The 14 Principles of Management were first introduced in the year 1916 by Henry Fayol.

Henry Fayol was the managing director of a mining company responsible for over 1,000 employees and his theories are based on his practical observations. The ideas he put forward were not presented to the English-speaking world until the late 40s of the twentieth century when they were first translated from French into English.

The 14 principles of management Henri Fayol proposed were meant to act as a manual for managers in their daily work with an aim to increase the effectiveness and work morale of both workers and managers.

Generally, the 14 principles can be grouped into coordination and specialization principles:

• The coordination principles give guidance about how to structure the organization in a hierarchical and highly effective fashion.
• The specialization principles give guidance about how to structure work most efficiently.

The 14 principles put forward by Henri Fayol are presented below:

1. Specialization of Work: Henri Fayol proposed that specialization of work increases output by making employees more efficient. It means organizing tasks and activities into specialized jobs that can be delegated to different employees.

2. Discipline: Employees must follow orders. The organization should stress the importance of following rules and orders effectively. It is meant to keep an organization running smoothly and efficiently and make sure that the organizations are compliant with industry standards (including safety standards).

3. Authority: Managers should have complete command over subordinates so they can give orders effectively; therefore the organization must give managers the complete authority to give orders to subordinates. It is believed that since the manager is more knowledgeable and experienced, he is better equipped to make informed decisions.

4. Unity of Command: Every employee should only report to one boss. The multiple power center can cause infighting within the organization. This single step can help you crack down on office politics and mould the work environment to be more streamlined.

5. Unity of Direction: Each activity performed by the organization should only have one command center or manager giving directions to employees. Similar to the one above, this principle is more about streamlining the work process.

6. Subordination of Individual Interest: The individual interest of an employee should never be prioritized over the interest of the organization. This one is necessary to ensure the team and organization stay on track.

7. Remuneration Policy: Remuneration includes financial and non-financial compensation. If an organization wants to keep its employees motivated and productive, then it should pay fair remuneration to its employees. Employees should always be paid according to their services to the organization.

8. Centralization: Decisions should always be taken by top management, and not by the subordinates of the company. The centralized form of decision-making is necessary for the company to reap maximum benefits from the expertise of top-level management.

9. Scalar Chain of Command: Communication should flow from the top of the organization to the employees and always follow a scalar chain of command – meaning that communication should preferably flow top-down.

10. Order: All materials and employees should have a designated fixed place, where they should always be found or work. The order encompasses many things, including having a clean and safe environment for employees with everything in its place.

It also means that the resources should be used in the right place at the right time. This includes employees, capital, and other resources.

11. Equity: There should be a principle of fairness about how the organization treats its employees. This means managers should treat everyone fairly at all times. Treating employees fairly increases employee retention.

12. Personnel Tenure: Limited number of employees is generally a good thing, and good employees should be rewarded with lifetime employment opportunities. It is important for employees to have job security in life.

13. Initiative: Employees should be given a chance to show individual ability, which will result in great results for the company. It will increase the creativity and decision-making ability of employees.

14. Esprit De Corps(Team Spirit): There should be harmony and unity between members of the organization, which would result in high work morale and motivation.

The 14 principles put forward by Henri Fayol historically had a great impact on the structuring of organizations in European countries, and many of today’s modern companies around the world still exhibit many of the managerial and organizational traits described by Henri Fayol.

Today, most of Henry Fayol’s management principles are still relevant and applicable to the corporate world. Let’s see where they stand in the current scenario:

Specialization of Work

In modern businesses, the concept of specialization of work is commonly seen in departments such as marketing, finance, human resources, and IT, where employees have specialized skills and knowledge to perform their tasks effectively.

However, this principle also has some drawbacks. It can lead to a lack of cross-functional knowledge and expertise, which may hinder teamwork and collaboration. It can also result in employees feeling bored or unfulfilled due to a lack of variety in their work.

Despite its drawbacks, the specialization of work principle is still important in many business contexts, particularly when it comes to increasing productivity and efficiency. However, businesses should also strive to provide opportunities for employees to develop their skills and knowledge across different areas, to promote cross-functional collaboration and reduce the risk of siloed thinking.

Discipline

Discipline is important in maintaining a safe and orderly work environment, ensuring compliance with laws and regulations, and promoting consistency in behaviour and performance. However, over-emphasizing discipline can result in a rigid and inflexible work culture that stifles creativity and innovation. Employees may feel micromanaged or disempowered, leading to low morale and job dissatisfaction.

Still, discipline plays an important role in many business contexts. It is essential to establish clear rules and guidelines, provide training and support to help employees follow them, and enforce consequences for non-compliance. However, businesses should also strive to balance the need for discipline with the need for flexibility and empowerment, to create a positive and productive work environment.

Authority

“Authority” involves the ability to give orders and the power to enforce obedience. In the business world, the authority principle helps with defining the roles and responsibilities of employees and establishing clear lines of communication and decision-making. It helps to ensure that employees are clear about what is expected of them and that their actions are aligned with the goals and objectives of the organization.

But if an organization becomes too much authority-centred, it stifles creativity and innovation – which is especially detrimental in today’s rapidly changing business environment. Too much authority also breeds a culture of fear and resentment among employees who may feel that their contributions are not valued or that their ideas are not being heard.

While it is essential to have clear lines of authority and responsibility and managers need to be able to make decisions and enforce them when necessary, businesses should temper them with collaboration, empowerment, and inclusivity to create a positive and productive work environment.

Unity of Command

One boss is always a good idea. Creation of a clear chain of command and accountability, ensuring that tasks are carried out efficiently without any misunderstandings. But this principle often slows down decision-making processes and limits flexibility in certain situations.

In modern times, the business structure has become more flat and employees have to report to multiple supervisors or work collaboratively in teams. This makes it difficult to follow the principle of unity of command strictly.

To make it work, it is still essential for businesses to ensure that each employee has a clear understanding of their roles and responsibilities and that there is a clear hierarchy of authority to avoid confusion and promote effective communication. 

The business may not follow the unity of command rigidly but it must ensure that its employees have a clear understanding of their roles and responsibilities, and have a clear reporting structure in place.

Unity of Direction

According to Henry Fayol, all activities and efforts of an organization should be directed towards the same goal or objective. It means that there should be a single plan of action and a unified direction for all activities to avoid confusion and conflicts.

When there is a clear direction, it becomes easier to plan, organize, and coordinate activities, which ultimately leads to better productivity and efficiency. In some cases though, this may result in missed opportunities for growth and development. Additionally, in today’s fast-paced and ever-changing business environment, it may be challenging to maintain a single direction as businesses need to be agile and adapt to changes quickly.

Hence, businesses today need to balance the unity of direction with the need for flexibility and adaptability to remain competitive and successful in the long run.

Subordination of Individual Interest

Henry Fayol righteously stated that the goals and objectives of the organization take priority over individual interests. But the primary drawback of this principle is that it can lead to employee dissatisfaction and disengagement if their interests are not taken into account. It can also result in employees feeling like they are not valued, which can lead to turnover and lower morale.

It is true that in times of crisis, a business may need to prioritize the interests of the organization over individual interests to ensure its survival. But businesses should use this principle with caution and balance the interests of the organization with the interests of their employees to ensure long-term success and employee satisfaction. It is important to create a workplace culture that values employee input and recognizes their contributions to the organization’s success.

Remuneration Policy

Henry Fayol suggested fair compensation and benefits for all employees. This is a must for a business to attract and retain talented employees. The challenge lies in determining a fair compensation and benefits package, especially in a highly competitive job market.

Also, the focus on remuneration as the main motivator for employees may lead to a lack of emphasis on other factors that could contribute to employee satisfaction and engagement, such as workplace culture, work-life balance, and career development opportunities.

Businesses do need to have a fair and competitive remuneration policy in place but it should be complemented with other strategies that focus on creating a positive work environment, providing growth opportunities, and recognizing employee contributions.

Centralization

Henry Fayol’s management principles emphasize that the authority to make decisions should be held by a select few at the top of the organization’s hierarchy. It seems that today this principle has become less relevant due to the increasing emphasis on employee empowerment and involvement in decision-making. 

The trend in modern organizations is to delegate decision-making authority to lower-level employees, as they are closer to the ground and have a better understanding of day-to-day operations. This helps to increase employee engagement and job satisfaction, which in turn can lead to better performance and productivity. Centralization of the decision-making process makes it slower as all decisions must go through a central authority. 

Though some aspects of centralization may still be relevant in certain industries or contexts, modern organizations are moving away from this principle and towards more decentralized decision-making processes.

Scalar Chain of Command

Management principles by Henry Fayol highlighted the importance of clear communication channels and hierarchical structures within an organization. But we have seen that it can lead to bureaucratic and slow decision-making processes, especially in larger organizations. It can also lead to a lack of flexibility and innovation, as decision-making power is concentrated at the top of the hierarchy.

In industries with highly regulated environments or situations that require emergency responses, a clear chain of command may be necessary to ensure the safety and well-being of employees and customers. In such cases, businesses can promote open communication and encourage cross-functional collaboration, while still maintaining a clear hierarchy of authority when necessary. This can help them make faster and more informed decisions, while also fostering a culture of innovation and adaptability.

Order

The orderly arrangement of resources and activities within an organization has become even more important than before, especially in the context of the increasing complexity and dynamism of the business environment. It can help businesses achieve better efficiency and effectiveness.

But the order and structure should never be inflexible and rigid, otherwise, they may hinder the organization’s ability to adapt to changing circumstances. It may also lead to unnecessary bureaucracy and administrative overheads. A balanced approach is required where businesses should create an appropriate level of structure and organization that supports the business’s objectives while remaining open to change and innovation.

Equity

the 1920s, Henry Fayol championed the cause of fair and just treatment of employees in an organization. he advocated creating a work environment where employees are treated with dignity and respect, and receive fair treatment in terms of rewards and recognition for their work.

Today, the principle of equity is highly relevant. A positive work environment is considered essential to improve employee morale, productivity, and retention. Organizations that follow the principle of equity can establish trust and credibility with their employees, leading to higher job satisfaction levels and a lower turnover rate.

But you can simply not treat all employees equally, given that every employee has unique needs and requirements. Implementing an equitable system can be time-consuming and resource-intensive, requiring significant investment in training, monitoring, and feedback mechanisms. Businesses should try to create a positive and productive work culture that fosters employee engagement and retention.

Personnel Tenure

This principle is not commonly followed in the current business scenario as it is difficult to maintain stable employment due to various factors such as globalization, technological advancements, and economic fluctuations. Job security, sometimes, leads to complacency among employees who may not be motivated to perform better or be flexible and adaptable.

Usually, government organizations and some large corporations offer more job stability. It might not be relevant and feasible for all businesses. Still, if an employee feels that he is valued and his job is secure as long as he performs well, it can serve as a big motivator and loyalty cultivator.

Initiative

When employees have the freedom to come up with ideas and solutions for the organization’s betterment, they feel empowered. It fosters a culture of innovation in the company.

There can be a lack of control over the ideas and solutions proposed by employees, which could lead to chaos and confusion. However, businesses can overcome this by setting clear guidelines and criteria for evaluating and implementing employee ideas.

Businesses should definitely continue to use this principle as it can lead to increased employee engagement, better problem-solving, and more positive work culture. It can also help organizations stay competitive and adapt to changes in the market.

Esprit De Corps(Team Spirit)

Fostering team spirit and unity among employees in an organization is important to have a positive and supportive work environment.

The only times the team spirit may pose a problem are the potential for groupthink and a lack of diversity in ideas and perspectives. A strong team spirit may also lead to the formation of cliques or exclusive groups, which can be detrimental to the overall functioning of the organization.

Still, businesses should try to promote a positive and collaborative work culture and encourage employees to work together towards shared objectives. This can be achieved through various methods such as team-building activities, open communication channels, and recognition of team accomplishments.

Ultimately, the benefits of promoting a positive and supportive work environment outweigh the potential drawbacks, and businesses should continue to prioritize this principle in their operations.