Term Paper

Term Paper Report Analysis of Henri Fayol and Max Weber

Principle and its Application on Commercial Bank of Ethiopia

Submitted to: Gebre S.(PhD)

By: Takele Abate

ID: MBAO/2405/14B

December 20,2022

Addis Ababa, Ethiopia

Yardstick International College

Masters of Business Administration(MBA) Online Program
Management Theories and Practices(MTP)
Assignment 01
I. Abstract
This is a Term paper that are discussed about the main great contributors of current
Management Henri Fayol, and Max Weber. This is all about Fayol’s and Weber’s Autobiography,
Motives of Fayol contribution for management, Theories and principles of Fayol, strength and
limitations of Fayol, Critics and application of Fayol’s Principle to Commercial bank of Ethiopia;
and conclusions and Recommendations of the Report about the bank which is I worked in. The
main objectives of this report is for the purpose of Term Paper Assignment for submitting on
January 2,2022, and this report gives for the reader good Knowledge about the Two
management contributors of Henri Fayol and Max Weber Management School of Thought
basically about principles Characteristics, assumptions, contributions and their importance for
the current application of their principles in the organizations.
1. Introduction
Autobiography vs Biography
Autobiography: An autobiography is a book written by someone about their life.
Autobiographies are written in the first person throughout because the writer is the protagonist
and the main character of the story. The purpose of writing an autobiography is to provide a
detailed account of the narrator's accomplishments and life events. The autobiography style
generally begins with early childhood and proceeds chronologically, listing all of a person's
experiences throughout their life. Autobiographies include information about where someone
grew up, their career, life choices, accomplishments, and challenges they overcame.
Biography: A biography is a history of a person's life written by someone else. Biographies are
often written about famous individuals and personalities like sportsmen, motivational speakers,
inspirational figures, etc. Biographies also cover the subject's entire life. Therefore, it is crucial
to include important information about the person's place of birth, education, childhood
experiences, partnerships, and so on.
2. Autobiography of Henri Fayol (1841-1925)
Henri Fayol (July 29, 1841 – November 19, 1925) Engineer and theorist of business
administration. He was born in Istanbul, Ottoman Empire. He grew up in a bourgeois family,
so he could study in the best institutes in the city. He studied civil engineering of mines and
finished in 1860. When he finished, he got a job as an engineer in the mines of an important
mining and metallurgical group: The Comantry Fourchambault Corporation. Fayol witnessed the
irruption of the Industrial Revolution and later its consequences. Also, he experienced the
consequences of the First World War. From the age of 19, he began his experience in the field
of metallurgy and coal. Due to the above, at age of 25, he was appointed mining manager. In
1878, Fayol was invited to the Paris Congress of the Mining Industrial Society, held on the
occasion of the Universal Exposition, to present a report on the alteration and spontaneous
combustion of the coal exposed to the air. This work was very well received and received very

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positive reviews, consecrating Fayol as an influential man in the world of science. His
contributions to the field of administrative thinking are remarkable.
Several of his postulates are well developed in the work Industrial and General Administration
(1916), this work first came out in the French countryside. Fayol was influenced by the theory
of Frederick Taylor in the field of scientific organization of work, whose influence emerged in
the second stage of the Industrial Revolution. Fayol developed an administrative model of great
rigor for his time, based on a positivist methodology, which focused on observing the facts,
making experiences and extracting rules. In 1921, he published The Industrial Disability of the
State, made a defense of the postulates of free enterprise against the intervention of the State
in economic life. During his academic life, he developed three essential aspects within the
administrative model: the division of labor, the application of an administrative process and the
formulation of technical criteria that should guide the administrative function. For Fayol, the
administrative function has as its object only the social body: while the other functions affect
not only the personnel of the company but also the raw material and the machines.
His knowledge allowed an important company: The Compagnie Commentary Fourchambault et
Decazeville, which was in a difficult administrative and economic situation, to get out of this
crisis. His administration was very successful, Fayol was CEO until 1918 when, due to his
advanced age, he decided to pass on his company to his successor. Later, Fayol dedicated his
life to write and deepen his administrative theories. Management and development of various
concepts, for example, the division of labor, discipline, authority, unity and command hierarchy,
centralization, fair remuneration, staff stability, teamwork, initiative, general interest, etc. His
contribution is very important because in the field of business management he distinguished
four functional areas: planning, organization, command and coordination and control. In
Industrial and General Administration (1916) each one of these important areas is developed.
The aforementioned work was translated into English until 1930 and did not have much impact
until its second translation in 1949. By that time, Fayol had already died because of his
advanced age, specifically died on November 19, 1925, in the French capital. Shortly before his
death, he published an important and controversial work: The industrial incapacity of the state
(1921), where he defended the postulates of free enterprise against the intervention of the
State in economic life.
We must indicate that his contributions were very important since the second half of the
nineteenth century and the first part of the twentieth century, marked a before and after in the
administrative method, in the dynamics of companies, being then the precursor of the
administrative model known as “Fayolism.” Just as many Fayol also criticized the ant humanist
method of Frederick Taylor, Taylor’s intention was really to eliminate downtime in the actions
of the workers to comply with the system design that was to increase production. Although he
took some lessons from him, he decided to focus on various aspects. The studies of this subject
were more valued well into the Industrial Revolution. Currently, studies have linked their
thinking with the postulates of economic liberalism. From their contributions we can

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emphasize: To take care that the human and material organization is directed to fulfill the
objective, and needs of the company, to establish a unique, competent, energetic authority
that serves as a guide, to harmonize the activities, to analyze the responsibilities of the Director
General, create a “General Staff” that is a group of men endowed with the energy, knowledge
and time that support the Director.
3. Max Weber (1864-1920)
Max Weber was born on 21st April, 1864 in Erfurt in Germany in a comparatively rich
protestant family. He lived most of his early life in Berlin. Weber’s father was a bureaucrat who
rose to a very high political position. He was more a hedonist than a protestant. But Weber’s
mother was a devout Calvinist, a woman who sought to lead on ascetic life. These sharp
differences between the parents led to marital tensions. This tension and conflict in family
affected Weber’s feelings and sentiments deeply.At the age of 18, Weber joined the University
of Heidelberg to study law. Afterwards, he gained and earned varied experiences as a soldier, a
professor; a politician, a legal expert and also as a sociologist. Weber suffered a complete
mental breakdown due to his father. After recovering from mental breakdown, Weber travelled
extensively. He lectured in the last three years of his life from 1918-1920 in the university of
Vienna and Munich. When his talent had reached full maturity he died on 14th June, 1920.
Max Weber the titan of German Sociology has left a deep imprint upon contemporary
sociology. Though his thought was based largely on George Simmel’s pioneering insistence on
the importance of interactive process, Weber oriented it in quite different direction in a
number of crucial ways.
Max Weber is one of the promethean figures of social thought. He was a jurist, economist and a
politician, all rolled into one. His profound understanding of history and other sciences of
culture had given him a deep insight in the affairs of men. This enabled him to evolve his own
conception of comprehensive science of social reality. Weber’s thought reveals his inner
conflicts. He is concerned with meaning that men had given to life. As a “disenchanted man” he
saw contradiction between the rationalizing society and the need for faith, and between
“Science and action”. Weber has left a great imprint upon sociology. He was a profound
scholar, a voracious reader and prolific writer.
1. Main works of Max Weber:
2. General Economic theory-1927
3. The protestant Ethic and the spirit of Capitalism-1930
4. Max Weber on Law in Economy and Society-1945
5. From Max Weber: Essays in Sociology-1946
6. The theory of Social & Economic organisations-1947

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 7. The methodology of Social Sciences-1949
8. The City’-1958
9. The Sociology of Religion-1963
10. On Charisma and Institution Building-1968
11. Economy and Society-1968 (In three volumes). Weber’s contribution to the
development of Sociology and social thought has been enormous. In all this writing he
has tried his level best to maintain his objectivity, neutrality, analytical approach,
historical insight and scientific fervor. Prof. Temasheff says, Max Weber could be
considered one of the greatest sociologists of the 20th century. Because Weber has
demonstrated that much can be achieved by using the ‘Ideal type’ procedure in social
science. He has contributed greatly to the understanding of social causation; in human
affairs. He has made painstaking study of concrete social situations and processes that
must form the foundation of any adequate sociological theory.Raymond Aron has
remarked; Weber was a man who was asking to himself the ultimate questions: “the
relations between knowledge and faith, science and action, the church and prophecy,
bureaucracy and charismatic leader, rationalization and personal freedom ….” More
than that he was a man with great historic erudition who “searched all civilizations for
the answers to his own questions.
4. What was the reasons/motives of Henri Fayol developing Administrative management
theory?
The information about Henri Fayol’s family confirms that his origins and particularly those of his
wife were in the lower middle-class. The revenues he earned using his technical skills and as
managing director allowed him to hold a higher social status in the Parisian bourgeoisie. The
works of Verney (1925) and Sasaki (1995) are confirmed. How did Andre ´Fayol’s lack of
professional success influence his son’s intellectual ambitions? One explanation may be found
in John Stacey Adams’ “equity theory” (Adams, 1963). According to equity theory, an individual
calculates a “score” of rewards gained for effort expended both for himself and for others.
Differences in scores between individuals are perceived as inequities. A comfortable social
standing is perceived as inequitable and unjust if the individual works little, is incompetent or
did not deserve his position. An individual that earns a low wage will be in an equitable
situation if he expends little effort and has a low skill level. One’s own perceived score as well
as that of others is a source of personal motivation by encouraging greater efforts to obtain
higher rewards. If the difference in scores is too large, the system may be perceived as unjust
and create dissatisfactions that can lead to a reduction in effort.
This model can be applied to Andre ´Fayol. His rewards in terms of salary and career were low
given his level of skills. His score was lower than that of his superior officer Emile Auguste
Ernest Julia that he accompanied to Turkey. Julia had studied at the Ecole Polytechnique with

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its selection based on mathematical abilities. While he had little knowledge of the artillery and
the fabrication of canons and shells he still had honorable military career. The rewards/efforts
score was very different between the officer and the sergeant. It was inequitable. According to
equity theory, “turnover maybe one method employees utilize to alleviate perceived inequity.
The description of Henri Fayol’s motivations to develop a management theory has little to do
with the theory itself. Only a small part of his thinking, namely his view of mathematics and the
Army were influenced by experiences in his private life. His criticism of excessive mathematics
teaching in engineering and management training reflects his experience with mathematics
when he was a student at Saint Etienne. His difficulties in mathematics prevented him from
graduating at the head of his class. At the same time, he studied accounting, which later
became an important part of his doctrine. A second influence can be found in his opinion about
the Army. His father was an on-commissioned officer in the artillery, his sister married a
pharmacist whose brother was a military doctor and he was fond of a distant cousin who was a
colonel in the engineering corps. His understanding of the Army came through its support
functions. He learnt of some of its operating absurdities and in particular those at peace time.
5. Theories, Principles and Assumptions of Fayol’s Administrative Management
Theory is a scientifically acceptable general principle that can explain a phenomenon. It is set
of statements or principles devised to explain a group of facts or phenomena, especially one
that has been repeatedly tested or is widely accepted and can be used to make predictions
about natural phenomena. Thus, a theory always explains a specific phenomenon. Moreover, a
theory stems from a hypothesis, which is proven with valid evidence. We mostly encounter
theories in the field of science. Quantum theory, theory of evolution, theory of general
relativity, theory of special relativity are some examples of scientific theory. In addition, there
are various theories such as political theories and philosophical theories.
Principle is a basic rule, law or concept. A principle can also refer to a value or a code of conduct
that guides behavior. Principles can be moral legal or scientific. Moral principles are the values
that guide the conduct of people in a particular society. Legal principles are the fundamental
source of laws whereas scientific principles are the rules or concepts that give rise to theories.
Generally, Theory and principle are two inter-related concepts. The key difference between
theory and principle is that theory scientifically credible general principle that explains a
phenomenon whereas principle is a basic truth, rule, or law.
5.1. Assumptions of Administrative Management Theory
The theory generally calls for a formalized administrative structure, a clear division of labor, and
delegation of power and authority to administrators relevant to their areas of responsibilities
and basically:
Administration is an integrated part of human life, administration is the process of directing and
controlling life in a social organization, the specific function of administration is to develop and

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regulate the decision making process in the most effective manner possible, and administrators
work with group or individuals with group referent not with individuals as such.
6. Definition of Administrative Management Theory
Administrative management theory is also known as Fayol's administrative management theory
because Administrative management theory is given by Henri Fayol's management theory that
effort to find a coherent way to plan an organization. Henry Fayol was the managing director,
industrialist, and mining engineer who was renowned for his work in the field of management
science Administration Industrielle et Generale" in 1916 A.D. After some years, his book was
published as the translated version "General and Industrial Management". The theory is
commonly known for a clear division of labor, the administrative structure, and the allocation
of power and authority to administrators appropriate to their region of responsibilities.
6.1. What is the Importance of Administrative Management Theory?
Administrative management theory primarily focuses on improving the efficiency of
management so that lower-level employees can recognize appropriately and the tasks
can be done consistently. Here are some benefits of good administrative management
that shows its importance:
Healthy Financial Situation: Administrative management has a prominent role in
managing the financial relationships of a business association. It is a management
strategy that majorly focuses on preserving all expenses within the budget and ensures
no depletion of money to keep a strong financial situation.
Data-based Decisions: Administrative management theory avoids any assumption or
whim in the organization's decision-making process. All decisions are taken based on
information gathered related to past and present activities of the organization and the
future perspective.
Assistance in Acquiring Goals: This resourceful management strategy assists in
achieving the company's principal goals. Each policy should be structured after a serious
analysis based on the business projects, leading to improved actions and
accomplishment of desired targets.
Higher Productivity: According to Administrative Management Theory by Fayol, it aims
to coordinate properly-placed ability: individual resources gain the highest output. The
management theory focuses on the capabilities and assigns the task as per the abilities,
leading to more rapid results and higher production.
Customer Satisfaction and Advanced Employees: It helps enhance employees'
agreement level by appropriately assigning their work per their skills. Employees feel
motivated towards their job roles or tasks, improving their overall performance quality,
leading to increased customer satisfaction.
6.2. According to Fayol, What Are Functions of a Manager?

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The functions may vary depending upon the nature of duties and responsibilities of the
manager. Henri Fayol states the following functions:

 Planning: Planning includes the structural planning of actions and determining the goals
and objectives of the action.
 Organizing: Organizing refers to creating an organizational structure to work together
with human resources and non-human resources.
 Commanding: Commands show the direction given by managers to the subordinates.
 Coordinating: Organizations have various divisions coordinating process brings the
actions of different divisions and departments and integrates their efforts to fulfil
organizational goals.
 Controlling: Controlling refers to comparing the company's actual performance with the
desired performance level and analyzing if there is any improvement required.

7. Henri Fayol's Principles of Management

Henri Fayol gives 14 principles given which particularity focused on management
functions of a company. The principles can be implied to any association/corporation
globally.
Henri Fayol's management theory proposed that these principles are not firm, but they
are flexible to use as per the requirements. So it completely up to the managers as to
how they use the organization and manage efficiently. Here are 14 guiding principles by
Henry Fayol are:
1. Initiative: It can be defined as the level of freedom that a company provides to its
employees to carry out certain plans and tasks without interfering and forcing them.
This helps to develop curiosity and enthusiasm in the workers by inspiring and gratifying
the employees.
2. Equity: Equity resembled that all the staff in a company are equal and should be treated
evenly.
3. Remuneration of workers: It is crucial to provide monetary and non-monetary
compensation as per the performance level. Remuneration should be fair, rational, and
reasonable.
4. Unity of Direction: As per Fayol's principles, there must be only one supervisor under
the management and plan. The teams must have equivalent aims and objectives to
move onward.
5. Unity of Command: As per this principle, an employee must receive orders only from
the supervisor. An employee should be responsible to the direct manager only. There
must only be one manager to direct the staff; this is important to avoid any
misunderstanding; thus will be helpful for the employees to be faithful to the doings.

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 6. Scalar Chain: Fayol's Administrative Management Theory states that top managers must
be chained from top administration to lower-level administration based on the chain of
command order. The top head of an organization should be at the peak of the chain so
that message flows top to bottom end thoroughly to the chain of authority of superiors.
7. Authority and Responsibility: Basically, authority is the power to formulate decisions,
whereas responsibility is a commitment of a staff member to execute a certain selected
job and be responsible to the administrator. There ought to be a sense of balance
between the two crucial factors, responsibility, and authority.
8. Individual Interest to General Interest: Commonly, there are two form interests:
individual and corporate interest. According to this principle, there should be
synchronization among two interests. Corporate interest should be prioritized as doing
well for the association and carrying incentives for the individuals.
9. Discipline: The organization must establish the rules and regulations so that every
employee works obediently and respectfully. Reward-punishment system, clarity of
regulations, good management, etc., are various ways to sustain discipline.
10. Stability of term: Giving job security can enhance the efficiency of employees. This
benefits the company as it subordinates the industry earnings and minimizes new
employees' hiring and training procedures.
11. Division of Work: This theory states that the whole accomplishment of administration
must be divided into parts. Employees must be assigned the jobs as per their
capabilities, interests, and skills. This theory helps to make the workers more valuable
and efficient.
12. Centralization: This belief states that the top-level administration ought to be
centralized to the top management level. Therefore, there must be an allocation of
authority to the subordinate, keeping in mind that the capability to make the imperative
judgments in the company ought to stay with the top management.
13. Order: This opinion facilitates human resources should be appropriately utilized in the
company. Giving the right job to the right man is critical in the actual operations of the
company. Therefore, management ought to classify responsibilities and put them
properly with employees and other sources.
14. Esprit de Corps: This theory indicates team spirit. An organization must incorporate all
its actions on the way to a single ambition and objective. There should be an integrated
team involvement in synchronization and teamwork, which is constantly better than the
collective of individual performances.
8. Common Criticism and Limitations of Henri Fayol
a. Management Oriented Theory: The administrative management theory is
management oriented. It does not give much attention to the problems of the
workers.
b. Lack of Importance to Informal Organization: The administrative management
theory does not give any importance to informal organization or groups. It gives
importance only to the formal organization structure.

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 c. Concepts Borrowed from Military Science: Some of the concepts of
administrative management theory were borrowed from military science. They
tried to apply these concepts to the social and business organizations. For e.g.
Henri Fayol gave importance to "commanding" and not "directing" the workers.
d. Mechanical Approach: The administrative management theory has a mechanical
approach. It does not deal with some of the important aspects of management
such as motivation, communication and leading.
e. 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.
f. 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.
g. Inconsistency: Fayol’s theory were based on personal experience and limited
observation. 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 not incompatible with the
division of work. The theory does not provide guidance as to which principle should be
given procedure over the other.
h. Stressed a one best way of organizing and managing
i. The Theory is based on intuition and observation rather than on empirical investigation
j. Today’s environment is more turbulent and unpredictable
k. Too general for today’s highly complex organization
l. Ignores customer need
m. Not based on practical research
n. Not Suitable for modern business.
o. The administrative theory has not paid proper attention to the human behavioral
aspects in the organization.
p. This theory has not concerned the situational factors. So it is inconsistent.
q. It is vague. There is no clear distinction between the structure and process of an
organization.

9. Major Strength and contributions of the administrative theory are:

The modern global marketplace is highly competitive. As a result, effective management of
information has rapidly become a core organizational function because it directly contributes to
the effective running of any company. Organizations must constantly review activities and
processes to improve reliability and efficiency. The business world is dynamic and volatile,
meaning that trends, behaviors, practices, needs, systems, and forces change very quickly.
Access and response to information must be excellent to keep up with this speed of change and
maintain a competitive edge. It is where administrative management comes in.

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  Here are some the contributions and outcomes of Henri Fayol’s administrative
management theory:
 This administrative theory laid the foundation for the study of management functions of
planning, organizing, staffing, directing, and controlling.
 This theory has provided a conceptual framework for analyzing the management
process.
 Introduced the universally applicable principles of management
 It serves as the guide to modern management.
 Fayol provided a language to communicate management theory and establish a
foundation for management and training.
 Managers should perceive organizations as living organisms that attention rather than
as mechanical machine.
 There are many examples of how organizations employ administrative management.
The responsibilities of administrative managers include:
 Budgeting
 Recruiting and training employees
 Conducting employee appraisals and reporting their performance
 Project management
 Business planning
 Financial management
 Database management
 Human resource and facility management
 Clerical tasks
o Henri Fayol, widely recognized as the father of modern management, is credited with
developing the administrative management theory. The theory attempts to find the best
way to design an organization. According to Fayol's idea, a successful organization is
characterized by:
 A formalized administrative structure.
 Delegation of power.
 Authority based on areas of responsibility.
 A clear division of labor.
 The administrative management theory seeks to guide managers on how to interact
with employees with respect to the core elements of management. The five core
elements of management are:
 Planning
 Coordinating
 Organizing
 Controlling
 Commanding

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 The six major organizational functions underlying these core elements of management,
as stipulated by Fayol, are:
 Financial
 Accounting
 Technical
 Commercial
 Managerial
 Security
10. Evolution of Management Thought – Introduction
There is a long history behind the evolution of management thought. Management is
considered as the significant feature of economic life of mankind throughout ages.
Management thought is regarded as an evolutionary concept. It has developed along with it
and in line with social, cultural, economic and scientific institutions. Management thought has
its origin in ancient times. It is developed along with other socio economic development. The
contributors to management theory include management philosophers, management
practitioners, and scholars. Modern management is based on the strong foundation laid down
by the management thinkers from the past events.
10.1. What Does Management Thought Means?
Management thought: Refers to the theory that guides management of people in the
organization. Initially management theories were developed out of the practical experience of
the managers in the industrial organization. Later on, managers borrowed ideas from several
other fields of study like science, sociology, anthropology, etc.
10.2. The Concept of Evolution of Management Thought
To understand the entire concept of evolution of the management thought, the topic is divided
into 4 major stages, which are as follows:
A. Pre-scientific management period
B. Classical Theory
C. Neo-Classical Theory (or Behavioral Approach)
D. Bureaucratic Model of Max Weber
A. Pre-Scientific Management Period: As the industrial revolution occurred in the 18th
century, there was a huge impact on management. The scenario changed the method of
raising capitals, organizing labor, and goods’ production for the individuals and
businesses. Entrepreneurs then had access to production factors like land, labor, and
capital. The final step was only to make some effort to combine these factors to achieve
the target successfully. But, after the industrial revolution, the newer dimension taken
by management is because of the involvement of certain notable personalities who
introduced some effective ideas and approaches for giving management an acceptable
and precise direction.
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 B. The Classical Theory: Robert Owens, Charles Babbage, and other prominent
personalities are regarded as management’s pioneers. However, their contribution to
the evolution of management is lower. Further, by the last decade of the 19th century,
the science of management began, and with it, some professionals like H. L. Grant, F. W.
Taylor, Emerson, and others entered for the establishment of scientific
management. Further, during the classical period, management thought focused on
standardization, job content, labor division, and scientific approaches for the
organization. It also related closely to the industrial revolution and the rise of large-scale
enterprises.
C. The Neo-Classical Theory: This duration of the evolution of management thought is a
better version of classical theory. It is a modified version of classical theory with several
improvements. The classical theory focused mainly on the areas of job including physical
resources and their management, but Neoclassical theory focuses on employee
relationships in the work ecosystem.
D. Bureaucratic Model: Max Weber, a German sociologist, proposed the bureaucratic
model. This includes a system of labor division, rules, authority hierarchy, and
employees’ placement based on their technical capabilities.
 Evolution of Management Theories: Organizations were shaped effectively and the
writings of some prominent writers consisted of the management and governance of
various kingdoms. These descriptions formed the literature that helped develop the
management theories. Several heads of religions, political affairs, and military also gave
the management models. For example, the books like Sun Tzu’s “The Art of War” and
Chanakya’s Arthashastra used some managerial purposes and the governance of the
kingdom concerning the policy formulations respectively.
 The Evolution of Management Science: Management evolution started with civilization,
and the evolution of management science is the entire concept involving several
theories behind it. Whatever we presently have gets refined and improved as
management thoughts and theories. This helps people in improving the knowledge of
the process and utilizes the management principles for enhancing the overall
organization.
11. CRITICS OF SCHOOL OF THOUGHT
11.1. CLASSICAL MANAGEMENT THOUGT
 Strength
Current management and organizational structure can provide many of its roots in the classical
management theory. One of the main advantages of the classical management theory was a
methodology for how management should work remember. Management principles can be
seen as a basis for the current management behavior today, such as use as a power of authority
and responsibility. Coined in this period.

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In addition, another advantage of the classical management theory is the focus on the division
of labor. By dividing labor tasks would be faster and more efficiently, thereby increasing
productivity. Division of labor can be seen in many applications today, ranging from fast food
restaurants, big production. In addition, the classical management theory also gave rise to an
autocratic style of leadership, allowing employees to take. Direction and command of their
managers.
 Weakness
The main weakness of the classical management theory arose from its tough, rigid structure.
One of the main principles of the classical management theory is to increase productivity and
efficiency; however, achieving these goals often came at the expense of creativity and human
relations. Oftentimes, employers and theorists would focus on scientific, almost mechanical
ways of increasing productivity. For example, managers would use assembly line methods and
project management theories that focused on efficient division of tasks.
11.2. Humanistic management Thought
 Strength
The Humanistic Management Center advocates a paradigm shift away from economistic views
on market activities in the direction of a humanistic attitude. To move from criticism of the
status quo towards abundant discourse on alternatives we have developed a three stepped
approach offering guidance and a broadcaster for reflection on managerial decisions as well as
decision making routes. We understand humanistic management on the basis of three
interrelated dimensions.
It’s a holistic theory, so it looks the entire whole person. For example, most other theories
reduce people to ‘components’, in order to treat disorders; the humanist theory would state
that the answer lies from looking at the entire person.
 Weakness
Lack of empirical evidence, the self-help therapy involved can teach narcissistic tendencies. The
disadvantage of the ‘humanist’ approach becomes all too evident at a ‘humanist’ funeral. There
is absolutely no comfort in the words of the ‘so called’ service, and absolutely no hope to the
relatives and friends of the dead person of the resurrection which Jesus proved and of life after
death.
11.3. Contingency Management Thought
 Strength
Fiedler’s model gives organizations a rapid method to identify a particular group of the best.
Potential leaders the theory includes a least-loved colleague scale, which helps identifies the
management of human relations orientation and task orientation of potential leaders. Leaders

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with a task orientation are best suited to groups in which they defined tasks with a high level of
control and supervision. On the other hand, leaders can a relationship orientation to use to get
the job done their interpersonal skills and can deal with complex problems when taking
decision. This theory has been designed as a contingency model and is not intended to
describe. All possible situations Because the model is to provide flexible enough to fit all kinds
of groups leaders and group relationships. Only the results of example, the margin as a group
has a leader with low human relations skills, Fiedler’s model still gives management the ability
to make an effective group with clearly defined roles and increasing the capacity of the leader
to rewards or provide information to punish their subordinates.
 Weakness
This model provides managers create by adapting a number of variables. Instrument for
effective groups According to Fiedler’s contingency model, there is not just one type of
successful leadership style, but each type of leader can thrive in the right group sites. The
model provides a number of factors may change management to improve efficiency. Group for
example, according to Fiedler’s theory but an impersonal task oriented leader can be effective
in a group while the group is highly structured and clearly defined roles. Leader Position power:
Position power is determined at the most basic level of rewards and punishments that the
leader has officially at his or her disposal for either reward or punish members of the group
based on performance. The more power the leader has, the more favorable the situation.
12. Who is Max Weber?
12.1. Max Weber the Founder of Bureaucratic theory of the management principles
Max Weber was born on 21st April, 1864 in Erfurt in Germany in a comparatively rich
protestant family. He lived most of his early life in Berlin. Weber’s father was a bureaucrat who
rose to a very high political position. He was more a hedonist than a protestant. But Weber’s
mother was a devout Calvinist, a woman who sought to lead on ascetic life. These sharp
differences between the parents led to marital tensions. This tension and conflict in family
affected Weber’s feelings and sentiments deeply.
At the age of 18, Weber joined the University of Heidelberg to study law. Afterwards, he
gained and earned varied experiences as a soldier, a professor; a politician, a legal expert and
also as a sociologist. Weber suffered a complete mental breakdown due to his father. After
recovering from mental breakdown, Weber travelled extensively. He lectured in the last three
years of his life from 1918-1920 in the university of Vienna and Munich. When his talent had
reached full maturity he died on 14th June, 1920.
Max Weber the titan of German Sociology has left a deep imprint upon contemporary
sociology. Though his thought was based largely on George Simmel’s pioneering insistence on
the importance of interactive process, Weber oriented it in quite different direction in a
number of crucial ways. Max Weber is one of the promethean figures of social thought. He was

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a jurist, economist and a politician, all rolled into one. His profound understanding of history
and other sciences of culture had given him a deep insight in the affairs of men. This enabled
him to evolve his own conception of comprehensive science of social reality. Weber’s thought
reveals his inner conflicts. He is concerned with meaning that men had given to life. As a
“disenchanted man” he saw contradiction between the rationalizing society and the need for
faith, and between “Science and action”. Weber has left a great imprint upon sociology. He was
a profound scholar, a voracious reader and prolific writer.
12. Main works of Max Weber:
13. General Economic theory-1927
14. The protestant Ethic and the spirit of Capitalism-1930
15. Max Weber on Law in Economy and Society-1945
16. From Max Weber: Essays in Sociology-1946
17. The theory of Social & Economic organisations-1947
18. The methodology of Social Sciences-1949
19. The City’-1958
20. The Sociology of Religion-1963
21. On Charisma and Institution Building-1968
22. Economy and Society-1968 (In three volumes).
Weber’s contribution to the development of Sociology and social thought has been enormous.
In all this writing he has tried his level best to maintain his objectivity, neutrality, analytical
approach, historical insight and scientific fervor. Prof. Temasheff says, Max Weber could be
considered one of the greatest sociologists of the 20th century. Because Weber has
demonstrated that much can be achieved by using the ‘Ideal type’ procedure in social science.
He has contributed greatly to the understanding of social causation; in human affairs. He has
made painstaking study of concrete social situations and processes that must form the
foundation of any adequate sociological theory.
Raymond Aron has remarked; Weber was a man who was asking to himself the ultimate
questions: “the relations between knowledge and faith, science and action, the church and
prophecy, bureaucracy and charismatic leader, rationalization and personal freedom ….” More
than that he was a man with great historic erudition who “searched all civilizations for the
answers to his own questions….”
13. Motivations of Max Weber Contribution
Weber saw bureaucracy as an effective form of social organization. He believed that it was
necessary because it created discipline, obedience, limitation of liability and selflessness. In
sociology, the model has often criticized bureaucracy, which was introduced by Max Weber. Of
course, Weber noted the disadvantages of bureaucracy such as ignoring the conflict and lack of
flexibility. Important positions in the bureaucratic organization are strictly subordinated to each
other and arranged in a hierarchical order. Each officer is responsible for his superiors, their

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personal decisions, and actions of subordinates. The volume of the power of the executive over
the subordinate is clearly identified. His actions are limited to the relevant rules and
regulations. Orders are official, not personal. They are an embodiment of general instructions
that implement a leader. Historical experience shows that an ideal organization does not exist.
Bureaucracy under socialism is related to the administrative-command system with over-
centralization in all spheres of public life. The struggle with bureaucracy must go through the
development of democracy, people's participation in making socially significant decisions for
the community, improving self-management, and creating a system of public supervision.
What did Max Weber believe? Weber believed that modern societies were obsessed with
efficiency – modernizing and getting things done, such that questions of ethics, affection and
tradition were brushed to one side – this has the consequence of making people miserable and
leading to enormous social problems.
13.1. Principles of Bureaucracy: The bureaucratic theory has gained recognition over time due
to unique characteristics. Modern institutions built on Max Weber six principles of bureaucracy
have strong structures, defined rules, a uniform system, human resource mostly people one
vision towards arching organizational goals.
14. Max Weber’s six principles of Bureaucracy
Max Weber’s principles of bureaucracy, define the Bureaucracy theory and what it stands to
archive within organizations. Bureaucratic principles include; hierarchy, job specialization,
division of labor, formal rules, procedures, equality, and recruitment on merit. These elements
make up max Weber ‘s six principles of bureaucracy. They help to enhance organization
capabilities by improving administrative and management systems through well-defined rules.
The application of the bureaucratic theory of management operates through these same
principles in our article.
•Top 6 Hierarchy Characteristics/Assumptions of bureaucracy by Max Weber include:
1. Hierarchy: is a type of system that shows arrangements or departments from above and
below. These can also be at the same level, giving or receiving instructions. Hierarchy allows
employees to understand and follow the chain of command from top to bottom.
2. Job Specialization: Job specialization is defined as a process and knowledge employees gain
through education, training, and experience to enable them to become professionals at on
particular job. It is important in an organization because it provides skilled workers who are
able to fulfill their daily activities.
3. Division of Labor: Division of labor is important and essential for economic progress.
Promotes efficiency and effectiveness in an organization and reduces the total cost of products
due to its element of specialization on Max Weber’s six principles of bureaucracy. Each
employee has a specific task and target hence enhancing productivity, and promoting efficiency
by dividing separate tasks and responsibilities.
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4. Procedures: Procedures are important to any organization and its processes. They can be in
form of policies and together provide direction for daily operations. Procedures enhance good
conduct in an organization, regulate employee performance, provide terms of service and
improve decision-making while boosting internal processes.
5. Recruitment on merit: The recruitment on merit process being consistently applied in an
organization increases professionalism. It’s a notion that promotes fairness, brings about
diversity, and demands integrity among managers in their duties. Recruitment based on merit
means decisions to employ and selection must be solely based on qualification criteria. This
produces a good system and more efficient, human resource managers in executing their
respective role. Max Weber’s six principles of bureaucracy must advocate for reduced bias,
through effective process, fairness, and an open structure with dedicated employees.
6. Fairness: Bureaucracy brings about exemplary impartial and just treatment among
employees. Through bureaucracy, people’s behavior and conduct is regulated without
favoritism. Fairness in the bureaucratic process is important because it reduces discrimination
by treating each individual in a similar manner. The same rules and punishment apply to
everyone, despite their position and status.
Max Weber was able to discuss bureaucratic management from two different angles which are
behavioral and structural. And having sound knowledge of both points will help managers,
readers or management students understand the concept more.
He wanted a system void of risk-taking or flexibility. Max weber’s main contribution to
management is his theory of authority, structure, and his description of organizations based on
the nature of authority.
14.1. Below are some of the focuses of the Max Weber bureaucratic management theory:
Accurate Record Keeping: Max Weber’s bureaucratic management theory was based on
strict record keeping. On this note, managers are expected to take accurate records of
things that happen within the said organization. The idea is partly to tackle or prevent a
possible reoccurrence of specific issues. Keeping detailed records of the responsibilities
in an organization, according to Max’s theory will help to avoid any form of
misunderstanding among employees. And when an employee calls in sick or turns up
late for a shift for one reason or the other, managers are also expected to monitor the
situation so that it does not end up becoming a habit.
Job Roles Delegated and Followed Strictly: Max Weber’s bureaucratic management
theory focuses on is the delegation of responsibilities to subordinates or employees
within an organization. Max believed that tasks should be assigned to workers based on
their skill levels and the ability for efficiency. Plus, there be nothing like a flexible role. In
other words, each employee must be aware of their responsibilities and functions within
the respective departments and organization at large and also stick to them.

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 Hire Based on Qualification Alone: Max Weber’s management style also includes hiring
the ideal candidate for a job. He believed that fixing employees in job positions they are
qualified for will enable them to be more efficient and deliver the expected result.
Max’s theory also disregarded nepotism or a deviation from this management standard
and believes that if someone is not qualified for a job, then the individual in question is
not the perfect match for that position.
Work-Related Relationship Permitted: Weber’s bureaucratic management system
discourages personal relationships between workers, particularly during working hours.
He believed that working hours should be used for work only and not to discuss
personal issues
14. Strength and Weakness of Max Weber Contribution
A. Significance and Strength of Bureaucratic Management
 These organizations are rational and, therefore, ideal forms of organizations.
Rationality leads to efficiency of operations.
 Managing organizations through formal chain of command, by highly qualified
and skilled managers leads to optimum utilization of resources.
 Depersonalization of management functions results in uniformity of operations
and fair and equal treatment of all the workers.
 Bureaucratic structures not only increase organizational efficiency (through
knowledge, unity of command, individual subordination, less frictions and
tensions etc.) but also facilitate growth of large-scale organizations.
B. Limitations of Bureaucratic Management
 Too much emphasis on formal rules and procedures ignores the social needs, desires and
sentiments of human beings.
 It hampers human creativity and innovativeness as there is impersonal approach in
dealing with people. This affects personal growth and development of employees.
Human beings have emotions and slight deviation in rules sometimes can be effective in
decision-making. However, bureaucratic organizations do not allow this flexibility.
 It ignores the role of ‘informal organization’ which both supplements and complements
formal organizations in achieving the formal goals.
 The hierarchy of authority denies the benefits of open communication. This may not
bring the desired level of efficiency.
 Strict adherence to rules, regulations and procedures makes the rules an end. The
organization structures tend to become procedure-oriented rather than goal-oriented.
 Division of jobs into specific categories creates water tight compartments amongst the
jobs and complicates their control and coordination. People become so specialized in
their tasks that they do not see beyond their activities to coordinate them with activities
of rest of the organization.
 Putting rules and regulations in writing delays processing of work.
 It leads to conflict between the organization and individuals. People want to work in
open and interactive environment and use their innovative abilities at the work place but

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 organization over emphasizes rules and regulations. A bureaucratic organization, thus,
works against the basic nature of human beings.
 It has a closed system perspective where organizations have no or little interaction with
the environment. It assumes rigid organization structure which is not adaptive to
environmental changes. Everything is done according to rules.
QUESTION 5: This is common Question for both Administrative management and Bureaucratic
management school of thought and discussion is given from the above Administrative
management.
15. Criticism of Bureaucratic Management
o Bureaucratic Management Approach of Max Weber also has some fault-lines and
received criticism for it.
 The emphasis only on rules and regulations.
 There will be unnecessary delays in decision-making due to formalities and rules of
Bureaucratic Organization.
 Coordination and communication hampered because of too much formality and rules.
 Bureaucracy involves a lot of paperwork and has just too much level of authority which
results in a lot of wastage of time, effort and money. Not ideal for efficiency.
 Because of its too much formality, a Bureaucratic approach is not suitable for business
organizations. The bureaucratic model may be suitable for government organizations.
 Too much importance is given to the technical qualifications of the employees for
promotion and transfers. Dedication and commitment of the employee are not
considered.
 Limited scope for Human Resource (HR). No importance is given to informal groups and
neither any scope is given to form one.
 The rules are inflexible and rigid. Further, there is too much emphasis on these rules and
regulations.
 Informal groups do not receive any importance. In current times, informal groups play a
huge role in most business organizations.
 Typically, bureaucracy involves a lot of paperwork which leads to a waste of time,
money, and also effort.
 The rules and formalities lead to an unnecessary delay in the decision-making process.
 While Government organizations can benefit from a bureaucratic structure, business
organization need quick decision-making and flexibility in procedures. Therefore, it is not
suitable for the latter.
 While the technical qualifications of the employee is an important aspect of his
promotion, a bureaucratic organization does not consider the employee’s commitment
and dedication.
 There is limited scope for Human Resource management.
 Coordinating and communicating is difficult

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 16. Analysis of Henri Fayol Principle on Commercial Bank of Ethiopia
1. DIVISION OF LABOR: According to Henry Fayol under division of work, "The worker
always on the same post, the manager always concerned with the same matters, acquire
an ability, sureness and accuracy which increases their output. In other words, division of
work means specialization. According to this principle, a person is not capable of doing all
types of work. Each job and work should be assigned to the specialist of his job. Division
of work promotes efficiency because it permits an organizational member to work in a
limited area reducing the scope of his responsibility. Fayol wanted the division of work
not only factory but at management levels also. This division of labor gives more
effectiveness and efficiency as well as equal distribution and sharing of responsibility;
and this reduces burdens for the branch managers.
2. AUTHORITY AND RESPONSIBILITY: Authority and responsibility go together or co-
existing. Both authority and responsibility are the two sides of a coin. In this way, if
anybody is made responsible for any job, he should also have the concerned authority.
Fayol's principle of management in this regard is that an efficient manager makes best
possible use of his authority and does not escape from the responsibility. In other
words, when the authority is exercised the responsibility is automatically generated.
CBE cannot and will not turn a blind eye to evidence of corruption. They have both an
ethical obligation and a fiduciary responsibility to our stakeholders and its customers. It
is our responsibility to make sure that resources are used for their intended purposes
and that we only finance a project when we have adequate assurances that we can do
so in a clean and transparent ways.
3. DISCIPLINE: According to Henri Fayol discipline means sincerity about the work and
enterprise, carrying out orders and instructions of superiors and to have faith in the
policies and programs of the business enterprise, in other sense, discipline in terms of
obedience, application, energy and respect to superior. In CBE, every employees and
managers have long lasting honesty behavior starting when employees join the bank,
induction and training have provided adequately. The one who lacks discipline will have
punished and perform well according to the bank discipline will rewarded. However,
Fayol does not advocate warming, fines, suspension and dismissals of worker for
maintaining discipline. These punishments are rarely awarded. A well-disciplined work
force is essential for improving the quality and quantity of the production.
4. UNITY OF COMMAND: According to Fayol there are supposed to be appropriate,
methodical and logical array of physical and shared factors, such as land, raw resources,
apparatus and equipment and employees respectively. As per view, there should be
protected, suitable and précised place for every article and every place to be used
effectively for a particular activity and service. In other words, principles are that every
piece of land and every article should be used properly, economically and in the best
possible way and selection and appointment of the most suitable person to every job.
There should be specific place for everyone and everyone should have specific place. As
a CBE is a large Company, every employee here is not accountable to only one manager.

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 There are multiple managers and many subordinates work under them. So every
employee is not accountable to only one boss and they have many employers to
respond their duties.
5. UNITY OF DIRECTION: Fayol advocates "One head and one plan" which means that
group efforts on a particular plan is lead and directed by a single person. This enables
effective co-ordination of individual efforts and energy. This fulfills the principles of
unity of command and brings uniformity in the work of same nature. In this way the
principle of direction create dedication to purpose and loyalty. It emphasizes the
attainment of common goal under one head. In case of CBE, even this principle is
completely comparable since the subordinates are not under one boss and get the same
direction every day. In such a large organization like CBE, it is quite hard to maintain
such kind of principle where all employees will follow the direction of the same manager
and work in a unified manner. The employees belong to multiple teams working on
differing plans. In matrix environment of CBE, the employees are reporting their work to
more than one person. This does not necessarily negate Fayol’s principle. In the bottom
line workers are being led by one team leader and getting directed by that same person.
If there is a separation of duties to other teams or sets of workers, then the reporting
would still go back to the Managers.
6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST: The interest of the
organization should come before the interests of the individual workers. In other words,
principle of management states that employees should submit their personnel interest
before the general interest of the bank. Sometimes the employees due to this
ignorance, selfishness, laziness, carelessness and emotional pleasure overlook the
interest of the organization. This attitude proves to be very harmful to the company
Every employee must be dedicated and submissive to achieve the goal of the bank. It
would not have been possible for the organization to achieve its goals and work on
different projects if the employees were not cooperative enough and saw interest
before the bank. The employees are extremely dedicated to the organization and work
for the welfare and goal of the bank. Thus this principle is evidently established in
commercial bank of Ethiopia managerial pattern.
7. FAIR REMUNERATION TO EMPLOYEES: According to Fayol wage-rates and method of
their payment should be fair, proper and satisfactory. Both employees and employers
should agree to it. Logical and appropriate wage rate and methods of their payment
reduces tension and differences between workers and management, create harmonious
relationship and a pleasing atmosphere of work. In CBE, they recruit and retain highly
qualified staff and have developed a compensation and benefits system designed to be
globally competitive, to reward performance, and to take into account the special needs
of a National staff. Every employee is paid a fair compensation so that they stay focus at
their work. The Bank Group’s staff salary structure is reviewed annually by the Executive
Directors and is adjusted on the basis of a comparison with salaries paid by private
financial and industrial firms and by representative public sector agencies.

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 8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the
subordinate’s role. The degree to which centralization or decentralization should be
adopted depends on the specific bank in which the manager is working. There should be
one central point in the bank which exercises overall direction and control of all the
parts. But the degree of centralization of authority should vary according to the needs of
situation. According to Fayol there should be centralization in small units and proper
decentralization in big company. Further, Fayol does not favor centralization or
decentralization of authorities but suggests that these should be proper and effective
adjustment between centralization and decentralization in order to achieve maximum
objectives of the business. The choice between centralization and decentralization be
made after taking into consideration the nature of work and the efficiency, experience
and decision-making capacity of the executives.
9. HIERARCHY: Managers in hierarchies are part of a chain like authority scale. Each
manager, from the first line supervisor to the president, possesses certain amounts of
authority. The President possesses the most authority; the first line supervisor the least.
Lower level managers should always keep upper level managers informed of their work
activities. The existence of a scalar chain and adherence to it are necessary if the
organization is to be successful.
10. ORDER: For the sake of efficiency and coordination, all materials and people related to a
specific kind of work should be treated as equally as possible. According to Fayol there
should be proper, systematic and orderly arrangement of physical and social factors,
such as land, raw materials, tools and equipment and employees respectively. As per
view, there should be safe, appropriate and specific place for every article and every
place to be used effectively for a particular activity and commodity. In other words,
principles are that every piece of land and every article should be used properly,
economically and in the best possible way and selection and appointment of the most
suitable person to every job. There should be specific place for everyone and everyone
should have specific place. This principle also stresses scientific selection and
appointment of employees on every job.
11. EQUITY: All employees should be treated as equally as possible. Employees must be
treated kindly and justice must be enacted to ensure a just workplace the principle of
equality should be followed and applicable at every level of management. There should
not be any discrimination as regards caste, sex and religion. An effective management
always accords sympathetic and human treatment. The management should be kind,
honest and impartial with the employees. In other words, kindness and justice should be
exercised by management in dealing with them. This will create loyalty and devotion
among the employees. Thus, workers should be treated at par at every level.
12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always
be a high priority of management. Recruitment and Selection Costs, as well as increased
product-reject rates are usually associated with hiring new workers. CBE insists on not
to hire out of desperation, not to hire an employee because the company needed

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 someone to fill the position yesterday. That is what temporary employees are for. If CBE
is looking for someone to fill the position long term, it is best to take some time to do
some research, gather as much information as one can about a job applicant. Proper
information is needed before hiring someone and those are: contact information for
personal and business references, a list of past and present employers, social security
number, birth date and more. These items will help the company complete reference
checks and to perform background checks to find out about any past criminal activity.
Offering skill testing can be helpful if a company wants to decrease employee turn-
around. It can either be done directly through human resource department or
employers can contract this responsibility out to a job placement agency. This is one of
the tools that will help determine whether the employers have found the best fit for
each position your company has open. Not only that, but it also cuts down on new
applicant recruitment costs. CBE follows this form of testing or verification. Showing
appreciation plays a major role here in CBE. Many employees almost always know when
they are doing a job wrong. However, these same employees very rarely ever hear from
their employers when they are doing their job right. Encouraging the employees by
saying kind words to them, and telling how much of a good job they are doing makes
them more likely to accept any words of advice on how to improve their work later on.
13. INITIATIVE: Management should take steps to encourage worker initiative, which is
defined as new or additional work activity undertaken through self-direction. Ways that
manifests employee initiative might occur on a small scale, such as an employee
jumping in to assist a coworker if there's a backlog of work. By taking the initiative, this
employee doesn't wait for direction from his boss. He observes a need and he makes
himself available. In addition, employees might show initiative on the job by simply
speaking up and offering suggestions. The employee might detect cracks in the system
and then brainstorm ways to fix these issues and improve productivity. The employee
might also do his homework and consider the financial aspect of implementing a new
idea. Sometimes fear or uncertainty of how they'll be received by management prevents
some employees from taking the initiative. Managers and employers are not always
open to suggestions from their employees. Even if an employee has an inventive and
useful idea, employers might dismiss his idea or accuse him of exceeding his authority.
This negative attitude causes many employees to keep quiet with regards to change.
Although CBE is trying to remove this fear from the minds of the employees, this
problem is still visible. Being open to suggestions is the key to improving employee
initiative. If a company establishes an open-door policy and solicits suggestions from the
staff, employees will feel comfortable with taking the initiative and presenting new
ideas. During staff meetings CBE opens the floor and allows employees to discuss their
concerns or ask questions. This creates a platform for employees to express their
thoughts on certain matters, and perhaps offer suggestions on ways to improve
production or the work environment. CBE also facilitates one-on-one discussions with
employees and invite them to express their opinions privately

14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings
among employees. The big question comes when as an individual member or a manager

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 has a challenge to promote the team spirit. This is one of the important aspect of CBE
which not only drives the composition of any team but also maintain the spirit it in
future. There can be many ways to promote the “Team Spirit” and there are different
methods which suits different situations. Some of them are: Giving Good Name to
Teams- This is very important and the core tool. Teams need a name; they need an
identity to which they can relate to. Major brands have created an image in minds of
people and everyone relates to them very well. In same manner employees need to give
an image to the team to which they can relate to CBE. When team members know what
they have ahead in future and how they would be evaluated it becomes easy for them
to be prepared. CBE forms the plan in form of breakup of events and associated points
that make the evaluation process extremely transparent. The activities can be in the
form of the results related to the work and other events which give them opportunity to
score points.
17. CONCLUSION: To secure the maximum prosperity for the employer, coupled with the
maximum prosperity for each employee. Although they are now almost 100 years old,
they continue to be relevant today.
18. RECCOMENDATION: Fayol principles of management were written having industrial
firms in mind. Obviously these are for profit companies not applicable to non-profit
organization. So some changes are needed for applying them in non-profit organization.

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