Henri Fayol Theory

Division of Work: - Work should be divided into small task/jobs. A trained specialist who is competent is required to perform each job. Thus division of work leads to specialization. This increase the effectiveness and efficiency in the work performance. Collectively they achieve the targets of the company. For example in a hospital neurosurgeon is concerned with nervous system whereas heart surgeon is concerned with respiratory system.

Authority and Responsibility: - Great power comes with great responsibility. There should be balanced between authority and responsibility. An organization should build safe grad against misuse of managerial power and irresponsibility during the work.

Discipline: - Discipline is systematic instruction in the organization for proper working. According to the Henri Fayol discipline requires good superior at all level, clear and judicious applicable of penalties. Suppose management and executive entered in the agreement where management have agreed on pay extra allowances if they do overtime to complete their target before time. Here discipline when applied would mean that both management and executives honor their commitments without any prejudice towards one another.

Unity of Command: - According to the Henri Fayol there should be only one boss for every individual in the organization. If this principle get violated then there will be confusion regarding the task. Unity of command provides the enterprise a disciplined, established, organized existence with harmonious relationship between superiors and sub-ordinates.

Unity of Direction: - According to this principle efforts of the all members in the organization should be directed towards common goal. The unity of direction cannot be possible without the proper plan and by creating group of related/ similar activity. For example during any operation the medical team works toward the common goal of health care of the patient.

Subordination of individual interest (to the general interest): - The interest of an organization should take priority over the interest of any individual. Every individual must understand that the organization grows then automatically its employee grows. For example if a person wants to maximize his/her salary then he has to work harder and when they achieve these target they will be automatically rewarded by the organization with good amount of salary.

Remuneration of employees: - The overall pay and compensation should be fair to both employees and the organization. The employees should be paid fair wages according to the cost of living, work assigned, financial position of the business, wage rate prevailing etc. Henri Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

Centralization (or Decentralization): - The concentration of decision-making is called centralization whereas its dispersal among more than one person is known as decentralization. According to the Henri Fayol managers and subordinates involvement need to balance through centralization.

Scalar chain (Line of Authority): - There are numbers of superior and subordinates in the organization. Due to this, hierarchy is required for unity of direction. But communication emerges as a fundamental requirement in unity of direction to achieve the desired targets. To resolve this “Scalar chain” principle was introduced which defines the formal lines of authority from highest to lowest ranks.

This principle describe that communication will flow from top to bottom management and it should be strictly followed by managers and subordinates.

Let’s consider a situation where there is one head “A” who has 2 line of authority under him/her.One line consists of B–C-D-E-F and another line of authority consists of L-M-N-O-P subordinates. If “E” wants to communicate with “O” then they have to be at same level of authority or He/She have to traverse the route E-D-C-B-A-L-M-N-O. According to Henri Fayol this chain should not be violated in the normal course of formal communication. 

However if there is an emergency then “E” can directly contact through “Gang Plank” As shown in the diagram. This is a shorter route to save delay in the communication.According to the principle an executive cannot directly communicate to the CEO of the company.

Order: - This principle defines “a place for everyone and everyone in his place”. In order to increase the efficiency and coordination all material and human power should be at same place at same time. If there is a fixed place for every this and it present there, then there will be no hindrance in the business activities.

Equity: - According to this principle behavior equity is important. This principle emphasizes kindliness and justice in the behavior of manager towards worker. This is important to ensure loyalty and devotion. Henri Fayol does not support to rule out by using force and also there should not be any discrimination against anyone on account of sex, religion, language, caste or nationality etc. Treating employees well is important to achieve equity.

Stability of Tenure of Personnel: - According to the Henri Fayol person should be selected and appointed after due and rigorous procedure. But once selected they should be kept at their post for minimum fixed tenure. They should be given reasonable time to show results. Any adhocism in this regard will create instability/insecurity among employee. This will affect the organization adversely.

Initiative: - Worker should be encouraged to develop and carry out their plans for improvement. Initiative means taking the first step with self-motivation. It is all about thinking out of the box and executing the plan. But it doesn't mean going against the working rules and moral of the organization. A good organization must have suggestion system results in substantial cost/time reduction.

Esprit de Corps: - Management should promote a team spirit of unity and harmony among employee, according to Henri Fayol management should promote teamwork because otherwise object would be difficult to realize. This will also increase mutual trust and reduce possible jealousies among the employees.