1. Division of labour
- Explanation:
Work should be divided into smaller, specialized tasks. This allows
employees to focus on one thing and master it, which increases efficiency,
speed, and accuracy.
- Example:
In a furniture factory, instead of one person building a whole chair, one
person cuts the wood, another assembles it, and a third person paints it.
2. Authority
- Explanation:
Authority is the right to give orders, and responsibility is the
obligation to perform the assigned task. They must go hand-in-hand; having
authority without responsibility leads to reckless behavior.
- Example:
A sales manager has the authority to offer a 10% discount to close
a deal, but he is responsible for ensuring the company still makes
a profit.
3. Discipline
- Explanation:
Discipline means respecting the rules, agreements, and regulations of the
organization. It requires good supervision and clear penalties for
violations.
- Example:
All employees must clock in by 9:00 AM. If someone is repeatedly late,
they face disciplinary action according to company policy.
4. Unity of Command
- Explanation:
An employee should receive orders from only one superior. Receiving
orders from multiple bosses leads to confusion, conflict, and divided
loyalty.
- Example:
If a graphic designer gets conflicting instructions from the Marketing
Manager ("Make it red") and the IT Manager ("Make it
blue"), they will be confused about whom to follow.
5. Unity of Direction
- Explanation:
"One head and one plan." Activities with the same objective
should be directed by one manager using one plan.
- Example:
A car company has a "Luxury Division" and an "Economy
Division." Each division should have its own separate planning and
leadership to avoid clashing strategies.
6. Subordination of individual
interest to common good
- Explanation:
The interest of the organization (the team) must always take precedence
over the personal interest of any single employee or group.
- Example:
A star player on a football team passes the ball to a teammate who has a
better chance to score, rather than trying to score himself for personal
glory.
7. Remuneration
- Explanation:
Compensation (pay) should be fair and provide maximum satisfaction to both
the employee and the employer. It motivates workers.
- Example:
A software engineer receives a competitive market salary plus a yearly
bonus based on the company’s profits, keeping them motivated to work hard.
8. Centralization
- Explanation:
This refers to the degree to which decision-making power is concentrated
at the top. The balance depends on the size and nature of the business.
- Example:
In a small bakery, the owner makes all decisions (Centralization).
In a large chain like McDonald's, local store managers have some power to
hire staff (Decentralization).
9. Scalar Chain
- Explanation:
The formal line of authority and communication ranging from the highest to
the lowest rank. Communication should generally follow this chain.
- Example:
If a junior officer needs to complain, they speak to their supervisor, who
speaks to the manager, who speaks to the director. They do not jump
straight to the CEO.
10. Order
- Explanation:
"A place for everything and everyone, and everything and everyone in
its place." This applies to material order (tools) and social order
(people).
- Example:
In a library, books are arranged by genre (Material Order), and the
librarian is always found at the help desk (Social Order), ensuring smooth
service.
11. Equity
- Explanation:
Managers should be kind, fair, and impartial to all employees. This
justice builds loyalty and devotion among the staff.
- Example:
A manager treats a new intern with the same politeness and respect as a
senior executive, creating a positive and non-discriminatory work
environment.
12. Stability of Tenure
- Explanation:
Employees need job security to perform well. Frequent turnover (hiring and
firing) is inefficient and costly due to training time.
- Example:
A company gives employees a permanent contract after a probation period,
so they feel secure and focus on their work instead of looking for new
jobs.
13. Initiative
- Explanation:
Employees should be encouraged to think out and execute new ideas or
plans. It gives them a sense of belonging and satisfaction.
- Example:
A customer support agent suggests a new FAQ page to reduce call volume.
The manager appreciates the idea and implements it.
14. Esprit de Corps
- Explanation:
Management should promote team spirit, unity, and harmony. "Union is
strength."
- Example:
After completing a difficult project, the manager takes the whole team out
for lunch to celebrate their collective success and bond as a group.