Home > Topics > Business Organisation and Management > Fayol's Principles – Applications in Modern Business

Fayol's Principles in Action – 2024 Edition! 🚀

Question: A French mining engineer from 1916... relevant in 2024??

Answer: ABSOLUTELY! Let's see how India's top companies use Fayol's wisdom EVERY DAY!

TCS (Tata Consultancy Services) – All 14 in Action! 💼

1. Division of Work ⚙️

Application:

  • Separate teams: Java developers, testers, DevOps, UI/UX
  • Project-based: Team A handles banking, Team B retail
  • Result: World-class specialization!

2. Authority & Responsibility ⚖️

Application:

  • Project Manager: Authority to allocate resources + Responsibility for delivery
  • If project fails? PM accountable!
  • If succeeds? PM gets bonus!

3. Discipline 🎖️

Application:

  • 9-hour workday policy (flexible but tracked!)
  • Dress code for client-facing roles
  • Result: Professional image globally respected!

4. Unity of Command 👤

Application:

  • Each developer reports to ONE project manager
  • No matrix confusion!
  • Clear escalation path

5. Unity of Direction 🎯

Application:

  • "AI & Automation First" strategy (top-level!)
  • ALL departments align: Sales sells AI, delivery builds AI, HR hires AI experts!

Infosys – Fayol Meets Technology! 💻

6. Subordination of Individual Interest 🏢

Real example - Vishal Sikka (Ex-CEO):

  • Wanted aggressive acquisitions (personal vision)
  • Board wanted cautious approach (company interest)
  • Conflict led to resignation!
  • Lesson: Company > Individual!

7. Remuneration 💰

Application:

  • Variable pay: 60% fixed, 40% performance-based
  • Stock options: Align employee success with company success!
  • Result: Top talent retention!

8. Centralization vs Decentralization ⚖️

Perfect balance:

  • Centralized: Technology standards, quality processes (Infosys HQ)
  • Decentralized: Client delivery, hiring (Each delivery center decides!)

Reliance Industries – Fayol at Scale! 🏭

9. Scalar Chain 🪜

Clear hierarchy:

Mukesh Ambani (Chairman)
    ↓
Business Heads (Jio, Retail, Petrochemicals)
    ↓
Regional Heads
    ↓
Store Managers (Reliance Fresh)
    ↓
Employees

BUT: "Gang Plank" exists!

  • Store manager can email corporate if emergency!
  • Example: During COVID, direct communication allowed!

10. Order (Material & Social) 📦

JioMart warehouses:

  • Material Order: Automated inventory (every item tracked!)
  • Social Order: Right people in right roles (data scientists, delivery partners, managers)

Flipkart – Fayol in E-Commerce! 📦

11. Equity ⚖️

Application:

  • Equal opportunity hiring (gender, region, background)
  • Flipkart Leap: Program for career breaks (helps women returners!)
  • Fair grievance redressal
  • Result: Diverse, happy workforce!

12. Stability of Tenure 🛡️

Challenge: E-commerce has high attrition!

Flipkart's solution:

  • ESOP (Employee Stock Ownership Plans) → Loyalty!
  • Career growth paths → Stay & grow!
  • Result: Senior employees have 5-10 year tenure!

Startups – Fayol Adapted! 🚀

13. Initiative (Zomato's Approach) 💡

Real example:

  • Delivery partner suggested "Live order tracking"
  • Zomato implemented!
  • Result: Industry-first feature, customer delight!

Google's 20% time (mentioned earlier):

  • Gmail, Google News, AdSense - ALL from employee initiative!

Fayol was RIGHT: Best ideas often come from bottom!

14. Esprit de Corps (Paytm's Culture) 🎉

Vijay Shekhar Sharma's approach:

  • All-hands meetings (entire company!)
  • Celebrates failures (learning culture!)
  • Offices designed for collaboration (no cubicles!)
  • Result: "One Team One Dream" culture!

When Principles CONFLICT (Real Dilemma!)

Scenario: COVID-19 Lockdown (2020)

Principle #12: Stability of Tenure (Don't fire!)
vs
Reality: Revenue down 80%!

What companies did:

Option A (Ola/Uber): Laid off 30% staff

  • Reason: Company survival!
  • Criticism: Violated stability!

Option B (Zomato/Swiggy): Zero layoffs + salary cuts

  • Reason: Preserved stability!
  • Cost: Burned cash reserves!

Lesson: Principles are GUIDELINES, not rigid rules! Context matters!

Modern Additions to Fayol's 14

What Fayol MISSED (because it didn't exist in 1916!):

a) Technology Integration 💻

  • Automation, AI, data analytics
  • Modern principle: "Digitize or die!"

b) Sustainability 🌱

  • Environmental responsibility
  • Modern principle: "Profit + Planet + People"

c) Agility 🌀

  • Rapid adaptation to change
  • Modern principle: "Fail fast, learn faster!"

d) Diversity & Inclusion 🌈

  • Fayol's 1916 → All white men!
  • Modern principle: "Diversity drives innovation!"

But Fayol's CORE principles? Still GOLD! ✨

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. TCS applying 'Division of Work' means:

Dividing salary equally
Specializing teams by skills
Working in divisions
Dividing office space

💡 Final Wisdom: "Fayol gave us the ALPHABET of management. Modern companies write their own STORIES using this alphabet! TCS, Google, Zomato - all speak Fayol's language, just with a 2024 accent!" 🌟✨

🎉 UNIT III COMPLETE! You've mastered Management Functions - from Taylor's stopwatch to Fayol's principles!

Next epic: Planning & Organising - How managers actually PLAN for the future and BUILD organizations! 📊🏗️

← PreviousNext →