MGT503 Important Concepts

By Sonu Ilyas Mughal

MGT503 Important Concepts

Management has been defined by several theorists in their own way. Henri Fayol defined management as, “Management is to

forecast, to plan, to organize, to command, to coordinate and control activities of others.” In simple terms, management is a

means of organizing and delegating the work that needs to be done among people who can do it, and then ensuring that said

work is done diligently and timely.

Fayol's 14 Principles of Management

Fayol's principles are listed below:

1. Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
2. Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
3. Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command – Employees should have only one direct supervisor.
5. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
6. Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non- financial compensation.
8. Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
9. Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or chain of command. 10. Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place. 11. Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.

12. Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority. 13. Initiative – Employees should be given the necessary level of freedom to create and carry out plans. 14. Esprit de Corps – Organizations should strive to promote team spirit and unity.

Fayol's Six Functions of Management

Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows:

1. Forecasting.
2. Planning.
3. Organizing.
4. Commanding.
5. Coordinating.
6. Controlling.

Key Points

Henri Fayol's "14 Principles of Management" have been a significant influence on modern management theory. His practical list of principles helped early 20th century managers learn how to organize and interact with their employees in a productive way.

Although the 14 Principles aren't widely used today, they can still offer guidance for today's managers. Many of the principles are now considered to be common sense, but at the time they were revolutionary concepts for organizational management.

Principle No. 1: The Functions of Management

While managers often view their work as task or supervisory in orientation, this view is an illusion.