Fayol's 14 fundamental principles for business success!

Fayol's principles were developed by engineer Henri Fayol in the early twentieth century, to improve the efficiency and productivity of organizations through their correct structuring and development.

These principles were the basis for the formulation of the "classical theory of administration", which is one of the most incorporated administrative models in today's organizations.

The principles have an emphasis on improving productivity and the search for maximum organizational efficiency.

If you want to learn all about the principles of Fayol, check out all the topics we will cover in this text:

• Fayol's principles
• Who was Henri Fayol?
• Fayol's 14 principles
• What are Fayol's principles?
• How to use Fayol's principles?

Fayol's Principles

Fayol was one of the first people to address the importance of good management and management of a company.

Before, it was believed that good leaders were already born with that "gift" and that this would be enough for the organization to prosper.

However, in his studies on business management, Fayol showed how essential it is that a company has good managers, there is no point in having only several professionals with technical knowledge without the correct administration.

With this, he developed Fayol's principles, which help organizations to be more efficient through good administration, which is composed of managers trained to make the best decisions for the benefit of the company.

Who was Henri Fayol?

Jules Henri Fayol was born in 1841 in Istanbul, in the former Ottoman Empire, and was an engineer, entrepreneur and writer, trained in France.

Fayol studied mainly business management and administration, being one of those responsible for bringing out the importance of these two topics in companies.

Before it was believed that just good leadership would be enough for its success.

Thanks to his studies and experiences within various environments, in which he shared his discourses and ideas about administration, he developed Administrative Theory, part of the Classical Theory of Administration.

He later became also known as the father of the Classical School of Administration.

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Fayol's 14 principles

Fayol explained in his work what were the main objectives of business administration, listing 14 fundamental principles for any organization to function in the best way.

Check out these principles:

1. Division of labor

According to Fayol, each employee must know their role within the company.

Thus, he will dedicate himself and study more to be better and better in his role, increasing the efficiency, productivity and management of the entire organization.

2. Authority and responsibility

The manager of a company must have authority over his team.

But, in addition, this authority must be imposed assertively and balanced on its employees, to better take advantage of the talent of each one within the company.

3. Discipline

Discipline is fundamental to establish the rules and standards that employees should know about how to behave within the organization, being fundamental for maintaining hierarchy and respect among all.

4. Command unit

According to Fayol, each employee of the company must respond only to a superior "responsible" for decision-making.

This will bring more clarity to the directions transmitted and prevent incorrect information from being passed on some subjects.

5. Steering unit

In the management unit, the company's activities that are in the same "area" or that have the same ultimate goal should be led by only one person.

This will define an action plan to direct employees, according to the organization's strategic planning.

6. Subordination

Subordination takes into account the premise that the interests of the company are superimposed on the general interests of any manager or employee.

In this way, organizational rules are maintained and team dissatisfaction is avoided.

7. Compensation

Compensation is related to the rewards offered to employees as a way of thanking and encouraging them for their efforts and productivity.

They go beyond wages and can involve prizes, bonuses and profit-sharing, for example.

8. Centralization

It aims to concentrate some activity, function or authority in the hands of a more qualified leader, who is free to divide this activity into subgroups.

These subgroups will be distributed among the other employees, according to their functions in the company.

9. Hierarchy

Hierarchy is one of the principles most defended by Fayol, who states that it is necessary to have a position (or authority) of maximum leadership within a company, which is subdivided among the other subordinates.

10. Order

The order's main objective is to avoid waste within an organization.

In this principle, each object and each person has their place in the organizational structure, with a good division of labor, which helps maintain the balance and proper functioning of the company.

11. Equity

According to Fayol, the leaders of an organization must be fair and inspiring, conveying a sense of belonging and pride to the employee so that he, in other words, "wears the shirt" of the company.

12. Staff stability

It's bad for a company when one of its positions is occupied by several people in a short time.

Therefore, the stability of personnel provides that the employees of an organization will be kept in it for longer.

13. Initiative

The initiative takes into account that employees, managers and units are free to make decisions or perform certain activities, provided that they are following the objectives of the organization.

14. Team Spirit

It is one of the main principles, being responsible for transmitting strength and sense of belonging to employees within a company, who know that together they will lead the organization to have the best possible results.

How to use Fayol's principles

Fayol's ideas are used to this day by companies to help their managers lead it and know how to lead employees in the best way.

Thus, for Fayol's 14 principles to be fulfilled within an organization, four foundations of administration must be realized:

• Planning;
• Organization;
• Control;
• Coordination;
• Command.

With the right balance between these five topics in management, the manager may be a true example of a leader, increasing the chances of taking your company to its maximum potential and avoiding bad attitudes within leadership.

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