2. Principles are the general statements which reflect
the fundamental truth about some phenomenon
based on cause and effect relationship.
Management Principles are broad and general
guidelines for decision making and behavior of
managers.
The features of principles of management are as
follows:
Management principles are very flexible.
These are applied with the creativity as these
principles influence the behavior of human being.
Management principles have to keep pace with
the changing requirement of business

3. DIVISION OF WORK
PARITY BETWEEN
AUTHORITY AND
RESPONSIBILITY
DISCIPLINE UNITY OF COMMAND
UNITY OF DIRECTION
SUBORDINATION OF
INDIVIDUAL
INTEREST TO
GENERAL INTEREST
REMUNERATION OF
PERSONS
CENTRALISATION
AND
DECENTRALISATION
PRINCIPLE OF
SCALAR CHAIN
PRINCIPLE OF
ORDER
PRINCIPLE OF
EQUITY
STABILITY IN
TENURE OF
PERSONNEL
PRINCIPLE OF
INITIATIVE
ESPIRIT DE CORPS

4. Division of work is also known as Principle of
Specialization. This principle states that all the work
should be divided into smaller tasks. Then the work
should be divided on the basis of the qualifications,
experience, skills and knowledge. This will lead to
improved efficiency of the employee in completing
the job. Fayol stated that this principle applies to all
kinds of work may it be managerial or technical.
Example: In a bank, one person is appointed to
deposit cash, one person is appointed for giving
cash, a person is making entry in pass book and
one is appointed to listen to customer queries. This
will make each and everyone specializes in his work
and will lead to effectiveness and efficiency in work.

5. Positive effects of this
principle:
Consequences of violation
of this principle:
 Whenever work is
divided according to the
qualification then it will
lead to specialization.
 When employee is
performing only one
part of the job then he
becomes expert in that
and results in less
wastage of resources.
 Lack of efficiency
 There will be no
specialization
 Chances of
duplication of work.

6. Authority refers to the power of getting things done
through others.
Responsibility is the consequence of authority. It refers
to duty to get the work done.
Fayol stated that there should be parity between the
authority and responsibility of the employee. Authority
without responsibility leads to its arbitrary use while
responsibility without authority will not let employer finish
his work on time. So both should be go hand by hand as
these are co-extensive. To accomplish the goals
effectively, adequate authority should be delegated along
with responsibility.
Example: A person is given responsibility to produce
100 units of goods without giving him authority to
purchase the raw material. This leads to his failure to
complete the target of producing 100 units in time as

7. Positive effects of this
principle:
Consequences of violation
of this principle:
 No misuse of
authority.
 Helps in meeting
responsibilities on
time without any
delay.
 Delay in work or in
completion of work due
to lack of authority.
 Misuse of authority due
to excess delegation of
authority.
 Overburden with work
due to excess
responsibility.

8. Discipline refers to obedience and respect to superiors. It refers to
:
 Following code of conduct, rules and regulations of
employment contract.
 Clear and fair agreement among subordinate and superior.
 Meeting commitments at all levels.
 Judicious application of penalties.
Fayol says, “DISCIPLINE IS WHAT LEADERS MAKE IT’. It may
be of two types: Self-Discipline and Command discipline. Self
Discipline springs from within the individual and is in the nature of
spontaneous response to a skillful leader. Command Discipline
comes from recognized authority and seeks the observance of
rules and regulations.
Example: The employees must honor their commitments towards
the organization by working effectively and efficiently. On the other

9. Positive effects of this
principle:
Consequences of violation
of this principle:
 Systematic working in
the organization.
 Improves efficiency.
 Disorder, confusion
and chaos.
 Wastage of resources
in absence of
discipline.
 Delay in work due to
absence of rules and
regulations.

10. Henry states ‘Should unity of command be violated,
authority is undermined; discipline is in jeopardy,
order disturbed and stability threatened. This rule
seems fundamental to me; so I have put it to the
rank of Principles.’
According to this principle, an employee should
receive orders from one boss only because if he is
receiving orders from more than one boss then he
will get confused and will not be able to understand
that whose orders must be executed first.
Example: If employee of production department is
asked to go slow in production to maintain quality
standard by the production in charge and sales in
charge instructs the employee to fasten the
production to meet the pending orders. In this
situation, employee will get confused as to whose
instructions must be followed by him.

11. Positive effects of this
principle:
Consequences of violation
of this principle:
 No ego clashes.
 No confusion in the
mind of subordinate.
 Improves
effectiveness in
working.
 Confusion in the mind
of the employee.
 Subordinate will get
chance to escape from
his responsibilities by
giving excuses.
 Ego clashes among the
different superiors.
 Difficulty in maintaining
discipline in the
organization.

12. According to this principle, ‘one unit means one
plan’, that is the efforts of all the members and
employees of the organization must be directed
towards one direction that is the achievement of
common goal. Each department and a group having
common objective must have one head and one
plan only.
Example: If an organization is producing different
lines of products: cosmetics, medicines and
confectionery items each product has its own
market and its own business environment. Each
division must plan its target and every employee of
that division must put his efforts towards he
achievement of plan of their division under the
direction of one head only.

13. Positive effects of this
principle:
Consequences of violation
of this principle:
 Achievement of
organizational goal.
 Efforts of all the
employees get unified
towards one direction
only.
 Lack of coordination.
 Wastage of efforts
and resources by
working in different
directions.
 Difficulty in achieving
organizational goal.

14. According to this principle, there should be
reconciliation between the individual and common
interests. If there is any conflict or clash between
the two, the interests of the organization should
prevail over the individual interest.
Manager must take all the decisions in the
organization by giving priority to organizational
interest and not his personal interest. The manager
can ensure this by his exemplary behavior by not
misusing his authority for personal favors. The
agreement between employers and employees
should be fair and there should be constant
vigilance and supervision.
Example: Before buying raw materials the manager
must compare the prices and qualities of the entire
supplier and give order to best rather than giving
order to his own relative by misusing his power.

15. Positive effects of this
principle:
Consequences of violation
of this principle:
 Achievement of
organizational goal.
 Coordination between
individual and
organizational goal.
 No achievement of
organizational goal.
 No Coordination
between individual
and organizational
goal.

16. According to this principle employees in the
organization must be paid fairly or adequately to
give them maximum satisfaction. The
employees should be paid fair wages and
salaries, which would give at least a reasonable
standard of living. At the same time it should be
within the paying capacity of the company. The
fair wage is determined according to:
Financial capacity of the concern.
By keeping in mind the minimum wage act of
the Government.
Wages and salaries paid by the competitors.

17. Positive effects of this
principle:
Consequences of violation
of this principle:
 Employees get
motivated.
 Devotion and
commitment of
employees increases.
 Increase in turnover
of employees.
 Dissatisfaction and
demotivation of
employees.

18. Centralization refers to concentration of authority or
power in few hands at the top level. Decentralization
means evenly distribution of power at every level of
management. According to Fayol, a company must
not be completely centralized or completely
decentralized but there must be combination of both
depending upon the nature and size of the
organization.
In small organization, centralization can be
preferred but in large organizations, where there is
large number of intermediaries, the decentralization
should be adopted.
Example: The major decisions and activities of
setting up organizational goals, plans, policies,
strategies can be centralized but there can be policy
of decentralization for the activities of routine work
such as purchase of raw materials, fixing targets of

19. Positive effects of this
principle:
Consequences of violation
of this principle:
 Benefits of
centralization as well
as decentralization.
 Fast decisions at
operational level and
strict control by top
level.
 Complete
centralization will
result in delay in
decision.
 Complete
decentralization will
result in misuse of
authority.

20. Scalar chain means chain of superiors ranging from
top management to the lowest rank. This principle
focuses that every communication must follow
prescribed routes. It can be short circuited only in
special circumstances or in emergency situations
when its rigid following is feared to be detrimental to
the organization. The information should be
communicated through gang plank in case of
emergency situations. Gang plank permits direct
communication between the employees working in
different positions without following the scalar chain.
Example: If the employee at lowest level wants to
communicate some urgent information to the CEO
of the company, he can use the gang plank. But
generally workers cannot directly communicate with
CEO but through gang plank it is possible.

21. Positive effects of this principle:
Consequences of violation of
this principle:
 Systematic flow of information.
 No communication gap in the organization.
 There may be communication
gap.
 No clarity in authority
responsibility relationship.

22. This principle is related to the arrangement of
things and placement of people. Fayol says that
there should be proper material and social order
in the organization. There must be Right man at
the Right place and Right thing should be at
right place.
Example: If the worker is in need of tool he
must know which tool room or box it will find.
Similarly, if any worker needs guidance from the
supervisor he must know the fixed cabin of the
supervisor.

23. Positive effects of this
principle:
Consequences of violation
of this principle:
 No wastage of time in
search of men and
material.
 Smooth and
systematic working of
an organization.
 Wastage of time and
energy in search of
men and material.
 Not able to contact
the people at the
right time.

24. Equity refers to kind, fair and just treatments to
the employees. The superiors should be fair
and impartial in their dealings with the
subordinates. They should give similar
treatment to all the people working in the similar
positions. Equity helps in creating cordial
relations between management and workers
and brings only loyalty in the organization.
Example: In multinational companies, people of
various nationalities work together without any
discrimination as we find a person of Indian
origin Sunder Pichai became CEO of Google.
Sunil Sood became CEO of Vodafone.

25. Positive effects of this
principle:
Consequences of violation
of this principle:
 Employees get
satisfied.
 Motivate the
employees and boost
up the morale of the
employees.
 Dissatisfaction in
employees
 Increase in turnover
 Unhealthy relation
between superior and
subordinates.

26. Stability of Personnel ensures no frequent
termination or transfer of the employees. Fayol
was of the view that job security is important for
an employee to give his best at the job. High
labor turnover is bad for the organization. So
the management should adopt such policies
that make the employees feeling connected to
the organization.

27. Positive effects of this
principle:
Consequences of violation
of this principle:
 Improves efficiency
level of the
employees.
 No wastage of time
and resources.
 Wastage of resources
in learning the new
job.
 Frustration and
dissatisfaction among
employees.

28. Initiative means doing something without being
asked to do. It refers to freedom to think for
oneself and use of discretion in doing work.
Fayol says that employees at all levels in the
organization should be given the opportunity to
show initiative and exercise judgment in the
formulation and execution of plans. It increases
their zeal and energy and encourages them to
act in an efficient way.
Example: Before setting up of plan, the
manager must welcome the suggestions and
ideas of employees to allow their maximum
participation. But once the plan is made every
employee must follow it and implement it.

29. Positive effects of this
principle:
Consequences of violation
of this principle:
 Develops feeling of
belongingness in
employees.
 Employees achieve
the target on time if
they are set up with
their consultation.
 Employees will not
work to the best of
their ability.
 Demotivation among
employees.

30. It is a French phrase which implies that there
should be spirit of co-operation in the
organization. This refers to harmony and mutual
understanding among the members of an
organization. Fayol stresses that only those
organizations can be successful which act as a
team.
Example: If the production manager assigned a
target of manufacturing 100 units to a group of
10 members, then each member must
contribute the production of 10 units at its own
to reach the target. In case any employee falls
sick, then remaining must take over its work
and finished it well. This will be defined as

31. Positive effects of this
principle:
Consequences of violation
of this principle:
 Develops team spirit.
 Achievement of group
goal
 Team goal may not be
achieved.
 No team spirit and
more stress on
individualism.