Fayol’s 14 Principles of Management Part 2

9. Scalar Chain: Scalar chain principle implies that a single, uninterrupted chain of authority should extend from the top level to the lowest position in the organisation. This further implies that the line of authority and communication flows from owners or board of directors to the superiors or foreman to the subordinates and workers. As an exception, Fayol introduced the concept of ‘Gang Plank’ to avoid delay in communica-tion in case of emergency between two people working on the same level but in different departments. Gang plank is a temporary arrangement between two subordinates in different departments to facilitate quick and easy communication. As shown in Fig. 2.2, there are two scalar lines from ‘A’ to ‘G’ and ‘A’ to ‘Q’, where ‘A’ is the head of the organisation, while ‘G’ and ‘Q’ are the workers at the lowest level in an organisation. The two scalar lines depict two different departments headed by ‘A’. ‘B’ and ‘L’ are a level lower than ‘A’ and so on. An emergent communication can be made between ‘F’ and ‘P’ through a gang plank shown as a dotted line where F and P can contact each other directly. However, both ‘F’ and ‘P’ need to contact their respective superiors ‘E’ and ‘O’ regarding their communication with each other. 10. Order: Order means that the right person is at the right place. This principle states that materials, equipment and other inputs should be in the right place at the right time and workers should be assigned to the jobs best suited to them. For example, to produce 100 steering wheels, the foreman should ensure that suitable inputs are in order to produce the exact number of steering wheels to avoid wastage or confusion about the order. 11. Equity: Equity principle implies that all workers should be treated equally and provided equal opportunity. Equity however does not discount for sternness and forcefulness. Superiors in the organisation should be kind and impartial and should not discriminate in terms of gender, religion, caste, etc. For example, women and men employees should be equally treated with respect and professionalism. 12. Stability of Tenure of Personnel: Stability of tenure refers to retention of workers by removing the feeling of job insecurity among workers. Retaining workers should be the highest priority of management that provides security, increase productivity and reduces employee turnover. High rates of employee turnover1 are inefficient and should be avoided. For example- if a hard-working employee is dissatisfied with her monotonous job, she can be retained by providing a new position (or responsibility) in another department within the company that requires her to explore and advance her capabilities. 13. Initiative: This principle implies that workers or subordinates should be given the freedom to take initiative in carrying out the work. They feel satisfied with their jobs and in turn increase efficiency of the organisation. For example– satisfied employees usually come on time and leave on time ensuring quality of work and maintaining time efficiency without being instructed by the management. 14. Esprit de Corps: Esprit de corps literally means team spirit and harmony that unites the organisation thus promoting a sense of organizational unity. Esprit de corps is a French phrase which means ‘group spirit’ and every organisation should maintain group cohesion to facilitate productivity and efficiency. For example, a worker’s injury that may lead to delay and loss in time for job completion can be managed by other workers uniting together and covering the possible time and costs lost by the injured worker. Fayol’s 14 Principles of Management – Division of Work, Authority and Responsibility, Discipline, Unity of Command, Centralization, Scalar Chain and a Few Others Fayol introduced the following general principles of management: 1. Division of Work: According to Fayol there should be clear cut division of work in the organization. Division of labour is done to cover the all activities of the organization and to avoid the overlapping of the activities. This ensures more and better work with the same effort in the organization. 2. Parity of Authority and Responsibility: Authority and responsibility both carry together in the organization. Due to the co-existence there should be parity between these two. Authority is not to be conceived of apart from responsibility. Once authority is exercised responsibility arises. 3. Discipline: Discipline is inherent part of the organization. It means there should be respect for agreements designed to secure obedience. Discipline prevails throughout the organization to ensure its smooth and effective functioning. Clear and fair agreements, good supervision and judicious application of penalties are maintained by discipline. 4. Unity of Command: According to this principle a person should get orders and instructions from only one superior. This should be in practice because dual authority over any employee became the causes of confusion and indiscipline. This principle is contrary to Taylor’s functional foremanship. Fayol told on this conflicting view that “I do not think that a shop can be well run in flagrant violation of this (unity of command). Nevertheless Taylor successfully managed large-scale concerns. I imagine in practice, Taylor was also able to reconcile functionalism with the principle unity of command but this is the supposition whose accuracy I am not in position to verify.” Fayol considered unity of command as an important principle of an organization. He says that “Should it (unity of command) be validated, authority is undermined; discipline is in Jeopardy, order disturbed and stability threatened.” This rule seems fundamental to me and so I have put it to the rank of a principle. 5. Unity of Direction: There must be one head and one plan for each group of activities having the same objectives. The unit of the organization must be directed for the objectives of the unit. Unity of direction is related with functioning of the organization in respect of grouping of its activities while unity of command is concerned with personnel at all levels in the organization in terms of reporting relationship. Unity of direction ensures better coordination among various activities of the organization. 6. Subordination of Individual Interest to General Interest: General Interest is above to individual interest. In the case of any conflict between individual and general interest the former must be subordinate. However, the importance of general interest is reduced by factors like ambition, laziness, weakness etc. Therefore, the relationship between employer and employee should be fair. A constant vigilance and supervision is required for this purpose. 7. Remuneration of Personnel: A fair and Reasonable remuneration should be paid to the employees and it must provide maximum possible satisfaction to employees and employers. Fayol advocated profit sharing only for managers. He did not favour profit sharing for workers. He also advocated non-monetary benefits for the organizations. 8. Centralization: Any activity which goes to reduce the importance of subordinate’s role is centralization. Fayal refers the extent to which authority is centralized or decentralized. Centralization is the natural order in small organizations while decentralization is regained for the large firms. Absolute centralization is not feasible in any organization. Centralisation and decentralization takes place according to the need and nature of the organization. 9. Scalar Chain: The scalar chain of authority and of communication from top to bottom should be present in the organisation. It consists that each upward or down word communication must flow through each position in the line of authority. This role must be followed by the organisations. This takes place in the special circumstances of the organization. In special circumstances only the rule of scalar chain may be violated. Fayol suggested the concept of ‘gang plank’ which is used to present the scalar chain from bogging down action. In this figure A is the top man having immediate subordinates B and J. In turn B and J are having immediate subordinates C and K. This continues to the level of G and O ordinarily the communication must flow from A to C and coming from top to down. Similarly, it must flow from A to O and vice versa. If A wants to communicate with G then it will be done via- B, C, D, E and F and upward. Communication will flow via E, F, D, C, D. This is a very time taking affair. Therefore, Fayol suggested the principle of gang plank. This system allows E to communicate with M, without following scalar chain. This process will save the time and energy. 10. Order: There should be an order related to the arrangement of things and people. There should be a place for everything and everything should be in its places. On the same way, there should be right person in the right place. This proper order ensures efficient order demands precise knowledge of the human requirements and resource of the organization and a constant balance is required. Generally it is more difficult to make balance in the large size of organisations. 11. Equity: It treats all peoples equal with justice and kindness. There should be no discrimination on any ground in the organization. It provides loyalty in the organisation. 12. Stability of Tenure: There should be stability in the tenure of the employees of the organisation. Only stable employees will take initiative and they will show loyalty with the organisation. The accountability of the employees can be also ensured by stability of tenure. 13. Initiative: Initiative is a very important feature of the organisation. Managers encourages to their employees for initiative within the limits of authority and discipline. Initiative provides better solution and understanding about the organisation. 14. Esprit De Corps: This last principal of management is known as – ‘Union is strength”. It also extends the unity of command for team work to achieve the objectives of the organisation. Fayol’s 14 Principles of Management in Details A principle means a fundamental truth. It establishes cause and effect relationship between two or more variables under the given situation. They serve as a guide to thought and actions. Therefore, management principles are basically the statements of fundamental truth based on logic which provide guidelines for managerial decision-making and actions. These principles are derived: i. On the basis of observation and analysis, i.e., practical experience of managers. ii. By conducting experimental studies. Henry Fayol has given 14 principles of management as stated under: 1. Division of Labour: Henry Fayol has stressed on the specialization of jobs. He recommended that work of all kinds must be divided and subdivided and allotted to various persons according to their expertise in a particular area. Subdivision of work makes it simpler and results in efficiency. It also helps the individual in acquiring speed and accuracy in his performance. Specialization leads to efficiency and economy in spheres of business. 2. Party of Authority and Responsibility: Authority and responsibility coexist. If authority is given to a person, he should also be made responsible. In the same way, if anyone is made responsible for any job, he should also have the concerned authority. Authority refers to the right of superiors to get exactness from their subordinates whereas responsibility means obligation for the performance of the job assigned. There should be a balance between the two, i.e., they must go hand in hand. Authority without responsibility leads to irresponsible behaviour whereas responsibility without authority makes the person ineffective. 3. Principle of One Boss: A subordinate should receive orders and be accountable to one and only one boss at a time. In other words, a subordinate should not receive instructions from more than one person because – i. It undermines authority. ii. Weakens discipline. iii. Divides loyalty. iv. Creates confusion. v. Delays and chaos. vi. Escaping responsibilities. vii. Duplication of work. viii. Overlapping of efforts. Therefore, dual subordination should be avoided unless and until it is absolutely essential. Unity of command provides the enterprise a disciplined, stable and orderly existence. It creates harmonious relationship between the superiors and subordinates. 4. Unity of Direction: Fayol advocates “one head one plan” which means that there should be one plan for a group of activities having similar objectives. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager. According to this principle, efforts of all the members of the organization should be directed towards common goal. Without unity of direction, unity of action cannot be achieved. In fact, unity of command is not possible without unity of direction. Difference between Unity of Command and Unity of Direction: Unity of Command: i. Meaning – It implies that a subordinate should receive orders and instructions from only one bss. ii. Nature – It is related to the functioning of personnel. iii. Necessity – It is necessary for fixing responsibility of each subordinate. iv. Advantage – It avoids conflicts, confusion and chaos. v. Result – It leads to better superior subordinate relationship. Unity of Direction: i. Meaning – It means one head, one plan for a group of activities having similar objectives. ii. Nature – It is related to the functioning of departments, or organization as a whole. iii. Necessity – It is necessary for sound organization. iv. Advantage – It avoids duplication of efforts and wastage of resources. v. Result – It leads to smooth running of the enterprise. Therefore, it is obvious that they are different from each other but they are dependent on each other, i.e., unity of direction is a prerequisite for unity of command. But it does not automatically comes from the unity of direction. 5. Equity: Equity means combination of fairness, kindness and justice. The employees should be treated with kindness and equity if devotion is expected of them. It implies that managers should be fair and impartial while dealing with the subordinates. They should give similar treatment to people of similar position. They should not discriminate with respect to age, caste, sex, religion, relation, Equity is essential to create and maintain cordial relations among the managers and sub-ordinate. But equity does not mean total absence of harshness. Fayol was of opinion that, “at times force and harshness might become necessary for the sake of equity”. 6. Order: This principle is concerned with proper and systematic arrangement of things and people. Arrangement of things is called material order and placement of people is called social order. Material order – There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity. Social order – Selection and appointment of most suitable person on the job. There should be a specific place for everyone and everyone should have a specific place so that they can easily be contacted whenever the need arises. 7. Discipline: According to Fayol, “Discipline means sincerity, obedience, respect of authority and observance of rules and regulations of the enterprise”. This principle applies that subordinates should respect their superiors and obey their order. It is an important requisite for smooth running of the enterprise. Discipline is not only required on part of subordinates but also on the part of management. Discipline can be enforced if – i. There are good superiors at all levels. ii. There are clear and fair agreements with workers. iii. Sanctions (punishments) are judiciously applied. 8. Initiative: Workers should be encouraged to take initiative in the work assigned to them. It means eagerness to initiate actions without being asked to do so. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences and new methods of work. It helps in developing an atmosphere of trust and understanding. People then enjoy working in the organization because it adds to their zeal and energy. To suggest improvement in formulation and implementation of plans. They can be encouraged with the help of monetary and non-monetary incentives. 9. Fair Remuneration: The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory and rewarding of the efforts. As far as possible, it should accord satisfaction to both the employer and the employees. Wages should be- determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing, etc. Logical and appropriate wage rates and methods of their payment reduce tension and differences between workers and management creates harmonious relationship and pleasing atmosphere of work. Fayol also recommended provision of other benefits such as free education, medical and residential facilities to workers. 10. Stability of Tenure: Fayol emphasized that employees should not be moved frequently from one job position to another, i.e., the period of service in a job should be fixed. Therefore, employees should be appointed after keeping in view principles of recruitment and selection but once they are appointed, their services should be served. According to Fayol, “Time is required for an employee to get used to a new work and succeed to doing it well but if he is removed before that he will not be able to render worthwhile services”. As a result, the time, effort and money spent on training the worker will go waste. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work. 11. Scalar Chain: Fayol defines scalar chain as – “The chain of superiors ranging from the ultimate authority to the lowest”. Every order, instruction, message, request, explanation, etc., has to pass through scalar chain. But, for the sake of convenience and urgency, this path can be cut short and this short cut is known as Gang Plank. A Gang Plank is a temporary arrangement between two different points to facilitate quick and easy communication. Gang Plank clarifies that management principles are not rigid rather they are flexible. They can be moulded and modified as per the requirements. 12. Subordination of Individual Interest to General Interest: An organization is much bigger than the individuals, it has therefore, and interest of the undertaking should prevail in all circumstances. As far as possible, reconciliation should be achieved between individual and group interests. But in case of conflict, individuals may be sacrificed for bigger interests. In order to achieve this attitude, it is essential that – i. Employees should be honest and sincere. ii. Proper and regular supervision of work. iii. Reconciliation of mutual differences and clashes by mutual agreement, for example, for change of location of plant, for change of profit sharing ratio, etc. 13. Espirit De’ Corps (Can be Achieved through Unity of Command): It refers to team spirit, i.e., harmony in the work groups and mutual understanding among the members. Spirit De’ Corps inspires workers to work harder. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the morale of the workers and interest of the undertaking in the long run. To inculcate Espirit De’ Corps, the following steps should be undertaken: i. There should be proper coordination at all levels. ii. Subordinates should be encouraged to develop informal relations among themselves. iii. Efforts should be made to create enthusiasm and keenness among the subordinates so that they can work to the maximum ability. iv. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. v. Subordinates should be made conscious of whatever they are doing is of importance to the business and society. i.e., face-to-face communication should be developed. The managers should infuse team spirit and belongingness. There should be no place for misunderstanding. People then enjoy working in the organization and offer their best towards the organization. 14. Centralization and Decentralization: Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision-making authority. Decentralization means disposal of decision-making authority to all the levels of the organization. In other words, decentralization is sharing authority downwards. According to Fayol, “Degree of centralization or decentralization depends on factors like size of business, experience of superiors, dependability and ability of subordinates, etc.” Anything which increases the role of subordinates is decentralization and anything which decreases, it is centralization. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a balance between the two.