Class 12 - Business Studies - Fayol s Principles of Management (#cbseNotes, #class12BusinessStudies)

Business Studies - Fayol's Principles of Management

Henry Fayol (1841-1925) got a degree in Mining Engineering and joined French Mining Company in 1860 as an Engineer. He rose to the position of Managing Director in 1988. When the company was on the verge of bankruptcy. He accepted the challenge and by using rich and broad administrative experience, he turned the fortune of the company.

For his contributions, he is well known as the “Father of General Management”.


He gave 14 general principles of Management which are as under:

⑴ Division of Work
⑵ Authority and Responsibility
⑶ Discipline
⑷ Unity of Command
⑸ Unity of Direction
⑹ Subordination of Individual Interest to General Interest
⑺ Remuneration of Employees
⑻ Centralization and Decentralization
⑼ Scalar Chain
⑽ Order
⑾ Equity
⑿ Stability of Personnel
⒀ Initiative
⒁ Espirit De Corps

(1) Division of Work: 
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.


(3) Discipline: 
It is the obedience to organizational rules and employment agreement which are necessary for working in the organization.


(4) Unity of Command: 
There should be only one boss for every employee. If an employee gets orders from two superiors at the same time the principle of unity of command is violated.


(5) Unity of Direction: 
Each group of activities having the same objective must have one head and one plan. This ensures unity of action and coordination.


(6) Subordination of Individual Interest to General Interest: 
The Interest of an organization should take priority over the interests of any one individual employee.


(7) Remuneration of Employees: 
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 than one person is known as decentralization. Both should be balanced.


(9) Scalar Chain: 
The formal lines of authority between superiors and subordinates from the highest to the lowest ranks are known as the scalar chain. This chain should not be violated but in emergency employees at the same level can contact through Gang Plank.

(10) Order: 
A place for everything (everyone) and everything (everyone) in its place. People & materials must be in suitable places at an appropriate time for maximum efficiency.


(11) Equity: 
The working environment of any organization should be free from all form of discrimination and the principles of Justice and fair play should be followed.


(12) Stability of Personnel: 
After being selected and appointed after the due and rigorous procedure the selected person should be kept at the post for a minimum period decided to show the result.


(13) Initiative: 
Workers should be encouraged to develop and carry out their plans for improvements. Initiative means taking the first step with self-motivation It is thinking out and executing the plan.


(14) Espirit De Corps: 
Management should promote team spirit, unity and harmony among employees. Management should promote a team work.