Organizati

onal
Behaviour
Report writing CA-2

Arpan Baul BCA - 1st year

Roll no. 31042723012
 Henri Fayol’s Fourteen Principles of
Management

 What are Principles of Management?

Any principle of management is a universal and general concept for decision-making and
execution. For example, while making a decision regarding the promotion of an employee, the
manager may decide considering their age or rank. Whereas others may promote them based
on their conduct and performance.
The principle of management is based on experience and changes in the business industry;
therefore, these principles may not be as firm as those of science. They involve human
behaviour and are used accordingly in the required situation. Thus, these principles change
with respect to time.

 Principles of Management by Henri Fayol :

1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to General Interest
7. Remuneration of Employees
8. Centralization and Decentralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Personnel
13. Initiative
14. Esprit De Corps

1. Division of Work
It refers to dividing the work into different individuals. Fayol recommended that work of all
kinds must be divided and allocated as per competence, qualification, and experience of
individuals. By breaking down complex projects into smaller, more manageable tasks,
individuals can become more efficient and skilled in their specific areas, leading to improved
overall productivity. According to Fayol, “Division of work intends to produce more and
better work for the same effort. Specialization is the most efficient way to use human
effort.”
For example, a bank has several operations, like collection and payment of cash, issue of
cheque books, etc. All those activities are divided and allocated to a different person in the
bank. This method of doing work also improves their efficiency and makes them experts in
their field.
2. Authority & Responsibility
According to this principle, there should be a proper balance between authority and
responsibility. Authority is the duty, which a subordinate is expected to perform. Authority
and responsibility go hand in hand. Authority without responsibility leads to irresponsible
behavior, while responsibility without authority will make a person ineffective.
According to Fayol, “Authority is the right to give orders and obtain obedience, and
responsibility is the corollary of authority. The two types of authority are official authority,
which is the authority to command, and personal authority, which is the authority of the
individual manager.”
For example, if a foreman is given the responsibility to produce 50 units per day, then he must
be given the required authority to achieve this target. If he is not given authority to draw raw
material from the stores, then he cannot be blamed.

3. Discipline
Discipline refers to obedience to the rules and regulations of the organization. Discipline
requires good supervision at all levels of management. According to Fayol, good supervision
at all levels, clear and fair rules, and a built-in system of penalties will help to maintain
discipline. It is a must for all levels of management. Maintaining a disciplined work
environment is crucial for organizational success. This principle highlights the importance of
mutual respect, adherence to established rules and regulations, and fair application of
consequences for both positive and negative behavior.
For example, employees must be disciplined to work effectively and efficiently to meet their
promises of bonuses, increments, and promotions. Its smoothness systemizes the functioning
of an organization by providing better relations between management and employees.

4. Unity of Command
According to this principle, each subordinate should receive orders and be accountable to only
the superior. No person can serve several masters at the same time. If an employee gets orders
from two superiors at the same time, then the principle of unity of command is violated, and
he will find it very difficult to decide who he has to obey first. Each employee should report
to only one direct supervisor, eliminating confusion and conflicting instructions. This
principle ensures clear accountability and streamlines communication within the organization.
For example, there is a salesperson who is asked to clinch a deal with a buyer and he is
allowed to give a 12% discount by the marketing manager. But the finance department tells
him not to offer more than a 6% discount. In this case, there is no unity of command, which
will lead to confusion and delay.

5. Unity of Direction
It implies that there should be one head and one person for proof of activities having the same
objectives. According to this principle, all the activities should be carried under the direction
of one head, and there should be effective coordination in all the activities. This principle
ensures unity of action and avoids unnecessary duplication of work. Activities of individuals
and teams within an organization should be aligned toward achieving the same objectives.
This fosters a sense of collective purpose and prevents individual efforts from working at
cross-purposes.
For example, if an organization has four departments for different activities, then each
department must be directed by one superior, and its employees should give their whole
efforts to achieving the plan of the organization. Each division should have its in charge,
plans, and execution resources. There should not be an unnecessary duplication of efforts and
a waste of resources.

6. Subordination of Individual Interest to General Interest

According to this principle, the interest of the organization as a whole must prevail over the
interest of the individual. It must be the interest of the organization that should be placed
above the interest of employees. It is the duty of the manager to reconcile them.
If reconciliation is impossible, then general interest must supersede individual interest.
A manager must sacrifice his interest. Manager can achieve their objectives when the
organization recovers from financial crises. While individual interests are important, they
should not supersede the collective goals of the organization. This principle encourages
employees to prioritize the organization’s success while recognizing individual contributions.
For example, there is a company that wants maximum output from its employees by
providing fewer salaries. There are employees on the other hand who want to get the
maximum salary while working the least. In both situations, the interests of the company will
supersede the interest of any one individual. As the interests of the workers and stakeholders
are more important than the interests of any one person.

7. Fair Remuneration of Employees

According to this principle, remuneration should be fair and satisfactory to both employees
and the organization. This principle leads to harmonious relations in the organization. Fair
remuneration should be determined based on government rules related to wages, financial
position of the organization, nature of work, and cost of living. Employees should be paid
reasonable wages for their service, which should provide them with a moderate standard of
living. Employee compensation should be fair, equitable, and motivating. This principle
acknowledges that appropriate compensation not only attracts and retains talent but also
incentivizes high performance.
For example, if an organization earns higher profits, then it should share some of its parts with
the employees in the form of bonus.

8. Centralization and Decentralization

Centralization refers to the concentration of authority at the top level, and decentralization
means distribution at all levels of management. According to this principle, there should be a
proper balance between centralization and decentralization. The degree of centralization and
decentralization depends on various factors, such as experience of the employees, ability of
subordinates, size of the organization, etc. Too much centralization leads to loss of control of
top management. Therefore an optimum balance should be maintained according to the need
of the organization. The degree to which decision-making authority is concentrated at the top
management level versus being delegated to lower levels is crucial. Fayol advocated for a
balance, with centralized control over crucial decisions and decentralized authority for
operational matters.
For example, Authority to take vital decisions must be given to the top management, whereas
authority related to operational activities must be given to the middle and lower level.

9. Scalar Chain
According to this principle, there is a scalar chain of authority and communication that moves
in a straight line from the superior to the lowest subordinate. Henri Fayol permitted a shortcut
of chain in case of urgency known as gang plank. Gang plank allows direct communication
between two employees of the same level. While adhering to the chain of command is
essential, Fayol also acknowledged the need for flexibility when necessary.
For example, E wants to communicate with I for some important work. The message should
orderly move from E to D, then to C, B, A, and then down from A to F then to G, H and
finally to I. This will take lots of time so to avoid this delay in work; Fayol suggested the
concept of Gang Plank. In this concept ‘E’ can communicate directly with ‘I’ on an urgent
matter, the gang plank allows two employees of the same level to communicate directly with
each but each must enforce to its superior.

10. Order
According to this principle, there should be a proper place for everything and everyone. Henri
Fayol emphasized on two types of order: material order and social order. In material order,
there must be a plan for everything. It ensures fix a place for various material tools. Whereas
in social order, there must be an appointed place for every employee, which ensures a proper
and fixed place/cabin for each employee. A well-organized and orderly workplace fosters
efficiency and minimizes wasted resources. This principle emphasizes the importance of
maintaining a clean and organized physical environment and establishing clear procedures for
various tasks.
For example, there should be specific place for foremen in a factory so that the work can be
done easily.

11. Equity
According to this principle, there should not be any discrimination amongst employees based
on religion, caste, language, or nationality. Equity ensures coordinated relations between
superiors and subordinates. It leads to the smooth and successful working of the enterprise. It
improves satisfaction and motivation of the employee, creating relation between manager and
employees. Managers should treat all employees with fairness and respect, regardless of their
background or position. This principle fosters trust, motivation, and a positive work
environment.
For example, workers doing similar jobs in the same organization should be paid same wages
irrespective of their sex, caste, religion and language.

12. Stability of Personnel

According to this principle, there should be proper effort to achieve stability and continuity of
employment. Fayol said that employees should be kept in their position for a reasonable time
to show result stability creates a sense of belonging, and workers are encouraged to improve
their quality of work. This will increase the efficiency of employees, and it will also increase
the reputation of the organization. Unnecessary labor turnover creates an atmosphere of
disbelief. Continuous changes in employees disturb the working environment.
For example, new employees must be given ample time to adapt to new culture and
environment of the workplace.

13. Initiative
According to this principle, workers should encourage and should be given an opportunity to
take initiative in making and executing the plan. Henri Fayol suggested that employees at all
levels should be encouraged to take initiative in work. It motivates employees to work better
and to take more interest in the organization. The initiative is a powerful motivator of human
behavior and a source of strength for the organization. This increase the mental growth and
feeling of belongingness in employees. It increases the commitment of employees toward the
organization. Lack of initiatives may create an atmosphere of non-cooperation. Encouraging
employees to take initiative and use their creativity can lead to innovation and problem-
solving. This principle fosters a sense of ownership and empowers employees to contribute
beyond their specific roles.
For example, organizations must have an employee suggestion system so that they have
feeling of belongingness.

14. Esprit De Corps

According to this principle, management should take reasonable steps to develop a sense of
belongingness and a feeling of team spirit amongst employees. In order to achieve the best
possible result, individual and group efforts need to be integrated. Production is teamwork
and it requires the full support of all members. For this purpose, a manager should replace ‘I’
with ‘We’ in his conversations to bring a team spirit among the employees. This will develop
an atmosphere of mutual trust. It will help in achieving group goals, leading to cordial
relations between management and workers. This principle emphasizes the importance of
promoting team spirit and a sense of unity within the organization. Building camaraderie and
fostering a collaborative environment can significantly enhance employee engagement and
overall success.
For example, authority and responsibility meant empowering managers, but now it means
empowerment of employees because of flat organizational structures that are gaining ground.
Challenges & limitations of Organizational
Behaviour
 What is Organisational Behaviour?
Organisational Behaviour involves interactions between individuals within an organization and
how these interactions influence the organization’s progress towards its objectives. It scrutinizes
the effects of various elements on behaviour within an organization. The primary emphasis of
organizational behaviour is on boosting employee productivity. According to the research study,
when employees feel recognized and important, they tend to work harder and be more
productive. This increased productivity can directly contribute to the organization’s profitability.
In addition, organizational behaviour also explores how organizations can more effectively
manage, modify, and enhance behaviour to attain desired results, such as productivity, employee
well-being, or job satisfaction.

Challenges for Organizational Behaviour:

Organisational Behaviour faces numerous challenges that are constantly evolving to improve
efficiency and achieve business goals. While the nature of jobs changes, some problems
persist.
1. Lack of Clear Direction: Leaders may either seldom discuss or outline a
deliberate future direction or strategy, or they may fail to communicate a coherent message
about this strategy to all organization members. Organizations often have numerous activities
to carry out but lack the synchronization needed to generate the momentum necessary for the
organization to modify, adapt, and shape its future.
2. Integrating Multiple Personalities: The difficulty of integrating multiple
personalities into a cohesive and unified team is a significant challenge. The mix of
backgrounds, judgments, views, and experiences can pose challenges for teams trying to
come together and work harmoniously.
3. Development of Key Capabilities and Behaviors’: Despite the presence of
many hardworking individuals with good intentions in any organization, creating a high-
performance organization often remains elusive.
4. Poor Communication and Feedback: Challenges arise when people either do
everything possible to avoid confronting others and holding them accountable, or seize any
opportunity to berate people, belittle them, and crush their spirits.
5. Absence of Perception: Building a viable organization requires hard work and a
keen understanding of the culture and environment that exist in a business. A clear
understanding of market requirements and market forecasts is essential. The absence of these
can result in significant losses in every sector.
6. Turnover: This is all about how frequently people leave a company and need to be
replaced. A high turnover rate can often be traced back to the work environment or the style
of leadership. This situation demands recruiters invest more time and resources in the hiring
process. Companies need to focus on keeping their employees satisfied, as this helps in
retaining talented professionals and attracting suitable candidates for open positions.
 7. Productivity Issues: This challenge comes into play when there is a lack of
motivation among the staff, leading to reluctance to fulfill their job responsibilities. This can
slow down the company’s operations and make it more difficult to achieve set goals.
Productive employees have a clear understanding of what’s expected of them, and they put in
the effort to meet these expectations.
8. Limited Innovation: This refers to a company’s struggle to come up with new
ideas and get ahead of its competitors. This can also have an impact on employee motivation.
Employees who are not passionate about their roles may not feel driven to perform them. As
time passes, a company should change its approach. Shaking things up in the workplace can
lead to the emergence of fresh ideas and reignite passion among employees.
9. Dealing with Workplace Conflicts: In any organization, conflicts can emerge
due to varying opinions, personalities, attitudes, and objectives. Such conflicts can hamper
teamwork, lower productivity, and decrease employee satisfaction. However, by establishing
a conflict resolution process and offering conflict management training, these conflicts can be
effectively managed.
10. Clarifying Roles and Responsibilities: Non-clarity in roles and
responsibilities can lead to confusion and inefficiencies among individuals, resulting in errors
and overlapping tasks. It is crucial to clearly outline each person’s roles and responsibilities.
Additionally, establishing effective communication channels can help in seeking clarification
and avoiding misunderstandings.

Limitations of Organizational Behaviour:

These are some of the main limitations of Organizational Behavior
1. Organizational behaviour cannot abolish conflict and frustration but can only reduce
them. It is a way to improve but not an absolute answer to problems.
2. It is only one of the many systems operating within a large social system.
3. People who lack system understanding may develop a 'behavioral basis', which gives
them a narrow view point, i.e., a tunnel vision that emphasizes on satisfying employee
experiences while overlooking the broader system of an organization in relation to all its
public.
4. The law of diminishing returns also operates in the case of organizational behaviour.
It states, that at some point increase of a desirable practice produce declining returns
and sometimes, negative returns.
5. The concept implies that for any situation there is an optimum amount of a desirable
practice. When that point is exceeded, there is a decline in returns. For example, too
much security may lead to less employee initiative and growth. This relationship shows
that Organizational effectiveness is achieved not by maximizing one human variable but
by working all system variables together in a balanced way.
6. A significant concern about organizational behaviour is that its knowledge and
techniques could be used to manipulate people without regard for human welfare. People
who lack ethical values could use people in unethical ways.
7. OB helps an individual to understand human behaviour only at workplace or he/she may
be a failure at domestic front.
8. OB has not contributed to improved interpersonal relations in an organization.
Jealousies, back stabbing, harassments go side by side with rewards, lectures,
discussions, smiles etc.
9. OB is selfish and exploitive. With emphasis on motivation, efficiency, productivity there
exists a kind of competition among workers and they are not able to live in harmony.

Bibliography & References: https://www.geeksforgeeks.org/