Fayol's principles (1)

Henri Fayol, a French mining engineer, is called the father of general management. He gave 14 principles for running an organisation, drawn from his experience at the top.

• Division of work: work is split into small tasks done by specialists; it gives 'more and better work for the same effort'.
• Authority and responsibility: they must be balanced. Authority should be commensurate with responsibility, with safeguards against its misuse.
• Discipline: obedience to rules and agreements. It needs good superiors at all levels, clear and fair agreements, and fair use of penalties.
• Unity of command: each employee gets orders from one boss only. Two bosses (dual subordination) cause confusion: a salesperson told '10% discount' by one manager and '5%' by another does not know what to do.
• Unity of direction: each group of activities with the same objective has one head and one plan. A firm making motorcycles and cars runs two divisions, each with its own head and plan.
• Subordination of individual interest to general interest: the organisation's interest comes first. A manager who buys from a relative at a higher price breaks this principle.
• Remuneration of employees: fair pay, which gives workers a reasonable standard of living and is within the firm's ability to pay.

Remember the difference: unity of command is about one person (one boss); unity of direction is about one group of activities (one plan).

'Fair' pay is judged from both sides. For the worker it means just and equitable pay for the work; for the firm it means pay within its paying capacity. A worker cannot call ₹5 crore a month 'fair' if the firm cannot pay it.

A common exam trap: a manager promises workers double salary if they pull the firm out of a loss. They do it in three months, and the manager refuses. Which principle is broken? Not remuneration, since their normal salary is still paid. A broken commitment breaks discipline, because discipline means obeying rules, agreements and commitments, on both sides.