Henry Fayol Principles of Management | Important Functions of Management



A management principle is a statement of general truth about organisation or management. In the words of Herbert. G. Hicks, ‘Principles of management are guiding rules of laws for managerial action.’ They are designed primarily to provide for better understanding of business circumstances and improving the organisational performance.


Henry Fayol Principles of Management - Knowledge Showledge
Henry Fayol Principles of Management | Functions of Management – Knowledge Showledge


Principles of Management

A number of principles of management have been developed to assist managers in performing their function well. A large number of principles has been contributed by the management authors belonging to the traditional schools of management thoughts. Henry Fayol a French industrialist, offered fourteen principles of management first time in 1916. During the period of 1920-40, in the U.S.A. many authors did hard work in developing and testing various principles of management.

Here are some important principles of management:-




Division of Work

Division of work means specialisation. Each job and work should be assigned to the specialists of his job. Division of work promotes efficiency because it permits an organisational member to work in a limited area reducing the scope of his responsibility/Fayol wanted the division of work not only a factory but at management levels also.


Authority and Responsibility

Authority and responsibility go together. Fayol stressed upon this that right and power to give orders should be balanced by the responsibility for performing necessary functions.



Fayol saw discipline in terms of, ‘obedience, application, energy and respect to superior’. According to him penalty for poor performance should be coupled with competent and fair supervision.


Unity of Command

A subordinates should take orders from only one boss. Fayol claimed that if the unit of command is violated, “authority is undermined, discipline in danger, order disturbed and stability threatened.” 


Unity of Direction

 Each group of activities having the same objective must have one head and one plan. It will create dedication of the purpose and loyalty.


Subordination of Individual Interests of General Interests

The interest of the business enterprise ought to come before the interests of the individual workers.



Remuneration should be fair and adequate. It should afford the maximum satisfaction to both types of incentives financial as well as non-financial.



There should be one central point in the organisation which exercise overall direction control of all the parts. But the degree of centralisation of authority should vary according to the needs of the situation.


Scalar Chain

The scalar chain is chain of supervisors from the highest to the lowest rank. It should be short circuited. An employee should feel to contact his superior.



The principle or order applies to both material as well as men. An organisation ought to be based on an orderly, rationally thought-out plan. “A plan for everyone and everyone in his place” was his slogan.



Kindness and justice should be exercises by management in dealing with their subordinates. This will create loyalty and devotion among the employees.



Stability is linked with long tenure of personnel in the organisation. Efficiency is promoted by a stable work force.



To ensure success, plans should be well formulated before they are executed.


Esprit de Corps

Fayol said that in union there is strength. The whole organisation should function as a team and every team member should work to best accomplish organisational good. He emphasized the importance of good communication in achieving team work.


Fayol said that even this list of principles of management is not inclusive. They are not rigid, they are flexible and absolute, but must be utilized by the management, in the light of changing and social conditions Management should develop continuously new ideas and new principles.




Harmony of Objectives

The effective organisational performance is achieved only when all persons of units of the organisation work towards an objectives that is harmonious. Harmony of objectives brings unity and uniformity in efforts.


Principle of Planning

Planning in the process by which objectives are formulated, concepts are conceived, approaches are selected and decisions for accomplishing these objectives are made. Formulation of objectives is a pre requisite step if the organisation is to accomplish its, goals in an orderly and rational manner.


Principle of Balance

Stability in the organisation requires that authority, power, responsibility and accountability be balanced. If any of these factors is out of balance, the organisation will be under pressure to restore the balances. Continued imbalance will cause resentment, hostility, friction and strike. Serious imbalance can threaten the continued existence of the organisation too.


Principles of Co-ordination

The principle of co-ordination explains the effective organisational performance is achieved when all persons and resources are co-ordinated in a balanced manner. Without coordination, non-productive random activity will result.


Principles of Exception

Management must invariably follow the principle of exception in the area of decision-making and control. The management must transfer all routine work to subordinates and should concentrate on important matters only.



The above discussed principles of management are very valuable for managers. Proper use of these principles can improve organisational performance. But these principles should be viewed as being valid for most organisations under most circumstances. They are not as exact as the principles of physical sciences, because management is a social science so the limit of human behaviour, his reaction, etc., will always be there with these principles. It remains the manager’s job to use his judgement in determining when to apply a certain principle.

The odds can be in his favour if he includes some important principles of organisation also in his managerial too kit. Even then, the importance of these principles can be explained as follows:

  • Their knowledge increases managerial efficiency.
  • These use brings orderliness and clarity in the area of management.
  • Their knowledge facilitates future research in management.
  • The organisational performance is effectively improved if they are applied by the management judiciously.



The Principles of management are not like the principles of physical sciences like Physics and Chemistry. The principles of management can’t be rigid or absolute as they are not rules or laws. No principle operates automatically, as for instance, Newton’s Third Law of Motion which states that “To every action there is always an equal and opposite reaction.” The major cause of this is that human factor in management is very delicate.

For instance one may derive a principle of motivation which states that productivity can be increased by increasing the wages. This should not lead to a conclusion that a 25% increase in wages would automatically increase the productivity by the same percentage. Urwick has rightly observed. “The principles, however, convenient as a shorthand method of thinking, are only guides in actions. If they become rules-rigid they lose their utility. These must be continuous machinery for working out new principles and applying existing principles to cases.”

It is not necessary that the management should follow the set norms and that it should in no circumstance deviate from the treated path. No Social Science worth its name can afford this situation. Certain amount of flexibility is a must to accommodate the new thinking and to adjust according to the needs of the situation. Thus, principles of management can be modified and improved by any manager in any situation. They are neither absolute nor stable for all times to come. They are flexible in the sense that they can undergo a change according to the changed conditions.

However, the flexibility of principles does not mean that they may be overhauled according to the whims and experience of even those who have not matured themselves in managing. If this is allowed, the principles will not withstand the test of time. The principles, if they are to serve as the foundation for efficient management for future managers, must be able to withstand the test of time.

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