ADMINISTRATIVE THEORIES BY FAYOL

Henri Fayol (1841-1925): Principles of Management - "Henri Fayol was a French mining
engineer who spent many of his later years as an executive for a French coal and iron combine. In
1916, as director of the company, Fayol penned the book General and Industrial Management. In
this book,Fayol classified the study of management into several functional areas which are still
commonly used in executive training and corporate development programs. The functional areas
identified by Fayol are planning, organizing, directing, coordinating, and controlling. Fayol set
down specific principles for practicing managers to apply that he had found useful during his years
as a manager.

He felt these principles could be used not only in business organizations but also in government,
the military, religious organizations, and financial institutions. Fayol's principles were not meant
to be exhaustive. Rather, his aim was to provide managers with the necessary building blocks to
serve as guidelines for managerial activities. In sum, the principles emphasize efficiency, order,
stability, and fairness. While they are now over 80 years old, they are very similar to principles
still being applied by managers today. The problem with Fayol's principles of management knows
when to apply them and how to adapt them to new situations" (Hahn, 2007).

Administrative management theory

Administrative management theory is another well-known classical management theory developed

by Henry Fayol in1916. Fayol was a senior manager. He has developed this theory based on
personal experience. The theory encompasses business management (business) and general
management. His main focus was on management. He introduced six functions and fourteen
management principles in his theory. Six management functions are predicting, planning,
organizing, commanding, coordinating, monitoring.

Principles of Management are discussed as follows:

.1) Division of labor: Fayol believed that work specialization is the best way to use human
resources. He believed that the work should be divided among individuals and groups to ensure
that effort and attention focused on specific parts of the work.

2)Authority: Fayol discussed authority as the right to give orders and the ability to exactly obey
and do what was ordered. Responsibility properly models authority, which covers accountability.
In other words, responsibility is a part of authority. Responsibility is allocated to an individual
simultaneously with the authority.

3)Discipline: Discipline is essential for success of an organization. Workers should be fined in

case of ignoring discipline in the organization. This is because success requires joint effort of all
worker.

4.Unity of command: unity of command should be observed in the organization, so that the
workers would be given orders just by an individual (the manager).

5.Unity of direction: Fayol believed that unity of direction should be observed in a successful
organization. In other words, the entire organization needs to move towards a common goal in a
common direction.

6.Focusing on individual interests rather than public interests: general interests and profits of
the organization should be prioritized compared with individual interest.

7.Remuneration: salaries of the workers should not be determined based on worker ‘s

productivity. Instead, salaries of the workers should be determined based on many variables such
as cost of living, supply of qualified personnel, general business conditions and success in the
business.

8)Centralization: Fayol stated that centralization or decentralization of management should be

determined according to organizational requirement or culture. He defined concentration as
reducing the importance of rituals. The importance of decentralization lies in escalating rituals in
the organization.

9.Scalar chain (hierarchy): management hierarchy should be present in the organization.

Authority should be given to the managers about their ranks in the hierarchy. High-level managers
should be given more authority regarding management hierarchy and vice versa. Low-level
managers should always inform top-level managers of their activities.

10.Order -Activities should be operated in an effective and efficient manner in the organization.

11. Personnel rights (equity): All employees should be treated fairly and properly. This shows
that basic rights, laws and regulations should be the same for all employees for success of an
organization. Justice should be established within the organization. It should also be noted that
equal rights and opportunities cannot be secured in the organization.

12.Stability of tenure of personnel: Fayol believed that salaries and other benefits should be
allocated to the employees based on their length of service in a successful organization. This is
because new recruitment necessitates additional costs and causes various problems.

13.Esprit de corps: Management should coordinate and encourage the employees, which increase
productivity. It can be stated that unity is powerful .

This theory is very popular and is currently implemented in large organizations. This is also
effective in the army force. Management functions developed by Fayol are used in all
organizations and enterprises. The six functions are reduced to four, which are still running. These
are planning, organizing, leading and controlling. Giving the right authority and responsibility is
also practiced in the whole world. This shows the strength of administrative theory. Unfortunately,
the Management Matrix ignores two principles of unity of command and unity of direction

Taylor (1890-1940): Scientific Management - At the turn of the century, the most notable
organizations were large and industrialized and often included ongoing routine tasks that
manufactured a variety of products. "The United States highly prized scientific and technical
matters, including careful measurement and specification of activities and results. Management
tended to be the same. Frederick Taylor developed the "scientific management theory” which
espoused this careful specification and measurement of all organizational tasks. Tasks were
standardized as much as possible. Workers were rewarded and punished. This approach appeared
to work well for organizations with assembly lines and other mechanistic, routinized activities"
(Carter McNamara, 2009). Taylor was considered the "father of management thought." He
developed four principles to increase efficiency in the workplace based on his own experience and
observations as a manufacturing manager (George, 2009, p. 43).

The Gilbreths: Time-and-Motion Study - Frank and Lillian Gilbreth refined time-and-motion
study in the early twentieth century. "The Gilbreths' preferred "motion study" to Taylor's "time
study," however the term "Time and Motion" has tended to stick in popular terminology. The
Gilbreths studied the actions taken by workers at certain task with the aim of streamlining the
processes involved. One of their most famous experiments involved analyzing the work of
bricklayers and significantly reducing the number of "operations" involved. This change benefited
both employer (increased productivity) and employee (decreased fatigue). The Gilbreths
developed a categorization system for the different basic activities which went to make up a task.
These were called Therbligs (an anagram of "Gilbreths"). The basic Therbligs numbered around
15 (the system developed over time) and included such actions as "find", "select" and "rest." Each
of these was represented by an icon, for example an eye for "find." The activity of a worker could
then be plotted on a Simo Chart ("Simultaneous Motion Chart") for optimization." (Mendham,
2008).

2. Scientific Management Theory (1890 - 1940)

Scientific management theory

This is a well-known management theory developed by Frederick Taylor in1911. This theory is
also important due to temporal factors and purpose of the investigation. His studies were the
greatest event of the nineteenth century . This theory is mainly focused on maximum productivity.
This theory delivers a proper solution for problems and challenges of industrialists (9). Taylor
believed that scientific management is the solution to business problems.

Taylor (1890-1940): Scientific Management - At the turn of the century, the most notable
organizations were large and industrialized and often included ongoing routine tasks that
manufactured a variety of products. "The United States highly prized scientific and technical
matters, including careful measurement and specification of activities and results. Management
tended to be the same. Frederick Taylor developed the "scientific management theory” which
espoused this careful specification and measurement of all organizational tasks. Tasks were
standardized as much as possible. Workers were rewarded and punished. This approach appeared
to work well for organizations with assembly lines and other mechanistic, routinized activities"
(Carter McNamara, 2009). Taylor was considered the "father of management thought." He
developed four principles to increase efficiency in the workplace based on his own experience and
observations as a manufacturing manager (George, 2009, p. 43)

Principles of Scientific Management.

He stated that certain efforts change the management system in some cases, so that interests of
workers are converted into interests of management (13). In an experiment, shovelers efficiency
increased from 16to59tons per day, which reduced the number of yard workers from500to140. He
brought a revolution in the art of cutting metal and quickly doubled the speed of cutting metals. In
the late nineteenth century and early twentieth century, Taylor worked on increasing efficiency
using scientific methods, eliminating additional movements and transfers at workplace. He wanted
to train workers for better jobs, divide the tasks between management and workers and implement
scientific management style with respect to different practices and workers in action. In this
method, each group make their best-efforts introduced four principles of scientific management
theory to increase productivity. He also predicted that these principles are suitable for all kinds of
human activities, from an individual simple task to complex organizational activities .

Scientific Management focuses on worker and machine relationships. American engineer named
Frederick Winslow Taylor published The Principles of Scientific Management, singlehandedly
creating “Taylorism”, the first modern Management “ism”. Inspired by the rise of the Industrial
Age, Taylor encourages managers to think of their employees as specialized, replaceable
components. By studying work methods and directing people more precisely, bosses could “secure
the maximum prosperity for the employer, coupled with the maximum prosperity for each
employee.”. Despite all criticism of Taylor’s scientific Management, his techniques continue in
Management field in the form of new - Taylorian approaches to operations management.

Human Relations Movement and subsequent developments (1930 onwards)

Eventually, unions and government regulations reacted to the rather dehumanizing effects of these
management theories. More attention was given to individuals and their unique capabilities in the

organization. A major belief included that the organization would prosper if its workers prospered
as well. The behavioral sciences played a strong role in helping to understand the needs of workers

and how the needs of the organization and its workers could be better aligned. Various new theories
including Theory X and Theory Y, were spawned, many based on the behavioral sciences.

Contemporary Theories of Management

Contingency Theory

Contingency theory asserts that when managers make decisions, they must take into account all
aspects of the current situation and act on those aspects that are key to the situation at hand.
Basically, it’s the approach that “it depends”. For example, the continuing effort to identify the
best leadership or Management style might conclude that the best style depends on the situation.

Systems Theory

Systems theory has had a significant effect on Management science and understanding of

organizations. A system is defined as a collection of parts unified to accomplish an overall goal.

If one part of the system is removed, nature of the system is changed.

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