Management theory by Henri Fayol

Management theory by Henri Fayol: 

Henri Fayol was born 1841 in Istanbul and died 1925 in Paris. He was a French management theorist. Fayol was one of the most influential contributors to modern concepts of management, having proposed that there are five primary functions of management: (1) planning, (2) organizing, (3) commanding, (4) coordinating, and (5) controlling. Controlling is described in the sense that a manager must receive feedback on a process in order to make necessary adjustments. Fayol's work has stood the test of time and has been shown to be relevant and appropriate to contemporary management.

Fayol believed management theories could be developed, then taught. His theories were published in a monograph titled General and Industrial Management (1916). This is an extraordinary little book that offers the first theory of general management and statement.

Fayol suggested that it is important to have unity of command: a concept that suggests there should be only one supervisor for each person in an organization. Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation.

Henri Fayol, the father of the school of Systematic Management, was motivated to create a theoretical foundation for a managerial educational program based on his experience as a successful managing director of a mining company. In his day, managers had no formal training and he observed that the increasing complexity of organizations would require more professional management. Fayol's legacy is his generic Principles of Management.

Fayol's management process allows command functions to operate efficiently and effectively through co-ordination and control methods. For Fayol, the managing director overlooked a living organism that requires liaison officers and joint committees.

There are many theories used in today's management roles that can be traced back to the theories of these "founding fathers" of management. For example, Henry Fayol's 14 principles serve as a point of reference that many of today's managers use when conceptualizing, planning, organization, implementing and overseeing ideas and theories in the workforce

The main purpose of Henri Fayol’s “General Principles of Management” is to offer valuable guidance in managing effectively and efficiently. He explains that these are only principles and may need to be built upon or changed due to certain circumstances. These principles can be applied to situations that we may face as managers. Fayol provides each principal with insight for each.

Division of Work is the first principle. Each person within an organization has certain tasks and responsibilities. Each person continues to do this same job every day and become efficient and skilled in their tasks. This means better productivity for the organization as a whole.

Authority and Principal in large companies mean there are varying degrees of responsibility assigned to each supervisory position. With this gained authority comes more responsibility.

Discipline is the next principle of management. It is important for the supervisor to prevent slacking or other bad behavior. Good examples should be set by the supervisors also.

Unity of Command is the idea that at any one time a worker should only have one supervisor to receive direct orders from. If there are orders coming from two supervisors, it can obviously cause confusion among the workers and animosity between the two supervisors. It can also cause a decrease in production due to confusion among the workers.

Unity of Direction is closely related to Unity of Command. The Leader makes the plans and the supervisors push the original idea through the chain. They take extra care in ensuring the original plan stays on track.

Subordination of Individual Interest to General Interest is the concept of the supervisor taking an active role to fighting bad habits of employees. It is a supervisor’s duty to urge employees to leave personal interests and problems out of the workplace. It is also imperative that the supervisor teach by their own example.

Remuneration of Personnel is the next principle. There are many considerations to take when determining an employees pay. What is the state of the organization? What is the cost of living? Is there a shortage of qualified workers in this area? These considerations are all taken into account when deciding on a fair remuneration. Compensation should be given to those as reward for hard work. On the same token though, it is important to not overcompensate. The three different modes of payment are time rate, job rate and piece rate.

Centralization is having a leader or manager that effectively communicates the goal to all managers below them and getting the task at hand to all people within the organization. True centralization occurs when supervisors take the orders from the leader and effectively communicate it to those below them. They need not add their own directives or ideas. Just give the necessary direction to get the job done.

Scalar Chair is the chain of command within an organization. It answers the questions of who supervises who and who is responsible for what.

Order is the next principle. Order can be applied to the material aspects of an organization as well as the Social Order. Having all necessary products/ paperwork or even people in the right order and organized correctly will make it easier for the organization to operate. Workers should have a general order and a place to conduct business and tasks.

Equity as a principle in the organization assures that each employee receives fair treatment and the same respect as others. When an employee feels this way it will show through their work efficiency and general attitude towards their daily tasks.

Stability of Tenure of Personnel is the idea that an employee should have ample time to learn a position and skills needed for their job before removing them from the job. Each job or task does take a level of expertise. This expertise is best gained by experience. Firing someone too soon and firing too often can be more detrimental than sticking with a person until they learn to effectively do their job.

Initiative can be achieved in several ways. Managers and Supervisors must be able and willing to instill a sense of pride and accomplishment in the minds of employees. They should also strive to be respected by the employees. This in turn will inspire workers to do their best for the manager.

Esprit De Corps principle is based on the idea of unity. Stay unified; do not split your employees up. Bring them together for a common good. Communicate effectively with all of them with a focus on verbal communication and not written. Strive for harmony in the organization

Henry Fayol’s Management Theory Pros and Cons

Pros

Fayol provided a language to communicate management theory and establish a foundation for management training.

Managers should perceive organizations as living organisms that require constant attention rather than as mechanical machines.

Cons

The principles describe a vision rather than reality and are based on Fayol's own experience rather than empirical research. Later studies by Mintzberg and Kotter found that successful managers spend little time carrying out Fayol's activities and rely more on cultivating networks and personal contacts.

Conclusion
It is the intertwining of these classic theories mixed with some of the more modern ones that keep the worldwide management and labor force in constant productivity and questing to achieve better and better efficiency roles. And though there are many different approaches to management, the goal stays the same: to produce goods and services efficiently in a timely manner with a positive and beneficial outcome for employee, manager and company as a whole.

Functions of management theory by HF

Criticism of Administrative Management Theory

Henri Fayol's management principles and functions are used even today for managing the organisations. However, his Administrative Management Theory is criticised on the following grounds :-

1.     Management Oriented Theory : The administrative management theory is management oriented. It does not give much attention to the problems of the workers.

2.     Lack of Importance to Informal Organisation : The administrative management theory does not give any importance to informal organisation or groups. It gives importance only to the formal organisation structure.

3.     Concepts Borrowed From Military Science : Some of the concepts of administrative management theory were borrowed from military science. They tried to apply these concepts to the social and business organisations. For e.g. Henri Fayol gave importance to "commanding" and not "directing" the workers.

4.     Mechanical Approach : The administrative management theory has a mechanical approach. It does not deal with some of the important aspects of management such as motivation, communication and leading.

1.“Employees should receive orders from one superior only”. How did Fayol define this principle?

Unity of Command. Unity of command states that every worker should have only one immediate superior – he or she is responsible to that person and should ideally receive orders from that person only. This helps to pin responsibility in case of faults and fix errors in the system more easily. It also helps prevent chaos.

2. "Respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect”. What was Fayol defining?

Discipline. Discipline was one of the most important principles (according to Fayol). He declared that discipline requires good superiors at all levels.

3. Fayol emphasised on the need for team work in completing objectives and in the principle “In union, there is strength”. What term did Fayol use for expressing this?

Esprit de Corps. Fayol was a Frenchman. He made his observations on general management in his book, “Administration Industrielle et Generale.”

4. To avoid wastage of time and resources while communicating in the formal chain (following the organisational chart), Fayol introduced a concept. What is it better known as?

Gang plank Policy. Suppose a supervisor in the service sector (of a firm) wanted to communicate something to his or her counterpart in the production sector. Following the formal line of communication would mean that he/she had to communicate to his/her superior who contacts theirs and so on till the person who is head of both the departments is contacted; from the latter, the message is routed downwards till it reaches the required person. As per the “Gang plank policy”, the supervisor can contact a counterpart in any department directly (subject to approval from his/her superior).

5. “Each group of activities with the same objective must have one head of one plan (to achieve the objective)”. What was Fayol defining?

Unity of Direction. Every department in an organisation must move according to specified plan – it is not only necessary that the plan optimises the working of the department; it should also be made considering the organisation as a whole (to prevent plans of different departments from clashing).

6. Fayol talks about “Division of Labour”.

Fayol believed that it is necessary to have division of labour to improve efficiency. He wanted this principle to all kinds of work – both managerial as well as technical.

7. “Order” was an important principle for Fayol. He broke down “Order” into two types – Material and what?

Social. Order was defined as “a place for everything (everyone) and everything (everyone) in its (his or her) place”.

8. Another important principle of Fayol was “Authority and Responsibility”. According to Fayol, Authority was a combination of official power as well as what?

Personal. Official authority was derived from the manager’s position while personal authority was obtained from a combination of factors like intelligence, past service, moral worth, experience, informal relationships etc.

9. Fayol advocated the need for subordination of general interest to individual interest.

He advocated that both ‘interests’ should be met but when these interests collide (or differ), then the overall interest (general interest) must prevail. Management must also try to reconcile the differences.

10."The extent to which authority is concentrated or dispersed”. This principle is known in the management fields as _______?

Centralisation. Fayol maintained that individual circumstances will degree (of centralisation) that is needed to “give the best overall yield”.