14 Principles of Management

Principles of management are core concepts and philosophies that successful managers use when steering companies, leading projects, budgeting, motivating employees, and making decisions on behalf of their organization.

Executives and corporate shareholders task their top management with myriad responsibilities. These include maximizing profitability, establishing a chain of command, promoting corporate social responsibility, embracing sustainability, maintaining the social order of a company, and steering decision-making processes. With so many components to balance, good managers look to solid theories of motivation, leadership, and strategy to guide them in their work.

Henri Fayol, a French mining executive with a knack for management, outlined fourteen principles of management in his 1916 book General and Industrial Management. Over a century later, these fourteen functions of management continue to influence corporate leaders at all levels of management as they establish organizational goals and refine their own management skills. You can use these skills for your personal management initiatives, from project management to steering an entire organization.

1. 1. Division of work: Good managers hire the right workers for the right roles and allow team members to focus on particular specializations. Not only is this wise human resources management, it also maximizes productivity.
2. 2. Discipline: Fayol’s theory of strategic management advises that managers maintain a professional distance from employees to command respect and authority. Good managers maintain discipline in their workforce, but they do not meddle in trivial affairs.
3. 3. Unity of direction: Managers must ensure that employees work toward the same end goal. They can also design interactive teamwork initiatives to keep all workers aligned.
4. 4. Unity of command: Unity of command requires a clear understanding of status; employees should know to whom they report as well as who reports to them. Managers are responsible for communicating the chain of command to all team members.
5. 5. Scalar chain: Closely linked to the unity of command, a scalar chain of communication engenders dialogue between management and everyday employees. You can establish a scalar chain by creating and distributing a company org chart.
6. 6. Authority and responsibility: All managers, from top management to project managers, must judiciously wield their authority to keep teams on task. They must also accept responsibility for actions performed under their authority.
7. 7. Remuneration: Managers should pay employees a salary that reflects their value. They can structure incentives that boost salary based on performance. Organizations run better when staffed with a smaller number of appropriately-compensated workers as opposed to a large number of underpaid workers.
8. 8. Order: The principle of order describes resource allocation. Managers must budget for human resources, raw materials, machinery, advertising, distribution, and more. Good managers allocate the needed resources to the proper departments, allowing all teams to fulfill their potential.
9. 9. Initiative: Managers must demonstrate initiative for new projects. They must also unlock the initiative in others, encouraging team members to bring their best ideas to the organization.
10. 10. Stability of tenure of personnel: Strong managers prioritize employee stability and seek to avoid periods of high employee turnover. Many of the other principles of management, like remuneration and scalar chains, can promote stability and continuity.
11. 11. Equity: Equity ensures that all employees are treated fairly and equally regardless of tenure, gender, race, age, sexuality, and any other demographic descriptor. This promotes a sense of fairness, which in turn leads to employee satisfaction and a healthy work culture.
12. 12. Subordination of individual interest: Fayol deems individual interests subordinate to company ones. Managers, while working, should focus their efforts on the company’s goals. Only when those goals are adequately serviced should managers turn to their personal goals.
13. 13. Degree of centralization: Fayol submits that organizations can thrive under both strong centralization (where C-suite executives and top management set the agenda) and decentralization (where departments and branches set the agenda). Wise managers match their degree of centralization to the specific nature of their organization.
14. 14. Esprit de corps: “Esprit de corps,” the French translation of “team spirit,” describes how human relations play a vital role in the success of a business. All business activities, from strategic planning and group entrepreneurship to line work and sales calls, improve when team members genuinely like each other. A manager must ensure that esprit de corps can thrive in their organization, even in high-stakes moments.

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