The 14 Principles of Management were first introduced in the year 1916 by Henry Fayol. Henry Fayol was managing director of a mining company responsible for over 1,000 employees and his theories are based on practical observations. The ideas put forward by Henri Fayol were not presented to the English speaking world until the late 40th of the twentieth century when they were first translated from French into English.
Henri Fayol proposed 14 principles of management, which should act as a manual for managers in their daily work, and which should 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, whereas the specialization principles give guidance about how to structure work most efficiently.
The 14 principles put forward by Henri Fayol are presented.
1. Specialization of work: Henri Fayol proposed that specialization of work increases output by making employees more efficient.
2. Discipline: Employees must follow orders, and the organization should stress the importance of following rules and orders effectively.
3. Authority: Managers should have complete command over subordinates so he can give orders effectively; therefore the organization must give managers the complete authority to give orders to subordinates.
4. Unity of command: Every employee should only report to one boss. because of the multiple power center, there is a chance of infighting within the organization.
5. Unity of direction: Each activity performed by the organization should only have one command center or manager giving directions to employees.
6. Subordination of individual interest: The individual interest of an employee should never be prioritized over the interest of the organization.
7. Remuneration policy: Remuneration includes financial and non-financial compensation. If an organization wants to keep its employees motivated and productive, then they should pay fair remuneration their employees. Employees should always be paid according to their services to the organization.
8. Centralization: always Decisions should be taken by top management, and not by the subordinates of the company.
9. Scalar chain of command: Communication 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 employee is generally a good thing, and good employees should be rewarded with lifetime employment opportunity. 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 their 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 the European countries, and many of today’s modern companies around the world still exhibits many of the managerial and organizational traits described by Henri Fayol.