Fayol's 14 Principles of Management

Henri Fayol was an industrialist of the early twentieth century. He developed fourteen principles of management that are still taught today. The definition of management is taken as "The process of coordinating and integrating work activities so that they are completed efficiently and effectively with and through other people." The principles are the universal truths of management that can be taught.

Principles of Management

Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialization increases output by making employees more efficient.

Authority. Managers must be able to give orders. Authority gives them this right. Note that responsibility arises wherever authority is exercised.

Discipline. Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership, a clear understanding between management and workers regarding the organization’s rules, and the judicious use of penalties for infractions of the rules.

Unity of command. Every employee should receive orders from only one superior.

Unity of direction. Each group of organizational activities that have the same objective should be directed by one manager using one plan.

Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole.

Remuneration. Workers must be paid a fair wage for their services.

Centralization. Centralization refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralization for each situation.

Scalar chain. The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed.

Order. People and materials should be in the right place at the right time.

Equity. Managers should be kind and fair to their subordinates.

Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort.

Esprit de corps. Promoting team spirit will build harmony and unity within the organization.

Mind Mapping

Mind Mapping is a useful technique that improves the way you take notes, and supports and enhances your creative problem solving.

By using Mind Maps, you can quickly identify and understand the structure of a subject, and the way that pieces of information fit together, as well as recording the raw facts contained in normal notes.

More than this, Mind Maps encourage creative problem solving, and they hold information in a format that your mind finds easy to remember and quick to review.
Popularized by Tony Buzan, Mind Maps abandon the list format of conventional note taking. They do this in favor of a two-dimensional structure. As such, a good Mind Map shows the 'shape' of the subject, the relative importance of individual points, and the way in which facts relate to one another.Mind Maps are more compact than conventional notes, often taking up one side of paper. This helps you to make associations easily. And if you find out more information after you have drawn the main Mind Map, then you can easily add it in.Mind Maps are also useful for:

1)Summarizing information;

2)Consolidating information from different research sources;

3)Thinking through complex problems; and

4)Presenting information in a format that shows the overall structure of your subject.

What's more, they are very quick to review as you can often refresh information in your mind just by glancing at one. In the same way, they can be effective mnemonics: Remembering the shape and structure of a Mind Map can give you the cues you need to remember the information within it. As such, they engage much more of your brain in the process of assimilating and connecting facts, compared with conventional notes.

To make notes on a subject using a Mind Map, draw it in the following way:

1)Write the title of the subject you're exploring in the center of the page, and draw a circle around it. This is shown by the circle marked 1 in Figure 1, above.

2)As you come across major subdivisions or subheadings of the topic (or important facts that relate to the subject) draw lines out from this circle. Label these lines with these subdivisions or subheadings. These are shown by the lines marked 2 in Figure 1.

3)As you "burrow" into the subject and uncover another level of information (further subheadings, or individual facts) belonging to the subheadings above, draw these as lines linked to the subheading lines. These are shown by the lines marked 3 in Figure 1.

4)Finally, for individual facts or ideas, draw lines out from the appropriate heading line and label them. These are shown by the lines marked 4 in Figure 1.

As you come across new information, link it in to the Mind Map appropriately.

A complete Mind Map may have main topic lines radiating in all directions from the center. Sub-topics and facts will branch off these, like branches and twigs from the trunk of a tree. You do not need to worry about the structure produced, as this will evolve as you develop your mind map.Note that the idea of numbered 'levels' in Figure 1 is only used to explain how the Mind Map was created. All we are showing is that major headings radiate from the center, with lower level headings and facts branching off from the higher level headings.While drawing Mind Maps by hand is appropriate in many cases, software tools like MindGenius improve the process by helping to you to produce presentation quality Concept Maps, which can easily be edited, distributed and redrafted.

Improving your Mind Maps Once you understand how to make notes in the Mind Map format, you can develop your own conventions to take them further. The following suggestions may help to increase their effectiveness:

1)Use single words or simple phrases for information: Most words in normal writing are padding: They convey facts in the correct context, and in a format that is pleasant to read. In your own Mind Maps, single strong words and meaningful phrases can convey the same meaning more potently. Excess words just clutter the Mind Map.

2)Print words: Joined up or indistinct writing can be more difficult to read.

3)Use color to separate different ideas: This will help you to separate ideas where necessary. It also makes your Mind Map easier to remember. Color also helps to show the organization of the subject.

4)Use symbols and images: Where a symbol or picture means something to you, use it. Pictures can help you to remember information more effectively than words.
Using cross-linkages: Information in one part of the Mind Map may relate to another part. Here you can draw in lines to show the cross-linkages. This helps you to see how one part of the subject connects with another.

Key Points:

Mind Mapping is an extremely effective method of taking notes. Mind Maps show not only facts, but also the overall structure of a subject and the relative importance of individual parts of it. They help you to associate ideas and make connections that might not otherwise make.

If you do any form of research or note taking, try experimenting with Mind Maps. You will find them highly effective!

Five Forces Model my Michael Porter

Every business faces competition. Good businesses are aware of the competitive forces in their marketplace, and position themselves to take full advantage of their strengths and their competitor’s weaknesses. Technology can sometimes be a key tool in maintaining competitive advantage.

Michael Porter described a concept that has become known as the "five forces model" to help understand how competition affects your business. This concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed.

Porters five forces model can be used to compare the impact of competitive forces on your own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces – each business has a different combination of resources and competences. Let’s use an example of my cousin who has very good mechanical skills and several years of experience fixing his and his friends old cars. He and a friend with similar skills have decided to open an auto-repair shop. Using Porters five forces, let us do a quick analysis of each of the five competitive forces the entrepreneurs are likely to encounter in their new business and how computers can help them in their businesses.

Competitive intensity: A larger number of firms increases rivalry because more firms compete for the same customers and resources. This is our traditional concept of competition.In pursuing an advantage over rivals, you can choose from several competitive moves like changing prices - raising or lowering prices to gain a temporary advantage, improving product differentiation. A company can also improve features or service, implementing innovations in the manufacturing process and in the product itself. Some industries can use a distribution channel that is novel or difficult to clone. To fully understand your direct competition you need information. Benefits are increased when businesses use computers not just to automate, but also to transform or inform an organization via the web. Our auto repair shop will use computers to track key performance metrics which allow them to adjust their prices and still make money. They will also use the internet to gather market data, track industry trends, and keep an eye on their local competition. If we publish all the skills and services that our company offers on a company website, we can increase our reach in the marketplace. Once an electronic link is established customers can communicate or check the status of their car using their computers. Perhaps we could set up cameras in the shop, and allow customers to see the work being done. This will add value to the business and save a lot of time for us and the customers as well.
Threat Of Substitutes: In Porter's model, substitute products refer to products in other industries. A product's price elasticity is affected by substitute products - as more substitutes become available, the demand becomes more elastic since customers have more alternatives. The competition engendered by a Threat of Substitute comes from products outside the industry. Although some people might take the bus or buy another car, there is no substitute for good mechanical skills and experience in an auto-repair shop. Keeping an eye on industry trends will help spot innovations that could affect your industry.

Buyer Power: Under such market conditions in which there are many suppliers and one buyer, the buyer sets the price. Buyers are powerful if buyers purchase a significant proportion of your product or service, or if it is standardized or regulated. Under these conditions it might be possible to become a preferred vendor by becoming more integrated with the buyer by automating the ordering and payment processes, and allowing the buyer partial access to your internal systems (an extranet). This is sometimes called supply chain management. Our auto shop has a diversity of customers.


Supplier Power: Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. Information technology can change the nature of the relationship and balance of power among buyers and suppliers. This is the mirror of buyer power. In many industries suppliers offer technical links to their internal network which can give the buyer competitive advantage. Many industries have electronic pricing and ordering systems, which can be linked right into the business. Our auto shop will take advantage of the parts database and a local branch of an auto parts distributor. The orders will automatically be generated based on diagnosis, and parts will be delivered the same day.

Barriers to Entry: Barriers reduce the rate of entry of new firms, thus maintaining a level of profit for those already in the industry. From a strategic perspective, barriers can be created or exploited to enhance a firm's competitive advantage. New entrants like our auto shop will have to attract customers away from established businesses. To the extent that technology is being used already in the industry, it establishes a baseline of competency and efficiency which must be met to be competitive. Technology can often allow smaller companies to compete with much larger more established companies by evening out the playing field. For the auto shop, it will give us diagnostic and parts resources which are fully competitive with larger shops, and enhance our ability to contact potential customers

How does your company measure up against the five forces? In the business of doing business, it is easy to lose perspective. Reviewing your position can help you take full advantage of your unique capabilities and market position.

Influential Leadership

The skill of dialogue is also fundamental. What kind of stance do you take? Do you assume an assertive, aggressive, or passive approach? Do you engage in too much advocacy for your position? Do you engage in sufficient inquiry regarding someone else's position? If your approach is heavily tilted in the direction of advocacy of your position, chances are you are not engaging in a good listening and dialogue process.

Reflecting is another core skill that influential leaders practice. Reflecting involves taking time to become fully aware of your own mental processes-your thoughts, feelings, and reactions to various situations.

Modeling, another core skill of the influential leader, involves the recognition that you are setting an example for others through your own behavior. The skill of modeling requires an awareness that your behavior is the primary communicator of your intent and challenges you to manage your behavior accordingly.

Last, but certainly not least, is the skill of the use of self. This skill involves using yourself as a barometer to assess what is going on inside you and around you and how to respond to your environment. For example, do you know what your "hot buttons" are? Do you know what makes you tick? Do all of your reactions have to do with the present situation or is a portion of your reaction coming from past experiences? If you are fully capable of using yourself as a barometer, you will be able to use your reactions and decipher what reaction is due to your past and what reaction is truly a response to the situation at hand. Then you can use that information to make dead-on strategic initiatives. You must use your self as a fined-tuned instrument-no easy task!
If leaders take on core values and if they develop core skills, they will walk in the world differently! That is, they will have presence, and presence cannot be acted. Presence creates a chain of reactions. When leaders have presence, followers will trust them. That trust is at the core of being influential. When was the last time you were truly influenced by someone you did not trust? You might have been influenced to go the other way, but not influenced to follow!
When leaders have presence, when others trust them, and when followers are influenced by them, desired results from the team/organization will follow. That is how a leader achieves results-not by coercion, but by influence.

A fictional example

Consider Company X, an independent insurance agency. The CEO, a successful man in the industry, has set an agenda to increase revenues five-fold in the next five years. He believes that such an expansion is possible, while the employees-from producers to account executives to administrative personnel-believe that such an expansion is nothing but a pipedream.

What often happens in such situations? To begin with, some brave souls may express their doubts. How is the CEO going to hear the concerns? A CEO who truly knows how to listen will ask questions, pay attention, and will try to see the logic of those who doubt the plan. A CEO who is reactive, who deep down inside possibly equates any doubts about the vision with subversion, listens half-heartedly and tries to come up with a rebuttal. He or she does not ask many questions but, instead, advocates heavily for his or her position. Because of that positional power, others might quickly sense that disagreeing with the CEO is not safe and probably will hesitate to express their concerns. They will pretend to be doing what is asked, but in reality they will be dragging their feet.

Precious time passes while the CEO believes that the employees are all in line with the vision. When it finally becomes evident that the desired results are not going to be achieved, the CEO becomes angry, takes that anger out on the employees, becomes frustrated and finally creates a new agenda with a new set of goals. Those who report directly to the CEO then model the CEO's style. They too become angry with their employees. Those employees try to voice their concerns and find themselves faced with a manager who cannot listen. They feel unsafe, so they pretend that they are in line with the new vision, while at the same time dragging their feet. And the scenario continues-on and on and on.

Another example

Now, consider a different possibility for Company X. As an influential leader, the CEO sets the same agenda: five-fold revenue increase in five years. The employees voice their doubts and concerns. This CEO asks a series of questions aimed at increasing his understanding of the employees' concerns. Some of those concerns prove to be legitimate. For example, employees might be concerned as to whether or not there are plans for expanding the infrastructure along the way. Being able to use himself as a barometer of how others are feeling, the CEO senses that the opposition may also have to do with the employees not knowing why such an expansion is necessary.

Sitting back and reflecting on how he might feel if he were in his employees' shoes, the CEO goes back to them and engages in meaningful dialogue about why such an expansion is necessary For example, perhaps he has reason to believe that without such an expansion, their organization is going to lose its independent status and will be sold. The CEO communicates those concerns and helps the employees consider what is desirable about remaining independent.

Thus, he communicates his value of service, letting his employees know that service to the organization, including his employees, is at the heart of his new vision. He also demonstrates humility by letting his employees know that he values their opinion, that there may be issues that he has not considered, that suggestions from others possibly could serve the entire organization. He therefore encourages open dialogue about how the goal can be achieved. Sensing his humility and authenticity, the employees model his behavior. They, too, communicate with their direct reports that they are interested in their employees' ideas and suggestions.

With employees who trust him, this CEO is much more likely to realize his vision.
Becoming an influential leader is a life-long goal that requires conviction, patience, practice and dedication.

By Hamid Mirsalimi, Ph.D., and Maureen Hunter, Ph.D.