Henry Fayol’s Contribution to Management

Henri Fayol pioneered the concept of management as coordinated functions and a

comprehensive framework from which management could be studied and
developed.

As one of the oldest and most popular approaches to management thought; Henri
Fayol’s (29 July 1841–19 November 1925) theory holds that administration of all
organizations—whether “public or private”, or “large or small” requires the same
rational process or functions.

This school is based on two assumptions; first, although the objective of an

organization may differ; for example, business, government, education, or religion,
yet there is a core management process that remains the same for all institutions.

Successful managers, therefore, are interchangeable among organizations of

differing purposes.

Second, the Administrative management process can be reduced to a set of

separate functions and related principles.

It has rightly been said by some scholars that “perhaps the real father of modern
management theory is the French industrialist Henri Fayol.” 1916 he published
“Administration Industrielle et Generale”.

It was translated and republished in English in 1929 as “General and Industrial

Management”.

In 1949 His book was published in the USA and from then his ideas became
famous. In the world, his book left a permanent mark on management thinking.
A successful industrialist, Fayol headed a steel and coal combine in France.

He is by now considered the father of the Universal process of Operational

management or administrative management theory because he made universal
generalizations about management based on his keen insight and practical
management experience.

As opposed to Taylor, Fayol endeavors to deal with “classical administration.” He

focuses his attention on the enterprise as a whole rather than on a single segment of
it.

He pioneered the concept of viewing management as being made up of functions,

and his work supplied a comprehensive framework from which management could
be studied and developed.

He also repeatedly emphasized that his principles apply not only to business but
also to political, religious, philanthropic, military and other undertakings.

The early life and career of Henri Fayol

Henri Fayol was born in 1841 in Istanbul, Turkey, and later moved to France. He
graduated as a mining engineer and began his career at a mining company called
Commentry-Fourchambault. Over the years, Fayol climbed the corporate ladder,
eventually becoming the company’s managing director. His experiences and
observations as an executive formed the basis for his management principles,
which he believed could be applied universally across various industries.
Fayol’s classification of business functions:
According to Henry Fayol, all the activities of a business enterprise could be
divided into the following six groups:
(i) Technical activities (relating to production)
(ii) Commercial activities (relating to buying, selling or exchange).
(iii) Financial activities (relating to search for and optimum use of capital i.e.
finances)
(iv) Security activities (relating to protection of the properties and personnel of the
enterprise)
(v) Accounting activities (relating to a systematic recording of business
transactions, including statistics also).
(vi) Managerial activities
Fayol’s classification of managerial functions:
Henry Fayol classified managerial functions, as consisting of the following:
1. Planning
2. Organizing
3. Commanding
4. Coordinating
5. Controlling
(c) Qualities required in managers:
Fayol mentions the following qualities required in managers; to enable them to
become better and more efficient:
1. Physical
2. Mental
3. Moral
4. Education
5. Technical
6. Experience

Fayol’s 14 principles of management

Henri Fayol introduced 14 principles of management, which he believed were
essential for effective administration. These principles provided a framework for
managers to organize and direct their teams efficiently. Let’s break down each of
these principles:
1. Division of work
Specialization increases productivity: Fayol emphasized the importance of
dividing tasks among employees based on their skills and expertise. This
specialization helps workers become more efficient, leading to higher productivity
and better-quality output.
2. Authority and responsibility
Balancing power with accountability: According to Fayol, managers must have
the authority to give orders and make decisions. However, with this authority
comes responsibility. Managers should be held accountable for their actions and
the performance of their subordinates.
Certain observations, worth noting in this context are:
(a) Of the two terms, authority and responsibility, the former is primary and latter
is secondary or conditional. Responsibility is a corollary and natural outcome of
authority; and cannot exist independently.
(b) In order that excessive authority is not misused by the holder of it, and
responsibility could be fixed in an exact and fair manner; there must be maintained
a balance between authority and responsibility known as the principle of parity of
authority and responsibility.

3. Discipline
Maintaining order through rules and agreements: Discipline is crucial for the
smooth functioning of an organization. Fayol believed that employees should
follow established rules and agreements to maintain order and respect within the
workplace. This discipline fosters a positive work environment and helps achieve
organizational goals.
4. Unity of command
Clear reporting lines: Fayol’s principle of unity of command states that each
employee should report to only one manager. This clear chain of command
prevents confusion and ensures that employees receive consistent instructions,
leading to better coordination and efficiency.
The obvious reasons for the application of this principle are:
(a) Confusion on the part of a subordinate regarding whose orders he must obey is
done away with. If there is more than one superior dictating terms to a subordinate;
the latter would always be in a state of confusion.
(b) Fixation of responsibility in an exact manner on a subordinate by the superior
issuing orders and instructions is facilitated. A single superior issuing orders and
instructions to a subordinate can easily seek an explanation from the subordinate as
to why the work was not done properly by him; when proper authority and work
facilities had been provided to him for that purpose.

5. Unity of direction
Aligned efforts towards common goals: Fayol argued that all activities within an
organization should be aligned towards achieving common objectives. This unity
of direction ensures that everyone is working towards the same goals, fostering a
sense of purpose and collaboration.
6. Subordination of individual interests to the general interest
Prioritizing organizational goals: Fayol believed that the interests of the
organization should take precedence over individual interests. Employees should
prioritize the organization’s objectives and work towards them, even if it means
putting their personal goals on hold.
7. Remuneration
Fair compensation for work: Fayol emphasized the importance of fair
remuneration for employees. He believed that workers should be compensated
adequately for their efforts, as this would motivate them to perform better and
contribute to the organization’s success.
8. Centralization
Balancing decision-making power: Centralization refers to the extent to which
decision-making authority is concentrated at the top levels of management. Fayol
believed that a balance between centralization and decentralization is essential,
depending on the organization’s size and complexity. Too much centralization can
stifle creativity, while excessive decentralization can lead to a lack of coordination.
9. Scalar chain
Hierarchy and clear communication: Fayol’s scalar chain principle emphasizes
the importance of a clear hierarchical structure within an organization. This chain
of command ensures that communication flows smoothly from top to bottom,
preventing misunderstandings and fostering efficient decision-making.
Scalar chain might be defined as the chain of superiors (i.e. managers) with grades
of authority ranging from the highest to the lowest.
The following simple figure illustrates the above concept:

In the scalar chain, each upper link is a superior; each lower links a subordinate.
For example in the above figure, as between B and C, B is a superior and C his
subordinate; as between C and D, C is a superior and D his subordinate; and so on
for all other links in the scalar chain. The uppermost link of the scalar chain
represents the manager of the highest rank (i.e. H, in this figure); the lowest most
links represents the manager of the lowest rank (i.e. H, in this figure).
Significance of the scalar chain:
The principle of the scalar chain is significant for reasons for having systematic
and orderly communication from the highest managerial link to the lower links and
vice-versa; each communication passing through successive links of the scalar
chain. In the figure given above, if e.g., B has to communicate a message to F; it
will pass from B to C, from C to D, from D to E, and finally from E to F.
According to Fayol, the scalar chain must be strictly observed in the usual course
of the functioning of the enterprise; except in emergency situations, when its strict
observance might be detrimental to the interests of the organisation.
The Concept of ‘gang Plank’:
As a short-cut to scalar chain, and without violating it, Fayol suggests the concept
of ‘gang plank’ – in cases the scalar chain is represented by a double ladder.
The following figure illustrates the concept of gang-plank:

In the above figure, here a gang plank is represented by the dotted line, which links
G to N, in a direct manner. A gang plank allows two managers at the same level in
the organisation to deal directly with each other without, of course, violating the
scalar chain.
It allows speedy decisions and saves much of time and inconvenience involved
were the scalar chain followed strictly. For example, in the above figure, if instead
of dealing with each other through the gang plank G and N follow the scalar chain;
the communication from G will fist climb up to A via F, E, D, C, and B and next it
will climb down to N from A vial I, J, K, L and M.

10. Order
Organized resources for efficiency: Fayol believed that order is essential for the
efficient functioning of an organization. This principle involves organizing both
material and human resources in a systematic manner to ensure that everything is
in its proper place. A well-ordered workplace minimizes waste, reduces confusion,
and enhances productivity.
The principle of ‘order’ implies a systematic arrangement of things and personnel.
Accordingly, order is classified by Fayol into two types of orders viz.,
(a) Material order (or physical order)
(b) Social order (or human order)
Material order is described as ‘a place for everything and everything in its place’.
Social order, in a similar tone, might be described as a place for everyone and
everyone is his/ her place’.
11. Equity
Fair treatment for all employees: Fayol emphasized the importance of fairness
and justice in the workplace. Managers should treat employees with respect and
impartiality, fostering a positive work environment. When employees feel valued
and fairly treated, they are more likely to be motivated and committed to their
work.
The principle of equity could thus, be described as follows:
Loyalty and devotion must be elicited (extracted) from the personnel through a
combination of kindliness and justice, on the part of managers, while dealing with
their subordinates.

12. Stability of tenure

Employee retention for organizational success: Fayol believed that retaining
experienced employees is crucial for an organization’s success. High employee
turnover can lead to disruptions and inefficiencies. By providing job security and
opportunities for growth, organizations can retain talented employees and maintain
stability.
In the interest of the efficiency of organisation and management, it is imperative
that personnel must stay in the organisation for as longer a period as possible. This
might be called the principle of the stability of tenure. A minimum rate of labour
turnover (movement of people into and out of an enterprise) is inevitable, for
reasons to retirement, death and other permanent incapacities of personnel and also
for reasons of coping with the requirements of growth and expansion of the
enterprise. However, unnecessary labour turnover must be avoided at all costs; as it
are both a cause and an effect of bad management.
13. Initiative
Encouraging innovation and creativity: Fayol encouraged managers to promote
initiative among employees. By giving workers the freedom to propose ideas and
take ownership of projects, organizations can foster a culture of innovation and
continuous improvement.
14. Esprit de corps
Building team spirit and unity: Fayol emphasized the importance of camaraderie
and team spirit within the workplace. Managers should strive to create a sense of
unity and cooperation among employees, as this fosters a positive work
environment and enhances overall productivity.
Conclusion
Henri Fayol’s contributions to the field of management have had a profound and
lasting impact on how organizations operate. His 14 principles of management
provide a comprehensive framework for managers to organize and direct their
teams effectively. By understanding and applying these principles, businesses can
create a positive work environment, foster innovation, and achieve long-term
success.