2. 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. Forecasting
2. Planning
3. Organizing
4. Commanding
5. Coordinating
6. 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
3. 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.
4. 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.
5. 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
6. 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.
7. 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.
8. 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 pre-
determined 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.
9. 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.
10. 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?
