HENRI FAYOL’S 14 Principles of Management
1. DIVISION OF WORK: Work should be divided among individuals and groups
to ensure that effort and attention are focused on special portions of the task.
Fayol presented work specialization as the best way to use the human
resources of the organization.
- In practice, employees are specialized in different areas and they have
different skills. Different levels of expertise can be distinguished within
the knowledge areas (from generalist to specialist). Personal and
professional developments support this. 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. This management principle of the 14
principles of management is applicable to both technical and managerial
activities.
2. AUTHORITY: The concepts of Authority and responsibility are closely related.
Authority was defined by Fayol as the right to give orders and the power to
exact obedience. Responsibility involves being accountable, and is therefore
naturally associated with authority. Whoever assumes authority also assumes
responsibility.
- In order to get things done in an organization, management has
the authority to give orders to the employees. Of course with this authority
comes responsibility. According to Henri Fayol, the accompanying power or
authority gives the management the right to give orders to the subordinates.
The responsibility can be traced back from performance and it is therefore
necessary to make agreements about this. In other words, authority and
responsibility go together and they are two sides of the same coin.
3. DISCIPLINE: A successful organization requires the common effort of workers.
Penalties should be applied judiciously to encourage this common effort.
- This third principle of the 14 principles of management is about
obedience. It is often a part of the core values of a mission and vision in
the form of good conduct and respectful interactions. This management
principle is essential and is seen as the oil to make the engine of an
organization run smoothly.
4. UNITY OF COMMAND: Workers should receive orders from only one manager.
- The management principle ‘Unity of command’ means that an individual
employee should receive orders from one manager and that the employee
is answerable to that manager. If tasks and related responsibilities are
given to the employee by more than one manager, this may lead to
confusion which may lead to possible conflicts for employees. By using
this principle, the responsibility for mistakes can be established more
easily.
5. UNITY OF DIRECTION: The entire organization should be moving towards a
common objective in a common direction.
- This management principle of the 14 principles of management is all
about focus and unity. All employees deliver the same activities that can
be linked to the same objectives. All activities must be carried out by one
group that forms a team. These activities must be described in a plan of
action. The manager is ultimately responsible for this plan and he
monitors the progress of the defined and planned activities. Focus areas
are the efforts made by the employees and coordination.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL
INTERESTS: The interests of one person should not take priority over the
interests of the organization as a whole.
- There are always all kinds of interests in an organization. In order to
have an organization function well, Henri Fayol indicated that personal
interests are subordinate to the interests of the organization (ethics). The
primary focus is on the organizational objectives and not on those of the
individual. This applies to all levels of the entire organization, including
the managers.
7. REMUNERATION: Many variables, such as cost of living, supply of qualified
personnel, general business conditions, and success of the business, should be
considered in determining a worker’s rate of pay.
- Motivation and productivity are close to one another as far as the smooth
running of an organization is concerned. This management principle of
the 14 principles of management argues that the remuneration should be
sufficient to keep employees motivated and productive. There are two
types of remuneration namely non-monetary (a compliment, more
responsibilities, credits) and monetary (compensation, bonus or other
financial compensation). Ultimately, it is about rewarding the efforts that
have been made.
8. CENTRALIZATION: Fayol defined centralization as lowering the importance of
the subordinate role. Decentralization is increasing the importance. The degree
to which centralization or decentralization should be adopted depends on the
specific organization in which the manager is working.
- Management and authority for decision-making process must be properly
balanced in an organization. This depends on the volume and size of an
organization including its hierarchy.
- Centralization implies the concentration of decision making authority at
the top management (executive board). Sharing of authorities for the
decision-making process with lower levels (middle and lower
management), is referred to as decentralization by Henri Fayol. Henri
Fayol indicated that an organization should strive for a good balance in
this.
9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority
scale. Each manager, from the first line supervisor to the president, possess
certain amounts of authority. The President possesses the most authority; the
first line supervisor the least. Lower level managers should always keep upper
level managers informed of their work activities. The existence of a scalar chain
and adherence to it are necessary if the organization is to be successful.
- Hierarchy presents itself in any given organization. This varies from
senior management (executive board) to the lowest levels in the
organization. Henri Fayol ’s “hierarchy” management principle states that
there should be a clear line in the area of authority (from top to bottom
and all managers at all levels). This can be seen as a type of management
structure. Each employee can contact a manager or a superior in an
emergency situation without challenging the hierarchy. Especially, when
it concerns reports about calamities to the immediate
managers/superiors.
10. ORDER: For the sake of efficiency and coordination, all materials and people
related to a specific kind of work should be treated as equally as possible.
- According to this principle of the 14 principles of management,
employees in an organization must have the right resources at their
disposal so that they can function properly in an organization. In
addition to social order (responsibility of the managers) the work
environment must be safe, clean and tidy.
11. EQUITY: All employees should be treated as equally as possible.
- The management principle of equity often occurs in the core values of an
organization. According to Henri Fayol, employees must be treated kindly
and equally. Employees must be in the right place in the organization to
do things right. Managers should supervise and monitor this process and
they should treat employees fairly and impartially.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees
should always be a high priority of management. Recruitment and Selection
Costs, as well as increased product-reject rates are usually associated with
hiring new workers. - This
management principle of the 14 principles of management represents
deployment and managing of personnel and this should be in balance with the
service that is provided from the organization. Management strives to minimize
employee turnover and to have the right staff in the right place. Focus areas
such as frequent change of position and sufficient development must be
managed well.
13. INITIATIVE: Management should take steps to encourage worker initiative,
which is defined as new or additional work activity undertaken through self
direction.
- Henri Fayol argued that with this management principle employees
should be allowed to express new ideas. This encourages interest and
involvement and creates added value for the company. Employee
initiatives are a source of strength for the organization according to Henri
Fayol. This encourages the employees to be involved and interested.
14. ESPIRIT DE CORPS: Management should encourage harmony and general
good feelings among employees.
- The management principle ‘esprit de corps’ of the 14 principles of
management stands for striving for the involvement and unity of the
employees. Managers are responsible for the development of morale in
the workplace; individually and in the area of communication. Esprit de
corps contributes to the development of the culture and creates an
atmosphere of mutual trust and understanding.
In the last century, organizations already had to deal with management in
practice. In the early 1900s, large organizations, such as production factories, had
to be managed too. At the time there were only few (external) management tools,
models and methods available.
Thanks to scientists like Henri Fayol (1841-1925) the first foundations were laid
for modern scientific management. These first concepts, also called principles of
management are the underlying factors for successful management. Henri Fayol
explored this comprehensively and, as a result, he synthesized the 14 principles of
management. Henri Fayol ‘s principles of management and research were
published in the book ‘General and Industrial Management’ (1916).
The 14 principles of management can be used to manage organizations and are
useful tools for forecasting, planning, process management, organization
management, decision-making, coordination and control.
Although they are obvious, many of these matters are still used based on common
sense in current management practices in organizations. It remains a practical list
with focus areas that are based on Henri Fayol ’s research which still applies
today due to a number of logical principles.
ToolsHero - https://www.toolshero.com/management/14-principles-of-
management/
Management Innovations
https://managementinnovations.wordpress.com/2008/12/04/henrifayols-14-
principles-of-management/
12 management principles by kazoo inamori
1. Clearly State the Purpose and Mission of Your Business
Set high objectives that are noble, just and fair.
People have different reasons for being in business. No matter the reason, we must
first define the purpose and mission of our business clearly.
Some might say "I started my business because I want to make money." Others might
say it was "because I need to support my family." These reasons are fine, but they
probably will not serve as a unifying purpose to rally your employees.
The purpose and mission of a business should transcend personal interest; it must be
just and fair.
If you would like your employees to work hard, they need a noble reason for doing so.
Without having a just cause — one that enables us to say, "I work for this noble
purpose" — humans cannot earnestly give their utmost effort.
2. Set Specific Goals
Once targets are set, share them with all employees.
Suppose that your company's annual sales are currently $1 million. Setting a specific
goal means that you visualize your goal clearly with a definite number, thinking, for
example, "I would like to increase sales to $2 million next year." You should set clear,
concrete targets not only for sales, but also for profits.
The important point here is that the goals must be specific both in terms of quantity
and timeline.
In other words, you should not just set an overall goal for the entire company. Rather,
you should have a goal for each section of the organization. Even the smallest
functional unit of your workplace must have a specific numeric target. Furthermore,
based on this clear guidepost, all employees should have their own specific goals as
well.
This applies not only in drafting your annual plan, but in defining it, you must also
clearly define your monthly targets. When monthly goals are clear, our daily objectives
tend to become more visible. In this way, we must set clear goals so that all employees
can fully understand their roles and achieve their goals.
3. Keep a Passionate Desire in Your Heart
Your desire must be strong and persistent to permeate your subconscious mind.
I believe that events will materialize exactly as we conceive them in our mind. In other
words, the key to success is how strongly we can hold on to our desire to accomplish
our goals.
I'm sure you constantly struggle with various management issues. However, I believe
that the determining factor in whether a business succeeds or fails lies with whether
managers can become obsessed with the issue to the extent that it is on their minds
day and night.
That is why I listed the third principle as "Keep a passionate desire in your heart: your
desire must be strong and persistent to permeate your subconscious mind." If you
take advantage of the power of your subconscious mind, you can grow your business
even more.
4. Strive Harder than Anyone Else
Work steadily and diligently, one step at a time, never relenting in tedious tasks.
When I ask business owners "Are you working hard?" they all answer, "Yes, I am!" But
business is a competition. If your rivals strive harder than you, your mediocre efforts
will not be enough to challenge them; your competitors will win and your company will
decline. Your company cannot prosper if your effort is dictated by the attitude "I am
trying my best." In order to win the fierce corporate competition and grow your
business, you must strive harder than anyone else.
Another important point is that this unrivaled effort must be a relentless daily
practice. In other words, you must not forget that every great achievement is an
accumulation of tedious efforts.
5. Maximize Revenues and Minimize Expenses
Measure your inflow and control your outflow; don't chase profit, but let it follow
your effort.
Many of you might think it is natural for expenses to rise at the same rate as
revenues, but this is not true. You should not be misguided by the preconceived
notion that expenses rise in tandem with revenue. Continuously striving for creative
ways to maximize revenues while minimizing expenses — this is the mindset that will
lead to high profitability.
For example, suppose a company has sales of 100, with the requisite human
resources and production facilities to achieve that. Now, if orders jump to 150,
businesses will generally increase human resources and production facilities by 50
percent to meet demand.
This kind of simple math must not be done. When orders increase 50 percent, you
may want to increase your workforce by 50 percent to keep pace. However, you should
limit the increase to 20-30 percent and find ways to work more efficiently. By doing
this, you are able to create a highly profitable business structure.
6. Pricing Is Management
Pricing is top management's responsibility — to find that one point where
customers are happy and the company is most profitable.
There are myriad ways to set pricing: selling large volumes at low prices with smaller
profit margins or setting higher prices with fewer sales to achieve larger profit margins
and anything in between. Therefore, you can say that pricing reflects the thinking of
management.
It is difficult, however, to forecast how much volume you can sell or how much profit
you can gain by setting a certain price. If the price is too high, it won't sell; if the price
is too low, even high sales won't earn profit. Either way, setting the wrong price could
result in major loss of revenue.
Prices must be set after accurately determining the market value of the product, then
finding the one point at which "units sold" multiplied by "profit margin" creates the
highest total profit. I consider this one point to be the maximum price at which
customers will still be happy to purchase the product.
It is not the sales manager — let alone a salesperson — who should find this one
point. Rather, it should be the job of top management. This should be the universal
principle for price setting.
7. Success Is Determined by Willpower
Business management requires a persistent, "rock-piercing" will.
I believe a manager's willpower is reflected in the way a business is managed. In
running a business, once a goal is set, the manager must have intense willpower and
determination to achieve that goal.
If you keep adjusting your management goals as conditions change, then even goals
that were already revised downward will be at the mercy of the next economic
fluctuation and might require further downward revisions. Companies that do this will
lose credibility in the eyes of their investors and employees. Once a goal is set,
management must have a strong will to see it through to the end.
One essential point here is the need to attain sympathy from one's employees.
Management goals are originally created and set by the top manager. At the same
time, it's very important that the goals are such that they inspire all employees to
think "Let's do it!" In other words, the key is to convert the willpower of the manager to
the collective will of all employees.
On their own, employees aren't likely to propose extremely challenging numeric targets
that will surely impose hardships on themselves. This is why goals must be
determined by top management and disseminated to the entire workforce.
8. Possess a Fighting Spirit
Management requires a more combative mentality than any martial art.
I believe a fighting spirit is as indispensable in management as it is in any martial arts
or combat sports. People who are so good-natured that they've never had a dispute or
conflict with another person should promptly relinquish their position as president to
someone possessing a stronger fighting spirit.
No matter how you justify your meekness, intense competition is a guarantee in the
business world. Even the owner of a company with two or three employees must run
the business with a fierce fighting spirit to protect them. I believe that unless the
president challenges business rivals with this kind of fierce fighting spirit, the
business will not be able to effectively compete.
This "fighting spirit," however, is not dumb, brute force. It is more like the fighting
spirit mothers have protecting their young.
In the world of animals, for example, we can see a mother bird bravely stand up
against a hawk swooping down to attack her nest of chicks. In this manner, even a
small animal will dare to leap head-on at a big, powerful enemy about to attack her
baby. Mothers show fierce courage and fighting spirit to protect their young, even
endangering themselves to divert a predator's attention away from her babies.
I consider such "fighting spirit" necessary in order for managers to fulfill their duty.
9. Face Every Challenge with Courage
Do not behave like a coward.
Why do I say we need courage? It's because courage is required when making
decisions.
Believing that I could not go wrong if I made decisions based on "the right thing to do
as a human being," I have single-mindedly stuck to this principle when making
business decisions.
Most business managers, however, when confronted with situations requiring a
decision based on principles, find themselves faced with various limitations and often
end up making errors in judgment.
Rather than basing decisions on principles and what is right for the business, some
managers base decision-making on settling the matter as amicably as possible without
causing discord. It's these times that call into question whether a manager possesses
true courage.
If you make decisions based on principles, then even if others threaten you, slander
you in public or you face other hardships, you will be able to endure it all knowing
that you made the best decision for the good of the company. This is possible because
you possess true courage.
10. Always Be Creative in Your Work
Innovate and improve continuously. Today should be better than yesterday;
tomorrow, better than today.
No company begins at the top of the game. Endeavoring to do creative work and
striving for continuous improvement by making today better than yesterday, and
tomorrow better than today — these attitudes determine whether a business can be
creative and innovative.
What you can accomplish in a day might be limited, but a full year's commitment to
daily improvement can lead to significant change. This applies to everything, including
sales, production and R&D. Great inventions and major discoveries result from
continued effort in such tedious, mundane activities.
Regardless of your industry, if your company policy is to “Refrain from repeating the
same action in the same way every day. Always be creative in your work,” and
managers set the example, then within three to four years your company will surely be
transformed into an innovative company developing formidable new products.
11. Be Kind and Sincere
Business is based on partnerships and must bring happiness to all parties.
Being kind and considerate can also be described as "altruistic." In other words, it
means having a beautiful mind that restrains a person from satisfying his/her own
desires and instead drives him/her to help others, even if it means making sacrifices. I
believe this is the most important mindset to have in the business world, too.
There was a time when, much like Kyocera, many Japanese companies acquired
American companies; however, we do not hear of many success stories like Kyocera's
acquisition of AVX. Following these other mergers and acquisitions, those Japanese
companies ended up withdrawing from the market or selling off the acquisition at a
large loss.
I think that a difference in mindset is what separates our successful acquisition of
AVX from those that failed. The difference lies in whether you are sincerely thinking of
the other party or merely focused on your own interests.
In classic Chinese literature, it has been said that "Pride brings loss, and humility
receives increase." Even though it may appear as though we are not benefitting from
our altruistic behavior of caring for the other party, we are assured wonderful results
over the long term.
12. Always Be Cheerful and Positive. Hold Great Dreams and Hopes in the
Pureness of Your Heart
It is my belief that business managers and leaders must always be cheerful and
positive no matter how adverse the circumstances they face. Business managers and
leaders often face one difficult problem after another. The more challenging the
circumstances, the more important it is to stay hopeful and optimistic in order to
successfully cope with challenges and achieve positive results.
Leaders are called to display a tremendous fighting spirit and possess strong willpower
and determination in order to face down adversity. This is why it is important for
leaders to be cheerful and positive every day. Otherwise, they will not be able to
endure the difficulties of business management over a long period of time.
While on the one hand, you must have the unyielding determination to do whatever it
takes to achieve your goal; on the other hand, you must also believe that no matter
what happens there is a bright future waiting for you, and thus live your life cheerfully
and positively.
No matter what adversities you may be facing right now, look at your life in a positive
light. That is the cardinal rule of life and the crux of living as a manager.
Official Website of Kasuo Inamori
https://global.kyocera.com/inamori/management/twelve/twelve12.html
