Administrative Theory of

Management - Explained
What is Administrative Management Theory

What is the Administrative Theory of

Management?
The Administrative Theory of Management was first generalized by Henri
Fayol (1841-1925) with his work and publications, Fayol's 14 Principles of
Management (1888) and Administration Industrielle et Generale (1916).

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.

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.
What are 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:

 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.
 Authority - Managers must have the authority to issue commands, but with that
authority comes the responsibility to ensure that the work gets done.
 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.
 Unity of Command - There should be only one boss from whom a worker receives
instructions?
 Unity of Direction - Each workgroup or department is working under a singular plan that
coordinates efforts. Work efforts should be guided by one supervisor.
 Subordination of Individual Interest - The interests of individuals are subordinate to
the general interests of the group or department or company.
 Remuneration - Compensation is used to incentivize worker performance.
Remuneration can include both financial and non-financial forms of compensation.
 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.
 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.
 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.
 Equity - The organization must be run based upon principles of fairness. Employees
should be treated with a combination of kindliness and justice.
 Stability of Tenure - Organizations need low turnover. This allows employees time to
learn their jobs, develop skills, and acquire loyalty.
 Initiative - Managers must promote initiative by allowing employees to create plans and
carry them out.
 Esprit de Corps - Establishing a sense of belonging within the organization creates a
sense of unity and moral.

Remember, the objective of Fayol's principles was to guide managers to

efficiently organize and interact with employees.
What are Fayol's Five Functions of a Manager?

Per 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:
 Planning
 Organizing
 Commanding
 Coordinating
 Controlling

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.

Notice that the planning function is flexible in nature to allow for contingencies
that arise in the process.

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.

Fayol recognized the need for managers to recognize and understand the
behaviors of employees and to set an example for them.

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.

Who are the 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.

Related Concepts
 Major Management Theories
 Scientific Theory of Management
 Bureaucracy Theory
 Chaos Theory
 Human Relations Theory
 Contemporary Management Theories
Human Relations Theory of
Management - Explained
What is the human relations theory of management?

What is Human Relations Theory?

Human Relations Theory focuses specifically on the individuals needs and
resultant behaviors of individuals and groups. It takes an interpersonal
approach to managing human beings. It presents the organization is made up
of formal and informal elements.

The formal elements of an organization are its structure. The informal aspects
of the organization include the interactions between individuals. In this way,
the organization is a type of social system.

This system should be managed to create individual job satisfaction and the
resultant motivation of the individual.

Notably, much emphasis is placed on how individuals interact within groups

and the result group behavior and performance.

Elements of Human Relations Theory

At the core of human relations theory are these six basic propositions:

 A focus on people, rather than upon machines or economics

 The organizational environment is not an organized social context
 Human relations are important in motivating people
 Motivation depends upon teamwork, requiring co-ordination and cooperation of
individuals involved.
 Human relations within teams must fulfill both individual and organizational objectives
simultaneously
 Individuals and organizations desire efficiency by achieving maximum results with
minimum inputs

Also, central to the understanding of Human Relations theory is the concept of

individual motivation. The drawback of this theory is that it requires the
acceptance of numerous assumptions about human behavior.
Who are the Primary Contributors to Human Relations Theory?

The primary contributors to Human Relations Theory are:

 Elton Mayo - Mayo is best known for his contribution to human relationships
management through the Hawthorne experiments.
 Mary Parker Follet - Follet employed psychological tools to understand the efficient use
of people. She introduced the concept of de-personalized authority and responsibility.
The also advocated for the integration of decision making through communication
channels.

What are the Hawthorne Experiments?

Professor Elton Mayo is known as the Father of the Human Relations

Approach to Management Theory. From 1924 - 1932, he, along with Fritz
Roethlisberger, T.N. Whitehead and William Dickson, conducted the
Hawthorne studies (so named for the location of the studies - the Hawthorne
Plan of Western Electric Company).

In these experiments, Mayo evaluated the attitudes and psychological

reactions of workers in on-the-job situations. It began by examining the impact
of illumination levels on worker productivity. Eventually, the study was
extended through the early 1930s and addressed a broader range of
workplace conditions.

The results, however, identified a unique identifier of group performance -

attention. The control and experimental groups' performance improved
irrespective of the environmental conditions.

The theory became known as the Hawthorne Effect - individuals perform

better when given special attention.

The study also addresses other major concerns, such as: individual vs group
job performance, worker motivation, and production standards.

The findings were as follows:

 Group dynamics (Social Factors) are important determinants of job performance and
output.
 Groups have their own norms and beliefs, independent of the individual members.
 Individuals are not solely motivated by compensation. Perceived meaning and
importance of ones work are the primary determinants of output.
 Employees prefer a cooperative attitude from superiors, rather than command and
control.
  Communication between management and employees is essential to understand
employee issues.
 Workplace culture sets production standards - despite standards set by managers.

The work of Mayo, through the Hawthorne studies, was instrumental in

understanding the roles of group behavior and individual psychology in
management practice.

Who is Professor Mary Parker Follet?

Follet research classical management principles in the context of human

elements. She employed psychology to understand employee interactions and
to promote the efficient use of people in the organization.

In her collective works, Dynamic Administration, Follet used psychology to

explore various aspects of the organizational environment:

 Workers must participate in the decision-making process through defined

communication channels.
 Employees prefer to be integrated into the decision-making process rather than subject
to the command and control of managers.
 Working in groups is generally more productive than working individually.
 Authority and order in an organization should be de-personalized. The facts of a
situation determine the basis of authority and responsibility.
 Managers must integrate employee input in the resolution of conflicts that provide a
benefit to all interested parties.
 Integration between departments or groups within the organization is preferable.

Related Concepts

 Major Management Theories

 Scientific Theory of Management
 Administrative Theory of Management
 Bureaucracy Theory
 Chaos Theory