Fayol’s 14 Principles of Management
Specialization/Division of Labor
By specializing in a limited set of activities, workers become more efficient and increase their output.
Authority/Responsibility
Managers must have the authority to issue commands, but with that authority comes the responsibility to ensure that the work gets done.
Discipline
Workers must obey orders if the business is to run smoothly. But good discipline is the result of effective leadership: workers must understand the rules and management should use penalties judiciously if workers violate the rules.
Unity of Command
An employee should receive orders only from one boss to avoid conflicting instructions.
Unity of Direction
Each unit or group has only one boss and follows one plan so that work is coordinated.
Subordination of Individual Interest
The interests of one person should never take precedence over what is best for the company as a whole.
Remuneration
Workers must be fairly paid for their services.
Centralization
Centralization refers to decision making: specifically, whether decisions are centralized (made by management) or decentralized (made by employees). Fayol believed that whether a company should centralize or decentralize its decision making depended on the company’s situation and the quality of its workers.
Line of Authority
The line of authority moves from top management down to the lowest ranks. This hierarchy is necessary for unity of command, but communication can also occur laterally if the bosses are kept aware of it. The line should not be overextended or have too many levels.
Order
Orderliness refers both to the environment and materials as well as to the policies and rules. People and materials should be in the right place at the right time.
Equity
Fairness (equity), dignity, and respect should pervade the organization. Bosses must treat employees well, with a “combination of kindliness and justice.”
Stability of Tenure
Organizations do best when tenure is high (i.e., turnover is low). People need time to learn their jobs, and stability promotes loyalty. High employee turnover is inefficient.
Initiative
Allowing everyone in the organization the right to create plans and carry them out will make them more enthusiastic and will encourage them to work harder.
Esprit de Corps
Harmony and team spirit across the organization builds morale and unity.