HENRI FAYOL'S PRINCIPLES OF MANAGEMENT

{EARLY MANAGEMENT THEORY}

INTRODUCTION:

Today's managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago?

Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol and others like him are responsible for building the foundations of modern management theory.

BACKGROUND:

Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large mining company in France. He eventually became the director, at a time when the mining company employed more than 1,000 people.

Through the years, Fayol began to develop what he considered to be the 14 most important principles of management. Essentially, these explained how managers should organize and interact with staff.

In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in the book "Administration Industrielle et Generale." Fayol also created a list of the six primary functions of management, which go hand in hand with the Principles.

Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of the most comprehensive. He's considered to be among the most influential contributors to the modern concept of management, even though people don't refer to "The 14 Principles" often today.

The theory falls under the Administrative Management school of thought (as opposed to the Scientific Management School, led by Fredrick Taylor). (Source –wiki)

FAYOL'S 14 PRINCIPLES OF MANAGEMENT ARE LISTED BELOW:

1. DIVISION OF WORK: When employees are specialized, output can increase because they become increasingly skilled and efficient.

2. AUTHORITY: Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.

3. DISCIPLINE: Discipline must be upheld in organizations, but methods for doing so can vary.

4. UNITY OF COMMAND: Employees should have only one direct supervisor.

5. UNITY OF DIRECTION: Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTEREST: The interests of one employee should not be allowed to become more important than those of the group. This includes managers.

7. REMUNERATION: Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.

8. CENTRALIZATION: This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.

9. SCALAR CHAIN: Employees should be aware of where they stand in the organization's hierarchy, or chain of command.

10. ORDER: The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.

11. EQUITY: Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.

12. STABILITY OF TENURE OF PERSONNEL:  Managers should strive to minimize employee turnover. Personnel planning should be a priority.

13. INITIATIVE: Employees should be given the necessary level of freedom to create and carry out plans.

14. ESPRIT DE CORPS: Organizations should strive to promote team spirit and unity.

Thus,

Henri Fayol's “14 Principles of Management” have been a significant influence on modern management theory. His practical list of principles helped early 20th century managers learn how to organize and interact with their employees in a productive way.

Although the 14 Principles aren't widely used today, they can still offer guidance for today's managers. Many of the principles are now considered to be common sense, but at the time they were revolutionary concepts for organizational management.

FAYOL'S SIX PRIMARY FUNCTIONS OF MANAGEMENT:

1. Planning.

2. Organizing.

3. Commanding.

4. Coordinating.

5. Controlling.

1. PLANNING:

Managers must plan for future conditions, develop strategic objectives and secure the achievement of future goals. Therefore, managers must evaluate future contingencies affecting the organization, and shape the future operational and strategic landscape of the company.

2. ORGANIZING:

Managers must organize the workforce in an efficient manner and structure and align the activities of the organization. Managers must also train and recruit the right people for the job, and always secure a sufficiently skilled and educated workforce.

3. COMMANDING:

Managers must supervise subordinates in their daily work, and inspire them to achieve company goals. Likewise it is the responsibility of managers to communicate company goals and policies to subordinates. The commanding of subordinates should always be consistent with company policies, and every manager should treat subordinates in line with the standards of the company.

4. COORDINATING:

Managers must harmonize the procedures and activities performed by the company, meaning that every activity of each organizational unit should complement and enrich the work of another.

5. CONTROLLING:

Managers must control that company activities are in line with general company policies and objectives. It is also the responsibility of the manager to observe and report deviations from plans and objectives, and to make initiatives to correct potential deviations.

Hence,

The five functions theory of Henri Fayol is a very normative and functional view on management, and the theory might not fully convey the managerial complexities faced by managers in their daily work. As such, Henry Fayol’s five functions focus very little on informal relationships between managers and subordinates, and do not touch very much upon how to develop and maintain a motivated workforce.

Source:

Master of Business Administration (MBA) notes

http://en.wikipedia.org/wiki/Henri_Fayol