BUSINESS STUDIES PROJECT FAYOL’S 14 PRINCIPLES OF MANAGEMENT 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 of scientific management. Fayol's work was one of the first comprehensive statements of a general theory of management. He proposed that there were six primary functions of management and 14 principles of management.Fayol's six primary functions of management, which go hand in hand with the Principles, are as follows: 1. 2. 3. 4. 5. 6.
Forecasting Planning Organizing Commanding Coordinating Controlling
In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in the book "Administration Industrielle et Generale." Fayol also created a list of the six primary functions of management, which go hand in hand with the Principles. Fayol's principles are listed below: 1. Division of Work 2. Authority 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Subordination of Individual Interests to the General Interest 7. Remuneration 8. Centralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of Tenure of Personnel 13. Initiative 14. Esprit de Corps
Kentucky Fried Chicken (KFC) KFC (the name was originally an initialism for Kentucky Fried Chicken) is a fast food restaurant chain that specializes in fried chicken and is headquartered in Louisville, Kentucky, in the United States. It is the world's second largest restaurant chain (as measured by sales) after McDonald's, with 18,875 outlets in 118 countries and territories as of December 2013. The
company is a subsidiary of Yum! Brands, a restaurant company that also owns the Pizza Hut and Taco Bell chains. KFC was founded by Harland Sanders, an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, In December 2013, there were 361 KFC outlets in India. As well as the standard KFC offerings, the chain sells a chickpea burger, a paneer burger, hot wings with chilli lemon sprinkles and other country-specific products. A major franchise holder is QSR Brands (M) Holdings, which operated 26 outlets as of 2012. Sanders' Original Recipe of "11 herbs and spices" is one of the most famous trade secrets in the catering industry. The recipe is not patented, because patents eventually expire, whereas trade secrets can remain the intellectual property of their holders in perpetuity. The "finger lickin' good" slogan was used from 1956, and went on to become one of the best-known slogans of the twentieth century. In 2011, the "finger lickin' good" slogan was dropped in favour of "So good," to be rolled out worldwide. 1. DIVISION OF WORK Meaning : According to this principle, as far as possible the whole work should be investigated, should be divided into small parts and each individual should be assigned only one part of the work according to his ability and tested repeatedly so that the benefits of specialisation may be achieved. When
employees are specialized, output can increase because they become increasingly skilled and efficient. Observations: During the course of personal observation regarding the principle of division of labour whatever was observed in the company may be described as follows: 1. In front of the entry gate, the selling and billing counter is located. 2. The order is given to the salesman standing at the counter and the bill is generated. The money is paid by the customer and the bill is received. 3. The order is then passed to the kitchen department which prepares the food. 4. The food then goes to packaging department. Here, the food is packaged and sent to the billing counter again. 5. The food is collected by the customer after that. Conclusion: The above facts indicate that the company has divided the total work into many parts. All the employees perform a particular job repeatedly. Therefore, it can be said that the principle of division of work is actually being followed meticulously. 2. AUTHORITY AND RESPONSIBILITY Meaning: According to this principle, authority and responsibility should go hand in hand. Managers must have the authority to give orders, but they
must also keep in mind that with authority comes responsibility. Observations:
QUESTON: Do you have all the authority connected with your work? ANS: Yes. Explanation: About the principle of management „Authority and Responsibility‟, the shift manager was asked to give her opinion to the question indicated above. The shift manager replied in favour of the principle as she had the authority to take decision. She was responsible for the performance of the workers. Therefore, a balance of authority and responsibility was maintained. Conclusion: By the interview with the shift manager, it is clear that the employees have got the authority as well as the responsibility regarding the work entrusted upon them. It can be said that this principle is implemented in this company.
3. DISCIPLINE Meaning: According to this principle, the organisational rules and employment agreement should be obeyed by both the superiors and subordinates which are necessary for the successful working of the organisation. Discipline must be upheld in the organization. Observations: During the course of personal observation regarding the principle of Discipline, the following facts were observed: It was observed that the employees usually got into personal conversation the moment they found any opportunity of doing so. They indulged in long conversations over the telephone in a joyful mood. Sometimes, even the customers were seen being ignored. Conclusion: The above facts highlight the important aspect of their conduct. It shows that the employees are not fulfilling their commitment with the company to work honestly for it. Therefore, it can be said that this principle of management is being violated in the company. 4. UNITY OF COMMAND Meaning: According to this principle, „there should be one and only one boss for every individual employee. Employees should have only one direct supervisor. Observations: QUESTION: Do you get orders from more than one boss? ANS: Yes Explanations: The shift manager of the company was asked to respond about the principle of unity of command. The manager replied that dual subordination existed i.e. she received orders from more than one boss. Conclusion: It clearly states that unity of command is not being implemented in the organisation. 5. UNITY OF DIRECTION
Meaning: According to this principle, “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.” Observations: 1. The store was divided in three sections or departments- Operations, Training and Human Resource Development (HRD). 2. All the three units were headed by three different individuals. 3. Every head kept a watch over the activities of his own unit. Conclusion: The above facts state that clearly the company has mainly three units. Therefore, it is clear that each is headed by a different individual and he is planning and regulating the activities of his own unit in his own way. This situation tells us that the principle of Unity of Direction is being implemented in the company. 6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST Meaning: According to this principle, „the interest of an organisation should take priority over the interest of any one individual employee.‟ The interests
of one employee should not be allowed to become more important than those of the organisation. Observations: QUESTION: Do you give top priority to the interest of the company? ANS. Yes. Explanation: With respect to this principle of management, the shift manager was asked to respond. She responded in a positive manner i.e. at the time of training, they taught the employees to keep the unit of the organisation at the top level. Conclusion: On the basis of the response which we had received, it can be asserted that the individual employees of the company gave priority to general interest of the organisation over the individual interest. 7. REMUNERATION TO EMPLOYEES Meaning: According to this principle, the employee should be paid fair remuneration which should give them at least a reasonable standard of living.
Employee satisfaction depends on fair remuneration for everyone. Observations: QUESTION: Do you get reasonable remuneration? ANS: No. Explanation: Regarding this principle of management, the shift manager was asked to express her opinion. She was not satisfied with the remuneration she was receiving. Conclusion: On the basis of our analysis, the employees of the company are not happy about the remuneration policy of the company. Therefore, it can undoubtedly be said that the company lacks behind in observing this principle of management.
8. CENTRALISATION AND DECENTRALISATION Meaning: According to this principle, „the superiors should adopt effective centralisation instead of complete decentralisation.‟ Results: QUESTION 1: Are the daily decisions made by the person concerned? ANS: Yes QUESTION 2: Are the major decisions taken only by the higher authorities? ANS: Yes Explanation: Regarding this principle, the shift manager was asked two questions. First was about the routine decisions and other was regarding the major decisions. The shift manager said that the routine decisions were taken by her and the concerned employees. On the other hand, the major decisions were taken by higher authorities. Conclusion: Our analysis clearly shows that the company does not adopt a complete centralisation or a complete decentralisation. Instead it can be said that the company follows the principle of centralisation in an effective way. 9. SCALAR CHAIN Meaning: According to this principle, an organisation should have a chain of authority and communication that runs from top to bottom. It should be followed by the mangers and the subordinates both. Employees should be
aware of where they stand in the organization's hierarchy, or the chain of command. Observations: QUESTION: Does the boss of your boss directly communicate with you? ANS: No. Explanations: A particular chain has to be followed in the company as said by the shift manager. The chain is as follows: Owner- Marketing Manager-Area Coach- Restaurant General Manager (RGM)- Assistant Restaurant Manager(ARM)- Shift Manager- Internal Development Programme(IDP)- 3 star, team member, house keeper. In any case, the chain cannot be broken. Conclusion: Our analysis shows that the chain made by the higher officials of the company cannot be broken. Therefore, scalar chain is implemented in the company. 10. ORDER Meaning: According to this principle “a right person should be placed at the right job, right place and time according to his skills.” The workplace facilities
must be clean, tidy and safe for employees. Everything should have its place. Observations: During the course of our investigation regarding the principle of „order‟, the following facts were observed: 1. It was observed that all the units had arranged their goods in a proper and orderly manner. 2. Whenever the material/goods got scattered because of the rush of customer, it was immediately restored in its proper place.
3. All the employees were observed to be working in their decided place of work. Conclusion: The above description makes it clear that all goods are placed in their decided place. Similarly, all the employees work only on the predetermined place of duty. Therefore, it can be said that the principle of order is being observed in the company. 11. EQUITY Meaning: According to this principle, „the managers should treat their subordinates as fairly as possible. So that they develop a feeling of dedication for their work.‟ Both, maintaining discipline and acting with kindness is
appropriate. Observations: QUESTION: Does your company give equal remuneration to all the employees doing a similar job? ANS: Yes Explanation: Regarding this principle, the question given above was put to the shift manager. She responded positively i.e. equal wages were given to people doing similar jobs. But appraisal was given to the person whose performance was the best. Conclusion: It can be said that the company is conscious about observing this principle of management. 12. STABILITY OF PERSONNEL Meaning: According to this principle, there should be a stability of tenure of the employees so that the work continues efficiently. Managers should strive to minimize employee turnover. Personnel planning should be a priority. Observations: QUESTION: Have you served this company for more than one year? ANS: No. Explanation: The shift manager was asked the question given above regarding this principle and she responded negatively. Conclusions: The above analysis indicates that labour turnover in the company is on the higher side. In other words, the employees do not continue to be in the service of the company for a long period. This situation reflects poor management in the company. Therefore, the company has to take care of the stability of the personnel in its own interest. 13. INITIATIVE Meaning: According to this principle, „employees in the organisation must be given an opportunity in making and executing plans. Observations: QUESTION: Does your boss give importance to your suggestion? ANS: Yes
Explanations: In order to check the implementation of the principle in the company, all the 80 employees were asked to express their opinions to the question given above. A total number of 57 employees were in favour of the question, while the remaining 18 employees gave negative answers. The other 5 remained numb on the question. Conclusion: Our analysis shows that the employees felt that their opinions were given importance. This is a comfortable situation. This helps in encouraging initiative and confidence among employees. 14. ESPIRIT DE CORPS Meaning: According to this principle, Organizations should strive to promote unity and continuously make efforts to develop a team spirit among the subordinates. Observations: During the course of personal investigation, the following facts with regard to the principle of Espirit De Corps came to right: 1. Usually the managers were seen using the word I instead of the word WE. 2. It was also observed that the managers did not show any interest for his subordinates. Conclusion: The above facts make it clear that the managers in the company are the victims of some sort of superiority complex. That is the reason as to why they give importance to the word I instead of the word WE. In the presence of such a situation the question of cooperation on the part of the employees is simply out of question.Thus, this principle of management is violated in the company. This is not a good situation.
QUESTIONNAIRE Q1. Do you give top priority to the interest of the company? Ans. Yes Q2. Do you get reasonable remuneration? Ans. No. Q3. Do you have all the authority connected with your work? Ans. Yes. Q4. Does the boss of your boss directly communicate with you? Ans. No. Q5. : Are the daily decisions made by the person concerned? Ans. Yes Q6. Are the major decisions taken only by the higher authorities? Ans. Yes Q7. Does your company give equal remuneration to all the employees doing a similar job?
Ans. Yes Q8. Have you served this company for more than one year? Ans. No. Q9. Does your boss give importance to your suggestion? Ans. Yes Q10. Do you get orders from more than one boss? Ans. Yes
