Henry Fayol (1841-1925)

Fayol was a French Mining Engineer who recorded his industry methods. He ultimately became a
management theorist with perhaps the greatest effect of all prior management theorists.  Fayol is
considered the father of Administrative Management Theory, often called Process Theory or
Structural Theory. 

Administrative Theory of Management

The Administrative Theory of Management was first generalized by Henri Fayol with his work
and publications

1. Fayol's 14 Principles of Management (1888)

2. Managerial Functions (1916)

As a member of the classical theory movement, Fayol's work was unique from that of Taylor,
who focused on worker efficiency. Instead, Fayol focused on organization and structure of work
tasks. He looked specifically at how management and workers are organized within a business to
allow for the completion of task. 

He proposed the creation of work groups and functional departments where distinct activities are
performed. These activities contribute to the accomplishment of greater tasks in furtherance of
company objectives. 

Fayol followed a top-down approach to organizational efficiency. He believed that the effective
organization of management would ultimately have an effect on the productivity of operational-
level workers. 

Administrative management theory is in contrast to the scientific approach to management, which

posited that worker efficiency would lead to greater managerial efficiency.
Fayol's 14 Principles of Management

Fayol's 14 principles of management provided specific guidance on the necessary organizational

elements necessary for effective management and demonstrate the Administrative Management
Approach. 

These principles can be summarized as follows:

1. Division of Labor - The division of labor within an organization allows for specialization.
Individuals can become more proficient in the accomplishment of a limited set of
activities - thus improving their output.

2. Authority - Managers must have the authority to issue commands, but with that authority
comes the responsibility to ensure that the work gets done.

3. Discipline - There must be a clear line of authority. Subordinates must fully obey
instructions from superiors. Managers must have the ability to instill discipline through
punishment.

4. Unity of Command - There should be only one boss from whom a worker receives
instructions?

5. Unity of Direction - Each workgroup or department is working under a singular plan that
coordinates efforts. Work efforts should be guided by one supervisor.

6. Subordination of Individual Interest - The interests of individuals are subordinate to the

general interests of the group or department or company.

7. Remuneration - Compensation is used to incentivize worker performance. Remuneration

can include both financial and non-financial forms of compensation.

8. Centralization - Decision making should be either centralized (management makes all

decisions) or decentralized (employees also make decisions) depending upon the
characteristics of the organization and worker competency.

9. Line of Authority (Scalar Chain) - There must be a hierarchy of authority that places
workers below managers in the reporting structure. The degree of authority is higher at
each stage of the organizational hierarchy. The organizational hierarchy should be well
understood throughout.
 10. Order - There must be well-defined rules and standards for the work environment and
work responsibilities. A safe and orderly environment leads to greater coordination.

11. Equity - The organization must be run based upon principles of fairness. Employees
should be treated with a combination of kindliness and justice.

12. Stability of Tenure - Organizations need low turnover. This allows employees time to
learn their jobs, develop skills, and acquire loyalty.

13. Initiative - Managers must promote initiative by allowing employees to create plans and
carry them out.

14. Esprit de Corps - Establishing a sense of belonging within the organization creates a
sense of unity and moral.

The objective of Fayol's principles was to guide managers to efficiently organize and interact with
employees.

Fayol's Five Functions of a Manager

Fayol's Administrative Management Theory, the individual functions of a manager may vary
widely depending upon the type of manager and the nature of the managers responsibilities. As
such, categorizing the functions of a manager helps understand what are the responsibilities of a
manager. 

Henri Fayol, in his classic 1916 book, Administration Industrielle et Generale, Fayol laid out an
informative categorization of managerial functions. These functions include:
The functions of commanding and controlling have generally been collapsed under the function
Leading. The result is the modern-day P-O-L-C framework of managerial functions. 

It is important to note that these categories are broad in nature. They represent the universal
responsibilities of a manager, regardless of the task or industry-specific responsibilities that a
manager may face, such as government, non-profit, accounting, finance, marketing, etc. 

 Planning - Fayol defined managerial planning as:

 Forecasting future conditions,

 Setting objectives, and

 Developing means to attain objectives.

 Organizing - Fayol defined organizing as structuring activities and organizing individuals

within the firm. This includes recruiting, equipping, and training individuals. 
 Commanding - According to Fayol, commanding as a managerial function concerned the:
 Direct supervision of employees, and
 Motivating their efforts toward a common objective.
 Coordinating - Fayol identified coordination as identifying, arranging, and scheduling all
activities carried out by subordinates. This coordination allows for the collective
accomplishment of plans. 
  Controlling - Concerns the constant supervision of activities to identify accomplishment
or goals and objectives. Derivation from the identified plan allows the manager to take
corrective action.

Major Contributors to the Administrative Theory of Management

The Administrative Theory of management is still very much integrated into our modern
understanding of organizations and management practice. 

Numerous theorists have contributed to Administrative Management Theory. These theorists

develop numerous process-based approaches that identified management activities as sets of
independent functions. 

These functions take place at all levels of the organization, regardless of the industry or nature of
the managers responsibilities. Noteworthy administrative theorists include:

 Max Weber (1864-1920) - Weber is credited with developing Bureaucracy Theory. This

theory was a contemporary of Scientific and pre-dated Administrative Management
theory. As such, we discuss Webers work as a section of Management Theory.

 James D. Mooney (1884-1957) - Mooney contributed to administrative management

theory through is book, Onward Industry! (1931), later republished as The Principles of
Organization. In his text, he applied administrative management theory to organizations in
various domestic and international contexts.

 Luther H. Gulick (1892-1993) - Gulick was a physician, administrator, and health

educator. He applied administrative management theory principles to government and
private organizations.

 George Terry (1909-1979) - Terry published the first text entitled, Principles of

Management. He adopted Fayols Functions framework. He combined commanding and
controlling into actualizing. He defined a principle as a fundamental statement providing a
guide to action to be applied through scientific methods.

 Harold Koontz (1909-1984) - Koontz approached management theory through the lens of

Human Relations within the organization. He advocated treating employees tactfully as a
 management approach within the organization. He co-authored the book Principles of
Management with Cyril J. O'Donnell.

 Cyril O'Donnell (1900-1976) - As a theorist, professor, and consultant, he published

management papers and his text with Harold Koontz defining management as a
combination of functions.

 Ralph Davis (1894-1960) - Davis was an academic and consultant who expanded upon
Fayol's management functions model. He published a text, The Fundamentals of Top
Management (1951), in which he introduced a rational-planning perspective to Fayols
model. As such, his impact was primarily in the field of management strategy.

 Henri Mintzberg (1939 - Present) - Mintzberg is a modern-era theorist who critiqued

Fayol's work as incomplete and impractical. He expanded upon the P-O-L-C framework
by focusing on the roles that managers assume within the organization. The impact of his
work has been substantial and is discussed as a separate section of Classical Management
Theory.

 Robert L. Katz (1933- 2010) - Katz expanded upon the functions of managers by

addressing the individual's skills that managers must possess at various levels within the
organization. This work spanned scientific and administrative theory as is discussed as a
separate section of classical management theory.