Fayol's Principles of Managemet with example of TATA ltd.

1. ALL INDIA SENIOR SECONDARY CERTIFICATE EXAMINATION – 2014-15
Project Of Business Studies
PRINCIPLES OF MANAGEMENT
SUBMITTED TO: AMIT
RAJPUT
(P.A Commerce)
DPS
SUBMITTED BY:YASH
AGARWAL
XII-
Commerce

2. CERTIFICATE
This is to certify that Yash Agarwal of Class XII Commerce of
Delhi Public School, Moradabad, has completed his project
file under my supervision. He has taken proper care and
shown utmost sincerity in the completion of this project. I
certify that this project is upto my expectation and as per the
guidelines issued by C.B.S.E.
Mr. Amit Rajput
(Dept. of Commerce)
DPS Moradabad
Signature:_________

3. ACKNOWLEDGEMENT
I am very thankful to my Business Studies Teacher, Mr.
Amit Rajput, who helped me in analyzing the application
of Principles of Management. It made my concepts more
clear, enhanced my knowledge and help me realize the
importance of Principle of Management.
I am also thankful to the C.B.S.E. for giving me such an
amazing opportunity of making this project, and giving a
suitable instruction and guidelines for the project.
Yash Agarwal
XII Commerce

4. •

5. Henri Fayol (Istanbul, 29 July 1841 –
Paris, 19 November 1925) was
a French mining engineer and director
of mines who developed a general
theory of business administration that
is often called Fayolism. He and his
colleagues developed this theory
independently of scientific management
but roughly contemporaneously. Like his
contemporary, Frederick Winslow
Taylor, he is widely acknowledged as a
founder of modern management
methods.

6. • Fayol was born in 1841 in a suburb of Istanbul, Ottoman Empire. His father (an
engineer) was appointed superintendent of works to build the Galata Bridge,
which bridged the Golden Horn. The family returned to France in 1847, where
Fayol graduated from the mining academy "École Nationale Supérieure des
Mines" in Saint-Étienne in 1860.
• In 1860 at the age of nineteen Fayol started the mining company named
"Compagnie de Commentry-Fourchambault-Decazeville" in Commentry as the
mining engineer. In 1888 he became managing director, when the mine company
employed over 10,000 people, and held that position over 30 years until 1918. By
1900 the company was one of the largest producers of iron and steel in France
and was regarded as a vital industry.
• Based largely on his own management experience, he developed his concept of
administration. In 1916 he published these experience in the book
"Administration Industrielle et Générale", at about the same time as Frederick
Winslow Taylor published his Principles of Scientific Management

7. • Division of Work - Fayol presented work specialization as the best way to use the human
resources of the organization.
• Authority - Managers must be able to give orders. Authority gives them this right. Note
that responsibility arises wherever authority is exercised.
• Discipline - Employees must obey and respect the rules that govern the organization.
Good discipline is the result of effective leadership.
• Unity of command - Every employee should receive orders from only one superior.
• Unity of direction - Each group of organizational activities that have the same objective
should be directed by one manager using one plan for achievement of one common goal.
• Subordination - The interests of any one employee or group of employees should not
take precedence over the interests of the organization as a whole.
• Remuneration - Workers must be paid a fair wage for their services.
• Centralization - Centralization refers to the degree to which subordinates are involved
in decision making.
• Scalar chain - The line of authority from top management to the lowest ranks represents
the scalar chain. Communications should follow this chain.
• Order - this principle is concerned with systematic arrangement of men, machine,
material etc. there should be a specific place for every employee in an organization
• Equity - Managers should be kind and fair to their subordinates.
• Stability of tenure of personnel - High employee turnover is inefficient. Management
should provide orderly personnel planning and ensure that replacements are available
to fill vacancies.
• Initiative - Employees who are allowed to originate and carry out plans will exert high
levels of effort.
• Esprit de corps - Promoting team spirit will build harmony and unity within the
organization.

8. The specialization of the workforce according to the skills of a person ,
creating specific personal and professional development within the
labour force and therefore increasing productivity; leads to specialization
which increases the efficiency of labour. By separating a small part of
work, the workers speed and accuracy in its performance increases. This
principle is applicable to both technical as well as managerial work,. this
can be made useful in case of project works too. Planning is to decide
what to do before .
Division of Work

9. The issue of commands followed by responsibility for their consequences.
Authority means the right of a superior to give enhance order to his
subordinates; responsibility means obligation for performance.
This principle suggests that there must be parity between authority and
responsibility.
They are co-existent and go together, and are two sides of the same coin.
and the authority must be commensurate with responsibility.
Authority and Responsibility

10. Discipline refers to obedience, proper conduct in
relation to others, respect of authority, etc.
It is essential for the smooth functioning of all
organizations.
This will also help shape the culture inside the
organization.
Discipline

11. This principle states that every subordinate should receive
orders and be accountable to one and only one superior. If an
employee receives orders from more than one superior, it is
likely to create confusion and conflict . Unity of Command
also makes it easier to fix responsibility for mistakes and the
authority should be commensurate with responsibility
Unity of Command

12. All those working in the same line of activity must
understand and pursue the same objectives. All related
activities should be put under one group, there should be one
plan of action for them, and they should be under the control
of one manager.
It seeks to ensure unity of action, focusing of efforts and
coordination of strength.
Unity of Direction

13. The management must put aside personal
considerations and put company objectives first.
Therefore the interests of goals of the organization
must prevail over the personal interests of
individuals.
Subordination of
Individual Interest

14. Workers must be paid sufficiently as this is a chief motivation of employees
and therefore greatly influences productivity. The quantum and methods of
remuneration payable should be fair, reasonable and rewarding of effort.
Remuneration is paid to worker as per their capacity and productivity. The
main objective of an organization is to maximize the wealth and the net
profit as well. For this purpose, the organization has paid wages, salary,
and benefit to their staff properly and scientifically so that organizational
efficiency can be ensured.
Remuneration

15. The amount of power wielded with the central management
depends on company size. Centralization implies the
concentration of decision making authority at the top
management. Sharing of authority with lower levels is called
decentralization. The organization should strive to achieve a
proper balance.
Degree of Centralization

16. Scalar Chain refers to the chain of superiors ranging from top
management to the lowest rank. The principle suggests that there should
be a clear line of authority from top to bottom linking all managers at all
levels. It is considered a chain of command. It involves a concept called a
"gang plank" using which a subordinate may contact a superior or his
superior in case of an emergency , defying the hierarchy of control .
However the immediate superiors must be informed about the matter.
Scalar Chain

17. Social order ensures the fluid operation of a
company through authoritative procedure. Material
order ensures safety and efficiency in the
workplace. Order should be acceptable and under
the rules of the company.
Order

18. Employees must be treated kindly, and justice must
be enacted to ensure a just workplace. Managers
should be fair and impartial when dealing with
employees, giving equal attention towards all
employees.
Equity

19. The period of service should not be too short and
employees should not be moved from positions
frequently. An employee cannot render useful service
if he is removed before he becomes accustomed to
the work assigned to him.
Stability of Personnel

20. Using the initiative of employees can add strength
and new ideas to an organization. Initiative on the
part of employees is a source of strength for
organization because it provides new and better
ideas. Employees are likely to take greater interest
in the functioning of the organization.
Initiative

21. This refers to the need of managers to ensure
and develop morale in the workplace;
individually and communally. Team spirit helps
develop an atmosphere of mutual trust and
understanding.
Esprit de Corps

22. Photo Gallery