HR assignment on: Henry Fayol’s Management theory

French industrialist Henry Fayol is considered to be the most significant contributor to contemporary concepts of management. Fayol is called the father of classical school of management. According to his observation over the organization, administrative management theory came into existence. Management theory given by Fayol is more tasks oriented rather than people oriented (Bizcovering, 2007). Henry Fayol’s management theory depicts the following perspectives. First frame an objective, planning of strategy, prepare an efficient structure, provide training, set guidelines and finally bring them together to meet those objectives. Each area of current modern workplace is influenced by the effective contributions by Henry Fayol. Management theory given by Fayol is applicable in today’s modern organization to make them competitive for growing complexities. These principles are applicable universally in today’s business management as they reflect the theme of modern management. In contrast, sometimes Fayol’s principles are not applicable in modern organizations and have no relevance today. In this essay, a discussion has been carried out over Fayol’s principles contributions and criticism of theory given by him by comparing several author’s views.

This paragraph talks about Henri Fayol’s concepts’ advantages in contemporary business world from Ritson and Parker’s point of view. They argued that throughout the twentieth century to the current scenario, Fayol’s ideas have been taken into use and also criticized by management.

Going forward to Fayol’s management theory and its relevance today, he presented fourteen management principles for contemporary management concepts. Yoo and Lemak discussed about his following principles:

Specialization of work,

• Authority and responsibility,
• Unity of command,
• Unity of direction
• And scalar chain

According to them, among all his principles these are being used to implement the cost management strategy (CMS) in today’s business framework. Basically CMS helps to identify and evaluate cost drivers to reduce the costs and maximize overall value (Yoo & Lemak, 2006). Besides, while thinking of Fayol’s principle of division of labor, they made a point to be noted that it was more important in this respect to implement CMS. In contrast, Parker & Ritson also argued that specialization of worker avoids loss of time from changing activities and helps in mechanization of operations on the other hand it encourages the minimum cost and maximum output which is the main objective of this strategy (Parker & Ritson, 2005).

However, Author Breeze also concluded that towards this mission (CMS) of modern organizations, remaining principles also come along in directing and controlling the cost. Most of the time, this same principle is not applicable for an organization using a differentiation strategy (Breeze, 1995). Moving forward, more relevance can be seen in today’s modern business world with Fayol’s management theory. Today organizations follow a top to bottom chain of communication as an essential ingredient to effective management. Fayol had listed scalar chain as his core principle among the principles listed. According to Brunsson & Holmblad, this is commonly into practice today to eliminate malfunctioning of organization. Because organizations are interconnected today and effective communication maintains these connections (Brunsson & Holmblad, 2008).

Nevertheless, Fayol had observed that “division of work has some limitations which may not be surpassed. A differentiation strategy involves organizational learning and a move away from structural inflexibility. Thus it can be concluded that the organizations applying division of labor to implement a cost leadership strategy will outperform those that are implementing differentiation strategy.

Furthermore, thorough control of worker is a generally required skill for effective implementation of cost leadership strategy today. Here in this context, Fayol’s principle of authority and responsibility comes forward in the light and is well applicable because it is the most critical factor to assist organizational control. In other words, firm pattern of authority and different areas of allotted responsibility is beneficial to an organization. It creates value and effectiveness to the work by specialized works of the distinct tasks. In contrast, harsh application of this principle can impact the job performance and affect employee participation and ability to perform well.

Similarly, Yoo & Lemak also emphasized on other three following principles;

• Initiative,
• Stability of tenure of personnel
• And esprit de corps

They stated that these principles are applied in organizations today to implement differentiation strategy. As previously noted, a differentiation strategy relies on creative product variations, and new product development. Therefore Fayol’s principle of initiative seems most applicable to execute this strategy in modernly managed organizations. It provides employees with a sense of rights and to have power over their jobs (Yoo & Lemak, 2006). Reid, D’s study of Fayol’s theory with 3D glasses presented a distinction that taking Initiative allows and maximizes creativity which is the demand of modern business world. On the other hand when it comes to link the same principle with minimization of cost, it does not seem that the principle gets successful here. To maximize the value and to minimize the cost, organizations would focus on tight procedures and cost control systems rather than supporting employees to take initiative and connect to innovative thinking (Reid, D, 2005)

Additionally, in modern phrase – time is required for an employee to get used to new work and achieve it well. In Fayol’s principle of stability of tenure of personnel articulates the requirement to have a safe and secure workplace and a strong business culture. Thus this principle should be needed to create and promote a culture of creativity overall for today’s professionals. However, this principle seems less relevant to the organizations having crucial cost management strategy. In such kind of organizations hiring new employees is cheaper despites the turnover costs. Moreover, Mclean & Jacqueline analyzed that Fayol’s principles of subordinate interests to the general interest, order and equity are exercised to implement both the strategies. Precisely, it can be said that Fayol’s principles presents the strategic leadership model. Due to this theory’s rough and controlled approach, Henry Fayol’s management principles are now applicable in today business practices more than the former modern principles (Mclean & Jacqueline, 2011). In contrast Fells also spoke about Henry Fayol’s theory’s relevance in today’s business world and said that he stands with time. His five element of planning, organizing, co-coordinating, commanding and controlling are able to pass the test of the time and generally stand quite with it (Fells, 2000).

In sum, a transformation in working of organizations in the twenty-first century has been observed. Today, superiors have the remarkable and definite selection of resources, which they use to enhance their skills and knowledge. It is due to early theorist Henry Fayol’s contribution to the management, that superiors/subordinates started to get gears for effective and efficient management. To explain this contribution broadly, Smith and Boyns in 2005 examined the recorded data provided by some British engineering colleges. They inspected the impact of Fayol’s theory on British management thoughts and practices which was respected by the British thinkers and practitioners. Smith also illustrated Fayol’s early contributions’ relevance to today’s professionals and concluded that the influence of Fayol’s management theory has been standing the test of time, but his impact on practice is greatly limited. His management theory is helpful and relevant for today’s organizational leaders because he recognized theories that worked for him and for his partners as well (Smith, 2005).

After elaborating Fayol’s theory’s relevance from both the perspectives, a discussion on how Fayol’s theory is being shaped and structured in today’s business world is carried out. Principles presented in the eighteenth century are unable to develop performance in changed situation and changed technology as well. In that case, following principles result into the construction of mechanistic structure of the organization.

• Unity of direction,
• Scalar chain,
• Specialization
• And unity of command

Above mentioned principles are insensitive to social and psychological needs of the employees. This will contribute negative performance and ineffectiveness to the organization. According to Gross, Fayol’s theory sought the organization as a close system whereas the modern organization operates in an ever changing (open system) environment. In these organizations changes are frequently accepted to suit the changes with the changing situations. Most of today’s organizations do not work in a close system as such the managers of modern organizations cannot be put into harsh jackets to take a specific action to solve a specific problem. Accordingly the modern organizations provide maximum independent to take actions, to think, innovate and bring about valuable changes (Gross, 2009). Although, all other authors like Almashaqba & Al-Qeed also talked about the criticism of Fayol’s work in contemporary framework. They analyzed that some of the concepts have not been defined clearly in Fayol’s principles. For an instance, the principle of division of work does not depict how the task has to be divided. In other words, it was observed and stated that administrative theory of Fayol undergoes from glitziness, generalization and lack of realism (Almashaqba & Al-Qeed 2010).

Moreover, Reid viewed Fayol’s theory and principles from both the positive and negative angle and found out its some of the following disadvantages in today’s management system.

• Principle of administrative theory was somewhere based on Fayol’s personal experience and some inadequate and limited observations.
• There is lack of generalizations and pragmatic evidences that may support his concept of principles.
• Some of his principles among fourteen are contradictory. For instance the unity of command principle is quite incompatible with the division of work principle. Because theory does not provide the proper guidance as to which principle has to be given preference over other.
• As per Fayol theory’s principles much attention is not paid on the workers. Moreover, they are considered as biological machines or an instrument in the work course.
• Further, Fayol’s theory was significant when organizations controlled in a stable and conventional environment. It seems less suitable in today’s unstable environment. For an instance, in today’s business context, managers cannot depend totally on formal authority and must use influences to get the work accomplished. Similarly, the theory outlooks organizations as power centers and do not identify the role of an autonomous form of organization.

However, principles like authority/responsibility, division of work and centralization are also not needed in modern business world because modern organizations believe in decentralization so that the desirable decisions can be made. Here in this context, Fayol’s theory fails to relate with today’s modern organization system.

For more than a century Fayol’s management theory has been providing a general structure for practicing managers. By the study of his observation, an outline has been framed to show how his old age ideas are applicable and relevant at present or criticized by the management. This study provides a new opportunity to see Fayol’s observation in different perspective and re-examines its relevance to today’s management practices. His advocacy of work division, senior’s responsibility, Individual’s importance and involvement; place him among the leading management theory practitioners and thinkers today. From Fayol, existing professionals have much more to think. The administrative theory was not only successful in the past but also continues to be effective in present. However, his theory did not always achieve pleasing results in the situations arising in twentieth century. Changes are taking place in these fields that gives birth to new perspective on management.

On the basis of several author’s view on Fayol’s theory it can be said that the administrative theorist Fayol basically emphasized to make organizations effective and efficient in terms of producing profit. However today’s modern organizations follow the fact that there are various other motivations to perform besides earning profit. Therefore modern organizations have to incorporate several aspects of socio-economic factor related to efficiency and human satisfaction. A great sense of practical utility has been found by a huge body of research in the work of Henry Fayol. Who defined a series of management principles by an organization can be managed effectively. However, authors put their views about theory in terms of its vagueness, inconsistency, pro-management biasness and its historical value. Through the overall study and the pointed noted out, it can be implied that the professionals need to recognize the significance of organizational management for implementing a competitive strategy effectively. Finally, by melding of past and future, use of Fayol’s principles in today’s context sets the foundation to implement effective strategies and the future development of organizations.

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