Fayol's 14 Principles of

Management
Prof Bhisma Murti

Masters Program in Public Health,

Graduate School, Sebelas Maret University
What are Principles of Management?
• The Principles of
Management are the
essential, underlying
factors that form the
foundations of successful
management.

• For example, successful

management needs
division of work for it will
increases efficiency of
labor.
According to Henri Fayol in his book General and
Industrial Management (1916), there are fourteen
'Principles of Management‘:
• Division of Work • The Degree of Centralization
• Authority and Responsibility • Line of Authority/ Scalar Chain
• Discipline • Order
• Unity of Command • Equity
• Unity of Direction • Stability of Tenure of Personnel
• Subordination of Individual • Initiative
Interest to Mutual Interest • Esprit de Corps/ Team Spirit
• Remuneration
Henri Fayol
• Henri Fayol was a French mining
engineer, mining executive, author
and director of mines who developed
general theory of business
administration that is often called
Fayolism.

• Born: July 29, 1841, Istanbul, Turkey

• Died: November 19, 1925, Paris,
France
• Nationality: French
• Education: École nationale supérieure
des mines de Saint-Étienne (1860)
 Division of Work
• The workforce is divided into small
tasks and specialization according
to the skills of a person
• According to Henri
Fayol specialization promotes
efficiency of the workforce and
increases productivity.
• In addition, the specialization of the
workforce increases their accuracy
and speed.
Discipline
• It is obedience, proper conduct
in relation to others, respect of
authority, etc.
• It is essential for the smooth
functioning of all organizations.
• A successful organization
requires the common effort of
workers.
• Penalties should be applied
judiciously to encourage this
common effort.
Misconduct and
Action Taken
Unity of Command

• Each worker should have

only one boss with no
other conflicting lines of
command.
 Unity of Direction
• The entire organization should
be moving towards a common
objective in a common
direction.
• All related activities should be
put under one group
• There should be one plan of
action for them
• They should be under the
control of one manager.
Remuneration
• Workers must be paid
sufficiently as this is a
chief motivation of
employees and
therefore greatly
influences productivity.
• The quantum and
methods of
remuneration payable
should be fair,
reasonable and
rewarding of effort.
 The Degree of Centralization
• Centralization implies the
concentration of decision
making authority at the top
management.
• The amount of power
handled with the central
management depends on
company size.
“Centralization” versus “Decentralization”
• “Centralization” is the systematic and
consistent reservation of authority at
central points in the organization
• “Decentralization” is the systematic
delegation of authority at all levels of
management throughout the
organization
• Delegating authority is not delegating
responsibility.
• Therefore, managers typically prefer
not to delegate authority for crucial
decisions.
Degree of Centralization
Advantages of centralized organizational structure:

1. Focused vision
2. Fast execution
3. Reduced conflict
4. Control and accountability
Degree of Centralization
Advantages of decentralized organizational structure:

1. Distributed burden of top executive

2. Increased motivation & morale
3. Greater efficiency & output
4. Quick decisions
5. Effective control
Distinction of Related Terms
Decentralization
• “Decentralization is usually referred to as the transfer of powers from
central government to lower levels in a political-administrative and
territorial hierarchy (Crook and Manor 1998, Agrawal and Ribot
1999).
• This official power transfer can take two main forms:
1. Administrative decentralization
2. Political decentralization.
Administrative Decentralization
• Administrative decentralization, also known as deconcentration,
refers to a transfer to lower-level central government authorities, or
to other local authorities who are upwardly accountable to the
central government (Ribot 2002).
Political Decentralization
• In contrast, political, or democratic, decentralization refers to the
transfer of authority to representative and downwardly accountable
actors, such as elected local governments” (Larson).
Deconcentration
• “The process by which the agents of central government control are
relocated and geographically dispersed” (Sayer et al.).
• “Administative decentralization, i.e. a transfer to lower-level central
government authorities, or to other local authorities who are
upwardly accountable to the central government” (Ribot 2002 in
Larson).
Devolution
• “The transfer of ‘natural resource management to local individuals
and institutions located within and outside of government’ (Edmunds
et al. 2003:1)
• Some people use ‘devolution’ only in reference to direct community
transfers” (Larson)
• “The transfer of rights and assets from the center to local
governments or communities. All of these processes occur within the
context of national laws that set the limits within which any
decentralized or devolved forest management occurs”(Sayer et al.).
Delegation
• “The transfer of managerial responsibility for specified functions to
other public organizations outside normal central government
control, whether provincial or local government or parastatal
agencies” (Ferguson and Chandrasekharan).
Line of Authority/ Scalar Chain
• The principle suggests that there should
be a clear line of authority from top to
bottom linking all managers at all levels.
• Authority: The right in the position and
hence the right in the person occupying
the position to exercise discretion in
making decisions affecting others and
the performance of individuals and
others.
• Power: The ability of individuals or
groups to induce or influence the beliefs
or actions of other individuals or groups
Order • Social order ensures the fluid operation
of a company through authoritative
procedure.
• Material order ensures safety and
efficiency in the workplace.
• Order should be acceptable and under
the rules of the company.
 Equity
• Employees must be
treated kindly, and
justice must be
enacted to ensure a
just workplace.
• Managers should be
fair and impartial
when dealing with
employees, giving
equal attention
towards all
employees.
Stability of Tenure of Personnel

• In order for an organization

to run smoothly, personnel
(especially managerial
personnel) must not
frequently enter and exit
the organization.
 Initiative
• Initiative on the part of
employees is a source of strength
for organization because it
provides new and better ideas.
• Using the initiative of employees
can add strength and new ideas
to an organization.
• Employees are likely to take
greater interest in the functioning
of the organization.
 Challenging Types of Initiative
• Afraid of failure
• Unmotivated
• Stuck in their
• Happy doing old
ways exactly what
they’re doing
 Esprit de Corps/ Team Spirit
• The need of managers to
ensure and develop morale in
the workplace; individually
and communally.
• Team spirit helps develop an
atmosphere of mutual trust
and understanding.
• Team spirit helps to finish the
task on time.
 Subordination of Individual Interest
• Management must see that the goals of the firms are always
paramount.