Interrelationship Between Management Functions

HENRY FAYOL’S PRINCIPLES OF MANAGEMENT

Fayol suggested fourteen principles of management which he found most frequently to apply in his work. He, however, recognized that there was no limit to the number of principles of management and the principles laid down by him were flexible and capable of adaptation to every need. The principles are discussed below:

1. Division of Work. It refers to the division of work among various individuals in the organization to bring about specialization in every activity. Fayol observed that specialization belongs to the natural order. It tends to increase efficiency. It helps to avoid waste of time and effort caused by change from one work to another. But when carried too far, it leads to loss of skill and craftsmanship of the employee, and makes the job monotonous and less interesting. Since division of work makes the job less satisfying, management practice of today gives serious thought to the possibility of job enlargement s a tool of job satisfaction. 

2. Authority and Responsibility. Authority denotes the right or power to give orders to the subordinate. Responsibility means the duty which the subordinate is expected to perform by virtue of his position in the organization. Responsibility must be expressed either in terms of functions or in terms of objectives. When a subordinate is asked to control the working of a machine, the responsibility is in terms of functions and when a subordinate is asked to produce a number of units of a product, the responsibility is created in terms of objectives.

3. Discipline. Discipline means getting obedience to rules and regulations of the organization. According to Fayol, discipline is obedience application, energy and outward marks of respect. Discipline is necessary for the smooth running of the organization. Maintenance of discipline in the organization depends upon the quality of leadership, clear and fair agreements and a judicious application of rules.

According to Fayol, discipline can best be maintained by: (a). having good superiors at all levels; (b). entering into agreements either with the individual employees or with the union, as the case may be, that are as clear and fair as possible; (c). ensuring that penalties are judiciously imposed.

4. Unity of Command. This principle emphasizes that a subordinate should receive orders from one superior only. If he receives orders from more than one superior, he will not be able to carry out the orders in a proper manner. Fayol observed that if this principle is violated, authority will be undermined, discipline will be in jeopardy, order will be disturbed and stability will be threatened. Dual command should have one superior whose command he has to obey.

By observing the principle of unity of command, the following benefits may he achieved:

(a). It helps clarify authority-responsibility relationships in the organization.

(b). There will be no possibility of the subordinate receiving conflicting orders.

(c). The organization structure will be simple and management will be more effective because there will be no confusion as to who is responsible to whom.

However, requirements of splintered as well as functional authority in the organization create situations where the principle of unity of command stands violated. The violation of the principle of unity of command may lead to the following consequences:

(a) Responsibility of a subordinate gets divided when he is made to receive orders from and report to more than one superior.

(b) The subordinate may prefer to give priority to execution of orders of different superiors at different times. This may create conflict among the superiors.

(c) The subordinate gets the opportunity to postpone the orders of one of his superiors on the false pretext that he is busy executing the orders of another boss.

5. Unity of Direction. Fayol expressed this principle to mean one hand and one plan for a group of activities having the same objectives. It is the condition essential to the unity of action, coordination of strength and focusing of efforts. Fayol observed, “Unity of direction must not be confused with the unity of command (one employee should receive orders from one superior only). Unity of direction is provided for by sound organization of the body corporate. Unity of command pertains to the functioning of the personnel. Unity of command cannot exist without unity of direction, but it does flow from it”.

The principle of unity of direction is useful for designing and functioning of the organization structure, i.e., creating departments and sub-departments. Thus, sales activities having common objectives should constitute one group, have one plan and be the responsibility of one manager. This will help in realizing the objectives under the overall control and supervision of one head. If the principle is not followed, there will be unnecessary duplication of efforts and there will be inefficiency in operations. 

6. Subordination of Individual Interest to the General Interest. The business enterprise is superior to individuals. The interests of the organization must prevail upon the personal interest of individuals. This principle calls for the reconciliation of objectives of individual with those of the organization and when the individual and organizational interest conflict, the latter must prevail. For the achievement of organizational objectives, both the employees and management should subordinate their interests to the general interests of the concern.

7. Remuneration of Personnel. The employees must be remunerated fully for their services rendered to the organization. The method of employee remuneration should be just and fair to everybody and as far as possible it should accord satisfaction to both the employees and the organization.

8. Centralization. Fayol referred to centralization in the context of authority. It means concentration of authority at one place or at one level in the organization. On the other hand, decentralization refers to the dispersal of authority to the lower levels in the organization. According to Fayol, the question of centralization or decentralization is a simple question of proportion. It is a matter of finding the optimum degree for the particular concern. In a small organization, where manager’s orders go directly to subordinates, there is absolute centralization. In a big organization, where the authority has been delegated to lower levels to the maximum possible extent, it cannot be called to have the top management. Thus, centralization of authority rests with the top management. Thus, centralization of authority is always present to a greater or lesser extent in every organization.

9. Scalar Chain. Scalar chain is the chain of superiors ranging from the ultimate authority to the lowest level in the organization. The line of authority is the route followed via every link in the chain by all communication which Start from or go to the ultimate authority. Fayol felt that departure from the chain is necessary to have fast and effective communication. Communication should be short-circuited as far as possible.

The principle of scalar chain recognizes the necessity of formal authority in the organization. It has the following advantages:

(a) There will be unity of command in the organization and there will be no confusion of dual order. Every member will know under whom he is working and whose orders he is to obey.

(b) Delegation of authority, which is essential to organizing, is facilitated.

(c) The scalar chain establishes the channels through which communication will pass.

There are two disadvantages also of the scalar chain. First, communication take too much as the order comes from top level to the bottom in a chain. Secondly, there is a possibility of distortion of messages as every superior from top to bottom may add something to or delete something from the actual message. Therefore, the scalar chain should not be rigid. There should be provision for short-circulating the chain so as to allow quick communication and swift action as shown in Fig. Fayol called it gang plank shown by the dotted line joining D and O.

In the above figure, there are two ladders of authority one from S to E and the other from S to P. If D wants to communicate with O under the scalar chain, information will first flow upward from D to S through C, B and A, and then downward from S to O through L, M and N. Thus, communication will normally be a time consuming process. In order to allow swift action, D and O should be allowed to exchange information directly by using gang plank. This will help exchange information directly by using gang plank. This will help management to follow the scalar chain and at the same time ensure swift action as and when necessary. 

10. Order. There must be “a place for everything and everything in its place.” This is what is meant by order. Fayol dealt with order in material things and also social order. In order to achieve order for material things, there must be a place specified for everything and everything must be in its specified place. For social order to prevail in the organization there must be an appointed place for every employee and every employee must be in his/her appointed place. There will be perfect social order in the organization if there is right person in the right place.

11. Equity. Equity requires fair judgment in dealing with human resources. Personnel must be treated with kindness and equity if devotion and loyalty are expected of them. Equity does not exclude either forcefulness or sternness. The superiors in the organization should be experienced and good-natured so as to deal with the subordinates in a proper manner.

12. Stability of Tenure of Personnel. This principle calls for lowest possible turnover of personnel for the well-being of the enterprise. Moreover, the employees should not be rotated at different jobs very frequently because considerable time is required to learn each job. According to Fayol, “Time is required for an employee to get used to new work and succeed in doing it well; always assuming that he possesses the requisite abilities. If, when he has got used to it or before that, he is removed, he will not have had time to render worthwhile service.”

13. Initiative. Fayol wanted that the subordinates should be given an opportunity to take some initiative in thinking out and executing the plans. Employees get satisfaction when they are allowed to take initiative. Initiative on their part can be a great source of organizational strength.

14. Esprit de Corps (Union is Strength). Literally speaking, the phase esprit de corps means the spirit of loyalty and devotion which unites the members of group. It also means the regard for the honor of the group to which one belongs. This principle calls for harmonious human relations in the organization so that the employees are loyal to the organization. Harmony among organizational personnel is a source of strength. Unity among personnel can be accomplished by proper communication. Verbal contacts with the personnel should be encouraged as far as possible.

Fayol warned against two enemies of esprit de corps, viz. (a) divide and rule, and (b) abuse of written communication. It will be dangerous for the firm to divide its workers. They should rather be welded in cohesive and highly interacting work-groups. Over-reliance on written communication also tends to disrupt the team spirit. Written communication, where necessary, should always be supplemented by oral communication because face-to-face contacts tend to promote speed, clarity and harmony.