Psychology of management

plan of action
which is based on the following: 
- the company’s resources (capital, building, raw material, marketing network, 
reputation, etc.); 
- accounting of the volume and price of unfinished production; 
- future trends, depending on technical, financial, commercial, and other conditions. 
Organization of managerial activity
supposes: 
- provision of careful planning and strict execution of the plan; 
- supervising that the enterprise’s personnel and material components correspond to the 
company’s aims, resources, and needs. 
As the main criterion of an executive’s workload Faiyolle proposed to consider the 
rational 
“control range”
expressed in the number of subordinates to one executive. He was the 
first to show quite logically that production management is permeated by psychology. According 

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to him, the main thing is taking into account human relationships. As an item of special concern 
Faiyolle believed the matter of managers’ and employees’ interactions with each other and 
between these two groups. He defined authorities as “the right to give orders and demand 
submission” and distinguished between a manager’s official authorities received through his 
position and personal prestige whose components are intellect, experience, moral merits, ability 
of leadership, previous services, etc. Alongside with professional selection he considered very 
important to ensure a stable, settled employees collective for an enterprise. Unlike Taylor, he 
didn’t consider decision-making at an enterprise as a privilege of only top-managers. His 
position in this question has later led to the proliferation of 
the principle of“delegating 
authority”
. Faiyolle raised the question of the necessity of managerial activity’s being singled 
out into a separate research object. He insisted on the necessity of teaching management at 
education establishments. Faiyolle was one of the first to pay attention to the role of managers’ 
personal individual-and-psychological peculiarities from the point of view of their influencing 
the enterprise’s successful operation. 
Faiyolle formulated the fourteen principles of management which are nowadays still 
recognized by specialists: 
1. Discipline, i.e. obeying and respect of the reached agreements between a company and 
its employees. Discipline also supposes sanctions which are to be applied fairly. 
2. Employees’ remuneration, including fair wages. 
3. Fairness: a combination of kindness and justice. 
4. Corporative spirit, i.e. personnel’s harmony, their unity. 
5. Subjugating personal interests to the common ones. Interests of an individual employee 
or a group must not prevail over those of the company. 
6. Division of labor, i.e. specialization. Its aim is carrying out a job of a larger volume and 
better quality under the same conditions. 
7. Authority and responsibility. Authority is the right to give an order, and responsibility is 
opposite to it. 
8. One-man management. An employee should get orders from only one person – the 
immediate executive. 
9. Direction unity. Each group acting for the same purpose should be united by a single 
plan and have one executive. 

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10. Centralization. The issue is the correct proportion between centralization and 
decentralization. This is the problem of measure determining which will ensure better 
results. 
11. Scalar chain. This is a number of persons working on governing positions, starting 
from the person holding the topmost position to a manager of the lowest rank. 
12. Order. There should be a place for everything and everything should be in its place. 
13. Work-place stability for the employees. High employee turnover decreases an 
organization’s effectiveness. 
14. Initiative. It means development of a plan and ensuring its successful realization. This 
imparts strength and energy to an organization. 
Faiyolle synthesized the ideas of one-man management and those of functional 
administrating that was put into the basis of the modern theory of organization. The fourteen 
principles offered by him contained the elements of “human resources” management (“personnel 
management” as it is customary to call it nowadays) which later got a wide proliferation in 
America.