14 Principles of Management Every Manager Should Know

14 Principles of Management Every Manager Should Know

What exactly does it take to be a great manager? You know there are a lot of things you need to become a great manager but the foundation for that path is the top 14 principles of management that shape the way organizations operate today.

Henri Fayol the father of modern management theory outlined the 14 principles that he believed were essential for effective management.

These principles introduced over a century ago remain as relevant as ever in guiding managers toward achieving organizational goals.

In this article, I will discuss each of Fayol’s 14 important principles, and explore their significance and practical implications for today’s managers.

Whether you are leading small or big teams mastering these principles can empower you to navigate the complexities of management with competence.

Are you ready to become a great manager? Then let’s get started exploring these powerful principles one by one…

 

Importance of understanding Principles of Management

Before understanding the principles of management, let me tell you why it is important for you as an aspiring manager to understand these principles. Just imagine you are learning how to bake a cake.

Before you start mixing the ingredients you need to understand the basic principles of baking such as preheating the oven, measuring ingredients accurately, and following the recipe.

In a similar way, for organizational management you need principles that can serve as a foundation on which managers can rely to make decisions, solve problems, and lead their teams effectively.

These foundational principles came into existence in 1916, initially presented in the book “Industrial and General Administration” by famous author and management theorist Henri Fayol.

Fayol is a French mining engineer who popularises the 14 principles of management which laid the groundwork for modern management theory and has been influential in shaping management practices around the world.

These principles provide insights into how to manage people, resources, and processes in a way that maximizes productivity, efficiency, and organizational success. 

Importance of Management principles

Let’s see how these principles can help you as an aspiring or existing manager.

  • These principles provide the foundational framework upon which management practices are built. They offer guidance on how to approach various managerial tasks and challenges, serving as a roadmap for effective decision-making.
  • By applying these principles, you as a manager can analyze situations, identify alternatives, and choose the most suitable course of action to achieve organizational objectives. Ultimately enables managers to make informed and rational decisions.
  • These principles emphasize the efficient utilization of resources such as human, financial, and material resources. With its implementations, organizations can maximize productivity, minimize waste, and improve overall efficiency.
  • These principles provide insights into different leadership styles, communication techniques, and motivational strategies that you as a manager can employ to effectively lead teams and foster a positive work environment.
  • Understanding management principles equips managers with strategies for resolving conflicts constructively. By applying principles of negotiation, mediation, and conflict resolution, managers can mitigate any type of conflict within the organization.
  • Management principles promote long-term sustainability by emphasizing factors such as ethical behavior, and social/environmental responsibility.
  • Organizations that adhere to these principles are better positioned to build trust with stakeholders and create value in the long run. Applying these principles leads to improved organizational performance.
  • By aligning activities with strategic goals, fostering innovation, empowering employees, and fostering a culture of continuous improvement, an organization can achieve a higher level of success.
  • Organizations must be able to adapt to changes effectively, principles such as flexibility, innovation, and continuous improvement help organizations stay agile and responsive to changes in the market, and technology.

 

14 Principles of Management

Now you know the importance of following the principles of management into managerial practices. Let’s get into the depth of each of these 14 principles one by one:

14 Principles of Management

1. Division of Work

The principle of division of work is also called specialization. It is the fundamental concept in management that emphasizes breaking down tasks into smaller and more manageable parts.

The idea behind the division of work is that when tasks are divided among individuals or groups each person can focus on a specific aspect of the job leading to increased efficiency and productivity.

By specializing in a particular area, individuals can develop their skills and expertise which can ultimately benefit the organization as a whole. For example, imagine an automobile company that produces cars.

Instead of having one person build an entire car from start to finish, the production process is divided into different stages such as designing, engineering, assembling, and testing.

Each stage requires a different set of skills and knowledge so by assigning specific tasks to different teams or departments, the company can streamline the production process and produce high-quality care more efficiently.

This is one of the foundational principles of management that is applicable in different functions of business like sales, marketing, finance, and human resources.

By breaking down tasks into smaller manageable parts businesses can achieve greater efficiency and productivity in the long term. (Check out – 10 Leadership Style Every Manager Should Know)

 

2. Authority

The principle of authority refers to the idea that there should be a clear chain of command within an organization. This means that every employee should know who they report to and who has the final say in the decision-making process.

In simple terms, imagine a sports team where the coach or team captain is the ultimate authority. Players know that they need to follow the coach’s instructions and decisions during a game.

Without this clear authority, chaos could ensue with players not knowing who to listen to or conflicting strategies being implemented. 

Similarly in business also, the principle of authority ensures that there is a hierarchy in place where managers have the authority to give orders, make decisions, and hold employees accountable for their actions.

This structure helps streamline operations, maintain order, and ultimately achieve the organization’s goal more effectively. (Check out – 5 Principles of Lean Thinking)

Managers should use their authority responsibly respecting their employees and considering their inputs when making decisions. A dictatorial approach can lead to resentment and decreased morale among team members.

That’s why managers should find a proper balance between asserting authority and fostering collaboration and mutual respect within the organization.

 

3. Discipline

This is one of the core principles of management that every aspiring manager should keep in mind. It refers to the importance of maintaining order and adherence to rules and regulations within an organization.

It’s about ensuring that everyone follows the established guidelines and behaves in a manner that contributes to overall organization success.

For example, imagine a soccer team where players must follow certain rules during a game such as not using their hands or not committing fouls. These rules help maintain fairness, integrity, and the smooth functioning of the game.

Similarly in business also discipline ensures that employees follow company policies, procedures, and codes of conduct. (Check out – What is Leaders Standard Work?)

Managers need to communicate clearly what is expected of employees in terms of behavior, performance, and adherence to rules and policies.

There should be fair and consistent consequences for those who violate rules or fail to meet expectations. Managers should demonstrate discipline themselves by following the same rules and standards they expect from their employees. 

This helps establish credibility and fosters a culture of accountability. Managers also need to support employees in meeting expectations by providing necessary resources, training, and guidance.

This principle is essential for creating a structured and orderly work environment where everyone understands their roles, responsibilities, and the consequences of their actions.

 

4. Unity of Demand

This principle is like having one boss or one captain steering the ship. It means that each employee should receive orders and instructions from only one superior or manager.

Let’s say you are playing in a soccer team. If every player received directions from multiple coaches at the same time, chaos would likely ensue.

One coach might say to attack while another might say to defend leaving all players confused and unable to perform effectively.

Similarly in business, if employees have to report to multiple managers they may receive conflicting instructions leading to inefficiency and frustration.

By following this principle organizations ensure clarity in the chain of command. Each employee knows who their direct supervisor is and where to go for guidance and instructions.

This clarity helps streamline communication, avoid confusion, and promote accountability. For example, if you work in a retail store, you report to the store manager.

They assign tasks, provide direction, and evaluate your performance. If you have questions or concerns you know to approach your manager rather than seeking input from other supervisors or colleagues.

This is one of the interesting principles of management that simplifies the organizational structure, enhances decision-making, and facilitates the smooth coordination of tasks and responsibilities.

It promotes efficiency and effectiveness by ensuring that everyone knows who they answer to and who is ultimately responsible for their work.

 

5. Unity of Direction

This principle is like having a GPS guiding all the members of a team or employees toward the same destination. It means that all activities within an organization should be aligned and directed towards a common goal or objectives.

Let’s say you are on a trip with friends, and everyone wants to reach a different destination. One person wants to go to the beach, another to the mountains, and someone else to the city.

Without a unified direction, there would be confusion and disagreement about which route to take, leading to inefficiency and wasted time.

Similarly in business also if different departments or teams pursue conflicting goals, it can lead to disorganization, duplication of efforts, and ultimately failure to achieve overall objectives.

By following this principle organizations ensure that everyone is working towards the same overarching goals or priorities. This alignment helps focus efforts, resources, and energies in a coordinated manner, maximizing productivity and effectiveness.

For example, if a company’s goal is to increase market share, all departments such as marketing, sales, and product development, should work together toward that objective.

Each department may have its specific tasks and responsibilities, but they are all moving in the same direction contributing to the overall success of the organization.

This is one of the best principles of management that promotes cohesion, synergy, and clarity of purpose within an organization. It ensures that everyone is pulling in the same direction, driving towards common goals.

 

6. Collective Interest Over Individual Interest

This principle emphasizes the importance of prioritizing the overall well-being and success of the organization over individual desires or ambitions.

It is important to recognize that the success of the team or company as a whole is more important than the individual success or goals of any single person.

Think of a basketball team where each player is focused on scoring the most points to boost their stats, rather than working together to win the game as a team.

This selfish approach can lead to a lack of teamwork, poor communication, and ultimately losses for the team. (Check out – Best Team Decision Making Techniques)

In business also, if employee prioritizes their interests such as personal recognition or advancement over the success of the company it can hinder collaboration, innovation, and overall performance.

With this principle, the organization can foster a culture where employees are motivated to work together towards common goals and objectives.

This mindset encourages collaboration, cooperation, and mutual support among team members leading to greater productivity and innovation.

Along with competing for promotions or recognition, employees should also focus on knowledge sharing, supporting each other, and collaborating on projects to achieve collective success.

When everyone is aligned and working towards the same goals, the organization can achieve greater results than any individual could accomplish alone.

This principle simply promotes a culture of teamwork, unity, and shared purpose within an organization. It encourages employees to set aside their interests and work together as a team towards the greater good.

 

7. Remuneration

This principle is all about fairly compensating employees for their work. It involves providing salaries, wages, bonuses, benefits, and other forms of rewards that align with the value and contribution of each employee within the organization.

Think of remuneration as the paycheck you receive for the work you do. It’s not just about the amount of money you earn but also about the recognition and appreciation you receive for your efforts.

Fair compensation motivates employee to perform their best, stay loyal to the organization, and contribute positively to its success.

Along with monetary rewards, remuneration can also include non-financial incentives such as recognition, career development, a positive work environment, and flexible work arrangements.

These factors play a crucial role in attracting and retaining top talent, boosting employee morale, and fostering a culture of engagement and commitment.

For example, a company that values its employee’s contribution might offer competitive salaries, performance-based bonuses, comprehensive benefits packages, and opportunities for advancement and skill development.

This not only motivates employees to perform well but also creates a sense of loyalty and satisfaction leading to higher levels of productivity and retention.

This principle creates a win-win situation where employees feel valued and motivated to give their best, ultimately benefiting both the individual and the organization as a whole.

 

8. Centralization

This is one of the most important principles of management, it is like having a main control center where decisions are made and authority is concentrated. 

It refers to the degrees to which decision-making authority is retained at the top levels of management within an organization.

Let’s say a tree with branches reaching out in all directions. At the center of the tree trunk is the main source of control and direction of the roots and the trunk itself.

Similarly, in a centralized organization decision-making power is concentrated at the top with senior management or executives holding the authority to make key decisions.

In a centrally managed organization, important decisions like strategic planning, resource allocation, and policy formulation are made by a select group of individuals or a single individual at the top of the hierarchy.

This approach can lead to greater consistency, uniformity, and alignment with organizational objectives. There are some potential drawbacks to centralization like it may result in slower decision making as all decisions must be referred to higher levels of authority.

This can also lead to disengagement and disempowerment among lower-level employees who feel their input is not valued or considered in decision-making processes.

On the other hand, decentralization involves delegating decision-making authority to lower levels of the organization and allows faster decision-making with greater autonomy among employees. 

The degree of centralization or decentralization adopted by an organization depends on various factors like size, structure, culture of organization, and industry context.

The balance between both centralization and decentralization approaches is necessary to manage operations and achieve organizational goals effectively.

 

9. Scaler chain

The principle of the scaler chain is like having a well-defined ladder in an organization where each step represents a level of authority and responsibility. 

It means there should be a clear and unbroken line of communication and authority from the top of the organization to the bottom. Imagine a relay race where each runner passes the baton to the next in line.

If there were gaps or breaks in the line of runners, the baton would be dropped and the team would lose momentum. Similarly in business if there are gaps or breaks in the chain of command, communication breakdowns and inefficiencies can occur.

By following this principle organizations ensure that information and decisions flow smoothly and efficiently through the hierarchy.

Employees know who they report to and who they can turn to for guidance or support. This clarity helps prevent misunderstandings, delays, and conflicts.

For example, if a junior employee has an idea for improving a process, they should communicate it to their immediate supervisor, who can then pass it up the chain to higher-level managers for consideration.

Similarly, if a decision is made at the top of the organization, it should be communicated down through the chain to ensure that everyone is on the same page.

This is one of the best principles of management that promotes order, coordination, and effectiveness within the organization.

 

10. Order

The principle of order means arranging things systematically and logically to promote efficiency and effectiveness in the organization.

Let’s say you walk into a cluttered room with items scattered everywhere clothes on the floor, papers on the desk, and books randomly scattered. It would be challenging to find what you need and productivity would suffer.

However, if everything is neatly organized with clothes in the closet, papers in the folders, and books on shelves, you can easily locate what you need and focus on the task at hand.

In business, the principle of order ensures that resources, processes, and activities are structured and arranged in a way that minimizes waste and maximizes productivity.

With this organizations create a conducive environment for smooth operations and efficient workflow. This involves things like:

Organizing resources such as materials, equipment, and tools to be shared and maintained in an orderly manner making them easily accessible when needed.

Structuring process by establishing clear and standardized procedures for performing tasks and activities, reducing confusion and errors.

It also involves coordinating activities means aligning timing and sequences of tasks to optimize workflow. Also keeping workspaces clean and organized can improve morale, safety, and efficiency.

For example, in a manufacturing company adopting the principle of order might involve arranging machinery in a logical layout to minimize movement and optimize production flow.

Similarly in an organization office, systematically organizing files and documents can enhance productivity and reduce time spent searching for information.

This principle emphasizes the importance of structure and organization in achieving operational excellence. By implementing proper systems organizations can streamline processes, minimize waste, and enhance overall effectiveness.

 

11. Equity

This is again one of the most important principles of management that focuses on treating employees with fairness, kindness, justice, and impartiality, regardless of factors like gender, race, or personal relationships.

Equity means ensuring that all employees are treated fairly and given equal opportunities for growth, recognition, and rewards.

It emphasizes the importance of fairness in decisions related to hiring, promotion, compensation, and disciplinary actions.

It means evaluating employees based on their performance, skills, and contributions rather than biases or personal preferences. This practice leads to high morale, productivity, and employee satisfaction.

For example, if two employees perform equally well on a project, they should both receive equal recognition and rewards, regardless of factors like seniority or personal relationships with managers.

Similarly, if disciplinary action is necessary it should be applied consistently and fairly to all employees without discrimination or favoritism.

This fosters a positive work environment where employees feel valued, respected, and motivated to contribute their best.

 

12. Stability of Tenure of Personnel

This principle is based on the simple idea that to nurture a garden properly, give your plants enough time to grow and flourish.

It means employees should have a sense of security and stability in their jobs with reasonable tenure or duration of employment.

Imagine you are trying to grow a beautiful garden but you keep uprooting plants every few weeks. They never have enough time to take root and thrive because they are constantly being disturbed,

Similarly in business, if employees are constantly changing roles or facing job insecurity it can disrupt workflow decrease productivity, and lower morale. With this principle, organizations provide employees with a sense of stability and security in their jobs.

This stability allows employees to develop a deeper understanding of their roles, build expertise, and form stronger relationships with colleagues and clients over time.

For example, if a company frequently lays off employees or undergoes frequent restructuring, it can create a culture of fear and uncertainty.

Employees can be hesitant to invest time and effort into their work if they are unsure about the longevity of their positions.

On the other hand, when employees feel secure in their jobs, they are more likely to be committed, engaged, and motivated to contribute to the organization’s success.

This is one of the principles of management that promotes a healthy work environment where employees feel valued, respected, and supported. That ultimately leads to greater organizational stability and success.

 

13. Initiative

This principle focuses on giving employees the green light to take the lead on projects and ideas. It means encouraging and empowering individuals at all levels of the organization to proactively identify problems, and take action without waiting for explicit instructions.

When employees feel empowered to take initiative they can drive innovation, improve processes, and contribute to the organization’s growth and success. Encouraging initiative involves things like:

Managers need to foster an environment where employees feel safe to take risks and make decisions without fear of punishment or criticism. Employees should have access to the necessary tools, training, and support to pursue their initiative effectively.

Initiatives often involve trying new things and learning from both successes and failures. Managers should encourage a growth mindset and provide opportunities for ongoing learning and development.

By promoting initiative organizations tap into the creativity, resourcefulness, and problem-solving abilities of their employees. This leads to greater agility, adaptability, and competitiveness in today’s business environment.

 

14. Esprit De Corps (Team-Work)

This is the last one of the important principles of management that talks about teamwork,  team spirit makes the team feel like family.

It refers to the spirit of camaraderie, unity, and teamwork among members of an organization. Let’s say you are part of a cricket team where every player genuinely cares about and supports each other.

They celebrate each other’s successes, lift each other up during challenges, and work together seamlessly on the field.

This strong bond creates a positive and motivating environment where everyone feels valued and motivated to give their best effort.

In business, Esprit De Corps means fostering a sense of belonging, loyalty, and mutual respect among employees. 

By embracing this principle, organizations can create a culture where employees feel connected to each other and the large purpose of the company.

This sense of unity and teamwork leads to higher morale, increased motivation, and ultimately improved performance and productivity.

Leaders play an important role in implementing this principle by encouraging open communication among employees, celebrating their achievements, and promoting a supportive environment where everyone’s contributions are valued.

For example, a company may organize team-building activities, social events, or volunteer opportunities to strengthen bonds among employees. 

They may also implement policies that promote work-life balance, flexibility, and a healthy work environment which helps build trust and team spirit among the team members.

When employees feel connected, appreciated, and motivated to work together towards shared goals it leads to greater satisfaction, engagement, and success for everyone involved.

 

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Conclusion

14 principles of management provide a solid foundation for effective leadership and organizational success. By understanding and applying these principles managers can create a framework for success in any industry or sector.

With these management principles, managers can foster a cohesive work environment where everyone understands their roles and responsibilities. This in turn promotes efficiency, reduces conflicts, and enhances productivity in the workplace.

By incorporating these principles into management practices, leaders/managers can create a culture of excellence, innovation, and continuous improvement within their organizations.

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