SIR HENRY FAYOL (1841-1925)

Henry Fayol was born in France in 1841. He got a degree in Mining

Engineering in 1860 at the age of 19 years and started working as an
engineer in a Coal Mining Company. In 1888 he was promoted as the
Managing Director of that company. At that time the company was in a
situation of insolvency. He accepted the challenge and developed a
general theory of business administration. He developed this theory
independently of scientific management but roughly contemporaneously
to bring the company out from this situation and he succeeded. When he
retired after 30 years the company was a leading coal- steel company with
a very strong financial background. He was one of the most influential
contributors to modern concepts of management. Henry Fayol became
famous as Father of Management Studies and Thoughts because
of the following contributions:
a He made a clear distinction between technical and managerial skills.
b He developed 14 principles of management which acts as guidelines for
modern managers to perform their managerial activities.
c He identified the main steps involved in the process of management
which are now considered as the major functions of managementPlanning, Organizing, Staffing, Directing, and Controlling.

ICICI BANK
ICICI Bank is an Indian multinational banking and financial services
company headquartered in Vadodara. As of 2014 it is the second largest
bank in India in terms of assets and market capitalization. It offers a wide
range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialized
subsidiaries in the areas of investment banking, life, non-life insurance,
venture capital and asset management. The Bank has a network of 3,800
branches and 11,162 ATMs in India, and has a presence in 19 countries.
ICICI Bank is one of the Big Four banks of India, along with State Bank of
India, Punjab National Bank and Bank of Baroda. The bank has subsidiaries
in the United Kingdom, Russia, and Canada; branches in United States,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre; and representative offices in United Arab Emirates, China,
South Africa, Bangladesh, Thailand, Malaysia and Indonesia. The
company's UK subsidiary has also established branches in Belgium and
Germany.
In March 2013, Operation Red Spider showed high-ranking officials and
some employees of ICICI Bank involved in money laundering. After a
government inquiry, ICICI Bank suspended 18 employees and faced
penalties from the Reserve Bank of India in relation to the activity.

FAYOLS PRINCIPLES OF MANAGEMENT

1. Principle of Division of Work

According to this principle the whole work must be divided into small tasks or
units and instead of assigning the whole work to one person, one task or a unit of
work should be assigned to one person according to the capability, qualification
and experience of the person. When a person performs a part of job again and
again he will become perfect and specialized in doing that and the efficiency
level of the employee will improve.
At ICICI bank there are different people employed for this purpose. There are
different employees for accepting cash deposits, clearing cheques, granting loan
etc., each employee is guided by the branch operation manager, branch
manager or by the next senior person to that employee.

2. Principle of Authority & Responsibility

Authority means power to take decision. Responsibility means obligation to

complete the job assigned on time. According to this principle there must be a
balance between the authority and responsibility. As excess of authority without
matching the responsibility may bring negative results and excess of
responsibility without matching the authority will not allow the worker to
complete his job on time. There should be a balance between both for best
results.
At ICICI Bank there are 2 verticals to follow this principle. The first one is the
imputer and the second is the authorizer. The imputer enters the details of each
and every transaction and the authorizer simultaneously checks and verifies the
transaction. Both the imputer and the authorizer have been given the authority
according to their work which leads to completion of work on time.

3. Principle of Discipline

Discipline refers to the general rules and regulations for systematic working in an
organization. Discipline does not only mean the rules and regulations but it also
mean developing commitment in the employees towards the organization as well
as towards each other. These rules should not be applicable to subordinates only
but will also be applicable to the supervisory level.
At ICICI Bank there is a very strict discipline check. The Branch Operations
Manager checks the disciplinary level of all the employees in the branch and also
checks that the employees are working systematically. The BOM also motivates
the employees.

4. Principle of Unity Of Command

According to this principle an employee should receive orders from one boss only
because if he is receiving orders from more than one boss then he will get
confused and will not be able to understand that whose order must be executed
first and on the other hand, if employee gets order from more than one boss than
he gets a chance to give excuses by saying that he was busy in executing the
order of the other boss.
At ICICI Bank on a macro and micro level again there are two departments. The
first one is the sales department and the other is the operation department. Each
of these departments has got 8-10 team members and a head to whom all the
members will have to report about the activities carried by each of them. The
Branch Sales Manager and The Branch Operations Manager both will report
about the activities carried out by their departments to the Branch Manager. And
the Branch Manager will report to the head of the zone. The orders to each of
these heads are given by their seniors only.

5. Principle of Unity of Direction

According to this principle one unit means one plan, that is the efforts of all the
members and employees of organization must be directed towards one direction

6.

that is the achievement of common goal. If this principle is applied than it leads
to coordination in the organization.
At ICICI Bank the main aim of the employees of the bank is to satisfy the needs
of its customers .For this purpose the bank has prepared different types
of policies, accounts and directs all the efforts of their employee
towards the achievement of the organizational goal as well as towards
the achievement of customer satisfaction.

Subordination of Individual Interest to General Interest

The interest of the business enterprise ought to come before the interests
of the praise individual workers. In other words, principle of management
states that employees should surrender their personnel interest before the
general interest of the enterprise. Sometimes the employees due to this
ignorance, selfishness, laziness, carelessness and emotional pleasure
overlook the interest of the organization. This attitude proves to be very
harmful to the enterprise.
In ICICI Bank the managers takes care that they should not fall into
temptation of misusing his/her powers for individual or family benefit at
the cost of larger general interest of the workers/company. This will ensure
the same behaviour by the workers.

7. Principle of Remuneration of Persons

According to this principle employees in the organization must be paid

fairly or adequately to give them maximum satisfaction. The remuneration
should be just and fair because if employees are underpaid they will not
be satisfied and an unsatisfied person can never contribute his maximum.
At ICICI Bank the salary paid to the employees are paid according to the
Minimum Wage Act of Government, by comparing the salary given to
other employees working at same post. The bank also compares the
performance of the employees to determine their salary.

8. Centralization and decentralization

There should be one central point in the organization which exercises

overall direction and control of all the parts. But the degree of
centralization of authority should vary according to the needs of situation.
According to Fayol there should be centralization in small units and
proper decentralization in big organization. Further, Fayol does not favor
centralization or decentralization of authorities but suggests that these
should be proper and effective adjustment between centralization and
decentralization in order to achieve maximum objectives of the business.
The choice between centralization and decentralization is made after
taking into consideration the nature of work and the efficiency, experience
and decision-making capacity of the executives.
ICICI Bank uses a predominantly centralized structure to ensure that
control is maintained over their thousands of branches. The need to
ensure consistency of a customer and his trust and reliability on the bank.
It makes easier for ICICI bank to implement common policies and practices
for the business as a whole and makes it easier for ICICI Bank to
coordinate and control from the centre. It helps them achieving economies
of scale.

9. Scalar Chain

The scalar chain is a chain of supervisors from the highest to the lowest
rank. It should be short-circuited. An employee should feel the necessity
to contact his superior through the scalar chain. The authority and
responsibility is communicated through this scalar chain. Fayol defines
scalar chain as "the chain of superiors ranging from the ultimate authority
to the lowest rank." The flow of information between management and
workers is a must. Business opportunities must be immediately avoided
of. So we must make direct contact with the concerned employee.
Business problems need immediate solution, so we cannot always depend
on the established scalar chain. It requires that direct contact should be
established.
Within each branch, there is one and only one superior/boss The Branch
Manager, to whom all the employees of the respective branch are
accountable. He is the only superior to be consulted and to seek advice
from. The Gang Plank provided by henri Fayol is useful in case of ICICI
Bank because there is a long route and it saves the communication time.

10.

11.

Principle of Order

In this principle order does not mean command but it means orderly
arrangement of men and material that is a fixed place for everything and
everyone in the organization. Fayol insisted that there must be a fixed
place to keep every material and things used in the organization and fixed
place or seat or cabin for every employee of the organization so that no
time and energy is wasted in search of any material or any person.
At ICICI Bank the bank has developed a system known as OUTLOOK. It
helps the employees to know about the other employees of the
organization. An employee will also know about the contact details of
another employee, and can also know about the employees working under
that employee. Every asset of the organization has got a proper place in
the bank and every employee has fixed place in the bank.

Principle of Equity

Equity refers to kind, fair and just treatment to the employees of the
organization. Employees will put up their maximum efforts only when they
are treated with kindness and justice. If a manager is biased in dealing
with the employees then employees will get dissatisfied and will not
contribute to their maximum capacity. If this principle is followed in an
organization than the employees will get satisfied and will be motivated
which will lead to boost up their performance.
At ICICI Bank every employee are equally treated. There is no gender bias
between any employees. The rules that are applicable to a male employee
are also applicable on female employees as well. The bank grants leaves
to the employees without any gender bias, the bank have the same leave
policy for both male and female workers.

12.

Stability of Tenure of Personnel

It refers to no frequent termination and transfer. According to this principle

the management must provide the feeling of job security among the
employees because with the feeling of insecurity for the job, the
employees cannot contribute their maximum. If this principle is followed
than the efficiency level of the employees improves.

 At ICICI Bank the employees are assessed on a monthly basis. The

manager after proper assessment warns the employees whose
performance is low and gives them a chance to improve their
performance. But if the performance is not improving than the employees
are sent for training known as Performance Improvement Plan (PIP).
In PIP the employees are given proper training about their respective job.
There are certain levels fixed for termination of an employee by the
manager as well as the Human Resource Department of the company.
Performance of all employees is tracked regularly and both stars and
stalwarts are moved across businesses to encourage cross functional
exposure and Talent Fungibility.

13.

Principle of Initiative

Initiative refers to chalking out the plan and implementing the same. Fayol
suggested that employees of an organization must be given an
opportunity to take some initiative in making and executing a plan. It
gives immense satisfaction to the employees by doing so. By following
this principle manager can develop a feeling of belongingness among the
employee.
At ICICI Bank in every quarter there is a meeting held by the state head
and managers in which employees are invited to give their suggestions. In
this meeting the management discusses about the goals of the bank to be
achieved and new plans and rules that are to be implemented. At Gujarat
level, the meeting is held in Ahmedabad in every quarter. The employees
are invited to give their suggestions about the existing policies and the
new policies that the company will be introducing.
In order to encourage and foster continuous and transparent
communication channels across the length and breadth of the
organization a structured "Communication Calendar" is followed. This
includes various mechanisms like - Branch Visits, Skip Level chats, Town
Halls, Intranet, Internet, Mass Mailers, Web casts, Family Meet, Health and
Wellness initiatives, and Sports, hobbies and fun activities. Through such
communication platforms employees get opportunities for skip level,
leadership level and cross functional interaction. These channels are also
actively used for seeking feedback, knowledge sharing and engagement
initiatives.

14.

Principle of Espirit De Corps

Espirit De Corps means union is strength. Fayol emphasized on the team

work. He suggested that every employee in the organization must
consider himself as a part or member of a team and try to achieve the
team goal because team contribution is always better and more than
individual contribution.
ICICI Bank is working on this principle only. The employees of the bank
work in a team and contribute all their efforts towards the achievement of
organizational goal. An employee in the training process is given training
to work as a team and develop a feeling of belongingness towards the
organization.

CONCLUSION

Henri Fayol's "14 Principles of Management" have been a significant

influence on modern management theory. His practical list of principles
helped early 20th century managers learn how to organize and interact
with their employees in a productive way.
Although the 14 Principles aren't widely used today, they can still offer
guidance for today's managers. Many of the principles are now considered
to be common sense, but at the time they were revolutionary concepts for
organizational management.

QUESTIONNAIRE
FAYOLS PRINCIPAL OF MANAGEMENT
(For ICICI Bank Employees)
NAME

OCCUPATION

AGE

1. Do you get reasonable remuneration?

a. Yes
b. No
2. Are there strict rules regarding orderliness at your
workplace?
a. Yes

b. No
3. Are you given sufficient power to carry out your job?
a. Yes
b. No
4. Do you give priority to the interest of the company?
a. Yes
b. No
5. Do you get orders from more than one boss?
a. Yes
b. No
6. Does your employee encourage team spirit?
a. Yes
b. No
7. Is your employer kind and just to you?
a. Yes
b. No
8. Does your employer encourage initiative?
a. Yes
b. No
9. Are you being trained for doing the same work?
a. Yes
b. No
10.
Is the misuse of power at your work place?
a. Yes
b. No
11.
Does your workplace have clearly defined rules and
regulations?
a. Yes
b. No
12.
Do all the employees have to work according to the
same plan?
a. Yes
b. No
13.
Does your employer pay attention to your personal
needs and wants?
a. Yes
b. No
14.
Are all the employees doing the same job, paid equal
wages?
a. Yes
b. No

15.
Are you being allowed by your employer to make
some important decisions?
a. Yes
b. No
16.
Does the boss of your boss communicate directly
with you?
a. Yes
b. No
17.
What is your annual income?
a. Less than Rs. 300000
b. Rs. 300000 Rs. 600000
c. Rs. 600000 Rs. 1200000
d. More than Rs. 1200000
18.
What is your level of satisfaction about the working
environment?
a. Highly Satisfied
b. Satisfied
c. Dissatisfied
19.
What are your working hours in the company?
a. Less than 8 Hours
b. 8 Hours
c. More than 8 Hours
20.
How many shifts do you have to work for?
a. One Shift
b. Two Shift
c. More than 2 Shifts
21.
What is level of satisfaction about the salary you are
paid?
a. Highly Satisfied
b. Satisfied
c. Dissatisfied