HISTORY

Henri Fayol (1841–1925) was a French management theorist, and his theories on management and work organisation were highly influential in the early twentieth century. He was a mining engineer who worked for a mining company, French Commentry-Fourchamboult-Decazeville, initially as an engineer. He later moved into general management and served as Chief Executive Officer from 1888 to 1918. During his tenure as Chief Executive Officer, he wrote various articles on ‘administration’, and in 1916 the Bulletin de la Société de l’Industrie Minérale published his ‘Administration, Industrielle et Générale – Prévoyance, Organisation, Commandement, Coordination, Contrôle”. In 1949, the first English translation appeared: “General and Industrial Management” by Constance Storrs.

THE 14 PRINCIPLES

1. Division of Labour. Specialisation allows the individual to develop experience and continually improve their skills. Thus, they can be more productive.
2. Authority. The right to give orders, which must be accompanied by the balanced responsibility of the role.
3. Discipline. Employees must obey, but this is a two-way street: employees will only obey orders if management does its part in providing good leadership.
4. Unity of Command. Every worker should have only one boss, with no other conflicting lines of command.
5. Unity of Direction. People engaged in the same type of activity must have the same objectives within a single programme. This is essential to ensure unity and coordination within the organisation. Unity of command does not exist without unity of direction, but it does not necessarily depend on it.
6. Subordination of Individual Interests to the General Interest. Management must understand that the company’s objectives always take precedence.
7. Remuneration. Pay is an important motivator, although, having analysed a number of possibilities, Fayol points out that nothing is as good as a perfect system.
8. Centralisation (or Decentralisation). The degree depends on the state of the business and the quality of its staff.
9. Scalar chain (line of authority). A hierarchy per management unit is necessary. However, lateral communication is also essential, provided that superiors are aware that such communication is taking place. The chain of command refers to the number of hierarchical levels from the highest authority down to the lowest level of the organisation. It should not be overly flexible or consist of too many levels.
10. Order. Both physical order and social order are necessary. The former minimises wasted time and unnecessary handling of materials. The latter is achieved through organisation and selection.
11. Fairness. In running a business, ‘a combination of kindness and justice’ is required. Treating employees well is important for achieving fairness.
12. Staff Stability. Employees work better if they are assured of job security and career development. Job insecurity and a high staff turnover rate will have a negative impact on the organisation.
13. Initiative. Allowing all staff to demonstrate their initiative is, in some ways, a source of strength for the organisation. Even if it involves sacrificing the “personal vanity” of many managers.
14. Esprit de Corps. Management must uphold the morale of its employees. He also suggests that: “true talent is needed to coordinate efforts, encourage insight, utilise each person’s skills and reward their merits without arousing jealousy or disrupting harmonious relations.”