Henri Fayol's 14 Principles of Management

• Henri Fayol, an engineer and administration theorist, proposed 14 principles of management that are still relevant today

Division of Labor

• Task specialization enhances efficiency and skill
• In a car factory, one worker assembles doors while another installs engines

Authority and Responsibility

• Authority entails the power to give orders; responsibility involves the obligation to ensure compliance
• A sales manager has authority to approve discounts and is responsible for achieving sales objectives

Discipline

• Respect for standards and agreements within the organization is key
• Bank employees must follow dress codes and security procedures

Unity of Command

• Every employee needs to receive orders from only one boss
• A graphic designer should receive instructions only from the creative director, not multiple managers

Unity of Direction

• A single plan and a single leader coordinate activities towards the same goal
• In a marketing campaign, all areas like social networking, design, and sales follow the same strategic plan

Subordination of Individual Interest to General Interest

• The organization's interest must be a priority over personal interests
• An employee desiring vacation on a key date must adjust to company needs

Fair Remuneration

• Equitable pay motivates employees
• A company awards performance bonuses to employees exceeding goals

Centralization and Decentralization

• Balance between decisions made at the top and those delegated to lower levels is important
• In a multinational, senior management defines the strategy, but regional managers make local decisions

Hierarchy (Scalar Chain)

• A clear line of authority needs to exist from top to bottom
• A customer service employee first informs their supervisor before escalating any problem to the manager

Order

• Everything should be in its place, both physically and organizationally
• A warehouse has a well-organized inventory, and each employee has clear functions

Equity

• Treat employees with justice and respect
• A company promotes equal pay without gender or ethnicity

Staff Stability

• Minimize employee turnover for better efficiency
• Investment in employee training and benefits helps retain talent

Initiative

• Encouraging employees to propose ideas and solutions is beneficial
• A store worker suggests a new product layout to improve sales

Team Spirit

• Promote teamwork and collaboration

• A company organizes team-building events promoting camaraderie

• Management is an interdisciplinary field drawing from various areas

• Management optimizes resource use toward organizational goals

• In industrial contexts, these disciplines affect efficiency, innovation, and company competitiveness

Economy

• Understanding the industry's macro and microeconomic context is important
• Economics aids in decisions about prices, costs, supply, and demand
• Economics facilitates efficient resource allocation

Accounting and Finance

• Guarantees control and financial planning for the business
• Optimizes investment in terms of machinery, tech and human talent
• Accounting and Finance facilitate the evaluation of industrial costs and budgets

Industrial Engineering

• Designs and optimizes production procedures to improve efficiency
• Lean Manufacturing and Six Sigma can be applied to improve quality and productivity
• Evaluating times, movements, and installed capacity in the industry occur here

Marketing

• Identifying market opportunities and defines positioning strategies are key
• Marketing influences product design and sales strategy
• Marketing supports pricing and promotion of industrial products

Organizational Psychology

• Contributes to leadership, motivation, and talent development
• Improves the organizational climate and productivity of workers
• Designs strategies to reduce stress and improve organizational culture

Business and Labor Law

• Ensuring compliance with labor and environmental regulations is very important
• Protecting intellectual property and corporate responsibility must be done
• Regulates contracts, agreements, and relationships with stakeholders

Information Technology and Systems

• Automation of industrial and administrative processes is made possible
• Implements ERP systems and business-management software
• Improves decision-making based on data and analytics

Logistics and Supply Chain Management

• Optimizes the flow of materials and finished products
• Reduces costs and times in industrial distribution
• Efficient supply and storage strategies are implemented

Sociology and Anthropology

• Analyzes the social and cultural impact of business decisions
• Facilitates the adaptation of products and processes to different markets
• Helps understand organizational and consumer behavior

Innovation Management and Entrepreneurship

• Business helps promote the development of new products and industrial processes
• Business helps foster a culture of innovation within companies
• Facilitates adaptation to technological and market changes