PRINCIPLES OF MANAGEMENT

A principle is a fundamental statement of truth that establishes a cause and effect relationship between two or more variables. It also serves as a guide to thought and action. On the basis of a principle we mat say that if this or that thing is done, it will lead to certain result. A principle may be either descriptive or prescriptive. As a descriptive, it simply describes a relationship between the variables. As prescriptive, it indicates what a person should do. Henry Fayol, who is regarded as father of modern management, has developed fourteen principles of management. They are as follows:

(1) Division of Work

This principle implies that every employee should be assigned only one type of work. The object of division of work is to derive benefits from the principles of specialization. It adds efficiency in the use of labor. Division of work applies to all kinds of work, management as well as technical and at all levels of organization.

(2) Authority and Responsibility

The right to give order, and power is called authority. On the other hand, responsibility means obligation to perform the work in the manner desired and directed by superior authorities. In any management process delegation of power, utilization of authority, and fixation of responsibility are the key to success. Authority without responsibility leads to irresponsible behaviour while responsibility with out authority will make a person ineffective. The success of management depends on parity of authority and responsibility.

(3) Discipline

Discipline implies obedience and respect of authority. It is essential for the smooth running of an organization. According to Fayol discipline requires (a) good superiors at all levels, (b) agreements with employees as clear and fair as possible, and (c) penalties judiciously applied.

(4) Unity of command

According to this principle, an employee should get orders and instructions only from one superior. He should be responsible only to one superior and not to so many bosses as described by Taylor in his functional foreman ship. If a subordinate has more than one superior, it will undermine authority, weaken discipline, divide loyalty and lead to confusion and delays.

(5) Unity of Direction

According to Fayol,''There should be one head and one plan'' for a group of activities having the same objective. Unity of direction signifies that each group of activities having the same objective must have one head and one plan. The purpose is to have better coordination among various activities to be undertaken by an organization.

(6) Subordination of Individual Interest to General Interests

This principle calls for the reconciliation of individual objectives with those of the organization and when the individual and organizational interests conflict, the latter must prevail. Hence, the interest of organization must prevail upon the interest of individuals. To ensure this, Fayol suggested (a) firmness and good example on the part of superiors, (b) arrangement as fair as possible, and (c) constant supervision.

(7) Remuneration of Personnel

Remuneration and method of payment should be fair as satisfactory to both employer and employees. Fayol was also in favor of providing non-financial benefits if possible. The rate of remuneration should be based on general business conditions, cost of living, productivity of concerned employees and the capacity of the organization to pay.

(8) Centralization

Centralization reduces sub-ordinate's role whereas decentralization increases it. According to Fayol, managers should retain final responsibility but the subordinates should be given enough authority to do their jobs properly. Hence, there must be a good balance between centralization and decentralization of authority and power. It depends upon so many factors such as size of undertaking, type of activities and the nature of organizational structure.

(9) Scalar Chain

Scalar chain refers to the chain of superiors ranging from the ultimate authority to the lowest rank. According to this principle, order or communication should pass through the proper scalar chain. However, to facilitate quick communication between two different links in the chain, a 'gang plank' or direct link may be created by passing the prescribed line of authority.

(10) Order

This principle is related to arrangement of material and people. Material order implies a proper place for everything and everything in its right place. Similarly, every man in the organization should be properly placed. The right man in the right job is very important for the successful functioning of an organization.

(11) Equity

Equity is the combination of kindness and justice. Employees expect equity from the management. It ensures healthy industrial relations between management and labor which is essential for the successful of working of an organization.

(12) Stability of Tenure

Employees must have job security. Frequent changes should be avoided. If they have job insecurity their morale will be low and they cannot do better job. Unnecessary labor turnover increases cost of selection and training. Whereas stability of tenure helps to develop loyalty and attachment on the part of employees.

(13) Initiative

It is concerned with thinking out and execution of a plan. Managers should encourage their employees to take initiative with in the limits of their authority and discipline. According to Fayol, ''Initiative is one of the keenest satisfaction for an intelligent man to experience''.

(14) Esprit De Corps

This is the principle of 'union is strength' and the strength of an organization lies cooperation and harmony in individual efforts. The management should follow the policy of 'divide and rule'. If there are any differences or misunderstandings or symptoms distrust among the employees, the manager should take timely steps to eliminate them.


The above principles of management as pointed out by Fayol, are not final. Principles are working hypothesis that is reasonably will established, accepted, and used in many successful organizations. According to Fayol, these principles have universal applicability. However, they cannot be applied blindly even in similar situation. they are to be used carefully and intelligently. As more research is conducted, new principles will emerges, other principles will be modified, and some will be discarded.