Henri Fayol

• Istanbul, 29 July 1841–Paris, 19 November

1925)

• He was a French mining engineer and director of mines

• He developed a general theory of business administration known as “Fayolism”.

• Director of "Compagnie de Commentry-Fourchambeau-Decazeville" in Commentry in 1888

Administrative Principleby Henri Fayol

This theory dealt with the entire organization (both workers and management) which functioned with four basic principles. Which are:

• Unity of command – Each person receives order from only one superior.

• Division of work – Specialization and efficiency were incorporated in workers.

• Unity of direction – Related activities were grouped under one manager.

• Scalar Chain – is the organizational structure which starts from the CEO’s to the labourers.

HENRI FAYOL’S Administrative Management

• He described management as a universal set of functions that included Planning, Organizing, Commanding, Coordinating and Controlling.

• He described the practice of management as something distinct from accounting, finance, production, distribution and other typical business functions.

• He argued that management was an activity common to all endeavours in business, government and even in the home.

HENRI FAYOL’S Administrative Management

Fayol separated “General Principles of Management” from “elements of Management.”

Elements of Management later on regarded as functions of management. He described management as a universal set of 6 functions :

1.Forecasting

2. Planning

3. Organizing

4. Commanding

5. Coordinating

6. Controlling

• Many of today’s management texts including have reduced the six functions to 5:

(1) Planning

(2) Organizing

(3) Command

(4) Leading

(5) Controlling

• He noted if firms have too much specialization then it leads to poor quality and worker involvement.

• Distinguished management activities from technical activities.

• Stressed the need for management education.

• Found that there a lack of management theory.

• Presented 14 Key principles of Mgmt as:

14 principle of Fayol are:1. Division of work (allows for job specialization)2. Authority & Responsibility (interrelated, Two types of authority are

official and personal authority. Official authority is derived from manager’s position and personal authority is derived from personal qualities such as intelligence, experience, moral worth etc. Responsibility arises due to the assignment of work.)

3. Unity of command (Employee should have one commanding authority and employee should be reporting to a single superior)

4. Discipline (Need of obedient, application, energy, behavior, respectful employees)

5. Unity of direction (Different group of Employees with the same objectives should work in one direction and should have a communication and reporting to a single authority)

6. Subordination of individual interest to the general interest(Setting an example of fairness and goodness is must, which can discourage individual ambitiion, laziness, weakness)

7. Remuneration (Fair and satisfactory scale of remuneration)

8. Centralization (. Consolidation of management functions. Decisions are made from top.)

9. Line of Authority (a clear chain from top to bottom of the organization)

10. Order (A place for everything and everything should be in place (material order), right man at the right place (social order), demands precise knowledge of requirements and resources and relation between them.)

11. Equity (combination of justice and kindness, brings loyalty, needs good sense, experience and good nature)

12. Stability of tenure of personnel (giving enough time for stability- the theory Z principle)

13. Initiative (thinking and execution of a plan. Increases zeal and energy, but should be within the limits of authority and discipline)

14. Esprit de corps (Union is strength and is an extension of unity of command, setting right the erring employee with oral directions and not with written explanation)

Notable publication

• General and Industrial Management, 1916 (in French); Sir Isaac Pitman,London, 1949 (in English)