Organizational activities must have one central authority and one plan of action

Henri Fayol (1840-1925) was a French industrialist and mining engineer. He is also known as father of general management. He developed the theory of administrative management, which attempts to find a rational way to design an organization as a whole. It calls for a formalized administrative structure, a clear division of labor, and delegation of power and authority to administrators. It focuses on the chief executive and goes downwards.

1. Division of work: Division of work indicates breaking down of complex work into simpler and homogenous unit. It facilitates specialization at work which helps to attain greater efficiency and effectiveness at work. This principle can be applied to all kind of works of managerial as well as technical responsibilities and at all levels of organization.

2. Authority and Responsibility: This principle states that authority without responsibility leads to irresponsible behavior and responsibility without authority will make a person ineffective. Thus, Fayol suggests that there should be a balance between responsibility and authority. Authority is a legitimate right or power to make decision and command over workforce. It is associated with the position or management hierarchy of the organization. Responsibility is the obligation or duty assigned to employees to accomplish organizational goals. Along with responsibilities, appropriate level of authority should be delegated to subordinates.

3. Discipline: This principle implies that everyone in the organization should be self disciplined so that every work can be done easily and smoothly. Discipline implies obedience and respect of authority. This is state of obeying specified rules, regulations and command of the superior. Indiscipline acts of individual lead misunderstanding, lack of coordination and cooperation ultimately lead the organization to failure.

4. Unity of command: This principle states that there must be only one superior or only one command at a time to the subordinate. When a person gets command from many superiors at a time then i creates confusion and delays in action. Only one superior can command many subordinates at = time but a subordinate should not get command from many superiors at a time.

5. Unity of direction: This principle states that same direction and instruction should be given to the similar type of responsibilities. If different superiors give different directions and techniques to single subordinate to accomplish same task, then subordinate may be confused regarding which direction should be followed. Unity of direction creates the unity of action. Simply, there must be one head, one plan and one boss.

6. Subordination of individual interest to general interest: Different individuals associated in the organization may have countless personal goals. But, organizations get established with organizational goals. If individuals are guided by their own personal goals ignoring organization goals, neither individual nor the organization can attain the goals. So, individuals must incorporate their interest with the organizational needs. They have to give first priority to organizational goals (general interest) rather than individual goals (individual interest) accepting that at attainment of organizational goals each individual can attain the individual goals.

7. Remuneration of personnel: According to this principle fair, transparent and marketable salary, wages and benefits should be provided to the employees. Remuneration must be in accordance with the experience, qualification, productivity, market inflation rate, etc. Organization should provide financial and non-financial benefits to the employees satisfying their basic needs. It should be competitive and based on productivity. A good remuneration system encourages employees for higher productivity and boost up their morale.

8. Centralization: Principle of centralization states that the ultimate authority of decision making must be in top level management. This is the philosophy of controlling organizational activities by the central authorities. This principle believes that the final authority should be retained to the top level of management though appropriate level of authorities should be delegated to the sub ordinates. Management must balance centralization and decentralization for the effective and disciplined functioning of organization.

9. Scalar chain : Scalar chain refers to the chain of superior-subordinates from top to the bottom for effective flow of authority, orders and communication. This principle states that there should be unbroken chain for command and communication.

10. Order: Order indicates placing the man, machinery, and things at the right place and sequence so that each resource can be obtained easily without loss of time. It says that right man should be appointed at right place at right time. For the efficiency and the productivity, right things must be kept at right place and time.

11. Equity: Equity refers to fair treatment, equality or justice in the behavior and performance of each  person in the organization. There should not be any discrimination on the basis of castes and creeds, religion, geography, and common saying of nearest and dearest. This principle ensures the healthy industrial relation between management and labour.

12. Stability of tenure: Stability of tenure refers to the duration of job done in an organization. Principle of stability of tenure states that there must be enough assurance of job security in the organization. Job insecurity decreases the morale of the employees as they think they can be fired at any time for any reason due to which their effectiveness and efficiency get decreased. Lack of stability of tenure increases labour turnover.

13. Initiative: According to this principle, every manager must take steps in order to make the work done properly to realize the goal of an organization. The initiation makes every work possible as it encourages and boost up the morale of employees. Managers must participate in execution of any plan and policy. Initiation encourages subordinates to devote their effort for utmost benefit. 3

14. Esprit de corps: Esprit de Corps refers to strength in unity. This principle states that there must be joint effort to materialize the goal of an organization as single effort doesn't suffice. The unity always generates team spirit (synergy effect) which can be strong reason for organizational success. Cooperation increases positive attitude towards the organization and its goal.

Which of the following principle suggests that organizational activities must have one central authority and one plan action?

What are the principles of management according to Henri Fayol?

What are the 3 types of theories in the classical approach to management?

What is the importance of the 14 principles of management?