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Chapter: Principles of Management

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The contribution of Henry Fayol to modern management

Fayol has proposed that there are five primary functions of management: (1) planning, (2) organizing, (3) commanding, (4) coordinating, and (5) controlling (Fayol, 1949, 1987). Controlling is described in the sense that a manager must receive feedback on a process in order to make necessary adjustments.


The contribution of Henry Fayol to modern management

 

Fayolism is one of the first comprehensive statement of a general theory of management, developed by the French management theorist Henri Fayol (1841–1925): one of the most influential contributors to modern concepts of management,

 

Fayol has proposed that there are five primary functions of management: (1) planning, (2) organizing, (3) commanding, (4) coordinating, and (5) controlling (Fayol, 1949, 1987). 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. Many of today’s management texts including

 

Daft (2005) have reduced the five functions to four: (1) planning, (2) organizing, (3) leading, and (4) controlling. Daft's text is organized around Fayol's four functions.

 

The 6 types of Operations

 

For Fayol any Organisation can be subdivided into six types of Operations. Each Operation being fulfilled by its corresponding Essential Function:

 

                        Technical Operations (production, manufacturing, transformation)

 

                        Commercial Operations (purchases, sales, exchanges)

 

                        Financial Operations (seek for capital and finance management)

 

                        Security Operations (protection of goods and people)

 

                        Accounting Operations (balance, P&L, cost control, statistics, etc)

 

6. Administrative'   Operations   (Management)(see   below   The   5 Elements of Administration)   

In 1925 six month before Henri Fayol’s death Verney helped Fayol redefine The function of administration (Administration Industrielle et Generale).

The old definition went as follows: The activities involved in businesses can all be classified under one of the following six headings: TECHNICAL, COMMERCIAL, FINANCIAL, SECURITY, ACCOUNTING, ADMINISTRATIVE organization, command, coordination and control. Compared with the new definition: The activities involved in businesses can all be classified under one of the following five headings: TECHNICAL, COMMERCIAL, FINANCIAL, SECURITY, ACCOUNTING These activities must be planned, organized, directed, coordinated and controlled, in a word: administered. The removal of the distinction between management and administration and the re-definition of administration, it appears that Fayol had finally synthesized these two concepts. Therefore the previous difficulties with this distinction no longer exist(Breeze, J., & Miner Jr., F.)

 

The 9 Levels

 

Fayol was representing an organisation like a living body (« corps social », ie. "social body") with main organs hierarchically structured as follow:

 

                        Shareholders,

 

                        Board of Administration,

 

                        General Direction and its General staff (advisors),

 

                        Regional/local Directions,

 

                        Main Engineers,

 

                        Services Managers,

 

                        Workshops Managers,

 

                        Foremen,

 

                        Workers.

 

 

The 5 Elements of Administration

 

Popularized by Fayol with the acronym of POCCC:

 

                        Planning' (to foresee/anticipate and make plans)

 

                        Organisation (to provide the Function with all is needed for its smooth running: Supplies, Tools, Funding, Employees)

 

                        Commandment (to lead the people employed by the organisation)

 

                        Coordination (to harmonise all actions of an Organisation in order to facilitate its smooth running and success)

 

                        Control (to verify if everything happens in accordance with defined plans, orders given, and accepted principles)

 

 

The word Control clearly provoked some misunderstanding by English-readers because its 1st meaning in French is "to check" and its 2nd meaning is "to have a grip over". And it is the other way round in English. So for the French-reader Fayol clearly meant "Check everything!".

For Fayol, "The Art of Commanding relies upon certain personal qualities and upon the knowledge of management general principles. (...) It has, like all other arts, its degrees. (...) The manager in charge of a commandment must:

 

                        have a deep knowledge of his staff;

 

                        cull the incapables;

 

                        well know the conventions binding the organisation and its members;

 

                        give the good example (by his attitude);

 

                        conduct regular inspections of the « corps social »;

 

                        get together his main partners in conferences (meetings) where are prepared the Unity of Direction and the Focus of Efforts;

 

                        not be distracted by details;

 

8.    aim to make prevalent among his staff, energy, initiative and « dévouement»."

 

The 14 Principles of Administration

 

                        Division of work: Reduces the span of attention or effort for any one person or group. Develops practice or routine and familiarity.

 

                        Authority: "The right to give orders. Should not be considered without reference to responsibility."

 

                        Discipline: "Outward marks of respect in accordance with formal or informal agreements between a firm and it's employees."

 

                        Unity of command: "One man one superior!"

 

                        Unity of direction: "One head and One plan for a group of activities with the same objective."

 

                        Subordination  of  Individual  Interests  to the  Common  Interest:

 

"The interests of one individual or group should not prevail over the general or common good."

 

                        Remuneration of personnel: "Pay should be fair to both the worker as well as the organization."

 

                        Centralisation: "Is always present to a greater or lesser extent, depending on the size of the company and the quality of its managers."

 

                        Scalar chain: "The line of authority from top to bottom of the organization."

 

                        Order: "A place for everything and everything in its right place; ie. the right man in the right place."

 

                        Equity: "A combination of kindness and justice towards employees."

 

                        Stability of personnel tenure: "Employees need to be given time to settle in to their jobs, even though this may be a lengthy period in the case of some managers."

 

                        Initiative: "Within the limits of authority and discipline, all levels of staff should be encouraged to show initiative."

 

                        Esprit de corps (Union is strength): "Harmony is a great strength to an organization; teamwork should be encouraged."


 

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. Like Socrates, Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation.



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