Management Fayol Organization

PRINCIPLES OF MANAGEMENT

Henri Fayol was born in 1841 in Istanbul. He was one of Europe’s leading thinkers on management theories and was one of the most influential contributors to modern concepts of management. Fayol was a key figure in the ‘turn-of-the-century’ Classical School of management theory. He suggested that management is a universal human activity that applies to family as well as to the organization. His Frenchmen has been described as the father of modern operational management theory. His ideas have become the very foundation of modern management concepts.

Henri Fayol was a French engineer and director of mines, was little known outside France until the late 40s when Constance Storrs published her translation of Fayol’s 1916 ” Administration Industrielle et Generale “.

Fayol’s career began as a mining engineer. He then moved into research geology and in 1888 joined, Comambault as Director. Comambault was in difficulty but Fayol turned the operation round. On retirement he published his work – a comprehensive theory of administration – described and classified administrative management roles and processes then became recognised and referenced by others in the growing discourse about management. He is frequently seen as a key, early contributor to a classical or administrative management school of thought (even though he himself would never have recognised such a “school”).

Henri Fayol theorising about administration was built on personal observation and experience of what worked well in terms of organisation. His aspiration for an “administrative science” sought a consistent set of principles that all organizations must apply in order to run properly.

F. W. Taylor published “The Principles of Scientific Management” in the USA in 1911, and Fayol in 1916 examined the nature of management and administration on the basis of his French mining organisation experiences..

With two exceptions, Henri Fayol’s theories of administration are going directly into the bureaucratic superstructure described by Weber. Henri Fayol focuses on the personal duties of management at a much more granular level than Weber did. While Weber laid out principles for an ideal bureaucratic organization Fayol’s work is more directed at the management layer

Fayol was the famous theorist who proposed that there are five primary functions of manager. He believed that management had five principle roles which he saw as

(1) Planning: To forecast and plan the future by drawing up plans of actions and how they will be implemented by identifying the strategies

(2) Organizing: To build up the structure, material and who give the delegated authority to carry out the specific tasks

(3) Commanding: Maintaining activity among the personnel and giving orders in the specific period of time telling the employees what exactly to do and how.

(4) Co-ordinating: Binding together the whole of the team so that they can harmonize their activities and efforts to one unified goal or achievement.

(5) Controlling: To see that everything occurs in conformity with policy and practise. Controlling is described in the sense that a manager must receive feedback on a process that is being carried out in an organization so that he can make the relevant adjustments if necessary.

Most of these activities are very task oriented, rather than people oriented, very similar to Taylor and Scientific Management. While both have a task focus, their approaches are quite different. Fayol was particularly interested in authority and its implementation while Taylor concentrated on work organisation (e.g. efficiency). In many ways their views illustrating some of the differences between the USA and Europe. The views and attitudes towards organisations and management are not always led by American theorists. He advocated a consistent set of principles that all organisations need to run properly. Although many of today’s management text including Daft (2005) have reduced the five functions to four, co-ordinating was congregated into the rest of the main functions. However all modern day management texts are based and organized around Fayol’s four functions.

Henri Fayol also fused the 14 principles for organizational design and effective administration. The 14 principles of management were discussed in detail in his book published in 1917 Administration industrielle et générale. He compared the conclusions made by Peter, Kanter and Handy. Fayol developed fourteen principles of administration to go along with management’s five primary roles. He laid down the following principles of organization which he later called the principles of management:

• Specialization of labour: A principle of work allocation and specialisation in order to concentrate activities to enable specialisation of skills and understandings, more work focus and efficiency. Specializing encourages continuous improvement in skills and the development of improvements in methods.

• Authority: The right to give orders and the power to exact obedience. If responsibilities are allocated, then the post holder needs the requisite authority to carry these out including the right to require others in the area of responsibility to undertake duties. Authority stems from:

• that ascribed from the delegation process (the job holder is assigned to act as the agent of the high authority to whom they report – hierarchy)

• Allocation and permission to use the necessary resources needed (budgets, assets, and staff) to carry out the responsibilities.

• selection – the person has the expertise to carry out the responsibilities and the personal qualities to win the support and confidence of others.

• Discipline: No slacking, bending of rules. The generalisation about discipline is that discipline is essential for the smooth running of a business and without it – standards, consistency of action, adherence to rules and values – no enterprise could prosper.

“in an essence – obedience, application, energy, behavior and outward marks of respect observed in accordance with standing agreements between firms and its employees ” 1916

• Unity of command: A concept that suggests there should be only one supervisor for each person in an organization. Each employee has one and only one boss. The idea is that an employee should receive instructions from just a single superior . This generalisation still holds – even where we are involved with team and matrix structures which involve reporting to more than one boss – or being accountable to several clients. The basic concern is that tensions and dilemmas arise where we report to two or more bosses. One boss may want X, the other Y and the subordinate is caught between the devil and the deep blue sea.

• Unity of direction: A single mind generates a single plan and all play their part in that plan. The unity of command idea of having one head (chief executive, cabinet consensus) with agree purposes and objectives and one plan for a group of activities) is clear.

• Subordination of individual interest to the general interest : When at work, only work things should be pursued or thought about. Fayol’s line was that one employee’s interests or those of one group should not prevail over the organisation as a whole. This would spark a lively debate about who decides that the interests of the organisation as a whole are. Ethical dilemmas and matters of corporate risk and the behaviour of individual “chancers” are involved here. Fayol’s work – assumes a shared set of values by people in the organisation – a unitarism where the reasons for organisational activities and decisions are in some way neutral and reasonable.

7. Remuneration of staff: Employees receive fair payment for services, not what the company can get away with.

“The price of services rendered.” 1916

The general principle is that levels of compensation should be “fair” and as far as possible afford satisfaction both to the staff and the firm (in terms of its cost structures and desire for profitability/surplus).

8. Centralisation: Consolidation of management functions. Decisions are made from the top. Centralisation for HF is essential to the organisation and a natural consequence of organising. This issue does not go away even where flatter, devolved organisations occur. Decentralisation – is frequently centralisaed-decentralisation !!! The modes of control over the actions and results of devolved organisations are still matters requiring considerable attention.

9. Scalar chain/line of authority: Formal chain of command running from top to bottom of the organization, like military. The scalar chain of command of reporting relationships from top executive to the ordinary shop operative or driver needs to be sensible, clear and understood.

10. Order: All materials and personnel have a prescribed place, and they must remain there. The level of generalisation becomes difficult with this principle. Basically an organisation “should” provide an orderly place for each individual member – who needs to see how their role fits into the organisation and be confident, able to predict the organisations behaviour towards them. Thus policies, rules, instructions and actions should be understandable and understood. Orderliness implies steady evolutionary movement rather than wild, anxiety provoking, unpredictable movement.

11. Equity: Equality of treatment (but not necessarily identical treatment) . Equity, fairness and a sense of justice “should”pervade the organisation – in principle and practice.

12. Stability of tenure or Personnel Tenure: Limited turnover of personnel. Lifetime employment for good workers. Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure promotes loyalty to the organisation, its purposes and values.

13. Initiative: Thinking out a plan and do what it takes to make it happen. At all levels of the organisational structure, zeal, enthusiasm and energy are enabled by people having the scope for personal initiative, in respect with Tom Peters.

14. Esprit de corps: Harmony, cohesion among personnel. Here Fayol emphasises the need for building and maintaining of harmony among the work force, team work and sound interpersonal relationships. It’s a great source of strength in the organisation. Fayol stated that for promoting esprit de corps, the principle of unity of command should be observed and the dangers of divide and rule and the abuse of written communication should be avoided

The final two principles, initiative and esprit de corps, show a difference between Fayol’s concept of an ideal organization and Weber’s. Weber predicted a completely impersonal organization with little human level interaction between its members. Fayol clearly believed personal effort and team dynamics were part of a “ideal” organization

Out of the 14, the most important elements are specialization, unity of command, scalar chain, and, coordination by managers (an amalgam of authority and unity of direction).

Advantages of Fayol’s theories and contributions

• Fayol was the first person to actually give a definition of management which is generally familiar today namely ‘forecast and plan, to organise, to command, to co-ordinate and to control’.

• Fayol also gave much of the basic terminology and concepts, which would be elaborated upon by future researchers, such as division of labour, scalar chain, unity of command and centralization.

Disadvantages

• Fayol was describing the structure of formal organizations.

• Absence of attention to issues such as individual versus general interest, remuneration and equity suggest that Fayol saw the employer as paternalistic and by definition working in the employee’s interest.

• Fayol does mention the issues relating to the sensitivity of a patients needs, such as initiative and ‘esprit de corps’, he saw them as issues in the context of rational organisational structure and not in terms of adapting structures and changing people’s behaviour to achieve the best fit between the organisation and its customers.

• Many of these principles have been absorbed into modern day organisations, but they were not designed to cope with conditions of rapid change and issues of employee participation in the decision making process of organisations, such as are current today in the early 21st century.

Successes

Fayol’s five principle roles of management are still actively practiced today. The author has found “Plan, Organize, Command, Co-ordinate and Control” written on one than one manager’s whiteboard during his career. The concept of giving appropriate authority with responsibility is also widely commented on (if not well practiced.) Unfortunately his principles of “unity of command” and “unity of direction” are consistently violated in “matrix management” the structure of choice for many of today’s companies.

Conclusion

Henri Fayol was important for two reasons: first, because he placed management centre stage; second, because he pondered the question of how best a company could be organised. He was also one of the earliest people to write and lecture on management issues, and indeed is sometimes referred to as the first management thinker.

It is clear that modern organizations are strongly influenced by the theories of Taylor, Mayo, Weber and Fayol. Their precepts have become such a strong part of modern management that it is difficult to believe that these concepts were original and new at some point in history. The modern idea that these concepts are “common sense” is strong tribute to these founders.

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The History of Management Thought by Daniel A. Wren

Business: The Ultimate Resource by Daniel P. Goleman

Project Management by David L. Cleland

Fifty Key Figures in Management (Routledge Key Guides) by Morgen Witzel

Daft, R. (2005). Management, (7th ed.). Mason, OH: Thomson South-Western.

Fayol, H. (1949). General and industrial management. London. Pitman Publishing company.

Fayol Fayol, H. (1987). General and industrial management: Henri Fayol’s classic revised by Irwin Gray. Belmont, CA: David S. Lake Publishers.