PH 103 principles

Henri Fayol

A French industrialist known for developing a widely used theory on general management and for his 14 Principles of Management.

Division of Work

The concept of work division traditionally involves assigning narrowly defined roles to each employee

Authority and Responsibility

Employees should have the authority for ensuring the perfromance and completion of tasks assigned to them

Span of Control

This refers to the limitation on the number of subordinates that a manager can effectively administer and control

Unity of Command

The principle that employees should report to a single direct supervisor to maintain a clear chain of command, avoiding confusion and ensuring that orders are not bypassed through multiple lines of authority

Unity of Direction

Group activities should have one leader and one plan with a unified objective to prevent fragmentation and ensure that all employees work toward the same business goals

Subordination of Individual Interest to General Interest

The principle that says the interests of individuals should not outweigh the interests of the organization.

Remuneration

The principle that payment should be fair, providing maximum satisfaction to both employees and employers based on the principle of “equal pay for equal work”

Centralization

The principle that authority should be concentrated at the top, ensuring that major policies and decisions are made by top management.

Scalar Chain

Ultimately authority lies at the top, with communication flowing downward, and the limitations of authority must be clearly understood, especially in settings with multiple potential leaders like hospitals

Order

The principle that ensures proper assignment of employees and allocation of resources within the organization.

Equity

The principle that involves fair and kind treatment of employees.

Stability of Tenure

Employees should be given adequate time and opportunities to prove their worth, which can be facilitated through probationary appointments

Simplicity

The principle that unnecessary elements should be eliminated to streamline processes.

Esprit de corps

The principle that emphasizes teamwork, communication, and cooperation for achieving team goals, as “in union there is strength”

Money

A fundamental resource essential for acquiring other resources, such as equipment, supplies and labor, requiring effective management through budgeting, forecasting, and financial decision-making.

People

A crucial resource for executing tasks and providing services, requiring management through recruitment, training, and motivation and performance management.

Time

A limited resource that must be effectively managed through prioritization of tasks and organization of work schedules to achieve productivity.

Material

Includes physical resources like equipment, supplies, and inventory that require effective management through inventory control, procurement, and maintenance.

Information

A vital resource for making informed decisions, especially with advancements in technology. Managing it involves organizing, storing, and analyzing data, which includes using technology to manage information systems, ensuring data security, and leveraging information for decision making and future planning

Organizing Process

The steps involved in structuring activities and allocating resources within an organization.

Organization

The formal and intentional design of structures, roles, and positions, the process of structuring activities, procedures, and people within the business, and/or the framework or backbone by which a business functions to provide services and offer goods to customers

Horizontal Differentiation

Differences among workers or units based on education, training, and assigned tasks. In a pharmacy, differences in training for pharmacy services and non-pharmacy items

Vertical Differentiation

Differences in hierarchical positions within an organization, represented by the chain of command. Organization charts show levels of authority and reporting relationships

Spatial Differentiation

The location of organizational units, which can be centralized or spread across multiple areas.

E.g.: A single location pharmacy vs a chain pharmacy with multiple branches

Formalization

The extent to which rules, procedures, and standards are used to control behavior and maintain structure within an organization.

Centralization

The concentration of decision-making power at higher levels in the organization. Policy decisions are made by top management, decentralized decisions are often at a lower level.

Division of Labor

The assignment of specific functions to individuals or groups to enhance efficiency.

e.g.: Pharmacists specializing in dispensing or clinical functions

Parity of Authority and Responsibility

The principle that authority and responsibility should be aligned within an organization, for decisions should not be passed without corresponding authority. In smaller pharmacies, owners may centralize control and resist delegating authority

Unity of Command

The principle that an employee should report to only one supervisor or manager.

e.g.: Matrix organization integrates different specialists while maintaining specialized departments

Span of Control

The number of employees a manager can effectively supervise.

Departmentalization

The grouping of individuals based on specific tasks or functions within an organization.

Organizational chart’s purpose

1. To assist in viewing the firm’s whole structure

2. To help management in dividing the different duties or functions in the business

3. To show the grouping of departments to easily direct and control activities

4. To sort the responsibilities of the positions so there will be no wasted time or effort

Lower-level manager

Can oversee 8 to 20 employees

Upper-level manager

Can supervise 4 to 8 employees

Components of formalization

Organizational rules, procedural specifications, technical competence, and impersonality

Organizational chart’s structure

1. Typically presented in a pyramid shape

2. Fewer positions at the top, with an increasing number of positions at the bottom

The Five Main Steps of the Organizing Process

1. Reflect on plans and objectives

2. Establish major tasks

3. Divide major tasks into subtasks

4. Allocate resources and directives for subtasks

5. Evaluate Results of operationalizing the organizing strategy

5.1. Feedback

Resources that are managed

Money, people, time, material, information

Henri Fayol’s greatest contribution

14 Principles of Management