration it is not left with any alternative but to impose it and then it is made responsible to see that discipline so imposed is strictly abided.

A thoughtful management may help the enterprise in having a disciplined working force whereas a rash and slack management may force the pace of indiscipline culminating into lower productivity, lesser turnover, lesser margin of profit and all-round chaos.

(4) Unity of Command:


The command should be well-planned and thought out. It must come from one source. Multiplicity of command is responsible for indiscipline and chaos while unity of command provides responsible leadership, better guidance and direction, good co-ordination and disciplined performance.

(5) Unity of Management:

All activities of the same nature aimed at achieving one and the same objectives should be kept under one command and under the same management. This ensures better planning, direction and co-ordination leading to a successful culmination of the operation.

(6) Suitable and Adequate Remuneration of Personnel:


Personnel working for the enterprise should suitably and adequately be rewarded so that their interest in the work and in the enterprise may be sustained. A wage policy based on different types of incentives helps the management in getting utmost co­operation from its workers.

(7) Centralisation:

The decision for centralised or decentralised form of organisation depends on the interest of the organisation, purpose, worker’s participation policy, human relations and nature and size of work to be accomplished. The decision would naturally vary from one organisation to another.

(8) Sub-Ordination of the Individual Interest:


“Sub-ordination of the Individual Interest to the Common Good” – is a slogan which catches eyes and goes deep into the mind. A successful manager is he who keeps his organisation and workers before his own self. Individual interest should yield place to group interest. This leads to a common good. This principle is important and is a major contribution of a thinker who was better equipped to put certain things before the world by way of managerial generalisation.

(9) Chain of Communication:

A decision on line authority is the first action of any management. Thereafter an oganisation chart is prepared of better communication and effective co-ordination. Communication gap is always dangerous. This should be guarded against with the help of an organisation chart. The chart should be able to avoid any communication gap with the line of authority.

(10) Execution of Orders:


“A place for everything and everything in its place” is a best norm for material management. The same holds good for ‘men’ management also, that is, ‘a place for every one and everyone in his place’.

This is a pre-condition for successful execution of orders received from the top. Orders are meant for honest execution. Only right person at right place realizes the meaning and importance of an order and its execution at proper time and proper manner.

(11) Equal Treatment:

Good sense, sound experience and sweet nature establish a combination of kindness and justice in managerial skill. Unbiased, meaningful and equal treatment should be the motto of a management in its relations with workers. The management should realise that the workers are the real masters of the whole show which the organisation has planned out before.

(12) Stability of Personnel:

Job security is the prime consideration for any-worker and if he feels that his job is secured and he is not going to be disturbed, then, he would do his best. He works for his organisation which can hope for better results if stability of personnel is ensured. A worthwhile service can be expected from a worker who feels that his tenure is stable.


(13) Initiative:

Initiative is freedom to think, to plan and to execute. At all levels of organisation workers have zeal, energy and capacity to do his best even if the direction is not proper, guidance is not up to the mark and leadership is poor. A manager, capable of taking advantage of such zealous and enthusiastic workers, can achieve tremendous success. But in most of the cases managerial personnel do not come up to the expectation.

They fail and their workers also fail in the work. What is required is that the workers should be allowed to take initiative, of course, under watchful eyes. Initiative brings self-confidence in a worker which if definitely required for better results.

(14) Espirit de Corps (Team Spirit):

For any successful operation team spirit is a must. Harmony and Union of thought among personnel of call categories and in every group collectively and separately encourage team spirit. Management should, never adhere to the principle of divide and rule’ instead it should believe in the principle of ‘Union is Strength’.

The management should also act in the same spirit. Team work is obviously a blessing to any organisation, which, of course, is difficult to achieve, but if it comes, it naturally brings with it collective wisdom and prosperity to the organisation.

Principles of Management by Henry Fayol – With Importance

A principle of management is simply something seen as fundamental. Some principles prescribe certain actions or conditions, e.g., the unity of command stating that a person should report or account to only one person (boss). Some principles describe or define some concepts or conditions, e.g., the principle of efficiency or centralisation.


In 1916 H. Fayol, a French industrialist, in his famous book, ‘General and Industrial Management’, described a num­ber of management organisation principles. These principles constitute the theory of management or administration of business, enterprises.

They are enumerated below:

1. Division of Work:

Division of work or specialisation alone can give maximum productivity and efficiency. Factory system of production and our machinery of distribution are based on (division of work. In fact, expansion of the market is limited by division of labour. Both technical and managerial activities can be performed in the best manner only through division of labour and specialisation.

2. Authority and Responsibility:


The right to give orders, the right to command, is called authority. The obligation to accomplish objectives or expected results or performance is called responsibility. Please note that authority and responsi­bility are the two sides of the management coin. They exist together. They are complementary and mutually inter-dependent. Acceptance of authority implies acceptance of responsi­bility for the performance of assigned work.

3. Discipline:

The objectives, rules and regulations, the policies and procedures must be honoured by each member of an organisation. Discipline demands good superiors at all levels of management. There must be clear and fair agreement on the rules and objectives, on the policies and procedures. There must be penalties and fines (punishment) for non-obedience or indiscipline. No organisation can work smoothly without discipline—preferably voluntary or self-discipline.

4. Unity of Command:

In order to avoid any possible confusion and conflict, each member of an organisation must receive orders and instructions only from one superior or boss and he|she must be accountable to one boss. We should not have multiple bosses, as it will lead to divided responsibility.

5. Unity of Direction:


All members of an organisation must work together to accomplish common or same objec­tives. Their efforts shall be directed towards one common super-goal.

6. Emphasis on Subordination of Personal Interest to Ge­neral or Common Interest:

This is also called principle of co­operation. Each shall work for all and all for each. General or common interest must be supreme in any joint enterprise. The organisation will collapse when personal interest becomes supreme and general interest is sacrificed.

7. Remuneration:

Fair pay with non-financial rewards can act as the best incentive or motivator for good performance. Exploitation of employees in any manner must be eliminated. Sound scheme of remuneration includes adequate financial and non-financial incentives.

8. Centralisation:


There must be a good balance between centralisation and decentralisation of authority and power. Extreme centralisation and decentralisation must be avoided.

9. Scalar Chain:

The unity of command brings about a chain or hierarchy of command linking all members of the organisation from the top to the bottom. Scalar denotes steps.

10. Order:

Fayol suggested that there is a place for every­thing and everyone which ought to be so occupied. Order or system alone can create a sound organisation and efficient management. Disorder leads to chaos and confusion.

11. Equity:

An organisation consists of human beings, a group of people involved in joint effort. Hence equality, i.e., jus­tice and kindliness must be there based on predetermined cus­tom or convention. Without equity, we cannot have sustained and adequate joint collaboration.

12. Stability of Tenure:

A person needs time to adjust himself with the new work and demonstrate efficiency in due course. Hence, employees and managers must have job security. Security of income and employment is a prerequisite of sound organisation and management.

13. Spirit of Co-operation:

Esprit de corps is the founda­tion of a sound organisation. Union is strength. But unity de­mands co-operation. Pride, loyalty, and sense of belonging are responsible for best performance.

14. Initiative:

Creative thinking and capacity to take ini­tiative can give us sound managerial planning and execution of predetermined plans. Creativity springs from curiosity and imagination. If you are imaginative, you are bound to be curious. Curiosity, imagination go together like bacon and eggs.

Importance of Principles of Management:

The principles of management provide insights to managerial behaviour and influence managerial practices. The management theorists or gurus have been continuously analysing all managerial activities and their results to frame principles, which can be used by managers under repetitive or similar circumstances. Thus, we can say that management principles enable managers to fulfill their tasks and responsibilities most effectively and efficiently.

Let us discussed the importance of principles of management:

(i) Provides Managers with Useful Insights into Reality:

Principles of management provide guidelines to solve similar problems. The principles provide knowledge and better understanding of circumstances and improve the ability of managers to handle similar situations. This increases managerial efficiency while solving recurring problems.

Example – Principles of management suggest that an enterprise can achieve maximum productivity if its work force is well motivated. A sales manager may fix targets and incentives so that sales executives feel motivated to increase sales turnover.

(ii) Optimum Utilisation of Resources and Effective Administration:

The cause and effect relationship provided by principles of management enables managers to foresee the effect of their decisions and actions. This helps them to use the limited human and physical resources optimally, minimizing the wastage and maximizing the benefits.

For effective administration it is a must that managers’ decisions are free from personal prejudices and biases. The principles of management provide broad guidelines or limits of managerial discretions, this enables managers to decide for the organisation rather than personal preferences.

Example – The managers cannot decide salaries or incentives for individuals as per their wish. They need to follow company policy and rules, evaluate each employee’s performance and contribution towards organisational goals.

(iii) Facilitates Scientific Decisions:

The scientific characteristic of management has resulted in framing the principles of management on the basis of experiments, observations and logic. The managerial decisions guided by principles of management are realistic, timely and based on objective assessment of the situation.

Example – Launch of a new product in the market is not by chance. In fact, it is backed by proper market research which may involve gathering information about the similar products available, competitors’ selling strategies, consumers’ expectations etc.

(iv) Meeting Changing Environment Requirements:

The flexible nature of principles of management provides opportunities to managers to modify principles to meet the needs of dynamic business environment.

In earlier times business enterprises used specialization within the organisation but today organisations are specializing in specific activities giving birth to BPOs (Business outsourcing process) and KPOs( Knowledge process outsourcing). For example, there are organisations who provide security services to other organisations.

(v) Fulfilling Social Responsibility:

In order to fulfill social responsibilities, management principles and theories have evolved to include values. Providing equal opportunities, following environment-friendly production techniques, producing good quality products are few examples of social values a business includes in its organisational objectives.


(i) Business enterprises like HCL has taken social responsibility of providing education facilities to society,

(ii) Each steel plant of SAIL has developed townships, established schools and hospitals for their employees.

(vi) Management Training, Education and Research:

The management has become a profession, which requires a professional degree from management institutes. The principles of management and the managerial experiences are used to create curriculum for teaching management as a discipline. The various case studies from real time businesses are used to not only teach and explain the principles of management to students but are also used by management gurus for their research and development of newer management techniques. Operation Research, Cost accounting, ‘Just in time’, ‘Kanban, ‘Kaizen’ are few examples of the newer management techniques developed as a result of research on existing principles of management.

Example – The working style of ‘Mumbai Dabawalas’ has become a part of various MBA programmes in India and abroad to discuss their efficiency with perfect time management.

Principles of Management by Henry Fayol – With Explanation

1. Division of Work:

Fayol was of the opinion that division of work would help in taking the advantage of specialisation. According to him, “specialisation belongs to natural order. The worker who always works on the same part, the manager concerned always with the same matters, acquire an ability, sureness and accuracy which increases their output. Each change of work brings in its training and adaptation which reduces output. Yet division of work has its limits, which experience and a sense of proportion teach us, may not be exceeded.”

2. Authority and Responsibility:

Fayol concluded that authority and responsibility were related and responsibility was the corollary of authority and arising from it. He said that authority was a continuation of official and personal factors.

Authority can be official or personal. Personal authority stems from personal qualities like intelligence, skills, education, experience, worth etc. whereas official authority was a result of the position held. Responsibility arises out of activities undertaken. Fayol emphasised on the parity between authority and responsibility to get the work done properly as in his opinion one was useless without the other.

3. Discipline:

Discipline is obedience, application, energy, behaviour, and outward mark of respect shown by employees.

Fayol believed that it is important for all people working in an organisation to be disciplined. Two types of discipline were analysed by him.

They were:

i. Self-imposed discipline which springs from within and is in the nature of spontaneous response to a skillful leader.

ii. Command discipline which arises out of a recognised authority and utilises deterrents to secure compliance with a desired action, which is expressed by established customs, rules and regulations.

Command discipline can be obtained by sanctions in the form of remuneration, warnings, suspension, demotion, dismissal etc. However, such sanctions should not be implemented without considering all the implications there of.

4. Unity of Command:

Unity of command implies that a person should get orders and instructions from only one superior. Fayol has considered unity of command as an important aspect in managing an organisation.

He says that “should it (unity of command) be violated, authority is undermined, discipline is in jeopardy, order disturbed and stability threatened. This rule seems fundamental to me and so I have put it to the rank of a principle.”

He felt that the more completely an individual has a reporting relationship to a single superior, the less is the problem of conflict in instructions and the greater is the feeling of personal responsibility for results.

5. Unity of Direction:

This principle states that each group of activities with the same objective must have one head and one plan. This principle is different from the principle of unity of command in that it is concerned with functioning of the organisation in respect of its grouping of activities or planning while unity of command is concerned in the personnel at all levels in the organisation in terms of reporting relationship. Unity of direction helps in better coordination of various activities to be undertaken by an enterprise.

6. Subordination of Individual to General Interest:

This principle says that common interest is above the individual interest. It clearly says that in case of any conflict between individual and common interest, the former shall be subordinate to the latter.

This said, it is also important to note that factors like ambition, laziness, weakness etc. tend to reduce the importance of general interest. To avoid any such situation, the leader or superior must set precedences of fairness and goodness along with constant vigilance and supervision.

7. Remuneration of Personnel:

Remuneration of employees should be fair in order to provide maximum satisfaction to employees and employers. The employee? Should get proper remunerations for the work performed by them and they should not feel that they are being cheated or harassed by the organization as employees.

Similarly an employer should also not have a feeling that he is paying more then what the employees have done for the organization. If possible the organization should also provide non-financial benefits to the employees.

8. Centralization:

In this principle Fayol has suggested that concentration of authority should be at the top management. Simply said, whatever increases the importance of subordinates is decentralization and whatever reduces the importance of subordinates is centralization.

There is no hard and fast rule of deciding what amount of authority should be retained or distributed among the subordinates. It should be decided on the basis of requirements of the organization. This is basically the matter of proportion which should be decided, and it is always preferable that major issues and decision making authority should remain with the top management.

9. Scalar Chain:

Scalar chain refers to the chain of authorities ranging from top management to the lower level management. It also clarifies the flow of communications (all types-upward communications, downward communication & horizontal communication). As discussed above there is an unbroken line of command ranging from top to lower level.

This chain can be broken in special circumstances in order to entertain the quickest action and communication. For this a gang plank (direct contact) may be created supporting the line of authority. This can be illustrated by the diagram below where we have 1, 2, 3, 4, 5, Z, A, B, C, D, E positions.

If 3 wants to communicate with C then the communication will flow from 3 to Z then from E to D, to C. In order to remove the delay we can have a gang plank created to have a direct communication between 3 and C.

This is indicated by the dotted line in the figure given below:

10. Order:

This is concerned with the arrangement of human and material resources. This is very important to have smooth functioning in the organization.

This is of two types:

a. Material Order:

It is concerned with materialistic things which implies that “a place for everything and everything in its right place”. Eg. Office in the office place, vehicles in the parking, raw materials in the store room, files in the cupboards, machinery in the production hall etc.

b. Social Order:

It is concerned with the human resources in the organization. It implies that “a place for everyone and everyone in his appointed place.” This is important for achieving the organizational objective of placing the right person at the right job. E.g. manager at the managers post and worker at workers post for goal of execution of the duties assigned by the managers.

11. Equity:

In order to create a healthy environment in the organization, management should treat the employees with kindness and justice i.e. every employee, specially of the some profile should be treated equally. This helps in developing loyalty in the employees for the organization. There should be no nepotism and favouritism in the organization.

12. Stability of Tenure:

In order to achieve the organizational goals, stability of tenure is very much required. There should be a reasonable security of service among the employees because stability leads to enhanced loyalty and attachment on the part of the employees for the organization.

Recruitment of new employees includes cost of recruitment, selection, training and development or we can say that new employees are liabilities for the organizations which after certain investments get converted into assets for the organization. So a stability of tenure is recommended to decrease the employees turnover ratio for the benefit of the organization.

13. Initiation:

Organizational goals can only be achieved if all the employees of the organization take initiative to work more and more without being asked to do so. They should ta the initiative to work themselves. For this kind of thinking employees are required to be motivated in such a way that they start working willingly. It helps to coordinate the efforts of individuals in a more positive manner.

14. Espirit De Corps:

This means unity is strength. It is the duty of the supervisor to encourage the concept of espirit de corps among the subordinates. If there is unity at the individual level it will result in the unity at the group level, which will result in unity at department level and finally it leads to unity at organizational level. When there is unity at the organizational level it will result in coordinated efforts which help in achieving the organizational goals more easily and effectively.

Principles of Management by Henry Fayol

Henri Fayol (1841-1925) was a French Mechanical engineer who gave 14 general principles of Management which are as under:

1. Division of work- According to this principle, the work is divided into small tasks / jobs and each one is done by a trained specialist which leads to greater efficiency.

2. Authority and responsibility- Managers are empowered with authority to give orders and obtain obedience and responsible for the accomplishment of task for which they are granted authority. Fayol suggested that there should be a proper balance between authority and responsibility granted to the manager.

3. Discipline- Discipline means the obedience to organizational rules and employment agreement which are necessary for the smooth functioning of the organization.

4. Unity of command- This principle states that at a time an employee should receive orders from one superior (boss) only. If an employee gets orders from two superiors at the same time the principle of unity of command is violated.

5. Unity of direction- According to this principle the efforts of all the members of organization should be directed towards the common goals. This principle, when applied properly, ensures unity of action and coordination.

6. Subordination of individual interest to general interest- According to this principle the Interest of an organization should take priority over the interests of any one individual employee.

7. Remuneration of employees – Fayol suggested that the overall pay and compensation should be fair to both employees and the organization.

8. Centralization and decentralization- The concentration of decision making authority is called centralization whereas its dispersal among more people is known as decentralization. Fayol seeks a balance between the two in an organisation.

9. Scalar chain- The formal line of authority between superiors and subordinates from the highest to the lowest ranks is known as scalar chain. This chain should not be violated but in emergency employees at the same levels can contact through Gang Plank.

10. Order- According to Fayol, Order means “a place for everything (everyone) and everything (everyone) in its place”. People & materials in an organization should be placed and arranged properly to avoid wastage of time and to attain maximum efficiency.

11. Equity- This principle states that the working environment of any organization should be free from all forms of discriminations and the principles of Justice and fair play should be followed.

12. Stability of tenure of personnel- According to this principle, the employee selected and appointed after due and rigorous procedure should be kept at the post for a minimum period decided to show result. Frequent changes of personnel may not be good for the organization.

13. Initiative- Fayol states that the workers should be encouraged to develop and carry out their plans for improvements. Initiative means taking the first step with self-motivation.

14. Espirit De Corps- This principle states that the management should promote team spirit, unity and harmony among employees. It is based on the concept that team contributes more than individuals. Management should promote a team work.

Principles of Management by Henry Fayol

1. Division of work – Specialization allows the individual to build up experience, and to continuously improve his skills. Thereby, he can be more productive.

2. Authority – The right to issue commands, along with which comes responsibility for its function.

3. Discipline – Employees must obey, but this is two-sided: employees will only obey orders if management play their part by providing good leadership.

4. Unity of command – Each worker should have only one boss with no other conflicting lines of command.

5. Unity of direction – People engaged in the same kind of activities must have the same objectives in a single plan. This is essential to ensure unity and coordination in the enterprise.

6. Subordination of individual interest (to the general interest) – Management must see that the goals of the firms are always paramount.

7. Remuneration – Payment is an important motivator.

8. Centralization (or Decentralization) – This is a matter of degree depending on the condition of the business and the quality of its personnel.

9. Scalar chain (Line of Authority) – A hierarchy is necessary for unity of direction. But lateral communication is also fundamental, as long as superiors know that such communication is taking place. Scalar chain refers to the number of levels in the hierarchy from the ultimate authority to the lowest level in the organisation. It should not be overstretched and consist of too many levels.

10. Order – Both material order and social order are necessary. The former minimizes lost time and useless handling of materials. The latter is achieved through organisation and selection.

11. Equity – In running a business a ‘combination of kindliness and justice’ is needed. Treating employees well is important to achieve equity.

12. Stability of tenure of personnel – Employees work better if job security and career progress are assured to them. An insecure tenure and a high rate of employee turnover will affect the organisation adversely.

13. Initiative – Allowing all personnel to show their initiative in some way is a source of strength for the organisation.

14. Esprit de corps – This is the principle that in union there is strength. Management must foster the morale of its employees. He further suggests that – “real talent is needed to coordinate effort, encourage keenness, use each person’s abilities, and reward each one’s merit without arousing possible jealousies and disturbing harmonious relations.”

The principles that Fayol and Weber set forth still provide a clear and appropriate set of guidelines that managers can use to create a work setting that makes efficient and effective use of organisational resources. These principles remain the backbone of modern management theory; recent researchers have refined or developed them to suit modern conditions.

For example, Weber’s and Fayol’s concerns for equity and for establishing appropriate links between performance and reward are central themes in contemporary theories of motivation and leadership.

Principles of Management by Henry Fayol

Following are the principles of management as given by Fayol:

1. Division of Labor:

The efficiency of individual employees can be increased with the help of specialization provided by division of labor. Fayol recommended that work of all kinds must be sub-divided and then allocated separately to a number of various workers. Sub-division makes each task simpler and results in greater efficiency. By repeating a small part of work, the individual acquires speed and accuracy in performance. This principle is applicable to both technical as well as managerial work.

2. Parity of Authority and Responsibility:

The right of a superior to give orders to subordinates, take decision on specific matters, use resources of the organisation and guide and regulate the behavior of subordinates is called as its authority. On the other hand, responsibility includes obligation with respect to the performance of functions and achieving goals in a satisfactory manner.

The principles of parity also suggest a relation between authority and responsibility. Giving authority without corresponding responsibility can lead to arbitrary and unmindful use of authority. Similarly, if a person is given some responsibility he must also be given adequate authority. Lack of necessary authority will make the individual ineffective.

3. Discipline:

Discipline is required not only on the part of workers but also on the part of management. Discipline in the sense of management means obedience, proper conduct in relations to others and complying with the rules and regulations of the organisations. Smooth running of business requires discipline. Rules should be clear and penalties should be imposed without any discrimination.

4. Unity of Command:

According to this principle, a subordinate should receive orders and be answerable to only one superior. This would lead to avoidance of confusion regarding work and conflict among superiors. Therefore, no employee should receive orders from two superiors at the same time.

5. Unity of Direction:

This principle seeks to ensure “unity of action, coordination of strength and focusing of effort”. According to this principle the efforts of all the members of the organisation should be directed towards common goals. For this purpose there should be one head and one plan for a group of activities having the same objectives.

For example, the production department should have single plan and ail must work to achieve specified goals in terms of quantity and quality of good to he produced. Thus, the principle of unity of direction emphasizes the importance of common goals being followed by all in a group activity under the direction of one head. The principle of unity of command refers to the need for each subordinate being accountable to one and only one superior.

6. Subordination of Individual’s Interest to General Interest:

What is in the interest of the organisation as a whole must take dominance over the interest of individuals. Generally, the effort should be made to bring about convergence of general and individual interest. But in case of conflict, individuals must sacrifice in the larger interest.

7. Fair Remuneration to Employees:

As per the Fayol’s viewpoint, salary of employees should be fair and reasonable. To be fair to the employees, wages should be determined on the basis of work assigned, cost of living and financial position of the business and average wage rates for similar work in the industry. Wages may be fixed according to the work done; there should be a provision for allowances based on changes in cost of living.

8. Centralization and Decentralization:

Centralization exists if top management retains most of the decision-making authority. Sharing authority downwards leads to decentralization. Fayol says that an organisation should try hard to achieve a balance between complete centralization and decentralization. In small organisations, where the range of activities is generally small, greater centralisation is possible. But in large organisations, the degree of centralisation should be less.

9. Scalar Chain:

Scalar chain refers to the chain of superiors from the top ranking manager to the lowest levels, which determines the line of authority in the organisation. It also acts as a chain of command as well as chain of communication for the organisation, as all orders and instructions flow from the top level through this chain to reach the lower levels.

The scalar chain also works like a chain of communication because all communications, written or oral, are required to flow through the chain in the hierarchy. If a supervisor writes a report for the head of the department, the report must be communicated by the supervisor to his immediate superior, who in turn will pass it on to his superior, and so on, up to the head.

10. Order:

This is a principle relating to the arrangement of things and people. In material order, there should be a place for everything and everything should be placed properly. Similarly, in social order, there should be right man in the right place. This kind of order demands precise knowledge of the human requirements and resources of the organisation and a fixed balance between these requirements and resources.

11. Equity:

Equity suggests that similar treatment is assured to people in similar positions. For example, workers performing similar type of jobs should be paid the same wage rate. The equity principle implies that managers should be fair and impartial while dealing with their subordinate. They should not give undue favours to some and neglect others. They should not show any discrimination in judging the performance and conduct of employees of the same category.

12. Esprit de Corps:

It refers to team spirit i.e. harmony in work group and mutual understanding among workers. Managers must take steps to develop a sense of belongingness among the members of a work group. If there is team spirit, everyone comes forward to help others. It helps to develop an atmosphere of mutual trust and understanding.

13. Initiative:

Employees at all levels should be allowed to take initiative in work related matters. Initiative means eagerness to initiate action without being asked to do so. However, it does not imply freedom to do whatever people like. They must observe discipline.

14. Stability of Tenure:

Fayol emphasized that employees should not be moved from their position frequently. The period of service in a position should be fixed. It often takes time to get used to work. An employee cannot render useful service if he is removed before he gets accustomed to the work assigned to him.

Principles of Management by Henry Fayol – Based on his Experience in the Mining Company

Henry Fayol has set forth the principles of management on the basis of his own experience in the mining company:

1. Division of Work:

Division of work makes a man a specialist. The reason is that division of work helps to specialise in an activity which increases the output with perfection. Besides, it avoids waste of time. According to Henry Fayol, division of work is applied to both technical and managerial kinds of work.

2. Authority and Responsibility:

Management is getting things done by others. A superior gives direction to his sub-ordinates to perform the job. Then the super-visor may exercise his authority. The post he holds invests him with this authority. Authority is closely connected with responsibility. Responsibility is shouldered whenever authority is exercised. Responsibility is essential to perform a job correctly.

3. Discipline:

According to Koontz and O’Donnell, “Discipline is the respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect.” According to Henry Fayol, “Discipline is essential in all levels of management people. Discipline is obtained through judicial application of penalties.”

4. Unity of Command:

A subordinate has only one superior. If not so, the sub-ordinate does not perform any job perfectly. In other words, each subordinate is responsible to only one superior.

5. Unity of Direction:

The business activities are grouped on anyone of the bases, normally on functional basis. The activities of a group are assigned to a person who is said to be a manager. This manager is expected to look after all the activities of a particular group.

6. Subordination of Individual Interest to Group Interest:

An individual has his own interest. At the same time, the organisation has its own interest. Here, the interest of an organisation is termed as group interest. Henry Fayol expected the reconciliation of the individual interest with group interest. In no way, the individual interest should dominate the group interest.

7. Remuneration of Personnel:

According to Henry Fayol, employees should be given fair and reliable remuneration. The employees should get satisfaction out of their wages. The wages are determined on the basis of the work done by the employee and the wages payable are similar to those of other companies. Besides, the payment of wages should be made without any delay.

8. Centralization:

Everything increases the importance of superior’s role in centralization, while everything decreases the importance of superior’s role in decentralization. In small firms, authority is centralized. In large firms, authority is decentralized. But, the centralization or decentralization of authority depends upon the personal character of the superior, his morality, reliability of resourcefulness and the like.

9. Scalar Chain:

According to Henry Fayol, “Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks.” The communication flows from top to bottom. For example, A is the superior and has three subordinates in the order B, C and D. If A wants to communicate anything to D, it should be passed via B and C. Likewise, If D wants to communicate anything to A, it should be passed via C and B. This is called scalar chain.

10. Order:

The principle of right place for everything and for everyone should be followed by the management. It is applied to both material and men. The material should be kept in order in the place where it is necessary. The personnel are selected scientifically and assigned duties according to their qualifications and ability.

11. Equity:

Equity refers to a combination of fairness, kindness and justice. All the employees of the organisation are treated equally by the managers. The application of equity requires goodness and experience of managers. Besides, it requires loyalty and devotion from subordinates.

12. Stability of Tenure of Personnel:

The security of job is an essential one. Insecurity of job results in the higher labour turnover. It increases the administration expenses. Unless and otherwise an employee has committed a mistake, no employee should be removed from service. The development of any organisation depends solely on the sincerity of labourers.

13. Initiative:

A manager should have the conceiving and executing initiative. It will have psychological effect over the subordinates. The subordinates are free to express their views or opinions in the execution of the work. Henry Fayol suggests that managers can take decisions after getting suggestions from the subordinates. Initiative is the keenest satisfaction of an intelligent man with experience.

14. Esprit De Corps:

This means union is strength or team spirit. All the employees of the organisation are put together as a team in order to achieve the objectives of the organisation. If there is any misunderstanding or difference of opinions or distrust on other employees, the management should take corrective steps to remove them. The management should not follow the policy of divide and rule.

Principles of Management by Henry Fayol

Fayol suggested fourteen principles of management which he found most frequently to apply in his work. He, however, recognised that there was no limit to the number of principles of management and the principles laid down by him were flexible and capable of adaptation to every need.

The principles are discussed below:

1. Division of Work:

It refers to the division of work among various individuals in the organisation to bring about specialisation in every activity. Fayol observed that specialisation belongs to the natural order. It tends to increase efficiency. It helps to avoid waste of time and effort caused by changes from one work to another.

But when carried too far, it leads to loss of skill and craftsmanship of the employee, and makes the job monotonous and less interesting. Since division of work makes the job less satisfying, management practice of today gives serious thought to the possibility of job enlargement as a tool of job satisfaction.

2. Authority and Responsibility:

Authority denotes the right or power to give orders to the subordinates. Responsibility means the duty which the subordinate is expected to perform by virtue of his position in the organisation. Responsibility must be expressed either in terms of functions or in terms of objectives. When a subordinate is asked to control the working of a machine, the responsibility is in terms of function and when a subordinate is asked to produce a number of units of a product, the responsibility is created in terms of objectives.

3. Discipline:

Discipline means getting obedience to rules and regulations of the organisation. According to Fayol, discipline is obedience application, energy and outward marks of respect. Discipline is necessary for the smooth running of the organisation. Maintenance of discipline in the organisation depends upon the quality of leadership, clear and fair agreements and a judicious application of rules.

According to Fayol, discipline can best be maintained by – (i) having good superiors at all levels; (ii) entering into agreements either with the individual employees or with the union, as the case may be, that are as clear and fair as possible; (iii) ensuring that penalties are judiciously imposed.

4. Unity of Command:

This principle emphasises that a subordinate should receive orders from one superior only. If he receives orders from more than one superior, he will not be able to carry out the orders in a proper manner. Fayol observed that if this principle is violated, authority will be undermined, discipline will be in a jeopardy, order will be disturbed and stability will be threatened. Dual command is a permanent source of conflict. Therefore, in every organisation, each subordinate should have one superior whose command he has to obey.

By observing the principle of unity of command, the following benefits may he achieved:

(i) It helps clarify authority-responsibility relationships in the organisation.

(ii) There will be no possibility of the subordinate receiving conflicting orders.

(iii) The organisation structure will be simple and management will be more effective because there will be no confusion as to who is responsible to whom.

However, requirements of splintered as well as functional authority in the organisation create situations where the principle of unity of command stands violated.

The violation of the principle of unity of command may lead to the following consequences:

(i) Responsibility of a subordinate gets divided when he is made to receive orders from and report to more than one superior.

(ii) The subordinate may prefer to give priority to execution of orders of different superiors at different times. This may create conflict among the superiors.

(iii) The subordinate gets the opportunity to postpone the orders of one of his superiors on the false pretext that he is busy executing the orders of another boss.

5. Unity of Direction:

Fayol expressed this principle to mean one head and one plan for a group of activities having the same objectives. It is the condition essential to the unity of action, coordination of strength and focusing of efforts. Fayol observed, “Unity of direction must not be confused with the unity of command (one employee should receive orders from one superior only). Unity of direction is provided for by sound organisation of the body corporate. Unity of command pertains to the functioning of the personnel. Unity of command cannot exist without unity of direction, but it does not flow from it”.

The principle of unity of direction is useful for designing and functioning of the organisation structure, i.e., creating departments and sub-departments. Thus, sales activities having common objective should constitute one group, have one plan and be the responsibility of one manager. This will help in realising the objectives under the overall control and supervision of one head. If the principle is not followed, there will be unnecessary duplication of efforts and there will be inefficiency in operations.

6. Subordination of Individual Interest to the General Interest:

The business enterprise is superior to individuals. The interests of the organisation must prevail upon the personal interests of individuals. This principle calls for the reconciliation of objectives of individual with those of the organisation and when the individual and organisational interests conflict, the latter must prevail. For the achievement of organisational objectives, both the employees and management should subordinate their interests to the general interests of the concern.

7. Remuneration of Personnel:

The employees must be remunerated fully for their services rendered to the organisation. The method of employee remuneration should be just and fair to everybody and as far as possible it should accord satisfaction to both the employees and the organisation.

8. Centralisation:

Fayol referred to centralisation in the context of authority. It means concentration of authority at one place or at one level in the organisation. On the other hand, decentralisation refers to the dispersal of authority to the lower levels in the organisation. According to Fayol, the question of centralisation or decentralisation is a simple question of proportion. It is a matter of finding the optimum degree for the particular concern.

In a small organisation, where manager’s orders go directly to subordinates, there is absolute centralisation. In a big organisation, where the authority has been delegated to lower levels to the maximum possible extent, it cannot be called to have the top management. Thus, centralisation of authority rests with the top management. Thus, centralisation of authority is always present to a greater or lesser extent in every organisation.

9. Scalar Chain:

Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest level in the organisation. The line of authority is the route followed via every link in the chain by all communications which start from or go to the ultimate authority. Fayol felt that departure from the chain is necessary to have fast and effective communication. Communication should be short-circuited as far as possible.

The principle of scalar chain recognises the necessity of formal authority in the organisation.

It has the following advantages:

(i) There will be unity of command in the organisation and there will be no confusion of dual order. Every member will know under whom he is working and whose orders he is to obey.

(ii) Delegation of authority, which is essential to organising, is facilitated.

(iii) The scalar chain establishes the channels through which communication will pass.

There are two disadvantages also of the scalar chain. First, communication takes too much as the order comes from top level to the bottom in a chain. Secondly, there is a possibility of distortion of messages as every superior from top to bottom may add something to or delete something from the actual message. Therefore, the scalar chain should not be rigid. There should be provision for short-circulating the chain so as to allow quick communication and swift action as shown in Fig. 5.1. Fayol called it gang plank shown by the dotted line joining D and O.

In the above figure, there are two ladders of authority one from S to E and the other from S to P. If D wants to communicate with O under the scalar chain, information will first flow upward from D to S through C, B and A, and then downward from S to O through L, M and N. Thus, communication will normally be a time consuming process. In order to allow swift action, D and 0 should be allowed to exchange information directly by using gang plank. This will help exchange information directly by using gang plank. This will help management to follow the scalar chain and at the same time ensure swift action as and when necessary.

10. Order:

There must be “a place for everything and everything in its place.” This is what is meant by order. Fayol dealt with order in material things and also social order. In order to achieve order for material things, there must be a place specified for everything and everything must be in its specified place. For social order to prevail in the organisation there must be an appointed place for every employee and every employee must be in his/her appointed place. There will be perfect social order in the organisation if there is right person in the right place.

11. Equity:

Equity requires fair judgement in dealing with human resources. Personnel must be treated with kindness and equity if devotion and loyalty are expected of them. Equity does not exclude either forcefulness or sternness. The superiors in the organisation should be experienced and good-natured so as to deal with the subordinates in a proper manner.

12. Stability of Tenure of Personnel:

This principle calls for lowest possible turnover of personnel for the well-being of the enterprise. Moreover, the employees should not be rotated at different jobs very frequently because considerable time is required to learn each job. According to Fayol, “Time is required for an employee to get used to new work and succeed in doing it well, always assuming that he possesses the requisite abilities. If, when he has got used to it or before that, he is removed, he will not have had time to render worthwhile service.”

13. Initiative:

Fayol wanted that the subordinates should be given an opportunity to take some initiative in thinking out and executing the plans. Employees get satisfaction when they are allowed to take initiative. Initiative on their part can be a great source of organisational strength.

14. Esprit de Corps (Union is Strength):

Literally speaking, the phrase esprit de corps means the spirit of loyalty and devotion which unites the members of group. It also means the regard for the honour of the group to which one belongs. This principle calls for harmonious human relations in the organisation so that the employees are loyal to the organisation. Harmony among organisational personnel is a source of strength. Unity among personnel can be accomplished by proper communication. Verbal contacts with the personnel should be encouraged as far as possible.

Fayol warned against two enemies of esprit de corps, viz. – (i) divide and rule, and (ii) abuse of written communication. It will be dangerous for the firm to divide its workers. They should rather be welded in cohesive and highly interacting work-groups. Over-reliance on written communication also tends to disrupt the team spirit. Written communication, where necessary, should always be supplemented by oral communication because face-to-face contacts tend to promote speed, clarity and harmony.

Principles of Management by Henry Fayol – With Examples

Henri Fayol a French mining engineer had developed management theories for scientific organisation of labour to control production costs in an enterprise. He was the first to identify the functions of management as Plan, Organise, Command, Coordinate and Control. For effective functions of an organisation Fayol categorized the business activities as Technical, Commercial, Financial, Security, Accounting and Managerial. Fayol suggested that for managerial efficiency, a manager must have appropriate education, knowledge and experience along with physical and moral qualities.

Based on his ON-THE-JOB experiences, Fayol developed the concept of administration through 14 principles of management. His principles of management were published as a book ‘Administration industrielle et generale’ in 1917. The English version of this book was published in 1949 as ‘General and Industrial Management’.

Let us now discuss Fayol’s 14 principles of management:

Principle # 1. Division of Work:

According to Fayol, “The intent of division of work is to produce more and better work for the same effort. Specialisation is the most efficient way to use human effort.”

The principle of division of work states that:

i. Work should be divided into small tasks/jobs.

ii. Each job should be performed by a trained specialist to achieve efficient and effective output.

iii. Entire organisation should be divided into separate departments, for example, finance, marketing, production, human resource etc.

iv. Each department should be managed by specialized persons, who individually motivate their teams to achieve the departmental goals effectively and efficiently.

v. All departments unify the individual efforts to collectively achieve the organisational goals.

Division of work is visible everywhere be it home, hospital, government organisation, school or a business enterprise. It is not possible for an individual to perform different types of tasks with same efficiency therefore, the tasks are divided among different people depending on their individual efficiencies and capabilities.

For example – In a school, the principal looks after administration and under her/him, there are individuals’ incharge for academics, discipline, admission co-curricular activities etc. Similarly, the business enterprises have separate professionals for sales, production, finance etc.

Principle # 2. Authority and Responsibility:

According to Fayol, “Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. The two types of authority are official authority, which is the authority to command, and personal authority which is the authority of the individual manager.”

The principle of authority and responsibility states that:

i. Managers need authority to fulfill their responsibilities.

ii. Enterprise must maintain balance between authority and responsibility.

iii. Authority is formal and informal. Formal authority is fixed as per stated rules and regulation of the organisation and informal authority is the power to negotiate the stated authority. An organisation must build safeguards against abuse of manager’s informal authorities.

For example – A sales manager has responsibility to achieve sales target. He has authority to plan his visits to customers, present organisation’s offers and schemes. At the same time, he has authority to negotiate prices with customers. If the sales manager offers discounts, which brings bigger volume of business and greater profits, there is imbalance between responsibility and authority but it is in favour of business. However, if sales manager gives discounts for personal benefits leading to loss for an organisation, it is considered as an abuse of authority.

Principle # 3. Discipline:

Discipline means following organisational rules, honouring employment contract by both employees and the management without any prejudice towards each other.

The principle of discipline states that:

i. The organisation must have clear and fair agreements.

ii. The clearly stated penalties.

iii. Good supervisors at all levels, who do not function according to personal choices or prejudices.

iv. The judicial application of penalties.

For example – If the company has fixed standards for production, wage rates and incentive plans then company must pay to its workers according to targets achieved. The workers also must try to achieve the targets and if they are unable to achieve targets then they must accept the differential wage rate without any prejudice against the company.

Principle # 4. Unity of Command:

The principle of Unity of Command means that each participant in a formal organisation should receive orders from and be responsible to only one superior.

The principle of command states that:

i. There should be one and only one boss for every individual employee.

ii. Orders/Instructions from only one superior provide clear directions to perform a task.

iii. Violation of the Unity of Command principle leads to undermining of authority, indiscipline, confusions and instability in the organisation.

For example – The production manager instructs its supervisor to produce product ‘X’ but the sales manager comes and tells the supervisor to stop production of ‘X’ and produce product ‘Y’ instead because there is market demand. Because of different set of commands from two bosses, the supervisor will be confused and may decide to produce nothing.

Remember, when you are at home your mom may instruct you to study accounts and your dad may say, no, study math. What will you do? I am sure you will end up watching television instead of studying. So, you will agree that if one receives dual instructions chances of underperformance are high.

Principle # 5. Unity of Direction:

According to Fayol, “Principle of Unity of Direction each division of organisation must have its own incharge, its own plans and execution resources to achieve specific goals.”

The principle of Unity of Direction states that:

i. The efforts of all the units of an organisation must be coordinated and focused towards achievement of organisational goals.

ii. To ensure unity of action and coordination, the departments with same objectives must follow one plan and have one head to lead.

For example – The sales department must be headed by a sales manager who sets the sales targets and prepares marketing strategies to achieve the targets. On the other hand, the production department must be headed by a factory manager who should be responsible for preparing production schedule, organising resources etc. However, both sales and production incharge must coordinate with each other to plan their activities effectively.

Principle # 6. Subordination of Individual Interest to General Interest:

According to Fayol, “The interest of an organisation should take priority over the interests of any one individual employee.”

Principle of Subordination of Individual Interest to General Interest states that:

i. Interest of the group or company must supersede the interest of any one individual.

ii. Interest of larger group of people cannot be sacrificed for interest of an individual however important he/ she may be.

iii. It is the responsibility of managers to ensure the application of this principle through their exemplary behaviour.

For example – The company works with an objective to be fair while giving salaries to its employees. One of the managers, who is valuable for business may demand for much higher salary. Company may not agree to his demands, as it will harm the interest of all other employees.

Each company follows policies related to discipline, salary structure, performance appraisals etc. so that the individual interests do not supersede the interest of entire organisation.

Principle # 7. Remuneration of Employees:

According to Fayol, “Organisation must treat all employees equal and fair in terms of compensation and growth opportunities.”

This principle states that:

i. The wages paid to employees must ensure a reasonable standard of living.

ii. The company must have the paying capacity to pay wages/salaries to employees.

iii. The wages paid must be just and equitable.

For example, a company, which pays fair and competitive wages to its employees, will always have a satisfied and motivated staff, the relationship between management and staff will be congenial and the working in the organisation will be smooth.

Principle # 8. Centralisation and Decentralisation:

Centralisation means concentration of decision making authority and Decentralisation means dispersal of decision making authority among more than one person.

According to Fayol, “There is a need to balance subordinate involvement through decentralisation with managers’ retention of final authority through centralisation.”

This principle states:

i. The authority to take core decisions must be retained by top-level management (Centralisation).

ii. The authority to take routine or day-to-day business decisions must be delegated to middle level and lower lever management (decentralization).

iii. The degree of decentralization depends on the scale of operations.

For example – In Reliance, the decentralization will be more as compared to a small trading company. The owner of small company may take all decisions from purchase to fixing of selling price, meeting buyers, hiring personnel etc. whereas in big companies each department is headed by a specialized personnel who has the authority to take decisions related to his/her department.

Principle # 9. Scalar Chain:

According to Fayol, “Organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates.”

The formal line of authority flowing from the highest to lowest ranks is known as scalar chain.

The principle of scalar chain states that:

i. An organisation consists of superiors and subordinates where superiors give instructions or directions to subordinates.

ii. Chain of authority must be followed during normal course of communication.

iii. In case of emergency the chain of authority may be violated through ‘Gang Plank’.

For example – Every company follows hierarchy while delegating responsibilities and authorities. The owner of the company may interact with heads of departments to brief them about the organisation’s goals, targets, plans and policies. The heads of department may further instruct and direct the supervisors and supervisors will finally instruct the workforce.

In the adjacent diagram, A is the head of company who has two lines of authority under him/her. In one line of authority the instructions and authority flows from A to B to C to D to E and in the other line of authority, instructions and authority flow from A to P to Q to R to S. In this scalar chain, B and P are at the same level of authority but in different line of authority. Similar is the case with C and Q; D and R; E and S. In normal course of communication, R can communicate with D only by following the route of authority, which is Q-P-A-B-C-D. However, if there is emergency R can communicate with D using a Gang Plank.

Principle # 10. Order:

According to Fayol, “People and materials must be in suitable places at appropriate time for maximum efficiency.”

The principle of order states that:

i. ‘A place for everything (everyone) and everything (everyone) in its (her/his) place’. It means that there should be assigned place for all physical resources and all human resources should be at their assigned places.

ii. The fixed or assigned places for all resources remove hindrances while conducting business activities.

iii. The orderliness increases efficiency and productivity.

For example – The finance director of company has his/her office on the second floor of the office building. Therefore anyone who wishes to meet him will expect him to be available in his office. If he does not have fixed office or he does not sit in his office then people will waste time looking for him all over the office.

Similarly, in your school there is a fixed place for keeping sports equipment, lab equipment etc. even you have a fixed classroom. All this maintains orderliness in the school.

Principle # 11. Equity:

According to Fayol, “Good sense and experience are needed to ensure fairness to all employees, who should be treated as fairly as possible”.

The principle of equity states that:

i. Managers must have just and kind behaviour towards workers.

ii. Fair behaviour towards workers will ensure loyalty and devotion from the workers.

iii. Management must appreciate efficiency and penalize underperformance or inefficiency.

iv. All employees must be provided discrimination free environment with equal growth opportunities, which means no discrimination on account of sex, religion, culture, caste, language etc.

For example – Today many foreign companies are headed by Indian origin professionals and many Indian companies appoint foreign nationals in managerial and technical positions to gain from their experience.

Principle # 12. Stability of Personnel:

According to Fayol, “Employee turnover should be minimized to maintain organisational efficiency”.

The principle of Stability states that:

i. The selection procedure must be framed in such a manner that it is able to select the personnel who are most suited for the job.

ii. The tenure of appointment must be fixed for a minimum period to provide stability to both company and new appointees.

iii. Employees must be given appropriate training to perform the tasks assigned.

iv. Performance of personnel must be reviewed after providing them appropriate opportunities and reasonable time to perform.

For example – Many companies today appoint people after conducting written exam followed by rigorous interview procedure. They may also give the selected employees on the job training. In return, employees may need to sign a bond for a fixed period of time. The employment contracts also have notice period clause where organisation or employees whoever wishes to discontinue services need to give a prior notice.

Principle # 13. Initiative:

According to Fayol, “Workers must be encouraged to develop and carry out their plans for improvements”.

The principle of Initiative states that:

i. Employees must be encouraged to give suggestions, which may improve productivity or decrease cost of production.

ii. Employees must be given opportunities to develop and execute plans but it must be within the established practices of the company.

For example – A sales manager may give suggestions to make marketing strategies more customer-oriented, but he/she should not change the pricing policy of the company to receive bigger orders or favour specific customers.

Principle # 14. Espirit De Corps:

According to Fayol, “Management should promote a team spirit of unity and harmony among employees”.

The principle of Espirit de Corps states that:

i. Teamwork should be promoted for effective coordination and realization of organisational goals.

ii. I must be replaced by “We” to give workers the sense of belongingness.

For example – If management formulates plans and policies after discussing with the employee representatives, it will give employees a sense of responsibility to follow the policies.