Henri Fayol’s Theory of
Management
Topic 4:3
Universalist or Functional management approach by Henri Fayol Fayol’s
contributions to management thought were threefold. First he made the
distinction between operating and managerial activities. First,
Fayol identified operating activities which included: 1.
Technical activities – such as production. 2.
Commercial activities – involved buying and selling 3.
Financial activities – such as securing capital 4.
Security activities – concerned with safeguarding
property 5.
Accounting activities – such as providing financial
information. Second,
Fayol identified five major management functions which include:
Third,
Fayol proposed fourteen principles of management that should guide the
thinking of managers in resolving concrete problems: 1.
Division of work – leads to specialization -
Helps to produce more and better for the same effort -
Applicable to all kinds of work as well as managerial -
Organization divided in different departments -
Leads to efficiency and effectiveness of work 2.
Authority and Responsibility – right to give order and
obtain obedience -
Responsibility i.e. obligation to complete assigned task on time -
Balance authority and responsibility to avoid misuse of
authority or failure to achieve goals 3.
Discipline - restraint from doing wrong -
Sincerity and obedience towards rules and regulations -
Good superiors at all levels, for agreements and judicious
application of penalties -
Obedience on part of workers and managers 4.
Unity of command -
Only one superior to give orders and to whom subordinates is
reportable -
Avoids confusions and chaos 5.
Unity of Direction -
One head and one plan 6.
Subordination of individual
interest to general interest -
Company’s interest should supersede individual interest -
Larger interests of workers and stakeholders are more important
than the interest of any one person 7.
Remuneration of employees -
Quantum and methods of remuneration payable should be fair and
reasonable -
Satisfactory pay provide reasonable standard of living and
within paying capacity 8.
Centralization and
Decentralization -
Centralization- concentration of decision-making authority -
Decentralization – its dispersal among more than one person -
Needs to balance – subordinate involvement through
decentralization with managers’ retention of final authority through
centralization -
Degree of centralization will depend upon the circumstances in
which the company is working. 9.
Scalar Chain -
Chain of authority and communication – runs from top to bottom -
C M
D N
F
P (the arrow through ‘A’ would be the channel
to follow for ‘E’ to communicate to ‘O’) 10.
Order -
Orderly arrangement of men and materials -
Place for everything 11.
Equity -
Emphasize kindliness and justice in the behaviour
of managers towards workers -
Brings loyalty and devotion 12.
Stability of Personnel -
Minimize employee turnover -
Personnel selected and appointed should be kept at their
position for a minimum fixed tenure 13.
Initiative -
Employees should be encourage to use their initiative without
force -
Should be encouraged to develop and carry out plans for
improvements 14.
Esprit De corps – united we stand divided we
fall -
Union is strength -
Employee should consider him/herself part of the team -
Replace ‘I’ with ‘We’ |
