HIMACHAL PRADESH NATIONAL LAW UNIVERSITY,

SHIMLA
Management Theory Semester 1 Assignment

Submitted To: - Dr. Praveen Kumar

Assistant Professor of law
Himachal Pradesh National Law University, Shimla.
Submitted By: - Aditi Goel
Enrollment Number – 1120220010
Course – BBA.LLB(Hons.)

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 TABLE OF CONTENTS
S.NO Content Page No.
1 Acknowledgment 3
2 Introduction 4
3 About the Book 5
4 Parts of book 6
5 Contribution 13
6 Importance 14
7 Appraisal 15
8 Bibliography 16

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 Acknowledgment
I would like to express my special thanks of gratitude to my Himachal Pradesh
National Law University, Shimla, Faculty Dr. Praveen Kumar, Assistant
Professor of law at HPNLU, for providing me this opportunity to work on this
project on the topic “Appraisal of Administration Industrielle et generalle”
and also for providing the requisite guidance on researching about the topic,
which has led me to gain in-depth knowledge and has given me a chance to
work on my research skills.
I would also like to thank my university and our librarian Mr. Arun Kumar for
providing remote access tools for facilitating research work virtually. Without
their help and facilitation, the completion of this project would not have been
possible. Also, this project has helped me understand the differences between
tort and wrongs.
Lastly, I would like to thank everyone whose encouragement and ideas have
helped me structure my project and take it to the final stage.

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Henry Fayol (1841-1925)

Henry Fayol was born in France in 1841. He earned a mining engineering degree in 1860 and
started working in a coal mine company. In 1888, he was promoted to Managing Director of
the company. At that time, the company was in a situation of insolvency. He accepted the
challenge and applied all his managerial techniques to bring out the company from the
position, and he succeeded. During his time as a top manager, he steered the company
through several crises and successfully oversaw development which brought the company
into the modern age. When he retired after 30 years, in 1916, the company was a leading
coal-steel company with strong financial background.
After retiring, Fayol took up the directorship of the Centre of Administrative Studies (CAS) in
Paris, a venue for debates on management and administration within both the private and
public sectors. Fayol also became a key figure in international management research. Fayol
published numerous articles and books on management and administration throughout his
career. One of the influential books was “Administration Industrielle et Generale.”
Henry Fayol became famous as the “Father of Management Studies and thoughts” because
of his following contributions:
1) He made a clear distinction between technical and managerial skills
2) He identified the main steps in the management process, which are considered the
significant functions of management- Planning, Organizing, Staffing, Directing, and
controlling.
3) He developed 14 principles of management that act as guidelines for managers to
perform managerial activities.
Fayol looked at management’s problems from the top management’s point of view. His
contribution to the theory of management has been revolutionary and constructive.

About the book

Administration Industrielle et Generale is a French Book written by Henry Fayol in 1916. The
text appeared in a professional journal in 1916 and was published as a book the following
year, in 1917. The text was translated into English for the first time in 1930 with the title
General and industrial administration, while the most famous version was published in 1949
with the title General and Industrial Management (Fayol, 1949). This edition became one of
the most quoted contributions to modern management theory. Because of this text, Fayol is
widely acknowledged as a founder of modern management. This book is divided into two

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parts PART 1: Necessity and possibility of teaching management and PART 2: Principles and
elements.

PART 1: Necessity and possibility of teaching

management

The first part advocates the possibility and necessity of teaching management. Fayol firmly
believed that management concepts are a part of everyday life and should be included in the
curriculum of higher education and primary schools.
Industrial Activities
Fayol divided the industrial activities into six groups: -
1) Technical – These activities involve production, manufacture, and adaptation.
2) Commercial – These include buying, selling, and exchange
3) Financial – The work involves the search for capital and its optimum utilization
4) Security – This work implies measures taken for the protection of property and human
beings
5) Accounting -These include balance sheets, costs, statistics
6) Managerial – It includes planning, organizing, staffing, directing, and controlling
All of the above activities are necessary for the successful operation of an enterprise, and
no one can be ignored or neglected. Though Fayol recognized the importance of the first
five activities, which are technical, commercial, financial, security, and accounting, the
main subject of his study and analysis has been management.

Based on the division of the industrial activities, Fayol

summarizes the task of management as follows: -

“… to forecast and plan, to organize, to command, to co-ordinate and to control.

To foresee and provide means examining the future and drawing up the plan of action.
To organize means building up the dual structure, material, and human, of the undertaking.
To command means maintaining activity among the personnel
To co-ordinate means binding together, unifying, and harmonizing all activity and effort.
To control means seeing that everything occurs in conformity with established rule and
expressed command.”

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Using this definition Fayol divides management into five functions: -

1) Planning
It is related to determining the organization’s future actions that will lead to attaining the
objectives by optimum utilization of the resources.
"The plan of action facilitates the utilization of the firm's resources and the choice of best
methods to use for attaining the objective."
It is based on the existing resources of the firm, the firm’s surroundings, the external
environment to which it is subject, and future needs and demands Etc. Most of these
conditions are subject to continuous change, so planning supposes that the manager can
analyze current events and evaluate future trends.
The maxim, “managing means looking ahead,’’ gives some idea of the importance of planning
in the business world.
As a managerial function, planning is essential in all firms and at all levels. But it differs in the
scope of applicability as per the change in the situations.

2) Organizing
Organizing is a matter of procuring the primary preconditions for the work regarding
materials, knowledge, financial resources, and human resources. Organizing the work is
carried out by ensuring careful preparation of the plan, making sure that the human and
material resources align with the requirement, harmonizing the activities, coordinating the
efforts, clearly defining the duties, seeing to the maintenance of discipline, deciding the fair
and suitable salary and wages for services rendered.
Organizing a business is to provide it with valuable everything to its functioning: raw
materials, tools, capital, and personnel. All this may be divided into two main sections,
material organization, and human organization. The latter only is to be dealt with here. When
equipped with the essential material resources, the corporate personnel or body should be
'capable of fulfilling the six essential functions, viz. of carrying all the activities embraced by
the concern.

3) Command
The organization, having been formed, must be set going; this is the command’s mission. This
mission is spread over the different heads of concern, each in charge of and responsible for
his particular unit. For every manager, the object of command is to get the optimum return
from all unit employees in the interest of the whole concern. The art of command rests on
certain personal qualities and knowledge of general ^ principles of management. It shows up
in small, as in large, concerns and, like all other arts, has its degrees of proficiency. This
extensive unit functions appropriately gives its maximum return and inspires public
admiration. In every sphere, industrial, military, political, or other, command of a large unit
calls for exceptional qualities.

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 4) Co-ordination
Coordination, according to Fayol, is the task of harmonizing all the organization's activities
in such a way that working procedures are made easier while pointing toward the
organization's goals. A well-coordinated organization is characterized by the following:
Each department works in harmony with the others.
In each department, divisions and sub-divisions are precisely informed about their share
of the communal task and the mutual aid they can afford.
The working schedule of the various departments and sub-divisions thereof are constantly
attuned to circumstances.
Coordination, in other words, is about adjusting activities to the surroundings, the
different parts of the organization, and external relations. While organizing the work is
inward-looking, coordination Fayol revolves around the organization's surrounding world.

5) Control
In an undertaking, control verifies whether everything complies with the plan adopted, the
instructions issued, and the established principles. It has the object of pointing out
weaknesses and errors in order to rectify them and prevent a recurrence. It operates on
everything, things, people, and actions. From the management standpoint, it must be ensured
that a plan does exist, that it is put into operation and kept up to date, that the human
organization is complete, the summarized personnel charts are in use, and that command is
exercised in line with principles, that co-ordinating conferences are held, etc., etc.
From the commercial standpoint, it must be ensured that the incoming and outgoing
materials are checked for quantity, quality, and price and that store records are appropriately
kept and promises honored.

PART 2: - Principles and elements of management

The second, and more familiar section of the book, synthesizes the principles of management
that Fayol had most frequently applied during his more than 50 years of managerial
experience. Here, the familiar 14 principles of management are detailed, and the renowned
five elements of management-planning, organizing, command, coordination, and control are
elaborated. The 14 principles are explained as follows: -
1) Division of labour
The object of the division of work is to produce more and better work with the same
effort. The worker is always on the same part, and the manager is concerned always with
the same matters, acquiring an ability, sureness, and accuracy which increase their
output. Each change of work brings in its train an adaptation that reduces output. Division

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of work permits a reduction in the number of objects to which attention and effort must
be directed and has been recognized as the best means of making use of individuals and
groups of people. It is not merely applicable to technical work but, without exception, to
all work involving a more or less considerable number of people and demanding abilities
of various types. It results in the specialization of functions and separation of powers.
Although its advantages are universally recognized and although the possibility of
progress is inconceivable without the specialized work of learned men and artists, the
division of work has its limits which experience and a sense of proportion teach us may
not be exceeded.
Advantages:
 When the work is divided according to the qualifications, it automatically leads to
specialization.
 When an employee performs only one part of the job, he becomes an expert,
resulting in less wastage.
Consequences of Not Applying
 Chances of duplication of work
 Lack of efficiency
 No specialization.
2) Authority and Responsibility
Authority is the right to give orders and the power to exact obedience. Responsibility is a
corollary of authority; wheresoever authority is exercised, responsibility arises.
3) Discipline
Discipline is, in essence, obedience, application, energy, behavior, and outward marks of
respect observed in accordance with the standing agreements between the firm and its
employees,
Discipline, being the outcome of different varying agreements, naturally appears under
the most diverse forms; obligations of obedience, application, energy, and behavior vary,
in effect, from one firm to another, from one group of employees to another, from one
time to another.
Therefore, discipline is essential for the business's smooth running, and without discipline,
no enterprise could prosper.
 Good superiors at all levels.
 Agreements as clear and fair as possible.
 Sanctions (penalties) judiciously applied

4) Unity of command

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 An employee should receive an order from one superior only for any action whatsoever.
As soon as two superiors wield their authority over the same person or department,
uneasiness makes itself felt, and should the cause persist, the disorder increases, the
following consequences are to be observed: either the dual command ends in the
disappearance or elimination of one of the superiors and organic well- being is restored,
or else the organism continues to wither away.
5) Unity of Direction
This principle is expressed as one head and one plan for a group of activities having the
same objective. It is the condition essential to the unity of action, coordination of
strength, and focusing of effort.
Unity of direction (one head, one plan) must be distinct from the unity of command (one
employee to have orders from one superior only). Unity of direction is provided by the
sound organization of the corporate body, and unity of command turns on the functioning
of the personnel. Unity of command cannot exist without unity of direction but does not
flow from it.

6) Subordination of individual interest to general interest

This principle calls to mind the fact that in a business, the interest of one employee or
group of employees should not prevail over that of the concern, that the interest of the
home should come before that of its members and that the interest of the State should
have pride of place over that of one citizen or group of citizens.
7) Remuneration of personnel
remuneration of personnel is the price of services rendered. It should be fair and, as far
as possible, afford satisfaction both to personnel and the firm (employee and employer). The
rate of remuneration depends, firstly, on circumstances independent^ of the employer’s will
and employee’s worth, viz. cost of living, f abundance or shortage of personnel, general
business conditions, 1 the economic position of the business, and after that, it depends ' on
the value of the employee and mode of payment adopted.
What is generally looked for in the method of payment is that —
 It shall assure fair remuneration.
 It shall encourage keenness by rewarding well-directed effort.
 It shall not lead to overpayment going beyond reasonable limits.
The various modes of payment in use for workers are — Time rates, Job rates, and Piece rates.
8) Centralization
Centralization is not a system of management, good or bad in itself, capable of being
adopted or discarded at the whim of managers or of circumstances; t it is always present
to a greater or less extent. The question of centralization or decentralization is a simple

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 question of proportion; it is a matter of finding the optimum degree for the particular
concern. In small firms, where the manager’s orders go directly to subordinates, absolute
centralization exists, but not in large concerns.
The degree of centralization must vary according to different cases. The objective pursued
is the optimum utilization of all faculties of the personnel.

9) Scalar Chain
The scalar chain is the chain of superiors ranging from the ultimate authority to the lowest
ranks. The line of authority is the route followed — via every link in the chain — by all
communications which start from or go to the ultimate authority. The need for some
transmission and the principle of unity of command dictates this path.

Let us suppose F has to contact P by following the rule of scalar chain; the information has
to travel from F following E, D, C, B, A, L, M, N, O, P. This is a time-consuming process over
which the information loses its significance, and the organization may bear the losses. This
is most commonly applied in government offices.
The gangplank acts as a bridge in emergencies so that important information can be
directly communicated from F to P.
10) Order
This principle is used in the case of material things. It is based on “A place for everything
and everything in its place.” To maintain the material order, each item must have an
appointed place and be in its allotted place. The purpose is to avoid loss of material and
facilitate all the activities to be done.

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Sometimes the appearance of the order may cover the real disorder. For Instance, if many
papers are scattered on the master’s desk, and an uneducated worker comes, re-arrange
them and stack them up in piles.
Similar is the case with Humans. “A place for everyone and everyone in its place.” And there
must be the right man in the right place. It requires precise knowledge of human
requirements and existing resources. As the essential posts are created and those who will fill
them are selected, each employee will be positioned to render the best of their services.

11) Equity
The principle of Equity refers to the kind, fair and just treatment of employees. Employees
will only put in their maximum efforts when they are treated with kindness and justice. If
a manager is biased in dealing with employees, employees will get dissatisfied and will not
contribute to their maximum capacity. Equity does not mean equal salary to a peon and
supervisor. Still, equity means the application of the same disciplinary rules and leave
rules in the same way irrespective of grade, position, and gender.
It means no discrimination on account of sex, religion, language, caste, belief, or
nationality.
12) Stability of tenure of personnel
It refers to no frequent termination and transfer. According to this principle, the
management must provide the feeling of job security among the employees because with
the feeling of insecurity for the job; the employees cannot contribute their maximum.
Frequent turnover of employees is bad for organizations, and such decisions must be
taken when they are almost unavoidable.
Not only turnover but frequent transfer or rotation should also be avoided because it
takes time for a person to learn and settle on a job. By the time he gets settled and
receives the transfer order, it will be a waste of resources, and the employee will not be
able to contribute his best to the organization.
13) Initiative
Thinking out a plan and ensuring its success is one of the keenest satisfactions for an
intelligent man to experience. It is also one of the most powerful stimulants of human
endeavour. This power of thinking out and executing is called initiative, and the freedom
to propose and execute belongs to, each in its way, the initiative. At all levels of the
organizational ladder, zeal and energy on the part of employees are augmented by
initiative. It is an excellent source of strength for the business. Therefore, it is essential to
encourage and develop this capacity for most.
For example, before setting up of the plan, the manager must welcome the suggestions
and ideas of employees to allow their maximum participation. But once the plan is made,
every employee must follow it and implement it.

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 14) Esprit de corps
"Union is strength." Business heads would do well to ponder this proverb. Harmony, the
union among the personnel of a concern, is great strength in that concern. Efforts, then,
should be made to establish it.
Management must encourage and promote team spirit, unity, and harmony. This will
bring coordination and cooperation to the organization. A manager should replace "We"
This will give rise to mutual trust, and belongingness among team members will minimize
the need for using penalties.

Contribution of book

This book is based on the ideas of modern society, and Henry Fayol owns successful
experience from his long and successful working life. This book is a presentation of the
author’s recommendations and thoughts.
This book became a classical contribution because it was one of the first to present a
systematic approach to management. Fayol's division of management into five functional
tasks and his 14 principles constitute a kind of theoretical framework for examining and
understanding modern management. It is an approach used by management researchers
Fayol's central position in modern management literature because of those researchers' use
of this book.

Henry Fayol’s importance to management theory

The historical significance of Administration Industrielle et Generalle is beyond dispute. Much

earlier, like Peter F Drucker and more recent management theoreticians like Mintzberg,
highlight this contribution by Henri Fayol as a cornerstone of modern managerial theory. It
can be either because those authors use Fayol's functional tasks and 14 principles to develop
a new managerial theory, or it can be a respectful celebration of Administration Industrielle
et Générale as one of the first written contributions to modern management theory.
The contribution of Henri Fayol is well known to even the beginning student of management.
Most principles of management textbooks ac- knowledge Fayol as the father of the first
theory of administration and his 14 principles as providing the framework for the process
school of thought. While lauding Fayol's contributions, the text's authors typically present this
material.
Academics and practitioners alike are still finding a number of Fayol's tenets worthy of
investigation and use. His attempt to specify how the nature of managerial work varies across

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hierarchical levels of the organization has been pursued, the fruits of which still are being
taught in the most beginning.
On reading the English translation of the book, it convinces me that it not only has historical
context but there is also a surprising timeliness to much of the material.
Similarly, his efforts to specify the essential traits or abilities of top managers also have been
pursued on and off since the original publication of his theory in 1916.
His sensitivity to the influence of organization size on the structure and managerial activities
is mirrored in a substantial and still-growing body of research.
Perhaps most unexpected was the emphasis he placed on planning. Not only did he
differentiate the time frames of forecasts which make up the general plan (ten-yearly, yearly,
monthly, weekly), but he also advocated a participative process saying that inputs and
modifications should involve departmental and regional management before the board
approves them of directors. The plan also was intended to act as an evaluative tool with
experience finally determining its actual value. The foundation for current thinking on long-
range planning is clearly found in Fayol's comments.
In a few instances, the text proved difficult to read. As a whole, however, the simplicity of the
writing style was refreshing. Fayol defined his terms as he introduced them, providing
elaborate illustrations and tabulations for clarity. His preciseness surely would delight journal
editors who have recently called for well-phrased and accessible arguments.
Students of management thought researchers and practitioners alike must be gratified by the
continuing efforts to discover and publish information about Fayol.

Criticism

Fayol repeatedly argued that his framework was appropriate for all kinds of industrial
concerns and, with only slight modifications, to commercial, political, financial, religious, and
military forms as well. Today, few would argue that all organizations, or even parts therein,
can be effectively managed "traditionally," particularly those organizations with
professionals, volunteers, or autonomous work groups.
His functional concepts are often emphasized to the exclusion of his interest in the human
element. Luther Gul- ick (1950, p. 48), in a review of the 1949 edition, noted that Fayol's
comments on "equity, initiative, esprit de corps, the working team, the organization as a social
fact, and the nature of 'principles' in administrative theory and education," reflect much of
the doctrine of the sociological and ps

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 BIBLIOGRAPHY
1) Voxted, S. (2017). 100 years of Henri Fayol. Management Revue, 28(2), 256–274.
http://www.jstor.org/stable/26381589
2) Carter, N. M. (1986). [Review of General and Industrial Management, by H. Fayol]. The
Academy of Management Review, 11(2), 454–456. https://doi.org/10.2307/258475
3) Fayol, H. (1949). General and industrial management. London: Sir Isaac Pitman & Sons, Ltd

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ychological schools of thought.

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