Henry Fayol’s Contribution to Management!
Henry Fayol (1841-1925) started his career as a junior engineer in a coal mine company in France and became its general manager in 1880.
He not only saved a large coal and steel company from bankruptcy, but also led to crowning success.
His ideas on management have been summed up as the Administrative Management Theory, which later evolved into the Management Process School. A contemporary of Taylor, Fayol for the first time attempted a systematic analysis of the overall management process. In 1916, he published his famous book in French language ‘Administration Industrielle Generale.’
It was reprinted several times in French and later published in English language under the title, General and Industrial Management in 1929. Fayol’s contribution to management can be discussed under the following four heads:
1. Division of Industrial Activities:
Fayol observed the organizational functioning from manager’s point of view.
He found that all activities of the industrial enterprise could be divided into six groups:
(i) Technical (relating to production);
(ii) Commercial (buying, selling and exchange);
(iii) Financial (search for capital and its optimum use) ;
(iv) Security (protection of property and persons);
(v) Accounting (Preparation of various statements, accounts, returns etc.) and
(vi) Managerial (planning, organisation, command, co-ordination and control)
He pointed out that these activities exist in every enterprise. He further said that the first five activities are well known to a manager and consequently devoted most of his book to analyse managerial activities.
2. Qualities of an Effective Manager:
Henry Fayol was the first person to recognise the different qualities for manager.
According to him these qualities are:
(i) Physical (health, vigour, and address);
(ii) Mental (ability to understand and learn, judgement, mental vigour, and adaptability) ;
(iii) Moral (energy, firmness, willingness to accept responsibility, initiative, loyalty, tact and dignity);
(iv) Educational (acquaintance with matters related to general functioning) ;
(v) Technical (peculiar to the functions being performed); and
3. Functions of Management:
Fayol classified the elements of management into five and all such elements were considered by him as the functions of management.
According to him following are the functions of management:
Deciding in advance what to do. It involves thought and decision relating to a future course of action.
Providing everything that is useful to a business enterprise for its operation i.e., men, materials, machines and money etc.
Maintaining activity among personnel (lead the personnel in a better way).
The channelisation of group efforts in the direction of achieving the desired objective of the enterprise (binding together-unifying and harmonizing all activity).
Seeing that everything is being carried out according to the plan which has been adopted, the orders which have been given, and the principles which have been laid down. Its object is to point out mistakes in order that they may be rectified and prevented from occurring again.
Fayol observed that these principles apply not only to business enterprise, but also to political, religious, philanthropic or other undertakings.
4. Principles of Management:
Hentry Fayol evolved 14 principles that can be applied in all management situations irrespective of the types of organization. He named Division of work (Specialisation), Parity between Authority and Responsibility, Discipline, Unity of Command, Unity of Direction, Subordination of Individual Interest to General Interest, Fair Remuneration to workers.
Effective Centralisation, Scalar Chain, Order, Equity, Stability in the tenure of personnel, Initiative and Esprit de Corps (Union is Strength) principles which he himself used on most occasions. Fayol made distinction between management principles and management elements.
The management principle is a fundamental truth and establishes cause-effect relationship while management element gives the functions performed by a manager. (These have already been explained in a separate chapter The Management Process). These principles not only influenced but also dominated management thought.