Henri Fayol is regarded as the father of Classical theory. Fayol’s Fourteen Principles of Management:
- 1) Division of work: Specialization boosts productivity.
- 2) Authority and responsibility: must match.
- 3) Discipline: Employees should obey orders under good leadership.
- 4) Unity of command: Each employee should receive orders from one superior to avoid confusion.
- 5) Unity of direction: one head and one plan for a group of activities having the same objectives.
- 6) Subordination of individual interest: Organizational goals take precedence over individual interests.
- 7) Fair remuneration: Monetary (Bonus etc) + Non Monetary (Compliment, credit etc).
- 8) Centralization or decentralization: Depends on business conditions and staff quality.
- 9) Scalar chain: clear line of authority ensures unity of direction.
- 10) Order: Material and social order are crucial for efficiency.
- 11) Equity: Fair treatment for all employees.
- 12) Stability of tenure: Employee stability is vital for success.
- 13) Initiative: Allowing personnel to show initiative.
- 14) Esprit De Corps: Fostering team spirit boosts morale.
These principles are flexible guidelines for managers, requiring adaptability to varying circumstances. The process of applying them would be more of an art than a science.
| Formal Organisations | Informal Organisations |
| Logically planned and deliberately designed official structure. | based on a network of personal relationships and group ties among employees |
| It has the legitimacy of official authority. | It has the legitimacy of social sanction. |
| It is rational. | It is irrational. |
| Its rules and regulations are promulgated by official authorities | The informal rules and norms are promulgated by small work groups. |
| It represents the views of classical administrative theorists. | It represents the views of human relationists and the behaviourists. |
LD White defined hierarchy as the universal application of the superior-subordinate relationship through multiple levels of responsibility, from top to bottom.
- It gives an organization a pyramidal shape of interconnected steps. Fayol referred to it as the ‘scalar chain‘, while Mooney called it the ‘scalar process’.
- The hierarchy is based on: 1) Principle of ‘through proper channel’ , 2) Principle of ‘correspondence’ and 3) Principle of ‘unity of command’.
Advantages | Disadvantages |
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