Henri Fayol Management Theory Pdf
Fayolism was a theory of management that analyzed and synthesized the role of management in organizations, developed around 1900 by the French management theorist Henri Fayol (1841–1925). It was through Fayol's work as a philosopher of administration that he contributed most widely to the theory and practice of organizational management. Henri Fayol (29 July 1841 – 19 November 1925) was a French mining engineer, mining executive, author and director of mines who developed general theory of business administration that is often called Fayolism. He and his colleagues developed this theory independently of scientific management but roughly contemporaneously. Like his contemporary, he is widely acknowledged as a founder of modern management method.
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Principles of Management by Henri Fayol. Henri Fayol is claimed to be the real father of modern management. He was a Frenchman born in 1841 and was working as an engineer with a mining company. He improved the condition of the company from virtual bankruptcy to high success. From his practical experience, he developed some techniques. Henri fayol's 14 principles of management are remembered even today for their simplicity and genius and are applicable for large and small organizations. Whenever you are managing something or running a business, you cannot pinpoint what is going wrong. This is where the management principles help. Believed that every organization today one way or the other implement the Fayol‟s principles of management. This paper therefore, looks to critically analyze the application of the Fayol‟s 14 principles of management highlighting their implications to a startup business.
This article provides an overview on Fayol’s contribution to modern management theory.
Almost simultaneously with Taylor, Henry Fayol (1841 – 1925), a French industrialist and manager, developed his theory of management.
He is regarded as the ‘Father of Modern Management Theory’, for he was the first to suggest the functions of management which are recognised as the essential part of a manager’s work by the modern authorities on management.
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Prior to Henri Fayol's development of an administrative theory of management, managers took a scientific approach to work, attempting to maximize productivity by treating their workers like machines. Fayol's 14 Principles of Management focus on the entire organization rather than just the work. This lesson covers the first seven of these principles. The management theory of Henri Fayol includes 14 principles of management. From these principles, Fayol concluded that management should interact with personnel in five basic ways in order to control and plan production.
He was a mining engineer of a large coal mining company and subsequently became its managing director. When he joined the company, it was almost bankrupt. When he retired after 30 years, the company was among the most successful enterprises with a long history of handsome profits and dividends.
During his successful career he searched for sound management principles. In 1916 he published his famous work, ‘General and Industrial Management.’
Fayol’s work is concerned with the higher level of the organisation.
He identified the following six activities which, he believed, had to be accomplished in all industrial undertakings:
(i) Technical (relating to production and manufacturing);
(ii) Commercial (buying, selling and exchange);
(iii) Financial (search for capital and its optimum use);
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(iv) Security (protection of property and persons);
(v) Accounting (record keeping, preparation of balance sheet, costing and statistics);
(vi) Managerial (functions of planning, organising, commanding, coordinating, controlling etc.).
Pointing out that the first five activities are well-known and found in all organisations, Fayol devoted most of his discussion to the analysis of managerial activities.
He divided his approach of studying management into three parts:
(a) Managerial qualities and training,
(b) General principles of management, and
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(c) Elements of management.
(A) Managerial Qualities and Training:
Fayol was the first person to identify the qualities required in a manager.
According to him, there are six types of qualities that a manager requires. These are as follows:
(i) Physical (health, vigour);
(ii) Mental (ability to understand and learn, judgement, mental vigour and adaptability);
(iii) Moral (energy, firmness, initiative, loyalty, tact, and dignity);
(iv) Educational (general acquaintance with the matters not belonging exclusively to the function performed);
(v) Technical (peculiar to the function being performed); and
(vi) Experience (arising from the work).
Fayol observed that the most important ability for a worker is technical and the relative importance of managerial ability increases as one goes up the scalar chain. He recognised a widespread need for the principles of management and managerial teaching.
He held that managerial ability should be acquired first in school and later in the workshop. In order to acquire managerial knowledge, he developed the principles of management to be taught in academic institutions.
(B) General Principles of Management:
Fayol laid down some basic principles of management. He believed in the flexibility of these principles. According to him, the light of principles, like that of light-houses guides, only those who know the way into port. He listed and described fourteen principles of management.
However, a brief summary of them is given below for quick reference:
(i) Division of Work:
Fayol has advocated it to take the advantages of specialisation. This principle can be applied at all levels of the organisation for higher productivity.
(ii) Authority and Responsibility:
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Responsibility is the corollary of authority and arises from it.
(iii) Discipline:
Discipline is essential for successful management and, to ensure it, Fayol suggested good supervision at all levels, agreements with the employees as clear and fair as possible, and judicious imposition of penalties.
(iv) Unity of Command:
It means that an employee should get orders from only one superior. Fayol has considered unity of command as an important aspect in managing an organisation. He suggested firmness and goodness on the part of the superiors, fair agreements with the workers and constant supervision by the managers to ensure good management.
(v) Unity of Direction:
Each group of activities having the same objectives must have one head and one plan.
(vi) Subordination of Individual Interest to Group Interest:
This principle reveals that the interest of the group should always prevail over the individual interest.
(vii) Remuneration of Personnel:
Remuneration and methods of payment should be just and fair so that maximum satisfaction can be attained by both the employers and the employees.
(viii) Centralisation:
“Everything which goes to increase the importance of the subordinates’ role is decentralisation, everything which goes to reduce it is centralisation.” The degree of centralisation of authority should vary according to the needs of the situation.
(ix) Scalar Chain:
It is the chain of the superiors from the ultimate authority to the lowest rank. A subordinate should follow the line of authority.
(x) Order:
According to Fayol, order means “a place for everything and everything in its place” and “a place for everyone and everyone in his place”; i.e., the right man in the right job.
(xi) Equity:
Equity is a combination of justice and kindliness. The managers should exercise kindliness arid justice in dealing with the subordinates. This will create loyalty and devotion among the employees.
(xii) Stability of Tenure of Personnel:
It is a big factor for the success of an organisation. Fayol pointed out that instability in tenure of service is both the cause and effect of bad management.
(xiii) Initiative:
Managers should permit the subordinates to take some initiative in thinking out and executing plans to keep up their zeal and energy.
(xiv) Esprit de Corps:
This is the principle of ‘Union is Strength’. Team-work and proper communication among the members of the group are important for the success of an organisation. Fayol wanted the managers to encourage cohesiveness and esprit de corps among their subordinates.
(C) Elements of Management:
Fayol opines that management should be viewed as a process consisting of five elements. He has regarded these elements as the functions of management. These are planning, organisation, command, co-ordination and control. According to him, ‘planning is the most important managerial function. Creation of ‘organisation structure’ and execution of commanding function are necessary to implement plans.
‘Co-ordination’ is necessary to make sure that everyone is working together, and ‘control’ ensures that everything is proceeding according to the plan. Fayol holds the view that these functions are required at all levels of management and in all types of organisations.
The contribution of Fayol has made the real beginning of the development of management as a separate field of study. It is true that, as a practical man, Fayol only set down the principles that he had observed and practiced; yet his observations are admirably fit for the currently developing theory of or approach to management.
Fayol was thus the first man to develop a comprehensive theory of management capable of universal application. His concepts and principles are generally accepted even today. He is, therefore, ‘the real founder of modern management’.
Criticism:
The contribution of Henry Fayol in the field of management thought is very important. He was the first person who pointed out the functions of management separately. However, in spite of such importance, his theory of management is not beyond criticism.
The management theory of Henry Fayol is criticised in the following aspects:
1. Higher Level Management:
The most important criticism regarding Fayol’s concept is that he has analysed management mainly from the view point of the top level managers. He considers that the top level managers only plan vital role in making an enterprise successful. But, practically it is not true.
He has not considered the role and significance of the lower level managers of the organisation. It should be remembered that the operative employees work under the supervision and control of the lower level managers who actually get things done through the group activities of their subordinate workers.
2. Less Emphasis on Human Aspect:
Fayol has not given proper emphasis on the utilisation of human resource. In his management theory human relation aspect is neglected.
3. Negligence of Joint Management:
There is no place for joint management in Fayol’s concept of management. Modern age is the age of joint management. At present the workers also participate in management through their trade union leaders.
4. Controversial Universality of Management:
Fayol opines that the elements, principles and methods of management indicated by him are applicable to all types of enterprises—trading or non-trading. But the principle of universality of management is very controversial. Because the principles of management depend on time, place, and situation of application and these are changed accordingly.
5. Ineffective in Culture-bound Management:
In recent times there is a tendency to establish culture-oriented management. Henry Fayol states that his principles can be changed, extended and rectified according to need and situation. If it can be done, the general theory do not have its utility and effectiveness.
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Henry Fayol’s Contribution to Management!
Henry Fayol’s Contribution to Management # Introduction to Fayol and His Work:
Henry Fayol (1841 -1925) was a French mining engineer who turned a leading industrialist and a successful manager.
He was a mining engineer in a French mining company and rose to the position of the Chief Managing Director.
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His life-long experience, in the field of managing, was reproduced in a monograph titled ‘Administration Industrial and General’. Fayol’s work gained popularity and was made known to scholars and practitioners of management; only when his monograph was published in English in the U.S.A. in 1949.
Henry Fayol’s Contribution to Management # A Broad Structure of Fayol’s Work:
Following is a brief comment on various facets of Fayol’s work:
(a) Fayol’s classification of business functions:
According to Henry Fayol, all the activities of a business enterprise could be divided into the following six groups:
(i) Technical activities (relating to production)
(ii) Commercial activities (relating to buying, selling or exchange).
(iii) Financial activities (relating to search for and optimum use of capital i.e. finances)
(iv) Security activities (relating to protection of the properties and personnel of the enterprise)
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(v) Accounting activities (relating to a systematic recording of business transactions, including statistics also).
(vi) Managerial activities
Point of comment:
In Fayol’s view, the first five groups of activities of a business enterprise were well-known. Hence, he had concentrated his attention only on an analysis of the sixth group of activities viz., managerial.
(b) Fayol’s classification of managerial functions:
Henry Fayol classified managerial functions, as consisting of the following:
1. Planning
2. Organising
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3. Commanding
4. Coordinating
5. Controlling
(c) Qualities required in managers:
Fayol mentions the following qualities required in managers; to enable them to become better and more efficient:
1. Physical
2. Mental
3. Moral
4. Education
5. Technical
6. Experience
(d) General principles of management:
By far, the most significant contribution by Fayol is the general principles of management listed by him, in his monograph titled ‘General and Industrial Administration. Based on his long managerial experience, Fayol advocates fourteen general principles of management.
Following is a brief comment on the fourteen general principles of management recommended by Fayol:
(1) Division of work:
Division of work (or division of labour) is a famous principle of Economics, invented by the traditional eminent economist, Adam Smith. Fayol had applied this principle, in the context of the management of business enterprises.
Division of work leading to specialisation results in increased human efficiency; as through the application of this principle, much more production is possible with the same amount of human efforts. Fayol recommends the application of this principle at both the levels in an organisation operational and managerial.
(2) Authority and responsibility:
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Authority, in management, is the key to a managerial job. It is the power inherent in a managerial position which enables a manager to command subordinates to work towards the attainment of enterprise objectives.
Responsibility, is the reverse of authority; whose essence is an obligation owed by a subordinate to the superior (from whom authority is received) for the proper performance of the job for which authority is granted to the former.
Certain observations, worth noting in this context are:
(a) Of the two terms, authority and responsibility, the former is primary and latter is secondary or conditional. Responsibility is a corollary and natural outcome of authority; and cannot exist independently.
(b) In order that excessive authority is not misused by the holder of it, and responsibility could be fixed in an exact and fair manner; there must be maintained a balance between authority and responsibility known as the principle of parity of authority and responsibility.
(3) Discipline:
Discipline, in simple terms, means obedience to the rules of the organisation, on the part of both-managers and subordinates – including outward marks of respect shown by subordinates towards superiors. Discipline is necessary in an organisation; if the organisation is to function properly and prosper and grow.
Potion of comment:
Henri Fayol Management Theory Pdf Examples
Discipline requires good managers. Superiors can expect discipline of subordinates; only when they themselves are disciplined.
(4) Unity of command:
Unity of command, is perhaps, one of the most useful and significant principles of management advised by Fayol. According to this principle, a subordinate must get orders and instructions, only from one superior at a time.
The obvious reasons for the application of this principle are:
(a) Confusion on the part of a subordinate regarding whose orders he must obey is done away with. If there is more than one superior dictating terms to a subordinate; the latter would always be in a state of confusion.
(b) Fixation of responsibility in an exact manner on a subordinate by the superior issuing orders and instructions is facilitated. A single superior issuing orders and instructions to a subordinate can easily seek an explanation from the subordinate as to why the work was not done properly by him; when proper authority and work facilities had been provided to him for that purpose.
(5) Unity of Direction:
To avoid confusion of this principle from the preceding one viz., the unity of command, unity of direction might be given a new nomenclature i.e. ‘similarity of guidance’. Unity of direction (or similarity of guidance) implies that for each group of activities having the same objective, there must be ‘one head and one plan’; or similar activities must be guided in similar ways.
For example, if in an industrial enterprise, there are 10,000 workers; then there must be only one overall production plan and only one overall Production In-charge, imparting similar instructions to all workers of course, through their respective foremen (or production superintendents).
Unity of direction is essential for achieving unity of action, in the pursuit of common objectives by a group of persons. As such, observance of this principle is a great aid in facilitating co-ordination, on the part of management.
(6) Subordination of individual to general interest:
This principle is, in fact, nothing but an exposition of the basic management philosophy, that in a group endeavor the individual objectives of people are subordinate to the common group objectives. Whenever, there arises a conflict between individual and group objectives, the management must help in arriving at reconciliation between the two set of objectives. Further, in case of need, the individuals must sacrifice, in favour of larger group objectives.
(7) Remuneration of personnel:
Remuneration of personnel is the price paid or payable to people – managers and workers – for their services rendered towards the attainment of the enterprise objectives. Since the question of remuneration is of vital importance for a smooth functioning of organizational life, making for good or bad industrial relations; Fayol recommends that the system of remunerating personnel must be such as affords maximum satisfaction to both-employees and employers.
(8) Centralisation (i.e. a rightful compromise between centralisation and decentralisation):
By the term centralisation, is meant a rightful compromise between centralisation and decentralisation. ‘Centralisation’ refers to a reservation of decision-making authority at top levels of management. ‘Decentralisation’, on the other hand, means a dispersal of authority from the central (top-level) points to middle, and specially lower levels of management.
Management must, therefore, strike out a balance between centralisation and decentralisation; a rightful compromise between the two, which under the circumstances will give the best overall yield, in terms of most efficient and smooth functioning of the enterprise.
(9) Scalar chain:
Scalar chain might be defined as the chain of superiors (i.e. managers) with grades of authority ranging from the highest to the lowest.
The following simple figure illustrates the above concept:
In the scalar chain, each upper link is a superior; each lower links a subordinate. For example in the above figure, as between B and C, B is a superior and C his subordinate; as between C and D, C is a superior and D his subordinate; and so on for all other links in the scalar chain. The uppermost link of the scalar chain represents the manager of the highest rank (i.e. H, in this figure); the lowest most links represents the manager of the lowest rank (i.e. H, in this figure).
Significance of the scalar chain:
The principle of the scalar chain is significant for reasons for having systematic and orderly communication from the highest managerial link to the lower links and vice-versa; each communication passing through successive links of the scalar chain. In the figure given above, if e.g., B has to communicate a message to F; it will pass from B to C, from C to D, from D to E, and finally from E to F.
According to Fayol, the scalar chain must be strictly observed in the usual course of the functioning of the enterprise; except in emergency situations, when its strict observance might be detrimental to the interests of the organisation.
The Concept of ‘gang Plank’:
As a short-cut to scalar chain, and without violating it, Fayol suggests the concept of ‘gang plank’ – in cases the scalar chain is represented by a double ladder.
The following figure illustrates the concept of gang-plank:
In the above figure, here a gang plank is represented by the dotted line, which links G to N, in a direct manner. A gang plank allows two managers at the same level in the organisation to deal directly with each other without, of course, violating the scalar chain.
It allows speedy decisions and saves much of time and inconvenience involved were the scalar chain followed strictly. For example, in the above figure, if instead of dealing with each other through the gang plank G and N follow the scalar chain; the communication from G will fist climb up to A via F, E, D, C, and B and next it will climb down to N from A vial I, J, K, L and M.
(10) Order:
The principle of ‘order’ implies a systematic arrangement of things and personnel. Accordingly, order is classified by Fayol into two types of orders viz.,
(a) Material order (or physical order)
(b) Social order (or human order)
Material order is described as ‘a place for everything and everything in its place’. Social order, in a similar tone, might be described as a place for everyone and everyone is his/ her place’.
(11) Equity:
The concept of ‘equity’ implies a sense of ‘fairness and justice’ to all working in an enterprise. The sims complete collection iso. Observance of equity, alone would make personnel loyal and devoted to the organisation.
The principle of equity could thus, be described as follows:
Loyalty and devotion must be elicited (extracted) from the personnel through a combination of kindliness and justice, on the part of managers, while dealing with their subordinates.
(12) Stability of tenure:
Henri Fayol Management Theory Pdf Download
In the interest of the efficiency of organisation and management, it is imperative that personnel must stay in the organisation for as longer a period as possible. This might be called the principle of the stability of tenure. A minimum rate of labour turnover (movement of people into and out of an enterprise) is inevitable, for reasons to retirement, death and other permanent incapacities of personnel and also for reasons of coping with the requirements of growth and expansion of the enterprise. However, unnecessary labour turnover must be avoided at all costs; as it are both a cause and an effect of bad management.
(13) Initiative:
Initiative, in the managerial context, refers to the freedom to think out a plan and its execution. It is, in fact, one of the keenest desires of, at least, an intelligent employee, to have initiative in matters relating to his work. Accordingly, the management must provide initiative to employees as a measure to motivate them.
(14) Esprit de corps (or union is strength):
Esprit de corps or union is strength is a simple common proverb, which refers to the strength or power associated with a group, when the members of the group work whole-heartedly in full cooperation with one another.
As a principle of management, esprit de corps (or union is strength) indicates a lesson to management to take steps for promoting team spirit among the group, as it will greatly facilitate the most effective attainment of common objectives.
Point of comment:
There is no doubt that Fayol’s work on management is of a pioneering and practical nature. Due to his outstanding contribution to management, scholars accord him the status of the ‘father of modern management theory’.