Administrative Management and Henri Fayol's 14 Principles of Management
Summary
TLDRHenri Fayol, a pioneer in modern management, is celebrated for his administrative theory that emphasizes administrative over technical skills in leadership. His 14 principles of management, including division of work, authority and responsibility, discipline, and unity of command, are foundational to organizational success. Fayol's insights, such as the importance of initiative and cooperation, continue to guide effective management practices today.
Takeaways
- 👨💼 Henri Fayol is recognized as one of the fathers of modern management, emphasizing the importance of administrative ability over technical skills in leadership.
- 🏭 Fayol's turnaround of Comambault from potential liquidation to a leading French firm underscored the impact of effective management over technical expertise.
- 🛠️ Fayol introduced the administrative theory, focusing on the functions of management: planning, organizing, leading, and controlling.
- 🔢 He established 14 principles of management that are still influential in contemporary organizational practices.
- 👷 The division of work, or labor, is the first principle, advocating for specialization to enhance proficiency and efficiency.
- 📋 Authority and responsibility should align, where those with authority are also held accountable for their decisions.
- 🚦 Discipline involves creating clear rules and procedures for all levels of an organization to ensure order and proper conduct.
- 🔄 Unity of command dictates that each worker should have one supervisor to avoid confusion and conflicting directives.
- 🎯 Unity of direction stresses the importance of a common goal for all members of an organization.
- 🤝 The subordination of individual interests to general interests is essential for the success of the organization as a whole.
- 💰 Renumeration should be fair, taking into account various factors like labor supply and business profitability.
- 🌐 Centralization vs. decentralization is a balance, with Fayol advocating for necessary centralization while encouraging employee initiative.
Q & A
Who is Henri Fayol and why is he considered one of the fathers of modern management?
-Henri Fayol is considered one of the fathers of modern management due to his significant contributions to the field. He was a French management theorist who developed the 14 principles of management and the five functions of management, which are still widely recognized and applied today.
What was Fayol's initial role at Comambault, and how did his tenure transform the company?
-Fayol was hired as the managing director, equivalent to a CEO, to oversee the liquidation of Comambault, a French steelmaker. Instead of liquidating it, he developed a plan to restore the company's financial health, and within twelve years, Comambault became one of the most valuable firms in France.
What did Fayol attribute the success of Comambault to, and how did this shape his management philosophy?
-Fayol attributed the success of Comambault to his administrative ability to manage people and get work done through others, rather than his technical ability. This realization led him to develop principles and theories that emphasized the importance of administrative skills in management.
What are the five functions of management that Fayol identified?
-Fayol identified the five functions of management as planning, organizing, leading, and controlling. These functions are foundational to the administrative process and are still recognized in modern management practices.
Can you explain the first principle of management according to Fayol, the division of work?
-The first principle of management, the division of work or division of labor, suggests that separating work into smaller tasks allows workers to develop expertise in specific areas, leading to increased proficiency over time.
What does Fayol's second principle of management, authority and responsibility, entail?
-Fayol's second principle states that a manager's authority should be consistent with their level of responsibility. Authority is the right to give orders, while responsibility is being accountable for those orders.
How does discipline, the third principle of management, relate to organizational effectiveness?
-Discipline, as the third principle, involves creating clear rules and procedures for employees to follow, which establishes order and ensures good behavior in the workplace. Fayol advocated for penalties to incentivize rule adherence.
What is unity of command, and why did Fayol consider it the most fundamental principle?
-Unity of command is the principle that each worker should report to and receive orders from just one supervisor to reduce misunderstandings and create a clear expectation of roles within the organization.
How does unity of direction contribute to an organization's success according to Fayol?
-Unity of direction ensures that all individuals and teams in an organization pursue a common goal or objective, which is critical for the organization's success.
What does the principle of subordination of individual interests to general interests mean in the context of management?
-This principle means that in successful organizations, individuals must put aside their personal interests and prioritize the interests of the group or organization as a whole.
How did Fayol view the role of renumeration in motivating workers?
-Fayol believed that fair and equitable pay practices, considering factors like labor supply and business conditions, were essential to motivate workers to align their interests with those of the team.
What is the balance Fayol suggested between centralization and decentralization in decision-making?
-Fayol suggested that organizations should only use a level of centralization that is necessary and focus on allowing individual workers the freedom to show initiative, which can vary depending on the organization's size and scope.
Outlines
👨💼 Henri Fayol: Father of Modern Management
Henri Fayol is recognized as one of the fathers of modern management, known for his administrative theory. He believed that administrative ability was more crucial for a leader's success than technical skills. Fayol's experience as the managing director of Comambault, a French steelmaker, led him to this conclusion. He turned the company around from the brink of collapse to one of France's most valuable firms. Fayol attributed this success to his management skills rather than his engineering background. He introduced the functions of management—planning, organizing, leading, and controlling—and developed 14 principles of management to guide effective organizational management. The first principle, division of work or labor, suggests that breaking down tasks can increase worker proficiency. The second principle, authority and responsibility, aligns a manager's authority with their level of accountability. The third principle, discipline, emphasizes the importance of clear rules and procedures for maintaining order and good behavior in the workplace. Fayol also advocated for penalties to encourage rule adherence.
🔄 Principles of Management Continued
The fourth principle, unity of command, is considered the most fundamental by Fayol, advocating that each worker should report to only one supervisor to avoid confusion and conflict. The fifth principle, unity of direction, emphasizes the importance of the entire organization pursuing a common goal. The sixth principle, subordination of individual interests, requires individuals to prioritize the group's interests over their own. The seventh principle, renumeration, stresses fair pay practices influenced by factors like labor supply and business conditions. The eighth principle, centralization, discusses the concentration of decision-making authority, with Fayol advocating a balance to encourage initiative. The ninth principle, the scalar chain, refers to the organizational hierarchy, aiding in understanding reporting structures. The tenth principle, order, promotes a clean and organized work environment for efficiency and safety. The eleventh principle, equity, underlines the importance of fair treatment of workers for commitment and effort. The twelfth principle, stability of tenure, focuses on minimizing employee turnover to reduce costs and disruptions. The thirteenth principle, initiative, encourages workers to take on new responsibilities for skill development and managerial efficiency. The fourteenth principle, spirit of cooperation, highlights the importance of teamwork and communication for morale and unity. Despite being over a century old, Fayol's principles continue to be influential in modern management practices, shifting the focus towards administrative abilities in leadership.
Mindmap
Keywords
💡Henri Fayol
💡Administrative Theory
💡Division of Work
💡Authority and Responsibility
💡Discipline
💡Unity of Command
💡Unity of Direction
💡Subordination of Individual Interests
💡Renumeration
💡Centralization
💡Scalar Chain
💡Equity
💡Stability of Tenure
💡Initiative
💡Spirit of Cooperation
Highlights
Henri Fayol is considered one of the fathers of modern management.
Fayol believed administrative ability was more important than technical ability for leaders.
Fayol's success at Comambault was due to his management skills rather than his engineering background.
Fayol identified the functions of management: planning, organizing, leading, and controlling.
Fayol developed the 14 principles of management for effective organizational management.
The first principle is division of work, which improves worker proficiency.
Authority and responsibility should be aligned according to Fayol.
Discipline involves creating clear rules and procedures for employees.
Unity of command means each worker should report to one supervisor to reduce confusion.
Unity of direction emphasizes the pursuit of a common organizational goal.
Individual interests should be subordinated to the general interests of the organization.
Renumeration should be fair and consider various factors such as cost of living and business conditions.
Centralization is about the concentration of decision-making authority.
The scalar chain represents the organizational hierarchy and reporting structure.
Order is essential for efficiency and safety in the workplace.
Equity in treatment is crucial for long-lasting worker commitment.
Stability of tenure of personnel minimizes costly employee turnover.
Initiative encourages workers to undertake new responsibilities and develop new skills.
The spirit of cooperation is about improving morale and promoting unity through teamwork and communication.
Fayol's principles are still widely followed over a century later.
Fayol's work shifted the focus towards training managers for administrative abilities.
Transcripts
Although his work wasn't widely known in the United States until 1949, Henri Fayol is considered
to be one of the fathers of modern management.
Often referred to as the administrative theory, Fayol believed that the success of an enterprise
was more dependent on the administrative ability of its leaders than on their technical ability.
He came to this conclusion after reflecting on his own experiences as the managing director
of a French steelmaker known as Comambault.
You see Fayol was hired on as managing director, which was basically the equivalent of CEO,
to oversee the liquidation of Comambault.
Instead, Fayol put together a detailed plan on how to bring Comambault back to financial
solvency.
Within twelve years, Comambault had risen from its almost certain demise, and became
one of the most valuable firms in all of France.
While reflecting on his experiences, Fayol realized this success wasn't due to his engineering
background, but rather his ability to manage people and get work done through others.
In addition to founding the functions of management, which we now know as planning, organizing,
leading, and controlling, Fayol developed the 14 principles of management.
These principles were what Fayol believed would help organizations engage in effective
management.
And many of these principles have become common practices in organizations today.
The first principle of management is the division of work, commonly referred to as the division
of labor.
Fayol believed that by separating work into smaller tasks it would allow workers to develop
an expertise in a certain area.
Since workers would perform only a series of specific tasks instead of a larger collection,
it is rather safe to say that over time workers would become more proficient in these tasks.
In addition, some workers are not suited for certain tasks.
So by divided the work into a smaller set of tasks workers can be placed in areas where
they can ultimately excel.
The second principle is one of authority and responsibility.
Fayol claimed that a managers authority should be consistent with his level of responsibility.
While authority is viewed as the right to give orders, responsibility is seen as being
accountable.
Thus someone with authority in an organization, at least according to Fayol, should also be
held accountable for the orders that are given.
The third principle is discipline.
Discipline is often described as the practice of training people to obey rules.
In the case of Fayol's administrative theory, discipline involves creating clear rules and
procedures for employees at all levels of the organization to follow.
These rules were meant to establish order as well as insure good behavior in the workplace.
And in order to establish an incentive for employees to follow these rules, Fayol advocated
that penalties should be used.
The fourth principle of management is unity of command.
Fayol believed that unity of command represented the single most fundamental principle in all
of these principles of management.
From this principle, Fayol claimed that all of the other principles originated.
Fayol strongly believed that no one can serve two masters at the same time.
What this often does is cause confusion amongst the workers and conflict among supervisors
as they struggle over who's direction should be followed.
So Fayol argued that each worker should report to and receive orders from just one supervisor.
This would reduce misunderstandings and ultimately lead to an environment in which all employees
knew exactly what was expected of them.
The fifth principle of management is unity of direction.
Instead of individuals and teams pursuing their own goals that may be in conflict with
one another, Fayol claimed that the entire organization should be pursuing a common goal
or objective.
Getting everyone in the organization working towards the same goal is absolutely critical
to an organization's success.
Somewhat in line with this principle is the sixth principle of management, which is the
subordination of individual interests to general interests.
Successful organizations require all individuals to put aside their own self-interests and
pursue only what is in the best interest of the group.
So any one interest of an individual should certainly not take priority over the interests
of the organization as a whole.
The seventh principle of management is renumeration.
Renumeration represents fairness in the pay practices of an organization.
Fayol believed that variables such as labor supply, cost of living, business profitability,
and general business conditions should all be considered when establishing a worker's
rate of pay.
If organization's do not maintain fair and equitable pay practices it will make it more
difficult to encourage workers to abandon their own interests for the sake of those
of the team.
The eighth principle of management is one of centralization.
Centralization represents the degree to which decision-making authority is concentrated
in the hands of a few people, or spread throughout the organization to employees at different
levels.
A centralized organization by its very nature establishes that only a few key individuals
have the authority to make decisions.
Opposite to a centralized organization is one that is decentralized, which means that
decision-making authority is given to employees at lower levels of the organization within
certain boundaries.
Although Fayol agreed that a centralized form of distributing authority allowed for more
accurate decisions to be made since those who may lack experience are prevented from
making decisions, he also believed that employees should given some freedom so that they can
show what he called initiative.
Since all organizations vary in terms of size and scope, Fayol claimed that the degree of
centralization or decentralization used is largely dependent on the organization itself.
However Fayol did claim that organizations should only use a level of centralization
that was absolutely necessary, and instead focus on allowing individual workers with
the freedom necessary to show individual initiative.
The ninth principle of management is the scalar chain.
The scalar chain represents the organization's hierarchy, which is commonly illustrated through
an organization chart.
The presence of a scalar chain allows employees to be familiar with where they stand in the
organizational hierarchy, as well as who they report to and who they should approach if
they have questions.
The tenth principle of management is order.
For the sake of efficiency and coordination, Fayol claimed that there should be a place
for everything and everything should be in it's place.
The creation of a clean and orderly work environment is important to productivity, but also has
implications for safety on the job.
The eleventh principle of management is Equity.
Fayol believed that an important element to successful management in an organization was
the equitable treatment of workers by management.
If management intends to achieve long-lasting commitment from workers, it's important that
workers are treated fairly.
Otherwise, workers may not pursue the goals of the organization or expend the appropriate
amount of effort to achieve those goals.
The twelfth principle of the management is stability of tenure of personnel.
This principle refers to management's task of minimizing employee turnover.
Turnover, whether voluntary or not, can be very costly to an organization.
In addition to recruiting, selection, and training costs, organization's also have to
deal with disruptions in output that can be caused by employee turnover.
So in order to minimize these issues, Fayol claimed that management should make every
attempt to retain productive workers.
The thirteenth principle of management is initiative, which represents investing in
the development of an organization's workers.
Fayol believed that management should encourage worker initiative, meaning the undertaking
of new responsibilities.
This allows workers to acquire new skills, while also freeing up management to perform
other tasks.
The fourteenth and final principle of management as established by Henri Fayol is what is often
referred to as the spirit of cooperation.
This principle refers to managements responsibility to improve morale and promote a sense of unity.
In order to accomplish this, Fayol emphasized the importance of teamwork as well as communication
in an organization.
Together these fourteen principles constituted effective management practices.
And although it has been over one hundred years since Fayol wrote of these principles
in his book entitled General and Industrial Management, these principles are still widely
agreed upon and followed today.
But perhaps an even greater contribution to modern day management was Fayol's insistence
that the success of an organization was determined more so by the administrative ability of its
leaders as opposed to their technical ability.
As a result, focus began to shift towards training and educating managers for the administrative
demands of today's organizations.
Well that's all for this video.
In our next video, we'll discuss the work of German sociologist Max Weber.
For questions please leave them in the comment box below and I'll do my best to get back
to those in a timely fashion.
And remember to subscribe to Alanis Business Academy to have our latest videos sent to
you while you sleep.
Thanks for watching.
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