Principles of Management

Principles of Management are precepts which provide directions for managerial decision making and action. They
serve as guidelines in the effective practice of management. These principles are universal in application, flexible
in scope, have a cause and effect relationship and are influenced by complexities of human behavior. These are
important because they describe the nature of management, provide guidelines to managers and highlight the
areas of managerial activity which require particular attention and action. In this article, I shall discuss the
principles formulated by early management thinkers Henri Fayol and Frederick Winslow Taylor.

Henri Fayol (1841–1925)

Henri Fayol was an important proponent of the Classical School of Management. He was a mining engineer and
well known for the general principles of management formulated by him in the 20th century. Fayol has been
described as the father of modern management theory. On the basis of his long experience in industry, Fayol
enumerated and explained fourteen principles of management.

These are as follows:

1. Division of Labour: Division of labour leads to specialization which increases the efficiency of individual
employees. Fayol recommended that work of all kinds must be subdivided and allocated to a number of
persons. Subdivision makes each task simpler and results in greater efficiency. By repeating a small part of
the work the individual acquires speed and accuracy in its performance.

2. Parity of Authority and Responsibility: The principle of parity suggests that there must be parity between
authority and responsibility. Giving authority without corresponding responsibility can lead to arbitrary
and unmindful use of authority. Similarly, if a person is given some responsibility, he must also be given
adequate authority.

3. Discipline: Discipline in management refers to obedience, proper conduct in relation to others, and
complying with the rules and regulations of the organisation. Smooth running of business requires
discipline on the part of both workers and management.

4. Unity of Command: This principle states that a subordinate should receive orders and be accountable to
only one superior. No employee, should therefore, receive instructions from more than one person.
Receiving orders from multiple bosses would lead to confusion and conflict.

5. Unity of Direction: This principle states that the efforts of all the employees should be directed towards
common goals of the organisation. The principle seeks to ensure unity of action, coordination of strength
and focusing of effort.

6. Subordination of Individual to General Interest: The interest of the organization as a whole must take
precedence over the interest of individuals. Generally, the effort must be to bring about convergence of
general organizational and individual interests. In case of conflict, individual interest must be sacrificed in
the greater interest of the organization.

7. Fair Remuneration to Employees: Fayol recommended that remuneration of employees should be fair
and reasonable. To be fair to employees, wages should be determined on the basis of work assigned, cost
of living, financial position of the business and average wage rates in the industry.
 8. Centralisation and Decentralisation: Fayol emphasised that an organization should strive to achieve a
balance between complete centralization and decentralization. In small organizations where the range of
activities is generally small, grater centralization is possible. But in large organizations, there should be
balance between centralization and decentralization.

9. Scalar Chain: Fayol defines scalar chain as the chain of superiors ranging from the top management to the
lowest ranks. This principle suggests that there should be a clear line of authority from top to bottom
linking all managers in the organisation. The scalar chain serves as a chain of command as well as a chain
of communication. Fayol also stressed that lateral communication is also fundamental and termed it
‘Gang Plank’.

10. Order: This principle is concerned with arrangement of things (material order) and placement of people
(social order).

11. Equity: The principle of equity suggests that similar treatment is meted out to personnel in similar
positions.

12. Stability of Tenure of Personnel: Fayol emphasised that employees should not be moved from their
positions frequently and the period of service in a position should be fixed. An employee cannot render
useful service if s/he is removed before s/he gets accustomed to the work assigned.

13. Initiative: The principle states that employees at all levels should be allowed to take initiative in work
related matters.

14. Esprit de Corps: This principle refers to team spirit that is peaceful interaction and mutual understanding
among members of a work group. Managers must take steps to develop a sense of belonging among
members of a work group.

Frederick Winslow Taylor (1856 –1915)

Frederick Winslow Taylor was a mechanical engineer who sought to improve industrial efficiency. He is regarded as
the father of scientific management. Scientific management refers to the application of science to management
practices. It involves the use of scientific methods in decision making for solving management problems. Taylor
developed a number of principles of scientific management.

These are as follows:

1. Development of a science for each element of a man’s work: Taylor advocated that the work/jobs
assigned to employees should be observed and analysed with respect to each element or part, and the
time involved. This needs to be done to arrive at the best way of performing the job and to determine the
standard output.

2. Scientific selection, training and development of workmen: The workers skills and experience must be
matched with the requirements of the respective jobs they are to perform. The employees should be
selected on the basis of tests and interviews. The workmen selected must be given appropriate training
for the specified tasks assigned.

3. Close cooperation between workers and management: Taylor suggested that cooperation with workmen
is a must for managers. It is only then that they can ensure that work is carried out in accordance with the
standards of performance and the goals of the organization are met.
 4. Division of responsibility between management and workers: The planning of work is the responsibility
of managers and the execution of planned work the responsibility of workers. Taylor advocated
separation of the two kinds of responsibilities so that each individual may be able to perform the tasks to
the best of his/her abilities and be compensated accordingly.

5. Mental Revolution: The workers and managers should have a complete change of outlook, a mental
revolution, with respect to their mutual relations and in relation to the work effort. They should take new
initiatives and innovate to improve their relationships and the work processes.

6. Maximum prosperity for employers and employees: Taylor advocated that the management should
secure maximum prosperity for the employers along with maximum prosperity of each of the employees.

Henri Fayol and Frederick Winslow Taylor have been the pioneers in the field of management science. They have
contributed immensely to the study of management and have published several books towards this end. The work
of these classical era thinkers has been complementary. Fayol’s and Taylor’s principles of management emerged
out of their encounter over the years with workers in industrial organisations. They realized that that the
problems of personnel and their management at all level were essential for overall organizational success.
Whereas Taylor worked from the operative level (bottom of the hierarchy) and moved upwards, Fayol preferred
the top down approach and moved from top level (Managing Director) down the hierarchy.