For any corporate body to achieve success in its operations, there are principles of organization in management they must follow. That’s because they are guidelines that successfully coordinate and direct the management functions in an organization or firm.
It doesn’t matter what industry. When managers understand and appropriately apply these principles, management efficiency is sure. Interestingly, that’s what this post proposes to help you to do.
In other words, in this article, you will learn:
- What are the Principles of Organization?
- Principles of Organization Structure
- 14 Principles of Organization
What are the Principles of Organization?
These are frameworks that allow the effective functions of management in a firm or group. They promote personal and corporate growth and encourage cooperation, productivity, and efficiency.
But more importantly, the principles of organization are guidelines that describe, capture and influence a company’s organizational structure and decision-making processes.
Principles of Organization Structure
The principles of organizational structure are the essential components that need to be in place or observed when planning out the structure of an organization. Some may call them the elements of organizational structure. They include division of work (specialization), a delegation of authority, the span of control, etc.
With that said, you shall be learning the 14 principles of management for efficiency in any organization.
14 Principles of Organization
In 1916, Henri Fayol, popularly known as the ‘father of modern management theory’ published the ‘14 principles of management which afterward was part of the core message in his book Administration Industrielle et Générale in 1917 (Faylol, 1917; 1930).
Note, Administration Industrielle et Générale is Administration Industrial and General Administration (in English).
Interestingly, this theory of Henri has stood the test of time. It not only gives a new look to what management means as a concept. Since its popularization, it has provided a framework for application across all levels of management.
Business managers have tested and used them to achieve managerial efficiency.
That said, below are the fourteen principles of management explained:
Principle 1: Division of Work
This is one of the 14 principles of organization that holds that an employee becomes more efficient and proficient when assigned a specific task. It supports the specialization among the employees of an organization and ensures the quality of products. To Fayol, division of labor results in increased workers’ efficiency, productivity, and speed.
Principle 2: Authority and Responsibility
Responsibility involves the duties, roles, or functions workers are to perform. It could be anything. For instance, in the case of a bank teller: accounting money at the counter at a bank. While for a teacher: teaching a group of students in a school.
You’ll agree those two workers could barely execute those responsibilities if they lack the authority to do so.
In other words, authority and responsibility in corporate management work hand in hand. So it’s safe to say, “Authority is what qualifies a worker or an employee to do what he’s to do—things captured in his job description.
However, there needs to be a balance. The authority given to an employee needs to be commensurate with his responsibilities. Employees are at risk of frustration when they have more authority than responsibility. This same applies to a manager; he’s likely to get frustrated when there is more responsibility than authority.
Principle 3: Discipline
This is the core value of management. And it stimulates a culture of mutuality among the workers of a firm or company. But to achieve this, companies set organizational rules, codes of conduct, and legal frameworks that should ethically govern the activities of workers and the company’s business operations.
And often, this, in turn, enhances the good performance of workers; while they advance in their careers.
Principle 4: Unity of Command
This principle of organization holds that an employee should only have one boss, whose command he’s subject to. In other words, as a management principle, unity of command establishes a chain of command in a corporate organization.
So essentially, it’s intended to prevent conflict of interest and confusion that may arise when a worker has more than one boss. You can imagine that.
Remember that adage, “Too many cooks spoil the broth.”
Principle 5: Unity of Direction
As part of the 14 principles of Henry Fayol, unity of command emphasizes the need for workers to work in harmony toward the realization of a unified goal. In other words, workers engaged in the same task should work towards the same objective under one manager’s direction or supervision.
For instance, in a big company, where you have many different departments, such as sales, ICT, accounting, marketing, etc., unity of direction supports that each department should have a manager or supervisor.
That way, members of each department are subject to their manager. This will allow them to work collectively to realize the goal of their department.
Principle 6: Subordination of Individual Interests to the Organization’s Interests
This principle of the organization states that employees should put the company’s interest over their interests. In other words, workers should be committed to the processes and goals of the company, and on no occasion should they sabotage the organization’s interest because of their interest.
However, for some people, this principle is harsh; and may not be ideal in all situations. Why?
They believe how employees have been treated matters. For these individuals, when employers value and give a sense of belonging to their workers, they tend to be motivated to work better.
Imagine a company that values its staff and plans for their career development, such as providing sponsorship for further training, development courses, seminars, and conferences. Or through informal commitments like holiday support packages, transparent communication, etc.
Don’t you think employees of such a company would feel obliged to give their best to their company?
Principle 7: Remuneration
This has to do with staff compensation. So essentially, this principle of organization in management believes that workers should get commensurate wages or pay for the work they deliver. Fayol included this because he believes workers’ compensation can profoundly impact their motivation to work.
As you know, a company that poorly or underpays its employees won’t get any good from doing that, other than a set of demotivated workers who will struggle to give their best in the delivery of their work specification. However, note that the remuneration of workers can be either monetary or non-monetary.
7 Principles of Organization
Principle 8: Centralization
Centralization is the principle of organization that addresses how decision-making and the issuance of orders should get done. As its name implies, it suggests that decision-making should emanate from the top management to middle management and then to subordinates.
For example, in a specific bank branch, you have the bank branch manager, who gives the various departmental heads of the Human Resources Department, Risk Management Department, etc. And these heads can relate any of such information to their team members.
However, the size of a corporate organization and business operation can influence the extent of how central the flow of authority and orders should be.
Principle 9: Scalar Chain
Scalar Chain is the principle of management that calls for a clear highlight of the chain of command in the organization structure. By stating the communication channels that exist; therefore, informing employees who’s accountable to who—and making certain decisions in certain instances.
Since the Scale chain principle emphasizes hierarchy and the flow of authority, it is also known as the hierarchy principle. Interestingly, it’s usually vertical, from top to bottom. Through this principle, employees know their direct seniors or leaders and can communicate with them directly when the need arises without hesitation.
Principle 10: Order
As part of Henry Fayol’s 14 principles of management, order ensures the efficient and effective utilization of all economic resources of an organization. They include money, materials, assets, manpower, etc. This principle ensures that these resources are placed orderly in the right place and at the right time.
Because when a corporate organization succeeds at that, there’s a boost in productivity in a favorable work culture.
Principle 11: Equity
As you know, another word for equity is fairness. Accordingly, this principle suggests that a company’s top management officers should treat their workers fairly. Because when workers recognize that the good of everybody is catered for, without favoritism, the company earns their loyalty. And then, there’ll be no feeling of being cheated compared to the treatment other colleagues get. As a result, some level of dedication is stimulated within the workers.
Principle 12: Stability of Personnel Tenure
This principle of management revolves around staff recruitment, training, and retention. According to Fayol, managers need to recruit the right staff and hope that such workers, for a given time, will apply the knowledge and experience they gain from the training they acquired back in the performance of their duties.
However, some management gurus today think that approach to management is quite old-fashioned.
Perhaps, that’s why managers today in the corporate world are keen to recruit staff that has the experience and the right qualifications already for the jobs. Because they believe work can be productive from the start upon employment, even as they get on-the-job training to improve what they already know how to do.
Principle 13: Initiative
Indeed, a good manager must have the creativity to initiate new ideas and execute them toward the realization of predetermined organizational goals. But beyond that, the principle of initiative encourages the top management team of a company to spur employees to utilize their initiatives.
But that becomes possible by providing a work environment that encourages that, and not micromanagement, where workers barely have a say; but are only expected to follow the rules and instructions from top managers. Nothing more, nothing less.
In other words, employees with no say about how best they can do their job tend to be demotivated and feel like dumbasses. Contrarily, when managers listen to their concerns and stimulate them to apply initiative, the performance of the functions, and job roles, they feel respected and motivated.
Principle 14: Esprit de Corps
Esprit de Corps is a French phrase that means “team spirit” in English. And that’s devotion and enthusiasm among a group of people. This principle believes a company’s employees must work in unity and cooperation because it fosters their morale and, of course, corporate success.
You can imagine a company where there’s division among workers. You’ll agree such firms will hardly achieve their business goals and objectives. That’s why top managers should provide an atmosphere that promotes togetherness among their workers. Not only that, they should model that to their subordinates.
A final thought on Principles of Organization in Management
You may want to ask, is this principle relevant today in the corporate world? The answer is yes. These principles are like compasses that guide managers in successfully performing the five main functions of management: planning, organizing, commanding, coordinating, and controlling.
In other words, the principles of management help managers plan, control, and coordinate the productive resources of the company, such as equipment, machines, money, machines, staff, etc.