Henri Fayol’s Background* Born in 1841 in a suburb of Istanbul, Ottoman Empire.* His father, an engineer, was appointed superintendent ofworks to build the Galata Bridge, which bridged the GoldenHorn.* His family then returned to France in 1847.* Graduated from the National School of Mines in SaintEtrenne in 1860
Cont….* After graduation he went to work and spent his entire career atthe mining company, “Commentry-Fourchamboult-Decazeville”.* By 1890, the company was one of the largest producers of ironand steel in France and regarded as a vital industry.* Fayol became managing director in 1888,when the minecompany employed over 10,000 people, and held that positionover 30 years until 1918.* He is credited with saving the company from bankruptcy* During his career he lectured at Ecole Superievre de la Guerre* In his retirement he established the Center of AdministrativeStudies
Cont…* Based largely on his own management experience,he developed his concept of administration.* In 1916 he published these experience in the book"Administration Industrielle et Générale", and atabout the same time as Frederick WinslowTaylor published his Principles of Scientificmanagement.Management.
Fayol’s Big Contributions to Management1) Universality of management:The same skills are needed to manage a coal minethat are needed to manage a hospital, post office,university, etc..2) Management is a field in and of itself:There were no schools of management prior toHenri Fayol!!!
Fayol’s Principles of Management1) Division of LaborThe object of this was ‘to produce moreand better work with the same effort’.Specialization, claimed fayol, was part ofthe natural order, observable in theanimal and in human societies. Divisionof work should not be limited totechnical activities only but extendedacross all aspects of an organization.
Fayol’s Principles of Management2) Scalar chainThis was the chain of superior ranging from theultimate authority to the lowest ranks. More familiarterms for the scalar chain would be hierarchy andchannels or lines of communication.Fayol combined these two concepts in his examinationof the scalar chain, establishing the need for theultimate authority but conceding that reference ofevery issue up to the organization to the highest pointis not always the swiftest. It is even the timedisastrously lengthy in large concerns, notably ingovernmental ones’.
Fayol’s Principles of Management3) CentralizationFayol preferred a less centralized management hierarchy. Hedidn’t want decisions made too far away from the problem .In considering the extent to which any organization should havea centralized or decentralized structure. Consistent with this was his view that his principle should notbe forced but applied pragmatically depending on circumstances.As he put it, the question of centralization or decentralization, is asimple question of proportion, it is a matter of finding theoptimum degree for the particular concern.. Everything which goes to increase the importance of thesubordinate’s role is decentralization, everything which goes toreduce it is centralization.
Fayol’s Principles of Management4) Unity of Direction This involved one head and one plan for a group of activitieshaving the same objective. Whereas unity of command required thateach employee should receive orders from one superior only, unityof direction could be summed up in the phrase one head, one plan. In fayol’s own words, it is the condition essential to unity ofaction, coordination of strength and focusing of effort. A body withtwo heads is in social as in the animal sphere a monster and hasdifficulty in surviving.
5) EquityEmployees should be treated fairly.For personnel to be encouraged to carry outtheir duties with all the devotion andloyalty of which they are capable, they mustbe treated with respect for their own senseof integrity, and equality results from thecombination of respect and justice
6) Subordination of Individual Intereststo the common interestFayol drew attention to the fact that one of thegreatest problems of management was to reconcilethe general interest with that of the individual andgroup interests.As he put it, ignorance, ambition, selfishness,laziness, weakness and all human passions tend tocause the general interest to be lost sight of in favor ofindividual interest and a perpetual struggle has to bewaged against them.
7) Authority & ResponsibilityThis was ‘the right to give orders and the power to exactobedience’. Foyal drew a distinction between officialauthority ( which derived from a manager’s appointedposition in an organization) and personal authority (whichstemmed from such attributes as intelligence, experience,integrity and leadership ability). His claimed that in a firstclass manager, personal authority is the indispensablecomponent of official authority.
Fayol argued, authority was always allied toresponsibility and the proper exercise of bothrequired the ability to make judgments and ifnecessary, impose sanctions.Fayol thought that authority should derive fromexpertise, leadership skill, knowledge, etc., andlead to a sincere commitment from subordinates
8) Remuneration of PersonnelFayol considered the factor that determine levels of pay but areindependent of the employer’s will such as the cost of living,availability of labour, the business environment and the economicsituation. He also examined the various modes of compensationavailable such as time rates, job rates, piece rates, bonuses, profit-sharing, payment in kind and various non-financial incentive. Heconcluded that whether wages are made up of money only or whetherthey include various additions such as heating,, light, housing, food, isof little consequence provided that the employee be satisfied.
9) Stability and tenure of employeesThis dealt with issues relating to personnel planning,management development and labour turnover. Fayolcalled for suitable induction period to enable employeesand particularly managers, to acclimatize themselves tonew work and situations. As he observed, insecurity oftenure is especially to be feared in large concern in orderto be in a position to decide on a plan of action, to gainconfident in one self and inspire it in others.
10) Unity of Command This was the nation that an employee should receive orders from onesuperior only. According to Fayol, dual command was bound togenerate tension, confusion and conflict. He noted the tendency to divide command between individuals andalso to blur the lines of demarcation between departments. The outcome, he claimed, was a dilution of responsibility and theerosion of clear lines of communication. A higher manager mightsometimes give orders directly to workers further down the hierarchy,thereby bypassing middle management.
11) Order Fayol advocated the maintenance of the tidy materialorder with appropriate and well kept storage facility,general cleanliness and the preparation of a diagram ofplan of the premises showing the various sections andfacilities. Similarly he insisted that ‘for social order toprevail the must… be an appointed place for everyemployee and every employee be in the appointed place’. It is applied to both material and men. The materialshould be kept in order in the place where it is necessary.The personnel are selected scientifically and assignedduties according to the required KSA’s.
Fayol’s Principles of Management12) DisciplineThis was in essence obedience, application, energy,behavior and outward marks of respect observed inaccordance with standing agreement between the firm andits employees. Fayol conceded that the discipline wouldtake different forms in various organizations butmaintained that it was nevertheless, in all circumstances,an essential ingredient. In Fayol’s view the move awayfrom individual bargaining toward collective bargainingmerely adjusted the rule governing discipline.Managers need to enforce rules to achieve company goals.
13) InitiativeThis was the power to conceive a plan andensure it success. It was central to ensuringhigh motivation and job satisfaction, beingone of the most powerful stimulants tohuman Endeavour. Broadly speaking,claimed fayol, the maximum opportunity toexercise initiative should be extended to allemployees through delegated authority.
Fayol’s Principles of Management14) Esprit de Corp•This involved the building and maintainingof harmony among the workforce.•Fayol strongly attacked the use ofmanagement style based on a belief in divideand rule.•As he put it, ‘dividing enemy force toweaken them is clear, but dividing one’s ownteam is a grave sin against businesses.
PLANNINGPLANNINGLEADINGLEADINGCONTROLLINGCONTROLLINGORGANIZINGORGANIZINGFayol’s Functions of ManagementCOMMAND
There are five elements of management such asplanning, organization, command, coordination andcontrol.
According to fayol, planning (attempting to assess thefuture and making provision for it) was an ensentialpart of management. Central to the process was thedevelopment of a formal plan of action that hedescribed as, ‘ a kind of future picture whereinproximate events are outlined with some distinctness,whilst remote events appear progressively lessdistinct, and it entails the running of the business asforeseen and provided against over a definite period.
An ideal plan of action should combine UNITY(i.e anoverall master plan supported by specific plan foreach activity), CONTINUITY (i.e the guiding actionmust be consistent as plans develop over the time)FLEXIBILITY (i.e possess the ability to adjust tounforeseen event) and finally, PRECISE (i.e be asaccurate as possible).
The second element of management identified byfayol was organizing, by which he meant providing abusiness with everything useful to its functioning :raw material, tool, capital and personnel.He paid particular attention to what he termed thecomposition of the boy corporate (the organizationalstructure) claiming that the form taken by theorganization would depend almost entirely on thenumber of people employed.As organizations grew and become more complex thenumber of employees would generate the need morethan layers of supervision.
Its objective to get the optimum return from allemployees. Successful command depended on acombination of personal quality and a knowledge ofthe general principle of management
In fayol’s view a manager who has command should :Have a thorough knowledge of personnel.Eliminate the incompetentBe well versed in the agreement binding the bsinessand employees.Set a good exampleConduct periodic audits of the organization and usesummarize charts to further this.Bring together chief assistants by means ofconferences, at which unity of direction and focusingof effort are provided for.Not become engrossed in detailAim at making unity, energy, initiative and loyaltyprevail among personnel.
It aimed at securing the optimumharmonization of all the activities of anorganization in such a way as to facilitateits working, and its success’.He was concerned here with maintainingthe balance between the various activitiesof the organization thereby ensuring, forthe example, that expenditure wasproportionate to income; equipmentprocurement to production needs andstocks to consumption.
The object of control in this context was to point upweaknesses and errors so that they might be rectifiedand prevented from reoccurring . As fayol put it,control operates on the everything, things, people,actions. Control stimulated the process of feedbackwhereby the organization adapted to changingcircumstance and constantly renewed itself.
UNITY At any one timean organization should haveonly one guidingorganizational goalCONTINUITY Planningis an ongoing process andprevious plans should bemodified to fit together in thecorporate frameworkACCURACY Managersshould collect and utilize allavailable information to makea plan as accurate as possibleFLEXIBILITY Amanager should not be stuckwith a static plan, but be ableto change and alter assituations do.
Common criticisms of Henri FayolManagement is not always universal:Fayol was criticized because he only had experience in a coalmine. Many have said just because you can manage a coalmine does not necessarily mean you can manage a hospital.His writing is lessons learned in his career:Everything that Fayol wrote about was something from hiscareer as the managing director of a mining company. Thecriticism is that his background was not all that diverse.
Common Criticism’s of Henri FayolTaylor’s argument:Taylor thought that specialization was the best form ofmanagement. He thought that each worker did eightdifferent things and that for each thing there should be asupervisor. Fayol thought that each person should only haveone supervisor. Further, Fayol liked having teams do worktogether and making their own decisions rather than havinga specialist do every little thing.
Common Criticisms of FayolModern Criticism:Fayol refused to purchase stock in his own companybecause he felt it compromised his position as the firm’smanaging director. Today, managers are expected to havetheir pay tied to stock because it is seen as their job toincrease shareholder wealth.Fayol, also, wanted to board of director’s and shareholdersto have limited power because he felt they wereincompetent. This is criticized by those today who demandshareholder rights be increased.
Too formal:Fayols theory is said to be very formal. However, in anyscientific and analytical study facts and observations have to bepresented in a formal manner.
Vague:Some of the concepts have not been properly defined. Forexample, the principle of division of work does not tell how thetask should be divided. Again, to say that an organization needscoordination is merely to state the obvious. In the words ofHerbert Simon, administrative theory suffers from superficiality,oversimplification and lack of realism.
Inconsistency:Principles of administrative theory were based on personalexperience and limited observations. There is too muchgeneralizations and lack empirical evidence. They have not beenverified under controlled scientific conditions. Some of them arecontradictory. For example, the unity of command principle isincompatible with division of work. The theory does not provideguidance as to which principle should be given precedence overthe other.
Pro-management Bias:Administrative theory does not pay adequate attention toworkers.Workers are treated as biological machines or inert instruments inthe work process.
Historical value: Fayols theory was relevant when organizations operated in astable and predictable environment. It seems less appropriate inthe turbulent environment of today. For example, present-daymanagers cannot depend entirely on formal authority and mustuse persuasion to get the work done. Similarly, the theory viewsorganizations as power centers and do not recognize the role of ademocratic form of organization.
Properly implemented, they are leading to organizational effectiveness and efficiency.
Fayol was everything but a theorist; he had over 30 years of experience leading a French mining company. Therefore one cannot really say that his ideas came out of the blue, especially in a time where only little research about management processes has already been published. And it was Fayol himself who said his list of management principles is non-exhaustive and should be adapted flexibly to a company’s individual situation.
Relevance:That a lot of his work has found its way into contemporary management theory in order to describe what today’s managers “should do to be effective and efficient. Fayol’s work was seen as a blueprint of good management, the productivity and living standards in America were increased. Furthermore he notes that much of the Japanese work style, i.e. just in time production, quality circles or lower level decision making, reflect techniques that were firstly introduced by Fayol.