Henri Fayol was a French mining engineer and director who developed one of the earliest comprehensive theories of management. He outlined 14 principles of management that are still used today, including division of labor, authority and responsibility, discipline, and unity of command. Fayol also identified five primary functions of management: planning, organizing, commanding, coordinating, and controlling. His work in the late 19th/early 20th century helped establish the field of management studies.

1. HENRI FAYOL
Prepared By:
Ahmad Norshafik Bin Mazi
205437
Muhamad Zawawi Bin Abdul Razak
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Muhammad Noorhafizi Bin Noor Azay
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2. Henri Fayol
(1841 - 1925)

3. Henri Fayol’s Background
* Born in 1841 in a suburb of Istanbul, Ottoman Empire.
* His father, an engineer, was appointed superintendent of
works to build the Galata Bridge, which bridged the Golden
Horn.
* His family then returned to France in 1847.
* Graduated from the National School of Mines in Saint
Etrenne in 1860

4. Cont….
* After graduation he went to work and spent his entire career at
the mining company, “Commentry-Fourchamboult-
Decazeville”.
* By 1890, the company was one of the largest producers of iron
and steel in France and regarded as a vital industry.
* Fayol became managing director in 1888,when the mine
company employed over 10,000 people, and held that position
over 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 Administrative
Studies

5. 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 at
about the same time as Frederick Winslow
Taylor published his Principles of Scientific
management.Management.

7. Fayol’s Big Contributions to Management
1) Universality of management:
The same skills are needed to manage a coal mine
that 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 to
Henri Fayol!!!

8. Subordination of
Individual Interests to
the common interest
Division of
Labor
Unity of
Command
Line of
Authority
Fayol's Principles
of Management
Centralization
Unity of
Direction
Initiative
Equity
Order
Discipline
Stability and
tenure of
employees
Esprit de
Corp
Remuneration of
Personnel
Authority &
Responsibility

9. Fayol’s Principles of Management
1) Division of Labor
The object of this was ‘to produce more
and better work with the same effort’.
Specialization, claimed fayol, was part of
the natural order, observable in the
animal and in human societies. Division
of work should not be limited to
technical activities only but extended
across all aspects of an organization.

10. Fayol’s Principles of Management
2) Scalar chain
This was the chain of superior ranging from the
ultimate authority to the lowest ranks. More familiar
terms for the scalar chain would be hierarchy and
channels or lines of communication.
Fayol combined these two concepts in his examination
of the scalar chain, establishing the need for the
ultimate authority but conceding that reference of
every issue up to the organization to the highest point
is not always the swiftest. It is even the time
disastrously lengthy in large concerns, notably in
governmental ones’.

11. Fayol’s Principles of Management
3) Centralization
Fayol preferred a less centralized management hierarchy. He
didn’t want decisions made too far away from the problem .
In considering the extent to which any organization should have
a centralized or decentralized structure.
 Consistent with this was his view that his principle should not
be forced but applied pragmatically depending on circumstances.
As he put it, the question of centralization or decentralization, is a
simple question of proportion, it is a matter of finding the
optimum degree for the particular concern..
 Everything which goes to increase the importance of the
subordinate’s role is decentralization, everything which goes to
reduce it is centralization.

12. Fayol’s Principles of Management
4) Unity of Direction
 This involved one head and one plan for a group of activities
having the same objective. Whereas unity of command required that
each employee should receive orders from one superior only, unity
of direction could be summed up in the phrase one head, one plan.
 In fayol’s own words, it is the condition essential to unity of
action, coordination of strength and focusing of effort. A body with
two heads is in social as in the animal sphere a monster and has
difficulty in surviving.

13. 5) Equity
Employees should be treated fairly.
For personnel to be encouraged to carry out
their duties with all the devotion and
loyalty of which they are capable, they must
be treated with respect for their own sense
of integrity, and equality results from the
combination of respect and justice

14. 6) Subordination of Individual Interests
to the common interest
Fayol drew attention to the fact that one of the
greatest problems of management was to reconcile
the general interest with that of the individual and
group interests.
As he put it, ignorance, ambition, selfishness,
laziness, weakness and all human passions tend to
cause the general interest to be lost sight of in favor of
individual interest and a perpetual struggle has to be
waged against them.

15. 7) Authority & Responsibility
This was ‘the right to give orders and the power to exact
obedience’. Foyal drew a distinction between official
authority ( which derived from a manager’s appointed
position in an organization) and personal authority (which
stemmed from such attributes as intelligence, experience,
integrity and leadership ability). His claimed that in a first
class manager, personal authority is the indispensable
component of official authority.

16. Fayol argued, authority was always allied to
responsibility and the proper exercise of both
required the ability to make judgments and if
necessary, impose sanctions.
Fayol thought that authority should derive from
expertise, leadership skill, knowledge, etc., and
lead to a sincere commitment from subordinates

17. 8) Remuneration of Personnel
Fayol considered the factor that determine levels of pay but are
independent of the employer’s will such as the cost of living,
availability of labour, the business environment and the economic
situation. He also examined the various modes of compensation
available such as time rates, job rates, piece rates, bonuses, profit-
sharing, payment in kind and various non-financial incentive. He
concluded that whether wages are made up of money only or whether
they include various additions such as heating,, light, housing, food, is
of little consequence provided that the employee be satisfied.

18. 9) Stability and tenure of employees
This dealt with issues relating to personnel planning,
management development and labour turnover. Fayol
called for suitable induction period to enable employees
and particularly managers, to acclimatize themselves to
new work and situations. As he observed, insecurity of
tenure is especially to be feared in large concern in order
to be in a position to decide on a plan of action, to gain
confident in one self and inspire it in others.

19. 10) Unity of Command
 This was the nation that an employee should receive orders from one
superior only. According to Fayol, dual command was bound to
generate tension, confusion and conflict.
 He noted the tendency to divide command between individuals and
also to blur the lines of demarcation between departments.
 The outcome, he claimed, was a dilution of responsibility and the
erosion of clear lines of communication. A higher manager might
sometimes give orders directly to workers further down the hierarchy,
thereby bypassing middle management.

20. 11) Order
 Fayol advocated the maintenance of the tidy material
order with appropriate and well kept storage facility,
general cleanliness and the preparation of a diagram of
plan of the premises showing the various sections and
facilities. Similarly he insisted that ‘for social order to
prevail the must… be an appointed place for every
employee and every employee be in the appointed place’.
 It is applied to both material and men. The material
should be kept in order in the place where it is necessary.
The personnel are selected scientifically and assigned
duties according to the required KSA’s.

21. Fayol’s Principles of Management
12) Discipline
This was in essence obedience, application, energy,
behavior and outward marks of respect observed in
accordance with standing agreement between the firm and
its employees. Fayol conceded that the discipline would
take different forms in various organizations but
maintained that it was nevertheless, in all circumstances,
an essential ingredient. In Fayol’s view the move away
from individual bargaining toward collective bargaining
merely adjusted the rule governing discipline.
Managers need to enforce rules to achieve company goals.

22. 13) Initiative
This was the power to conceive a plan and
ensure it success. It was central to ensuring
high motivation and job satisfaction, being
one of the most powerful stimulants to
human Endeavour. Broadly speaking,
claimed fayol, the maximum opportunity to
exercise initiative should be extended to all
employees through delegated authority.

23. Fayol’s Principles of Management
14) Esprit de Corp
•This involved the building and maintaining
of harmony among the workforce.
•Fayol strongly attacked the use of
management style based on a belief in divide
and rule.
•As he put it, ‘dividing enemy force to
weaken them is clear, but dividing one’s own
team is a grave sin against businesses.

24. PLANNINGPLANNING
LEADINGLEADING
CONTROLLINGCONTROLLING
ORGANIZINGORGANIZING
Fayol’s Functions of Management
COMMAND

25. There are five elements of management such as
planning, organization, command, coordination and
control.

26. According to fayol, planning (attempting to assess the
future and making provision for it) was an ensential
part of management. Central to the process was the
development of a formal plan of action that he
described as, ‘ a kind of future picture wherein
proximate events are outlined with some distinctness,
whilst remote events appear progressively less
distinct, and it entails the running of the business as
foreseen and provided against over a definite period.

27. An ideal plan of action should combine UNITY(i.e an
overall master plan supported by specific plan for
each activity), CONTINUITY (i.e the guiding action
must be consistent as plans develop over the time)
FLEXIBILITY (i.e possess the ability to adjust to
unforeseen event) and finally, PRECISE (i.e be as
accurate as possible).

28. The second element of management identified by
fayol was organizing, by which he meant providing a
business with everything useful to its functioning :
raw material, tool, capital and personnel.
He paid particular attention to what he termed the
composition of the boy corporate (the organizational
structure) claiming that the form taken by the
organization would depend almost entirely on the
number of people employed.
As organizations grew and become more complex the
number of employees would generate the need more
than layers of supervision.

29. Its objective to get the optimum return from all
employees. Successful command depended on a
combination of personal quality and a knowledge of
the general principle of management

30. In fayol’s view a manager who has command should :
Have a thorough knowledge of personnel.
Eliminate the incompetent
Be well versed in the agreement binding the bsiness
and employees.
Set a good example
Conduct periodic audits of the organization and use
summarize charts to further this.
Bring together chief assistants by means of
conferences, at which unity of direction and focusing
of effort are provided for.
Not become engrossed in detail
Aim at making unity, energy, initiative and loyalty
prevail among personnel.

31. It aimed at securing the optimum
harmonization of all the activities of an
organization in such a way as to facilitate
its working, and its success’.
He was concerned here with maintaining
the balance between the various activities
of the organization thereby ensuring, for
the example, that expenditure was
proportionate to income; equipment
procurement to production needs and
stocks to consumption.

32. The object of control in this context was to point up
weaknesses and errors so that they might be rectified
and prevented from reoccurring . As fayol put it,
control operates on the everything, things, people,
actions. Control stimulated the process of feedback
whereby the organization adapted to changing
circumstance and constantly renewed itself.

33. UNITY At any one time
an organization should have
only one guiding
organizational goal
CONTINUITY Planning
is an ongoing process and
previous plans should be
modified to fit together in the
corporate framework
ACCURACY Managers
should collect and utilize all
available information to make
a plan as accurate as possible
FLEXIBILITY A
manager should not be stuck
with a static plan, but be able
to change and alter as
situations do.

34. Common criticisms of Henri Fayol
Management is not always universal:
Fayol was criticized because he only had experience in a coal
mine. Many have said just because you can manage a coal
mine 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 his
career as the managing director of a mining company. The
criticism is that his background was not all that diverse.

35. Common Criticism’s of Henri Fayol
Taylor’s argument:
Taylor thought that specialization was the best form of
management. He thought that each worker did eight
different things and that for each thing there should be a
supervisor. Fayol thought that each person should only have
one supervisor. Further, Fayol liked having teams do work
together and making their own decisions rather than having
a specialist do every little thing.

36. Common Criticisms of Fayol
Modern Criticism:
Fayol refused to purchase stock in his own company
because he felt it compromised his position as the firm’s
managing director. Today, managers are expected to have
their pay tied to stock because it is seen as their job to
increase shareholder wealth.
Fayol, also, wanted to board of director’s and shareholders
to have limited power because he felt they were
incompetent. This is criticized by those today who demand
shareholder rights be increased.

37. Too formal:
Fayol's theory is said to be very formal. However, in any
scientific and analytical study facts and observations have to be
presented in a formal manner.

38. Vague:
Some of the concepts have not been properly defined. For
example, the principle of division of work does not tell how the
task should be divided. Again, to say that an organization needs
coordination is merely to state the obvious. In the words of
Herbert Simon, administrative theory suffers from superficiality,
oversimplification and lack of realism.

39. Inconsistency:
Principles of administrative theory were based on personal
experience and limited observations. There is too much
generalizations and lack empirical evidence. They have not been
verified under controlled scientific conditions. Some of them are
contradictory. For example, the unity of command principle is
incompatible with division of work. The theory does not provide
guidance as to which principle should be given precedence over
the other.

40. Pro-management Bias:
Administrative theory does not pay adequate attention to
workers.
Workers are treated as biological machines or inert instruments in
the work process.

41. Historical value:
Fayol's theory was relevant when organizations operated in a
stable and predictable environment. It seems less appropriate in
the turbulent environment of today. For example, present-day
managers cannot depend entirely on formal authority and must
use persuasion to get the work done. Similarly, the theory views
organizations as power center's and do not recognize the role of a
democratic form of organization.

42. Properly implemented, they are leading to
organizational effectiveness and efficiency.

43. 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.

44. 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.

45. Q & A