Henri Fayol and the 14 Principles of Management

Introduction

• Henri Fayol: Considered one of the fathers of modern management
• Administrative Theory: Believed enterprise success depended more on administrative ability than technical skill
• Experience: Managing director (CEO equivalent) of Comambault, turned it from near liquidation to one of France's most valuable firms in 12 years

Functions of Management

• Planning, Organizing, Leading, Controlling
• Fayol realized management success was due to managing people effectively

14 Principles of Management

1. Division of Work
   • Specialization improves productivity and expertise
   • Allows workers to excel in smaller, specific tasks
2. Authority and Responsibility
   • Authority to give orders must align with accountability
   • Emphasis on responsible use of authority
3. Discipline
   • Clear rules and procedures
   • Penalties to ensure good behavior and order
4. Unity of Command
   • Workers report to one boss to avoid confusion and conflict
   • Fundamental principle; origin of other principles
5. Unity of Direction
   • Organizations should pursue common goals
   • Critical for organizational success
6. Subordination of Individual Interests
   • Group interest over individual interest
   • Essential for organizational harmony
7. Renumeration
   • Fair pay practices (consider labor supply, cost of living, profitability)
   • Prevents individual interests from overshadowing team goals
8. Centralization
   • Degree of centralization varies by organization
   • Balance between decision-making authority and employee initiative
9. Scalar Chain
   • Clear organizational hierarchy
   • Helps employees understand reporting relationships
10. Order
    • Organized work environment improves productivity and safety
11. Equity
    • Fair treatment of workers
    • Essential for long-lasting worker commitment
12. Stability of Tenure
    • Minimize employee turnover to reduce costs and disruptions
13. Initiative
    • Encourage new responsibilities and skill acquisition
    • Frees up management for other tasks
14. Spirit of Cooperation
    • Promote teamwork and communication for better morale and unity

Lasting Impact

• Fayol's principles still widely agreed upon and followed today
• Shifted focus towards training and educating managers for administrative roles

Next Lecture

• Focus: German sociologist Max Weber

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