Business managers utilize different principles to manage their employees and establish a favorable work environment. Some aim to develop healthy work relationships to promote obedience and respect while others prefer autocratic leadership to demonstrate their authority and gain enforced obedience. These contrasting methods will work depending on an organization’s industry as well as the types of employees present. There are industries where healthy work relationships can lead to improved productivity while organizations with individual-minded employees may require autocracy to have compliance in the workplace. These reasons lead business managers to test different principles and assess their effectiveness.
Some of the most prominent management principles are Henry Fayol’s 14 Principles of Management. These principles enumerate different ideas that managers can use to ensure the productivity of an organization. Identifying the principles’ presence in an organization can help a manager establish a healthy work environment and address issues that can arise due to the lack of a principle. Aside from Henry Fayol’s management principles, there are also the five management functions, manager roles, four dimensions of emotional intelligence, and others. The presence of these principles in an organization can be integral to its success and productivity. This research paper will discuss and provide a clear understanding of each principle.
Henry Fayol’s 14 Principles
Most business managers utilize Henry Fayol’s 14 Principles due to their straightforward ideas and application. The 14 principles are division of work, authority, discipline, unity of command, unity of direction, collective interest over individual interest, remuneration, centralization, scalar chain, order, equity, stability of tenure, initiative, and esprit de corps. Despite the extensive list, individuals can group the principles into three categories. These are the proper work behavior principles, managerial goals principles, and managerial controlling activities principles (Fayol’s 14 2016). The categories focus on the manager’s performance, their relationship with subordinates, and organization processes.
Principles Under Proper Work Behavior
The principles under proper work behavior include division of work, authority, and discipline. These principles deal with the ideas that managers can utilize to promote proper work behavior. The division of work principle refers to the idea that a manager must only provide one task to an employee. This principle relies on the theory that employees can achieve specialized skills if they only perform one task (An Introduction n.d.). Under this principle, managers must break down a process into smaller tasks and delegate each to one employee. Additionally, this principle does not only pertain to subordinates’ tasks. Managerial roles may also require division of labor since an organization has different departments. For example, an organization may have a human resource department with one manager that oversees recruitment and training. Under the principle, the organization should hire different managers for recruitment and training. This will promote specialization which will develop the expertise of the managers and increase the organization’s productivity.
The other two principles under proper work behavior are authority and disciple. Authority deals with the relationship between managers and subordinates. The manager possesses authority over the subordinates which allows them to delegate tasks and provide instructions. Discipline is obedience, respect for authority, and compliance to organizational rules (Fayol’s 14 2016). An individual with authority must aim to establish discipline in an organization to ensure proper work behavior and professional standards. However, it is important to note that subordinates have a level of authority. According to Bhasin (2019), the level of authority and responsibility will depend on an individual’s position in an organization. This implies that while managers have the main responsibility of enforcing discipline, subordinates are also responsible for maintaining proper work behavior. Managers can utilize these principles through the implementation of organizational rules that reward proper behavior and punish misconduct. Additionally, individuals with high levels of authority should act as role models for their subordinates to garner their respect and compliance.
Principles Under Managerial Goals
The principles under managerial goals include unity of command, unity of direction, and subordination of individual interest. Managers must aim to achieve these principles and incorporate them into their management goals to increase productivity. The principle of unity of command and unity of direction refers to a unified authority and organizational mission. Unity of authority promotes an organization where an employee answers to only one superior. An employee may experience conflicting instructions and confusion due to a multi-chained structure (Marume & Jubenkanda 2016). The principle of unity of command addresses this problem by promoting a clear chain of command. The clear chain of command then allows an organization to establish the principle of unity of direction. This principle pertains to an organization’s pursuit of a common goal. Since a clear chain of command will have one superior, the organization will follow the superior’s objective. The singular goal and structure that the two principles promote can help improve employee performance and create a well-structured organization.
However, there are certain arguments regarding the unity of command principle. Seckler-Hudson stated that other relationships exist in an organization that will require an employee to report to different superiors Additionally, Herber Simon argued that organizational structures may require a superior to issue a command to a subordinate with a different superior (cited in Marume & Jubenkanda 2016). This can lead to issues in a workplace that strictly follows a straight line of command. However, Simon suggested that there should be an authority in an organization that will determine the instruction that the employee will obey in the presence of two superiors. Simon’s suggested structure aims to preserve the unity of command by implementing a higher level of authority, preferably high in the organizational hierarchy, to oversee the communication between managers and subordinates.
The last principle under the managerial goal category is the principle of subordination of individual interest. This principle dictates that employees must prioritize the organization’s interests. The principle promotes employee sacrifice for the success and productivity of an organization (Rodriguez 2001). Employees should avoid working for solely individual interests but for the overall benefit of an organization. However, this does not mean that an individual must sacrifice their health and welfare for an organization. Instead, they should prioritize collective work and goals instead of singular contributions. For example, a real estate agent may try to steal a co-worker’s prospect to reach their monthly target sales. This action can lead to workplace conflict which can result in a negative work climate as well as bad relationships. The bad conflict and relationships can then lead to low work productivity and even high turnover rates. Under the principle, the manager should motivate employees to work collectively. Managers can do this through a group or organizational sales quota where members can contribute without the pressure of individual targets.
Principles Under Managerial Controlling Activities
The principles under managerial controlling activities consist of the remaining eight of Fayol’s 14 principles. These are remuneration to employees, centralization, scalar chain, order, equity, stability of personnel, initiative, and esprit de corps. These principles are factors that managers can directly control through organizational structures and the treatment of their subordinates. Remuneration to employees, equity, stability of personnel, initiative, and esprit de corps are principles that pertain to the treatment of employees. The principles of centralization, scalar chain, and order focus on the effects of organizational structures and systems to increase productivity.
Remuneration to employees refers to the proper payment of salary to an employee. Remuneration provides employees with satisfaction and a reason to continue working for an organization. A manager must aim to not underpay nor overpay their employees to avoid issues regarding employee satisfaction and relationship. Proper remuneration depends on an employee’s value, employee’s position, the organization’s business model, and the state of the economy. (Investopedia 2021). This implies that employees will receive different amounts of remuneration and it is up to the superiors to assess the proper salary.
However, employee satisfaction is not only dependent on remuneration. The principles of equity, initiative, and esprit de corps also contribute to employee satisfaction. Equity refers to the manager’s fair treatment of their subordinates. According to Rodriguez (2001), fair treatment of employees will lead to loyalty and devoted service. These qualities are indicative of employee satisfaction and perception of the organization. The principle of initiative pertains to an employee’s ability to work and incorporate their input. According to Fayol, managers should encourage employees to show initiative in their work under the limitations of their authority and responsibility (cited in Fayol’s 14 2016). This will increase their work satisfaction and motivation which can increase productivity. Lastly, the principle of esprit de corps or team spirit promotes positive relationships between the members of an organization. This will further increase employee satisfaction and motivation, thus, creating a high morale work environment. Common methods of promoting esprit de corps are through company outings, gatherings, and reward systems. These factors contribute to employee satisfaction which also increases productivity and lower turnover rates.
Concerning low turnover rates, the principle of stability of personnel refers to the stable flow of personnel within an organization. A stable flow of personnel or low turnover rates allow organizations to save resources and experience growth. The previously discussed principles all affect the stability of personnel as they contribute to the employee experience in an organization. A high attrition rate within an organization can cost various resources since new employees must receive training that requires manpower as well as financing. Trainees will also provide a lower level of performance which can affect productivity. While this principle is important in ensuring a stable organization, modern companies tend to aim for a high attrition rate to avoid the high wage requirements of long-term employees (Rodriguez 2001). Businesses do this through low wages and overloading tasks which promotes high turnover rates. This principle is useful for managers in an industry that benefits from long-term and loyal employees.
The principles of centralization, order, and scalar chain focus on organizational systems and processes to develop a productive and efficient operation. The principle of centralization refers to the balance between centralization and decentralization in an organization. According to Fayol, centralization is lowering the impact of subordinate roles while decentralization is increasing their impact (Fayol’s 14 2016). This means that a centralized organization focuses on the input of superiors while a decentralized organization is dependent on its employees. Additionally, corporatefinanceinstitute.com defined centralization as a process of organizational planning where a superior oversees all the decisions. This definition supports Fayol’s centralization and clarifies the integral role of the manager in the system. An organization’s productivity will be dependent on the balance between centralization and decentralization. A healthy balance between the two concepts can lead to an efficient work environment while other organizational structures may benefit from higher levels of centralization or decentralization. Managers must assess the level of centralization an organization requires and establish a system that will promote productivity and stability.
Along with centralization are the principles of scalar chain and order. The principle of scalar chain focuses on the vertical hierarchy present in an organization while the principle of order which pertains to the proper placement of an organization’s resources. The principle of scalar chain suggests that an organization must have a vertical hierarchy to be productive. This means that there should be a descending hierarchy of authority that governs decision-making and communication. Through the principle of order, an organization can achieve a scalar chain. The principle of order includes the proper placement of human resources in an organization. Managers and superiors must place the right individuals in the right position in the chain to ensure productivity and efficiency. Aside from the proper placement of human resources, the principle of order also includes the management of physical resources such as raw materials and products. These principles promote a structured system in an organization that managers and superiors can implement through their business plans.
Other Management Principles
Aside from Henry Fayol’s 14 Principles of Management, there are also other principles that management experts have found to increase productivity and establish a healthy work environment. According to Bill Davis, a core faculty for the online degree programs of Forbes School of Business and Technology, there are five principles that he utilizes in his management practice. These principles are the functions of management, types and roles of managers, resource management, four dimensions of emotional intelligence, and knowing the business. Managers can utilize these principles to better manage their subordinates and establish a system to increase productivity. Individuals can also incorporate some of Fayol’s 14 Management Principles to produce more appealing results. Additionally, some of the aspects of these principles may have similarities with some of the 14 Principles.
Functions of Management
The functions of management pertain to the five functions of managers in an organization. The five functions are planning, organizing, leading, staffing, and controlling (Davis 2019). The planning function of managers refers to the establishment of organizational plans and goals. Managers have the responsibility to create business plans and make decisions on how to reach them. The organizing function follows the planning function. It means that after the planning stage, a manager must organize their subordinates through the delegation of tasks for the pursuit of the organizational goal. The function of leading pertains to the manager’s responsibility to act as a role model and promote efficient communication in the organization. The function of staffing refers to manpower acquisition and human resource management. Managers must assess the capabilities of their subordinates and place them in positions that will promote productivity. Lastly, the function of controlling pertains to the manager’s responsibility of evaluating performances and applying them in their decision-making. Managers must know and exercise these five functions to effectively manage their subordinates and promote productivity in the workplace.
Types and Roles of Managers
The principle regarding managerial types and roles refers to the different parts that managers play in an organization. According to Mintzberg, managers have decisional, interpersonal, and informational roles in an organization (cited in Davis 2019). These roles have similarities with the five functions of management, however, they focus more on identifying the key roles of manages. Decisional roles refer to the decision-making roles of managers. Managers have the responsibility to create decisions that will impact an organization’s productivity. They can do this through the implementation of the five functions of management. The interpersonal role is similar to the leading function of management. It pertains to the manager’s responsibility to be a role model for their subordinate and promote good work relationships. Lastly, the information role refers to the manager’s responsibility of acting as a communicator to subordinates and other managers. For example, a manager in a scalar chain may need to convey a message from a higher-level manager to their subordinates.
Management of Resources and Applying the Four Dimensions of Emotion Intelligence
These two principles have strong similarities with Fayol’s 14 Principles as they are about resource management. The principle of effective management of organization resources is synonymous with Fayol’s principle of order. The two principles dictate that managers must ensure the proper allocation of human and physical resources. The principle of applying the four dimensions of emotional intelligence has similarities with the principles of authority, discipline, equity, initiative, and esprit de corps. These principles refer to proper work behavior and establishing good relationships in the organization. The four dimensions of emotional intelligence are self-awareness, social awareness, self-management, and good social skills. These dimensions have effects on human productivity which managers should utilize to promote efficiency and organizational loyalty.
Know the Business
The last principle that Bill Davis discussed is “knowing the business”. The principle refers to a level of specialization for managers. An effective manager will need to have expert knowledge regarding the type of business they are managing. This expertise will support and guide their decision-making and their treatment of their subordinates. For example, a fast-food manager with four years of experience in the industry may not be an effective real estate sales manager. This is due to their lack of knowledge regarding the real estate industry as well as managing sales employees. Managers must aim to develop a keen understanding of a specific type of business to ensure that they possess the proper tools to develop plans and make decisions.
There are various management principles that managers can utilize to develop an effective and productive work environment. Henry Fayol’s 14 Management Principles emphasize proper work behavior, managerial goals, and managerial controlling activities. Managers can utilize these principles to promote good work ethics, create effective business plans, and develop a productive organizational system. Aside from Fayol’s 14 Principles, management experts utilize the principles of management functions, roles of managers, resource management, four dimensions of emotional intelligence, and knowing the business. These management principles have similarities with Fayol’s 14 Principles but also provide additional theories in management. They establish the manager’s organizational role as well as promote effective management practices. These principles along with Henry Fayol’s 14 Management Principles play an integral role in an organization’s success and productivity.
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