Henri Fayol’s Principles of Management

Henri Fayol explains management as a process of forecast followed by planning, organisation, command, coordination and control of activities of others. In simpler terms, management refers to proper organisation and delegation of work along with ensuring its completion. Vitally, this simple concept is the basis for Fayol’s principle of management.


Notably, be it a corporate set up or a simple business enterprise, efficient management is vital to ensure smooth functioning, which in turn generates significant revenue. Keeping this in mind, there have been quite a few theorists who have attempted to theorise the management’s role and function. In this regard, principles of management offered by Henri Fayol are a remarkable success. 


14 Principles of management by Henri Fayol

Henri Fayol principles of management as a whole is a general theory proposed in the early 1900s, which aims to increase managerial efficiency. This principle focuses on better management that, in turn, leads to increased production and enhanced revenue generation. Consisting of 14 principles, this theory can be effectively implemented in any enterprise or department.


Implemented by managers to regulate every internal activity of an enterprise, these 14 principles proposed by Fayol currently form the basis of management for most small and medium organisations across this globe. These 14 principles are described in detail below.


  • Division Of Work

There are many types of works or production processes that come together to create a final product. 

Taking this fact into consideration, Henri Fayol also noted that every employee is not efficient in every department of production. This led to Fayol’s first principle, which suggests segregation or division of work according to efficiency.

Division of work to employ efficient employees in designated departments has many effects on the overall production of an enterprise. Increased efficiency contributes to accuracy, as well as the speed of workers, in turn adding to total productivity. 

A fine example would be of a car manufacturer, where a group of engineers build the engine, designers create its body, and leather workers stitch its seat, so on and so forth. 


  • Authority and Responsibility

Authority and responsibility are two of the most critical aspects of management which must be incorporated within managers. Authority of a manager is vital to implement efficient working of an organisation’s workforce. 

Additionally, this authority also helps in keeping different departments synchronised. Responsibility, as a key aspect, implores managerial personnel to implement their authority on this enterprise’s workforce.

Essentially, a sense of responsibility makes a manager push his/her employees towards achieving an organisation’s cumulative goal. These two aspects are complementary since it is the latter which enforces its former into action. Contrastingly, responsibility without authority can lead to improper and inefficient use of resources.


  • Discipline

This is a fundamental aspect which is also taken into account by Henri Fayol 14 principles. Discipline is fundamental to improving efficiency, and any management must implement it effectively. 


In turn, discipline helps with a better and timely performance by employees. Additionally, it also contributes to enhanced inter-departmental relationships that are paramount in completing production.


As an example, the implementation of timely schedules by management to log output can be instrumental in cumulative efficiency. Typically, it includes organisational norms, principles, etiquettes, etc.


  • Unity Of Command

Employees require clarity in terms of their work and production, something which can be severely disrupted if there is no unity of command. 


This principle of management states that it is vital for an organisation to have proper unity of command, to ensure that its resources are properly allocated and used. Lack of unity of command can lead to confusion for employees and workers, which in turn leads to wastage of resources.


According to this principle by Henri Fayol, every employee should be headed by a single manager. In case an employee has more than one manager, there always remains a chance of miscommunication, wrong allocation and confusion that can severely impact an organisation’s productivity.


Suppose, Rajiv, who works in Company A, is asked by one superior to prepare a list of clients based on industries, whereas another superior asks him to prepare a list of clients based on firm size. This creates confusion for Rajiv that in turn hampers overall productivity of that organisation due to wastage of working hours and delayed list preparation.


  • Unity Of Direction

Of Henri Fayol 14 principles of management, this aspect looks towards the aim of an organisation. In simplest terms, this principle states that every employee of an organisation should be directed towards the achievement of a cumulative goal.


With different employees engaged in different departments, the workforce of an organisation usually has different objectives. However, to achieve maximum output, every employee must have their organisational goal in mind and work towards it. At a cumulative level, this greatly increases the overall efficiency and productivity of an enterprise.


  • Subordination Of Individual Interest

This aspect is in tune with that mentioned immediately above, where Fayol emphasises the necessity of subordinate individual aims and objectives. Suppressing personal targets and focusing on an enterprise’s general objective is vital to increase productivity and efficiency. To this effect, managers must understand personal aims and targets of employees, and align them with that of the organisation to achieve maximum efficiency.


  • Remuneration

Remuneration is a crucial aspect of an organisation since it motivates employees for better work. Consequently, a reflection of efforts, efficiency and dedication towards the productivity of an enterprise must be rewarded with adequate remuneration and hikes. 


Notably, it is remuneration for which employees join an enterprise, and lack of reward can lead to decreased production, as well as fall in efficiency.


Periodic salary hikes are crucial for this same reason. Additionally, incentives and bonuses are also used by managers to motivate their employees into increased efficiency, which contributes to higher productivity and better revenue generation for an organisation. 


Interestingly Fayol also mentioned that along with financial rewards, managers should also consider non-financial motivations like company retreats, gifts and awards, etc.


  • Centralisation

Henri Fayol states in his Principles of management that it is imperative for an organisation’s management to be centralised in their decision making. 


Additionally, impartial and neutral judgement by authority offers clarity to its employees, while also keeping every process and functionality fair. In turn, judicious decision making keeps company targets clear while motivating employees towards increased efficiency.


This principle is primarily effective for organisations that have a limited workforce and production targets. While this cannot be implemented for large companies and firms, small organisations can benefit immensely from this principle.


  • Scalar Chain

Henri Fayol’s principle of management emphasises on maintaining a transparent chain of command. Maintaining this clear hierarchy, especially in managerial positions, is essential since it provides every employee with clarity. 

When workers and employers know this chain of command and are aware of their managers, a smooth flow of information is maintained in an organisation.


Students should note, maintenance of this hierarchy can be difficult in times of emergency when this command is usually shifted to a centralised authority. For such circumstances, Henri Fayol proposed an idea of “gangplank”. This idea suggests that during any emergency, employees can violate their chain of command and communicate with different levels of hierarchy.


  • Order

Henri Fayol’s order principle of management refers to the organisation of all resources in a well defined and systematic manner. This is vital since it reduces the wastage of resources, as well as that of time. Additionally, the workforce of a company is also well organised and well placed to function smoothly if every resource is in order.


Furthermore, orderly maintenance of resources also promotes an efficient and favourable work culture which helps an organisation in its long run. Essentially, it promotes a positive work environment aimed at efficient and increased productivity. This principle should be supervised and regularly updated to ensure efficiency in a company’s workforce.


  • Equity

According to Henri Fayol, it is imperative for a company’s management and authority to be impartial towards its employees. Discriminating employees based on any aspect other than performance can be detrimental to their efficiency. Additionally, management should also make it a point to treat their employees with respect.


Maintenance of equity has a long-serving effect on the employees of a company since it develops trust along with a sense of belonging on their part towards their company. 

Consequently, it is the responsibility of management to prevent any sense of discrimination amongst its workforce. Understandably, the equity principle of management is a vital aspect towards maintenance and motivation of an enterprise’s workforce.


  • Stability

Henri Fayol proposed his principle of stability since this too has a long-serving effect on a company’s workforce. Employees and workers offer maximum efficiency and output only when they feel secure in their designated job.

 

This crucially includes job security which is a driving factor not just for employee efficiency, but also in terms of retaining their services over.


Stability is paramount to the growth of a company. Retention of the workforce is vital, especially since new recruits often require training which can lead to wastage of company resources.


  • Initiative

As Henri Fayol puts it, there are many aspects in which initiative impacts an organisation. Firstly, incorporating employees in general discussion while encouraging them to give inputs motivates them for better work. Additionally, it also adds value to an employee in the sense that he/she feels important to an organisation.


Furthermore, initiative as a principle of management also opens up new avenues since employees and workers can usually offer ideas that have practical aspects into consideration. As a result, initiatives can be immensely helpful in increasing the efficiency of a company’s workforce.


  • Esprit De Corps

The last of Henry Fayol’s 14 principles of management, esprit de corps refers to teamwork which is paramount for a company’s success. Subsequently, the management of an organisation must ensure there is a cordial and harmonious relationship between its employees.

Notably, this also includes a motivation for employees and workers to be supportive of each other. In turn, teamwork leads to better chemistry between different departments of an enterprise that contributes toward greater productivity. Creating and promoting this positive and supportive environment also helps in developing trust between different employees and workers.


As defined by Henri Fayol, these 14 principles cumulatively form the basis of management. Consequently, students should note these meticulously along with their implications to have a better understanding of managerial contributions, as well as managerial efficiency for better exam preparations. 


Vitally, even though this principle is applicable for every type of organisation, it is currently most commonly used by small and medium organisations for enhanced management and greater productivity.


Henri Fayol’s Functions of Management

Along with these principles of management, Henri Fayol also recognised the functions which must be served with proper management. Consequently, noting Henri Fayol functions of management also become crucial to have a clear understanding of his principles of management.


  • Forecasting: To implement efficient management, it is imperative to begin by analysing relevant information and data. This contains both present and past information which are used to analyse and predict the upcoming future.

  • Planning: This immediately follows forecasting, which forms the basis for planning. Relevant business forecasts are used to plan appropriate courses of action.

  • Organising: Proper arrangement of every necessary resource is vital to ensure efficient management. Subsequently, management must organise and arrange human resources, raw materials, technological infrastructure, etc. in a manner that promotes efficacy. 

  • Commanding: This function allows management to instruct and direct different resources towards their ultimate target.

  • Coordinating: A vital function, it is imperative for management to synchronise different departments to minimise loss of resource while maximising output.

  • Controlling: Performance of personnel and use of resources should be checked and tallied with projected and desired levels of output. This function helps in minimising wastage while maximising optimal resource usage.


Importance of Henri Fayol’s Principles of Management

Understanding the importance of Fayol principles gives clarity to students over their applicability and necessity. These pointers are mentioned below - 


  • Improved Understanding of Management: Personnel in managerial positions get a better understanding of their role and functions due to Fayol’s principles of management. Improved understanding leads to efficient management that, in turn, contributes to the overall production of an organisation.


  • Efficient Managerial Training: These principles given by Henri Fayol also help in formulating training modules for managers. Effectively, these principles help in creating better managers for an enterprise since it teaches them vital areas of management.


  • Understanding The Role of Management: It is crucial to have a clear understanding of the expectations from a managerial role in order to fulfil it. These principles help potential managers as well as their trainers to identify and therefore focus on every essential role that must be fulfilled by efficient management.


  • Research Guide for Management: Another major contribution of Henry Fayol principle of management is that it provides a guideline for researches on management. This is helpful not just in formulating a better strategy for management, but also in recognising past errors and therefore correcting them. Consequently, these principles help in formulating precise strategies for efficient management.


Advantages Offered by Henri Fayol’s Principles of Management

Along with the importance of 14 principles of Fayol, commerce students must also note every advantage offered by these principles. 


  • Helps in Facilitating Organisational Structure: Discussed above among the principles, an organisational structure is pertinent for the efficient and smooth functioning of an enterprise. With Fayol’s principles, this structure is given a proper shape along with a well-defined hierarchy. Notably, this hierarchical structure is still widely followed, especially by small- and mid-sized business organisations.


  • Promotion of Team Ideology and Concepts: Efficient combination of different departments of an organisation is necessary to maximise its production. It is promoted by Henri Fayol’s principles, which state that the private interest of employees should be subordinated towards the general interest of an organisation. That, in turn, also promotes harmony and efficient functioning between different departments of an enterprise.


  • Motivation of Employees: Among the 14 principles of management put forth by Henri Fayol, stress is given on employee compensation and encouragement. This is especially necessary to motivate employees towards the general interest of an organisation, and consequently improve their contribution. Notably, Fayol does not just mention financial compensation to motivate employees but also suggests non-financial motivations.


Difference between Henri Fayol’s Principle of management and Taylor’s Theory of management


FW Taylor also presented a theory related to efficient management, though this theory is quite different from that of Henri Fayol’s. Unlike the 14 principles of management of Henri Fayol, FW Taylor’s theory offers 4 major management principles. Additionally, this theory is in coherence with scientific management and involves experimentation, observation and analysis.


Inference of these observations and analysis offered in this theory helps in enhancing managerial efficiency. This theory of management by FW Taylor pays attention to the supervision of management along with that of performances of both employees and managers. Distinctly different from Fayol’s principles, the differences between these theories are elucidated below in detail.


Basis

Henri Fayol

FW Taylor

Proponent and meaning

Proposed by Henri Fayol, also known as the father of modern management, this theory has 14 principles which combinedly contribute towards managerial efficiency.

Proposed by FW Taylor, also known as the father of scientific management; this theory proposes 4 fundamental principles which aim at increased overall productivity.

Concept 

A general theory of management which is applicable at all levels

A scientific theory of management based on observations and experiments

Area of focus

Top-level management

Low-level management

Approach towards management

Top to bottom approach

Bottom to top approach

Aim 

To implement and deliver managerial efficiency

To increase the productivity of employees and labour

Basis of theorisation

Personal observation and experiences

Scientific observations and experiments


Understandably, Fayol’s principles of management form the basis of managerial principles while that of Taylor is an advanced approach that comes later. Both these theories have widespread application and are still implemented to achieve more efficient management and as a result, aim at increased revenue generation.


Evidently, Henri Fayol contribution to management has been quite vast owing to his principles and other observations which have been discussed above. Interestingly, students of commerce should note that there are numerous other theories and concepts related to management which are not just in their scope of syllabus, but also essential to understand the concept of management.


Now, pupils can easily refer to study material from Vedantu to get a proper understanding of these concepts. Additionally, Vedantu is also offering live classes which are especially helpful if a student finds any topic difficult to understand.

FAQ (Frequently Asked Questions)

1. What Is Henri Fayol’s Principle of Management?

Henri Fayol’s principle of management is a general theory which offers a detailed understanding of different aspects of management. Applicable to any organisation or department, these principles implement managerial efficiency, thereby contributing to an organisation’s overall production and revenue generation. Consequently, Henri Fayol was also known as the father of modern management theory, owing to his principles.

2. What Are Henri Fayol’s Functions of Management?

Henry Fayol’s functions of management emphasise on 6 distinct facets that come together to implement managerial efficiency. These are forecasting, planning, organising, commanding, coordinating and controlling. Essentially followed in this given chronology, managers must fulfil these functions to increase their efficiency and thereby contribute to an enterprise’s revenue.

3. Is There Any Other Theory of Management?

While there are quite a few theories of management, FW Taylor’s theory is also considered to be crucial along with Henri Fayol’s principles of management. Taylor’s theory of management was a scientific approach which includes experimentation, observation, analysis, etc.

4. How did Henri Fayol Define Activities Within an Industry in His Principles of Management?

Henri Fayol defined 6 activities of industry, of which managerial is the final aspect. Other activities are technical, commercial, financial, security, and accounting. These individual departments come together to contribute to revenue generation, though primarily it is management which maintains the efficiency of all these other activities.