14 PRINCIPLES

OF
BUSINESS
MANAGEMENT
BY
HENRI FAYOL
Submitted by:
Bautista, Kristelle Marisse
Gomez, Mae Kimberly
Delos Reyes, Kyla
Buiness Management

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14 Principles of Business Management

1.Division of Work

 In practice, employees are specialized in

different areas and they have different skills.
Different levels of expertise can be
distinguished within the knowledge areas.
 According to Henri Fayol specialization promote
efficiency of the workforce and increases
productivity.
 In addition, the specialization of the
workforce increases their accuracy and speed.

2.Authority and Responsibility

 The concepts of Authority and responsibility are
closely related.
 Authority was defined by Fayol as the right to
give orders and the power to exact obedience.
 Responsibility involves being accountable, and
is therefore naturally associated with authority.
 Whoever assumes authority also assumes
responsibility.

3.Discipline
 Holding the notion that discipline is “respect
for agreements which are directed as
achieving obedience, application, energy and
the outward marks of respect”
 Fayol declares that discipline requires good
superiors at all levels, clear and fair
 agreement and judicious application of
penalties.

4.Unity of Command
 According to this principle, an individual in the
organization must receive orders from only one
supervisor.
 In case an individual has the reporting
relationship with more than one
supervisor then there may be more
conflicts with respect to whose
instructions to be followed.

5.Unity of Direction
 All the individual or groups performing
different kinds of a task must be directed
towards the common objective of the
organization.
 Teams with the same objective should be working
under the direction of one manager, using one
plan. This will ensure that action is properly
coordinated

6.Subordination of Individual Interest

 According to this principle, the individual and

organizational interest must
coincide to get the task accomplished.
 The individual must not place his
personal interest over the common
interest, in case there a conflict.

7.Renumertion
  Remuneration in an organization play as a
motivational force that keeps the employees
fueled to do well.
 This remuneration should be in tandem with the
efforts that they put in.
 Remuneration may be monetary or non-monetary.
 At the end, the employee must feel that he was
appropriately rewarded for his efforts.

8.Centralization

 Fayol defined centralization as lowering the

importance of the subordinate role.
 Decentralization is increasing the
importance.
 The degree to which centralization or
decentralization should be adopted depends on the
specific organization in which the manager is
working.

9.Scalar of Chain

• Fayol talks about a clear line of hierarchy from

the top rung to the lowest. So that every
employee knows who is their immediate senior in the
times of conflict or crisis.
• But also the employee must be able to contact any
person in the hierarchy without hesitation during a
time of crisis.

10. Order
• This principle is related to the
systematic arrangement of things and people in the
organization.
• This means every material should be in its
place, and there should be a place for every
material.
• Likewise, in the case of people, a right man should
be in the right job

11. Equity

• Employees should be treated with equality and

respect.
• This is among the core values of management.
• It will fall on the manager to ensure that
there is no discrimination of any kind
happening in the workplace.

12. Stability of Tenure of Personnel

 Retaining productive employees should always be

a high priority of management
 Recruitment and Selection Costs, as well as
increased product-reject rates are usually
associated with hiring new
workers.

13. Initiative
• Initiative is conceived as the process of
thinking out and executing a plan.
• Since it is one of the keenest satisfactions for an
intelligent man to experience
• Fayol exhorts managers to sacrifice
personal vanity in order to permit
subordinates to exercise it.
14. Esprit de Corps

 This means “unity is strength”

 This principle implies that union is
strength and an extension of the
principle of unity of command.
 Fayol here emphasizes on the need for teamwork
and the importance of
communication in obtaining it.