HENRY FAYOL AND GENERAL MANAGEMENT THEORY

Size: px

Start display at page:

Download "HENRY FAYOL AND GENERAL MANAGEMENT THEORY"

June Hensley
5 years ago
Views:

1 2012 HENRY FAYOL AND GENERAL MANAGEMENT THEORY

2 TABLE OF CONTENTS Introduction... 3 Fayol s Management Theories... 3 Division of Work... 3 Authority and Responsibility... 4 Discipline... 4 Unity of Command... 5 Unity of Direction... 5 Subordination of individual interest to general interest... 6 Remuneration of Personnel... 6 Conclusion... 7 References... 7

3 INTRODUCTION Henry Fayol was one of the greatest management theorists who has give a different perspective to the way management theories were looked at. He came out with many theories and general management observations in his first book General and Industrial management written in the year Some of the basic concepts like having a single manager and thus uniformity in command were proposed by Fayol. One of the most appealing things that made him popular amongst others was that he used analogies that were in direct connection with those with the daily lives. In this assignment I would look at exploring various concepts that Fayol has introduced to the public and the impact that it has on our daily lives and modern day organizations especially given the drastic changes that has happened to the business landscape. There are several theories that he proposed years ago and at the same time has relevance even today in this sharply competitive environment. In this report we would be looking at various theories, their pros and cons and ho they have been impacting the current business environment. FAYOL S MANAGEMENT THEORIES DIVISION OF WORK According to Fayol, Work in any organization should be divided into various departments and this has a clear logic to it.. It is clear that no one can be an expert in all the fields and at the same time by dividing the work the quality of work improves and the productivity of the employees also improves (Breeze, 1988). This theory has formed as the basic foundation wherein we have seen improvements in productivity levels of various employees and at the same time there are dedicated departments as a part of this division of work theory and we see that there are far better improvements that are happening at a micro level that has improved the business processes. One of the major disadvantage in this case is that extremity in division of work can lead to people doing redundant work and at the same time too much of cost involved (Pope, 1988). This can also lead to the repetition of work and people getting bored of the work and hence leading to job dissatisfaction. But overall even though this theory has been existing long before, it has been put to use by almost all the companies and they have reaped dividends because of the same. This has

4 resulted in companies focusing more on the improvements at a micro level and department level and this has actually come up with some drastic changes in the way in which the business has been done. AUTHORITY AND RESPONSIBILITY Authority and the way in which an organization is managed play an important role the way in which the business is being done. Fayol was of the opinion that there should authority that should be give to the right set of people so that they are able to make strategic decisions o the behalf of the team (Mowll, 1989). It is virtually impossible for any team to work without somehow is in control of the situation. But Fayol also makes sure that the power that these select set of people have should make use of the same in a responsible manner. One of the advantages that such a system can have is that this would result in the whole team having a better control on the proceedings and the whole team being driven by a single goal (Pogue, 1990). This also brings in a certain sense of responsibility on the part of the employees and thus making sure they take ownership of the work. One of the things that the top management has to make sure is that those who are given the power should be using it in a proper manner. Some disadvantages of the same is that in some cases the supervisors take undue advantage of the powers that are being given to them and as a result of it peoples talents go unnoticed. Thus if those who are give the authority are not using it a proper manner then it can result in employee dissatisfied with the treatment that are being offered and hence can result in employee attrition. DISCIPLINE Discipline according to Fayol was one of the most important things that can make sure that the business is sustainable in the long run. This according to him was the single most important thing that can make or break a business (Bakewell, 1989). He has made it clear that discipline is not something that the company can force upon its employees and at the same time it should arise from the respect that they have for their superiors. In most of the cases we have seen that discipline is something that has been put in bad light and this is mainly because of the attitude of the supervisors. Discipline in terms of operations also is very essential in those organizations having complex procedures, so that the rates of the errors can be minimized. Fayol was more in

5 favor of having a behavioral approach as compared to that of others who was of the opinion that it requires some amount of negative reinforcement (Earnest, 1990). He has focused more o the human interactions that can only make the disciple in an organization possible. This according to him can help them in improving the work conditions and at the same time the employees would be more prone to fall in line rather than going against it. One of the best ways is to have a broad framework and then allowing the employees to make their decisions which are what is seen in today s organizations. This gives them a sense of self respect being give I the organization and at the same time they are more likely to come up with inputs to improve the system. UNITY OF COMMAND This was one of the things that he emphasized in general management that there should be a single command so that the employees are not being confused or they have a single goal that would simplify their targets much better (Breeze, 1981). According to Fayol the basic design in any organization should be such that there should be single channel of command even though in some cases it can happen coincidentally. This can help the organization in organ sating the workflow of the employees in such a way that it is beneficial to the organization and there is no redundancy of work that is involved and hence the organization can save on the costs that are involved in the same (Parker, 1978). There are certain companies which believe in a flat structure and which has worked for them and even in such cases they cannot neglect Fayol's theory as in the command or the order has to come from a single person alone. Otherwise there are chances of conflict of decisions that can affect the organization badly. Y One of the things that the management has to make sure is that they have to make sure that the one that is given the power to command is worthy of the same and at the same time he is guided by a set of guidelines so that he is not making unnecessary use of that power. UNITY OF DIRECTION According to Fayol, any business to be successful needs its employees to work together in a single direction and this is in correlation with the unity of command principle that he had proposed. There has been several instances in the modern industry where in various departments have been motivated to do different things that can bring glory to their respective departments

6 and in effect forget the organizational goals (Willmott, 1981). By having a unity of direction different parts of the organization would actually work together and the effort that they have to put in order to make sure that the costs would be reduced. This is very essential in the dynamic environment in which we are in mainly because of the organization as a whole doesn t have a unity of direction then it is easy for the competitors to sideline them. This will also give a food for thought for the top management so that they would be clear about where they have to take the organization and how to go about it rather than being reactive to the moves of the competitors. Thus they can anticipate the changes that happening in the market rather than being reactive about the same. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST According to Fayol, the organization has to develop a culture that can help them in reconciling the personal interests in favor of the team goals and this is possible only if we can make sure that the team works for a common goal and they can make sure that they can keep their personal differences aside (Nord, 1978). This is possible only if they can have a strong leadership at the top that can make sure that there is perfect harmony within the team and as a result of the same they can keep the differences aside and work for the common goal. But according to Fayol the company has to makes sure that the employee benefits are kept in mind and there is sufficient room for improvement in terms of their careers so that they give that extra bit for the company and keep their personal interests aside when it comes to company affairs (Gomberg, 1985). He also mentioned that there needs to be a constant supervision that has to make sure that there are no big changes that are happening and everyone is abiding by the rules and regulations that are being set. This theory also has not lost validity in the modern times when we see that the importance of the human capital has increased and it is more important for the companies to make them realize that they have the collective interest before the personal interest. REMUNERATION OF PERSONNEL This is one of the theories that he proposed years ago and still has relevance in this day. He proposed that the remuneration that the employees should get should motivate them to give in

7 their best effort for the company and the company may use any one of the techniques like the time rate, piece rate. He was also of the view that the knowledge workers should be treated differently from that of others and they should be motivated with monetary rewards like bonuses and stock options (Winkle, 1992). Profit sharing was one of the concepts that he has proposed for people in the top management that can help the company in making sure that these leaders would take wise and informed decisions that would be beneficial for the company as a whole. Remuneration can play a vital role in deciding the motivational levels of the employees and also decides the levels of satisfaction and hence the retention of employees (Abrahamson, 1996). CONCLUSION Most of the theories that Henry Fayol has proposed years back are relevant even in today s times and even though some might not look relevant today, they are being practiced with some modifications to match the needs of the markets. These are some of the things that most of the managers ignore in today s market thinking that they don t have a vital role to play in the current business environment. But business is always a simple game played on simple rules. And that is where the importance of Fayol s concept comes in. these are some simple things that are often neglected but can have a huge impact in the way in which the business is being done. Relevance of these theories cannot be thus avoided even in this era of business where the business landscape is changing at a rapid pace. REFERENCES Wankel, C Management Education in Poland. Review of Business (Spring): Willmott, H. C Images and ideals of managerial work: A critical examination of conceptual and empirical accounts. Journal of Management Studies (July): 349. Earnest, E. R Toward a revival of the principles of management. Industrial Management (January/February): Pogue, G Control and the management function. Management Accounting. UK (October):

8 Pope, W. C Management practices in the analysis of flawed social systems (Part One). Occupational Hazards (April): Breeze, J. D Henri Fayol's basic tools of administration. Proceedings of the 41st Annual Meeting of the Academy of Management: 101 Gomberg, W The historical roots of the democratic challenge to authoritarian management. Human Resource Management (Fall): Parker, L. D The classical model of control in the accounting literature. The Accounting Historians Journal 13(1): Mowll, C. A Successful management based on key principles. Healthcare Financial Management (June): Bakewell, K. G. B The relevance of management principles and techniques to the smaller information unit. Library Management 10(6):15-23 Abrahamson, E Management fashion. Academy of Management Review (21): Boeker, W The development and institutionalization of subunit power in organizations. Administrative Science Quarterly 34(3): Nord, W Theory Y assumptions in a non - theory Y world. Interfaces (February):

The Nature of Organizational Theory. (Management Theory)

The Nature of Organizational Theory (Management Theory) An organization is a collection of people working together under a division of labor and a hierarchy of authority to achieve a common goal. Continuously