Henri Fayol (born 1841 in Istanbul; died 1925 in Paris) was a French management theorist. Henri Fayol was one of the most influential contributors to modern concepts of management, having proposed that there are five primary functions of management:
4. Coordinating, and
5. Controlling (Fayol, 1949, 1987).
Controlling is described in the sense that a manager must receive feedback on a process in order to make necessary adjustments. Fayol’s work has stood the test of time and has been shown to be relevant and appropriate to contemporary management. Many of today’s management texts including Daft (2005) have reduced the five functions to four: (1) planning, (2) organizing, (3) leading, and (4) controlling. Daft’s text is organized around Fayol’s four functions.
Fayol believed management theories could be developed, then taught. His theories were published in a monograph titled General and Industrial Management (1916). This is an extraordinary little book that offers the first theory of general management and statement of management principles.
Fayol suggested that it is important to have unity of command: a concept that suggests there should be only one supervisor for each person in an organization. Like Socrates, Fayol suggested that management is a universal human activity that applies equally well to the family as it does to the corporation.
Fayol has been described as the father of modern operational management theory (George, p. 146). Although his ideas have become a universal part of the modern management concepts, some writers continue to associate him with Frederick Winslow Taylor. Taylor’s scientific management deals with the efficient organisation of production in the context of a competitive enterprise that has to control its production costs. That was only one of the many areas that Fayol addressed. Perhaps the connection with Taylor is more one of time, than of perspective. According to Claude George (1968), a primary difference between Fayol and Taylor was that Taylor viewed management processes from the bottom up, while Fayol viewed it from the top down. George’s comment may have originated from Fayol himself. In the classic General and Industrial Management Fayol wrote that “Taylor’s approach differs from the one we have outlined in that he examines the firm from the “bottom up.” He starts with the most elemental units of activity — the workers’ actions — then studies the effects of their actions on productivity, devises new methods for making them more efficient, and applies what he learns at lower levels to the hierarchy…(Fayol, 1987, p. 43).” He suggests that Taylor has staff analysts and advisors working with individuals at lower levels of the organization to identify the ways to improve efficiency. According to Fayol, the approach results in a “negation of the principle of unity of command (p. 44).” Fayol criticized Taylor’s functional management in this way. The most marked outward characteristics of functional management lies in the fact that each workman, instead of coming in direct contact with the management at one point only, receives his daily orders and help from eight different bosses(Fayol, 1949, p. 68.) Those eight, Fayol said, were (1) route clerks, (2) instruction card men, (3) cost and time clerks, (4) gang bosses, (5) speed bosses, (6) inspectors, (7) repair bosses, and the (8) shop disciplinarian (p. 68). This, he said, was an unworkable situation, and that Taylor must have somehow reconciled the dichotomy in some way not described in Taylor’s works.
Fayol graduated from the mining academy of St. Etienne (Ecole des Mines de Saint-Etienne) in 1860. The nineteen-year old engineer started at the mining company Compagnie de Commentry-Fourchambeau-Decazeville, ultimately acting as its managing director from 1888 to 1918. Based largely on his own management experience, Fayol developed his concept of administration. The 14 principles of management were discussed in detail in his book published in 1917, Administration industrielle et gerale. It was first published in English as General and Industrial Management in 1949 and is widely considered a foundational work in classical management theory. In 1987 Irwin Gray edited and published a revised version of Fayol’s classic that was intended to free the reader from the difficulties of sifting through language and thought that are limited to the time and place of composition.
Henry Fayol synthesised 14 principles for organisational design and effective administration. Fayol’s 14 principles are:
1. Specialisation/Division of Labour
A principle of work allocation and specialisation in order to concentrate activities to enable specialisation of skills and understandings, more work focus and efficiency.
2. Authority with Corresponding Responsibility
If responsibilities are allocated then the post holder needs the requisite authority to carry these out including the right to require others in the area of responsibility to undertake duties.
The generalisation about discipline is that discipline is essential for the smooth running of a business and without it – standards, consistency of action, adherence to rules and values – no enterprise could prosper. “in an essence – obedience, application, energy, behaviour and outward marks of respect observed in accordance with standing agreements between firms and its employees “
4. Unity of Command
The idea is that an employee should receive instructions from one superior only. This generalisation still holds – even where we are involved with team and matrix structures which involve reporting to more than one boss – or being accountable to several clients. The basic concern is that tensions and dilemmas arise where we report to two or more bosses. One boss may want X, the other Y and the subordinate is caught between the devil and the deep blue sea.
5. Unity of Direction
The unity of command idea of having one head (chief executive, cabinet consensus) with agree purposes and objectives and one plan for a group of activities) is clear.
6. Subordination of Individual Interest to the General Interest
Fayol’s line was that one employee’s interests or those of one group should not prevail over the organisation as a whole. This would spark a lively debate about who decides that the interests of the organisation as a whole are. Ethical dilemmas and matters of corporate risk and the behaviour of individual “chancers” are involved here. Fayol’s work – assumes a shared set of values by people in the organisation – a unitarism where the reasons for organisational activities and decisions are in some way neutral and reasonable.
7. Remuneration of Staff
The general principle is that levels of compensation should be “fair” and as far as possible afford satisfaction both to the staff and the firm (in terms of its cost structures and desire for profitability/surplus).
Centralisation for Henry Fayol is essential to the organisation and a natural consequence of organising. This issue does not go away even where flatter, devolved organisations occur. Decentralisation – is frequently centralisaed-decentralisation !!! The modes of control over the actions and results of devolved organisations are still matters requiring considerable attention.
9. Scalar Chain / Line of Authority
The scalar chain of command of reporting relationships from top executive to the ordinary shop operative or driver needs to be sensible, clear and understood.
The level of generalisation becomes difficult with this principle. Basically an organisation “should” provide an orderly place for each individual member – who needs to see how their role fits into the organisation and be confident, able to predict the organisations behaviour towards them. Thus policies, rules, instructions and actions should be understandable and understood. Orderliness implies steady evolutionary movement rather than wild, anxiety provoking, unpredictable movement.
Equity, fairness and a sense of justice “should”pervade the organisation – in principle and practice.
12. Stability of Tenure
Time is needed for the employee to adapt to his/her work and perform it effectively. Stability of tenure promotes loyalty to the organisation, its purposes and values.
At all levels of the organisational structure, zeal, enthusiasm and energy are enabled by people having the scope for personal initiative. (Note: Tom Peters recommendations in respect of employee empowerment)
14. Esprit de Corps
Here, Fayol emphasises the need for building and maintaining of harmony among the work force , team work and sound interpersonal relationships.
Analysis Avalina polytechnic University The Avalina polytechnic University (APU) case is the story of management skills, a great example and a good proof of how good management structures and decisions can build a beautiful castle from the dead ground and how that can be torn down to pieces by wrong management decisions. Introduction APU was founded in 1961 in Indiana, US by a successful business man named Dr. Robert Van de Mar who had large informal influence in Avalina. The first purpose of the university was to serve the local community with students trained in business and engineering and the second to offer a meaningful future to the youth of Avalina. During the responsibility period of Professor Brandt who was the first Dean, the university took big steps by developing its communication network with the work industry, partnerships with other famous universities and hiring well-known teachers. The structure and strategies used made a lot of students, especially locals to apply to the programs making the university able to demand higher fees and start sport clubs. In conclusion, Professor Brandt managed to establish a strong foundation for the university to expand on. This all took a turn when Fred Ruback with a good load of experience in cost-reduction and work efficiency took over. Even though his decisions were first welcomed by teachers, after a short while the negative consequences began to appear and a lot of teachers were left thinking only about one question; “What went wrong at APU?” Growth period As the normal process of most startup businesses, the logistics in the organizations was at first coordinated by direct supervision from the dean to the operating core. In this case, the top manager, the Dean was supervising two units: the engineering and business unit. When looking at the “industry lifecycle matrix” (Schriber, 2015), the University did everything according to a known academic fundamentals of organizations. As it started to grow, more resources were invested. Eventually, the university grew into two well-functioning differentiated units, business and engineering which has developed and specialized more into units divided, professional standardization. In terms of Mintzberg’s archetypes we assume that the university was organized in a professional bureaucracy form (Mintzberg, 2009, p.153). We based our assumptions on the fact that teachers performed independently on pre-learned skills within their operating core units, at time. The University was at this stage coordinated according to what Mintzberg defines as a “Mechanism of standardization of skills” and reach its mature stage by focusing on high academic standards. The university eventually became an “established player on the state educational market” (Schriber, 2015). 2. Deterioration period After Professor Brandt retired, the steering committee hired a new dean named Fred Ruback. Mr. Ruback had his background from the car industry with a long career in managing and improving efficiency in several industries. From the very beginning it was clear that structural changes were going to be made. In his inaugural speech he mentioned “his intention of focusing on running a “tight ship” (Schriber, 2015). Ruback made a lot of structure changes in the organization to save costs. Eventually the university started to discharge from a well-functioning university structured in form of a professional bureaucracy, to a square, misfitting machine bureaucracy. Likewise, the university also went from being coordinated as standardisation of working skills to a more controlled form of coordination as standardization of work process. According to Mintzberg, “the machine bureaucracy is a structure with an obsession- namely control” (Mintzberg, 2009, p.167). The teachers independent work got restricted and formalized among other changes that limited the creativity within the teaching staff. "Planning and Admission decided to formalize course description that had to be submitted, approved, and locked one year in advance to ensure an optimal use of classrooms, teacher resources, and the like, among other changes”. (Schriber, 2015) Thus, the new structure left no room for adjustments which is clearly necessary within the education industry, consequently employees got upset. “Teachers became afraid of trying to improve since it risked backfire and lead to prolonged discussions with the planning office”. (Schriber, 2015) Mr Ruback, also modified the working process. The teacher's role had been changed from a key role to operator delivering a unified message. Mr. Ruback said “If one teacher has made a plan for a course, that plan could be used by other teachers, too – just change the books!”. And a teacher argue that he “cannot add extra lectures or decide “. The new coordinating mechanism within the school follows exactly Mintzberg description of standardisation of work process because “Work processes are standardized when the contents of the work are specified, or programmed” (Mintzberg, 2009, p.5) Apart from the limitations in the teacher's influence, Mr. Ruback also reduced the qualification standards required for new employees. "To further improve the financial situation was to hire faculty without a PhD (of course apart from PhD students; training to become PhDs, and non-academic staff)" (Schriber, 2015). 3. Conclusion- Why didn't the new structure work out? In this case we believe that by applying old concepts, which have shown to be profitable in certain industries, does not necessarily have to show the same outcome in others. We believe that a university's profitability-level is primarily dependent on the number of students it manages to recruit. The reputation, education quality and research abilities, highly affect the attractiveness and must hence be the heart of the organization. Mr. Ruback underestimated the importance of letting the professionals perform independently. Mintzberg states that this kind of dysfunctional response is explained by “those outside the profession—clients, nonprofessional administrators, members of the society at large and their representatives in government [...] they do the obvious: try to control the work with one of the other coordinating mechanisms.” (2009, p.210). Mintzberg states that a standardization of the working process, will consequently result in an indirect standardization of skills. The difference is that the operators learn the job in the business, instead of pre learned at g.e. a university. By coming from a different management background, Ruback might have done this correlation and applied the same argument when decreasing the standardization of skills to a increased level of work process implemented standardization. This might be possible in a similar case within a commercial industry, which do not serve the same purposes as a university. (2009, p.6-7) In conclusion it is important to always have in considerations that there is no optimal way of forming a structure for an organisation, no matter what foundation in academic theories the structures are based on. In the APU case such assumptions were made and consequently the result showed to be devastating. References Mintzberg, Henry (2009). Structure in fives: designing effective organizations . [2nd ed.] Harlow, Essex: Pearson Education: Svante Schriber (2015). Avalina Polytechnic University. Principles of Management, Stockholm Business school. Svante Schriber (2015). Organizations and their environment. Lecture slides (lecture 4). Principles of Management, Stockholm Business school.