Administrative Management of Henri Fayol

Division of Labor
 It refers specialization of jobs.
 All Work must be divided and subdivided and allotted to various persons according to
their knowledge in a particular area.
 Subdivision of work makes it simpler and results in efficiency.
 It also helps the individual in acquiring speed, accuracy in his performance.

Party of Authority & Responsibility

 Authority & responsibility are co-existing.
 If authority is given to a person, he should also be made responsible.
o Authority: The right of superiors to get accuracy from their sub-ordinates
o Responsibility: Duty for the performance of the job assigned.

Discipline
 It is about obedience.
 Discipline refers clear and fair agreements and judicious application of penalties
 Employees must obey, but this is two-sided: employees will only obey orders if
management play their part by providing good leadership

Unity of Command
 Sub-ordinate should receive orders & instructions from only one boss
 Each worker should have only one boss with no other conflicting lines of command
Unity of Direction
 It means one head, one plan for a group of activities having similar objectives.
 Efforts of all the members of the organization should be directed towards common goal.

Differences between Unity of Command and Unity of Direction

Basis Unity of command Unity of direction

It implies that a sub-ordinate should It means one head, one plan for a
Meaning receive orders & instructions from group of activities having similar
only one boss. objectives.
It is related to the functioning of
It is related to the functioning of
Nature departments, or organization as a
personnel’s.
whole.
It is necessary for fixing responsibility It is necessary for sound
Necessity
of each subordinate. organization.
It avoids duplication of efforts and
Advantage It avoids conflicts, confusion & chaos.
wastage of resources.
It leads to better superior sub- It leads to smooth running of the
Result
ordinate relationship. enterprise.

Subordination of Individual Interest

 Every worker of the organization has 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.

Remuneration
 Remuneration should be sufficient to keep employees motivated and productive.
 Wages should be determined on the basis of cost of living, work assigned, financial
position of the business, wage rate prevailing etc
 There are two types of remuneration
o Non-monetary Remuneration - a compliment, more responsibilities, credits
o Monetary Remuneration - compensation, bonus or other financial
compensation

The Degree of Centralization

 The focus 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

Scalar Chain
 The formal lines of authority from highest to lowest ranks are known as scalar chain.
  According to Fayol, “Organisations should have a chain of authority and communication
that runs from top to bottom and should be followed by managers and the
subordinates.”

Fayol’s Scalar Chain

 There is one head ‘A’ who has two lines of authority under her/ him.
 One line consists of B-CD-E-F.
 Another line of authority under ‘A’ is L-M-N-O-P. If ‘E’ has to communicate with ‘O’ who
is at the same level of authority then she/he has to cross the route E-D-C-B-A-L-M-N-O.
 This is due to the principle of scalar chain being followed in this situation.

Gang Plank
 According to Fayol, this chain should not be violated in the normal course of formal
communication. if there is an emergency then ‘E’ can directly contact ‘O’ through ‘Gang
Plank’ as shown in the diagram.
 This is a shorter route and has been provided so that communication is not delayed.

Order
 According to Fayol, “People and materials must be in suitable places at appropriate time
for maximum efficiency.”
 The principle of order states that ‘A place for everything (everyone) and everything
(everyone) in its (her/his) place’. Essentially it means orderliness.

Equity
 ”According to Fayol, this principle gives importance to kindliness and justice in the
behaviour of managers towards workers.
 This will make sure loyalty and devotion.
  Fayol does not rule out use of force sometimes.

Stability of Personnel
 “Employee turnover should be minimised to maintain organisational efficiency”
 Personnel should be selected and appointed after due and rigorous procedure.
 But once selected they should be kept at their post/ position for a minimum fixed
tenure.

Initiative
 Workers should be encouraged to develop and carry out their plans for improvements
 According to Fayol, Initiative means taking the first step with self-motivation.

Espirit De Corps
 Management should promote a team spirit of unity and harmony among employees
 According to Fayol, management should promote teamwork especially in large
organisations otherwise objectives would be difficult to realise.

Name of Principle Explanation

1. Division of Work Specialisation in workers Job design

2. Authority & Responsibility Managers are empowered

3. Discipline Formalised Controls

4. Unity of Command Subordinates report to only one boss

5. Unity of Direction Functions have only one plan and one boss

Subordination of individual interest

6. Employees are committed to the organisation
to common good

7. Remuneration of personnel Reasonable Pay reward system

8. Centralisation Trickle down decision making

Hierarchical, formalised communication

9. Scalar Chain
channel

Internal information system for control

10. Order
purposes

11. Equity Commitment obtained through kindness

Train employees and encourage them to

12. Stability of tenure of personnel
remain

13. Initiative Managers conceive and implement new ideas

Maintaining high morale among employees is

14. Espirit de corps
imperative