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Henri Fayol, the father of the school of Systematic Management, realized that organizations were
becoming more complex and required their managers to work more professionally. His motivation was to
create a theoretical foundation for an educational program for managers who lacked formal training in
those days. Basing his work on his experience as a successful managing director of a mining company, he
developed generic 'Principles of Management' to help organizations achieve optimum performance
working toward their goals.
Fayol described his fourteen Principles of Management with the understanding that his list was neither
exhaustive, nor universally applicable. He developed the 14 principles of management in order to help
managers learn how to organize and interact with their employees more effectively. The 14 principles
have been a significant influence on modern management theory, although they are not widely used
today (or are being interpreted differently), they can still offer guidance for today’s managers. Many of
the principles are now considered to be common sense, and are rarely considered as directly important
to the well being of any organization.
Therefore, we will be analyzing the Henri Fayol’s 14 principles of management and its direct/indirect
applications to the activities and performance of a bank of today.
1. Division of Work
According to Henry Fayol under division of work, work should be divided among individuals and groups
to ensure that effort and attention are focused on special portions of the task. Fayol presented work
specialization as the best way to use the human resources of the organization. Division of work promotes
efficiency because it permits an organizational member to work in a limited area reducing the scope of
his responsibility. Looking at today’s bank, you will agree with me that this is still being practiced, where
you have the bank employees assigned to specific job functions. For example, those receiving cash
deposits from customers are most times different from those processing the transactions and those
authorizing it. You also have funds transfer units, customer service units, e-business units, etc. These
units are manned by different bank staff performing different functions with a common goal – service to
the customer.
Fayol’s principle of management in this regard is that an efficient manager makes best possible use of
his authority and does not escape from the responsibility. In other awards when the authority is
exercised the responsibility is automatically generated. This is very much applicable in the bank of today
where every supervisor exacts his authority to ensure prompt and quality service delivery to the bank’s
customers by his subordinates. He also takes responsibility for their successes, misconducts, service
failures as well as their career progression in the bank.
3. Discipline
According to Henry Fayol discipline means sincerity about the work and enterprise, carrying out orders and
instructions of superiors and to have faith in the policies and programmes of the business enterprise. In other
words, a successful organization requires the common effort of workers and, penalties, sanctions, etc should
be applied judiciously to encourage this common effort. A well disciplined workforce is essential for improving
the quality and quantity of the production. This is very relevant in a bank without which there will be poor
service deliveries, service failures to customers and even frauds. Sanctions in the form of warning/caution
letters, suspension without pay, dismissal or termination of appointments, depending on the gravity of the
offense are normally applied to maintain discipline and ensure quality service delivery to their customers at all
time.
4. Unity of Command
A subordinate should take order from only one manager and he should be responsible and accountable
to him. Fayol claimed that if the unit of command is violated, authority is undermined; discipline is in
danger, order disturbed and stability threatened. The violation of this principle will face some serious
consequences. In this way, the principle of unity of command provides the enterprise a disciplined,
stable and orderly existence. It creates harmonious relationship between officers and subordinates,
congenial atmosphere of work. It is one of the Fayol’s important essential principles of management.
This is also very much applicable in a bank where the bank employees take order from only their direct
supervisor, who takes full responsibility for what goes on in his unit.
5. Unity of direction
Fayol advocates “One head and one plan” which means that group efforts on a particular plan be led and
directed by a single person. This enables effective co-ordination of individual efforts and energy. This
fulfils the principles of unity of command and brings uniformity in the work of same nature. In this way
the principle creates dedication to purpose and loyalty. It emphasizes the attainment of common goal
under one head. This is also applicable in a bank where for instance, a unit head, eg operations manager
directs the affairs of the operations unit/staff towards the bank’s common goal. You also have the
Managing Director spearheading the affairs of the bank ensuring that the various units, the entire
organization and the staff are moving towards the organizational goal of the bank in the same direction.
9. Scalar chain
Scalar chain is a chain of supervisors from the highest to the lowest rank. It should be short-circuited. An
employee should feel the necessity to contact his superior through the scalar chain. The authority and
responsibility is communicated through this scalar chain. Fayol defines scalar chain as “the chain of
superiors ranging from the ultimate authority to the lowest rank. In banks for instance, managers, area
managers, divisional heads, etc in hierarchies are part of a chain-like authority scale. Each manager, from
the first line supervisor to the managing director, possesses certain amounts of authority. The MD
possesses the most authority; the first line supervisor the least. Lower level managers should always
keep upper level managers informed of their work activities. The existence of a scalar chain and
adherence to it are necessary if the organization is to be successful. This is very evident in today’s banks.
10. Order
According to Fayol there should be proper, systematic and orderly arrangement of physical and social
factors, such as land, raw materials, tools and equipments and employees respectively. In other words,
the principle states that every piece of land and every article should be used properly, economically and
in the best possible way. Selection and appointment of the most suitable person to every job is also part
of this principle. The principle stresses scientific selection and appointment of employees on every job.
Therefore, for the sake of efficiency and coordination, all materials and people related to a specific kind
of work should be treated as equally as possible. This principle is also being applied in the bank today,
where materials and human resources are being optimally managed and allocated for effective results.
11. Equity
The principle of equality should be followed and applicable at every level of management. There should
not be any discrimination as regards caste, sex and religion. An effective management always accords
sympathetic and human treatment. The management should be kind, honest and impartial with the
employees. In other words, kindness and justice should be exercised by management in dealing with
their subordinates. This will create loyalty and devotion among the employees. Thus, workers should be
treated at par at every level. This principle is very important for the well being of any organization and
banks are not exceptions. Although it is very difficult to treat every staff at par at every level, given the
capitalist nature of these organizations, but most organizations including banks takes care to ensure
most staff are treated fairly to prevent disloyalty and de-motivation. However, with the recent massive
retrenchments in Nigerian banks, we may be tempted to say that the principle of equity in non-existent
in Nigerian banks.
13. Initiative
Under this principle, management provides an opportunity to its employees to suggest their new ideas,
experiences and more convenient methods of work. Management should take steps to encourage
worker initiative, which is defined as new or additional work activity undertaken through self direction.
This is also practiced in the banks where employees are encouraged to apply their initiatives in rendering
quality services to their customers. However, there are always processes, procedures and policies in
place to guide the employees to ensure successful implementation and prevent abuse of the
privilege.
Conclusion
Although Principles such as Division of labour and Stability of jobs and positions seem to be a
product of their times, other aspects such as the need to specialize, unity of command, clear
reporting relationships in a formal structure, and the need to coordinate activities among
specialized groups, are relevant today. Today’s managers have access to an amazing array of
resources which they can use to improve their skills, but Henri Fayol’s 14 principles can and it is still
offering guidance directly or indirectly for today’s managers