Mike Wills
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Henri Fayol's Administrative Theory

Henri Fayol's Administrative Theory

Jan 05, 2023

Henri Fayol (1841-1925) developed six functions of management that work in conjunction with 14 management principles. This theory has some core ideas that live on today, but you'll rarely find a workplace swearing by Fayol's 14 principles.

The six functions are:

1. Forecasting
2. Planning
3. Organising
4. Commanding
5. Co-ordinating
6. Controlling

Some people combine forecasting and planning into one function, simplifying the theory down to five functions. The functions are straightforward, with Fayol saying managers need to plan for the future, organize necessary resources, direct employees, work collaboratively and control employees to make sure everyone follows necessary commands.

The 14 principles are:

  1. Division of work - Employees should have complementary skill sets that allow them to specialise in certain areas.

  2. Authority - Management needs authority to give employees orders. This authority must be agreed upon.

  3. Discipline - This gets to the idea of employees listening to commands and being disciplined in getting work done. If a manager sets a deadline, an employee should have the discipline to meet it.

  4. Unity of command - Employees answer to their managers, and there aren't a bunch of unnecessary people involved with the process. Going over your manager's head would be an example of breaking this principle.

  5. Unity of direction - Teams should be striving for common goals. Subordination of individual interests - The team comes before the individual.

  6. Remuneration - There are monetary and non-monetary versions of remuneration. Both are needed to motivate employees.

  7. Subordination of Individual Interest to General Interest - The interests of any one employee or group of employees should not take precedence over the interests of the organisation as a whole.

  8. Centralisation - There should be a balance between decision-making power. For example, a company's board of directors should have a say, but the midlevel managers shouldn't be overpowered.

  9. Scalar chain - Each company should have clear hierarchical structures.

  10. Order - This refers mostly to cleanliness and organization within a workplace. An office shouldn't be disgustingly messy.

  11. Equity - Employees should be treated well.

  12. Stability of tenure of personnel - This principle suggests that businesses should try to limit turnover and keep employees around as they accumulate knowledge and improve.

  13. Initiative - Employees should share ideas and be rewarded for innovative thinking and taking on new tasks.

  14. Esprit de corps - Employee morale matters. This principle suggests that managers should work to keep employees engaged and interested. There are quality aspects of this theory.

Remembering all 14 principles can be challenging and makes more sense for a test on management than an entrepreneur running their business, but the principles apply in today's workforce. Things like equity and remuneration are important aspects of management. Other principles, like scalar chain, aren't always necessary. Some businesses find success without clear hierarchies, and the organizational setup depends largely on the business and the size of the company.

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