Start the class by explaining the importance of Management in our daily lives. Henri Fayol is considered as father of Management. The 14 principles laid down by him are universally applicable in almost all real – life scenarios. Let’s take a small case study and try understanding the perspective of principles laid down by Henri Fayol.
In a society, the park area was to be renovated. Funds were collected by the residents and a representative was chosen to manage the funds and supervise the park renovation. The journey of that representative to get the park completed involves the use of all the principles of management. Let’s study them one by one:
- Division of work: The representative chosen from among the residents carefully called a meeting of gardeners, architect, swings contractor, and other people who were to be actively involve in the construction of the park. He allocated the tasks to each one of them. Now all the people knew what they had to do. This is the principle of division of work.
- Authority: The representative who was chosen had full decision making authority starting from choosing the contractors to the allocation of funds for each process. Fayol says that a person is only able to manage things if he owns it. If a person has been given authority, then only will he be able to feel responsible and accountable for his decisions.
- Discipline: The representative, while signing an agreement with all the vendors who are actively involved in renovation of park, decided a deadline date for the completion of each task. This was done to bring discipline and timeliness in the completion of the project.
- Unity of Command: Take for example, if the residents chose 4 representatives instead of 1, and all four of them gave different orders to different vendors, what will it result into? A complete chaos, isn’t it? Therefore, Fayol stresses that all the people who have to work on a project should receive orders and instructions from a single person. This principle is called Unity of Command.
- Unity of Direction: To complete a project, there could be many ways to do it. For eg: the placement of swings in the park could be of many types: centrally placed, corner placed, distributed cluster placed. But Fayol says that there should be one best decision made in the starting and all the people should be moving towards a common objective in a common direction.
- Subordination of Individual interests to general interests: Here, in the above example, the renovation of park is a general interest. All the residents willingly contributed the funds for the common benefit and beautification of society. This is what is known as subordination of Individual interests to general interests.
- Remuneration: Fayol says that a worker will willingly do his job only when he is fairly paid for that job. It is the duty of the representative to see whether the contract workers actively involved in the project are fairly paid or not.
- Centralisation vs. Decentralisation: 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. In the above example, the scenario is more of decentralisation where, the representative has decentralised all the tasks to different vendors or contractors such as gardeners, plumber, swing contractor etc.
- Scalar Chain: Fayol says that Managers in hierarchies are part of a chain like authority scale. Lower level managers should always keep upper level managers informed of their work activities. In the above case, it is very important for all the vendors to report about the progress of work to the representative.
- Order: The principle of order by Fayol suggests that the jobs that involve a similar kind of complexities should be treated equally. In the above case, all the vendors are closely connected in terms of the complexity of their jobs. Therefore, the remuneration given to them should be similar.
- Equity: The principle of equity suggests that there should be no favouritism in an organisation on the basis of background, education, position etc. The rules should apply to all the employees equally and all the employees should be treated as equally as possible.
- Stability: Stability suggests that a project can only be efficiently completed when the people working in that project are stable. Consider a situation where, the swing contractor took advance and didn’t turn up for 2 months. The other vendors kept waiting for him to do the final touch up. Therefore, Fayol suggests that a good management includes making the people stabilise and work for a project efficiently.
- Initiative: Fayol suggests that when people are genuinely connected in a project, take initiatives to complete that project whole – heartedly. In the above case, the representative definitely must have shown interest in getting the park renovated and took initiative to supervise the whole project by himself.
- Espirit de Corps: This is Spanish word for “Spirit of Co-operation”. Fayol suggests that there should be harmony and co-operation among the employees. Now, for example, if all the vendors involved in the park project do not co-operate or co-ordinate with each other, the project will be delayed and will not bring effective results.