Nature and Importance of Managerial Principles by Henri Fayol

Henri Fayol was one of the most influential contributors to modern concepts of management. Fayol has been described as the father of modern operational management theory. Like Socrates, Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation. Fayol’s career began as a mining engineer. He then moved into research geology and in 1888 joined, Comambault as Director. Comambault was in difficulty but Fayol turned the operation round. On retirement he published his work – a comprehensive theory of administration – described and classified administrative management roles and processes then became recognized and referenced by others in the growing discourse about management. He is frequently seen as a key, early contributor to a classical or administrative management school of thought. His theorizing about administration was built on personal observation and experience of what worked well in terms of organization. His aspiration for an “administrative science” sought a consistent set of principles that all organizations must apply in order to run properly. F. W. Taylor published “The Principles of Scientific Management” in the USA in 1911, and Fayol in 1916 examined the nature of management and administration on the basis of his French mining organization experiences. His motivation was to create a theoretical foundation for an educational program for managers who lacked formal training in those days. Basing his work on his experience as a successful managing director of a mining company, he developed generic ‘Principles of Management’ to help organisations achieve optimum performance working toward their goals.

Fayol’s five functions are still relevant to discussion today about management roles and action.

1. to forecast and plan – prevoyance examine the future and draw up plans of action
2. to organise build up the structure, material and human of the undertaking
3. to command maintain activity among the personnel
4. to co-ordinate bind together, unify and harmonise activity and effort
5. to control see that everything occurs in conformity with policy and practice

Fayol introduced 14 principles of management. Fayol thought that his principles would be useful to all types of managers. He truly advocated the notion that if a manager wants to be successful, he only needs a certain set of management principles.

Importance of Managerial Principles

A principle refers to a statement which reflects the fundamental truth about some phenomenon. It is a basic statement that provides understanding and guidelines to thinking and action. These principles explain relationship between two or more sets of variables under a given situation. It establishes cause and effect relationship and serves as a guide to thought and action. The management principles are derives on the bases of observation and analysis of events which managers have to face in actual practice. For instance, it was observed that efficiency can be increased by dividing work into certain well defined jobs. This led to the formulation of the principle of division of labor. A part from direct observation , another method of deriving principles is conducting experimental studies.

Without principles one is in darkness and chaos; interest, experience and proportion are still very handicapped, even with the best principles. The principle is the lighthouse fixing the bearings but it can only serve those who already know the way into port. Without theory no teaching is possible. The ideal manager would be one who, possessed of all requisite knowledge for settling managerial, technical, commercial, financial and other questions before him, also enjoyed sufficient physical and mental vigor and capacity for work to be able to meet all the weight of business contacts, command and control incumbent upon management. There is no man alive whose knowledge embraces every question thrown up in the running of as large concern, and certainly none possessed of the strength and disposing of the time required by the manifold obligations of large-scale management. Hence the need to fall back on the staff. The management practices and techniques are based on well defines principles. Proper understanding of these principles makes the managers more realistic in their profession.

The importance of management principles are stated below:

• Helps in setting objectives:  Management principles help an organization in setting their objectives. Thus, in turn contribution to goal setting process. When goals and objectives are appropriately set, it would contribute towards efficiency in achievement if results.
• Optimum utilization of resources:  Optimum utilization of resources is possible through proper monitoring of the performance of employees. The principles of management clearly spell the best way of doing the work and attaining effectiveness in action. It points out how money, time, money, materials and human efforts can be used economically to improve productivity. This fact is clearly seen in the principles of division of work, delegation of authority, fair remuneration etc.
• Scientific decisions:  By following the principle of decentralization of authority, managers can take decisions scientifically as the situation demands. Taking appropriate decisions at the right time is essential for the smooth running of organization.
• Change in technology: Managers must face the challenges of the competitive world. They keeps a close watch on changing technology being adopted in various fields. By following the principle of division of labor, managers are able to identify where and for what activity the technology are changed.
• Effective administration: By following certain principles like unity of command, unity of direction etc managers can manage their respective areas effectively. This removes confusion in the minds of the employees.
• Social obligation: A business enterprise is an integral part of the society. It derives its inputs from the society and supplies its output to the society. It has to supply quality products at reasonable price to the employees. The principle of fairness, equity and justice help in protecting the interests of all concerned with the existing growth and development of the organization.
• Research and development: Just as management principles evolved through scientific observations, current management practices too should be based on rational judgment. There should be continuous process of research in all the functional area of management. Marketing research helps in identifying the demand for a product and promoting it, research in finance helps in evaluating the financial feasibility of projects and so on. Management principles emphasize on such research.

Nature of  Managerial Principles

The nature of managerial principles is as follows:

• Empirical in nature:  Management principles evolved out of systematic research undertaken by certain renounced management thinkers. The new findings lead to development of new principles.
• Aimed at influencing human behavior: Human behavior is unpredictable. It is often situational and at other times driven by inner feelings and thoughts. The complex human behavior needs guidance and directions. Management principles attempt to such guidance in human action. These principles guide action in a given context and situation changes, application of such principles would require change. This principle remains same but the application is different. Team work as a principle is good for attainment of organizational goals.
• Relativity: Management principles are relative in nature and not absolute. They have to be applied keeping in view the prevailing situation and organizational requirements.
• Flexibility: Management principles never remain static. They are applied according to change in situation after considering the condition prevailing there and circumstances which necessitated the application. Span of control may vary for similar organizations when qualities in the superiors and subordinates vary. The principles of management can be applied with variation under different condition in different ways .
• Universal application: Management principles have universal application, all types of organization in all types of organization and in all places. Thus principle of management fin application in the police force, religious organization, business organization, or sport club. They find application with a multinational corporation as well as small sole trading firm. It is true that such principles are applied with flexibility. Thus decentralization has its own relevance everywhere.