Henri Fayol

(1841 - 1925)

Henri Fayol’s Background

* Graduated from the National School of Mines in Saint Etrenne in 1860

* After graduation he went to work and spent his entire career at Commentry-Fourchamboult-Decazeville. He was named managing director in 1888 and maintained that position until he retired in 1918.

* He is credited with saving the company from bankruptcy

* During his career he lectured at Ecole Superievre de la Guerre

* In his retirement he established the Center of Administrative Studies

Fayol’s Big Contributions to Management

1) Universality of management: The same skills are needed to manage a coal mine that are needed to manage a hospital, post office, university, etc..

2) Management is a field in and of itself: There were no schools of management prior to Henri Fayol!!!

Fayol’s Principles of Management

Division of Labor Fayol Encouraged job specialization while realizing that too narrow a focus lead to boredom and falling production

Authority & Responsibility This is more than giving and having orders followed. Fayol thought that authority should derive from expertise, leadership skill, knowledge, etc., and lead to a sincere commitment from subordinates

Fayol’s Principles of Management

Unity of Command Orders should be received from only one person.

Line of Authority There should be a chain of command from the very top to the very bottom of the organization. Fayol realized that there should be as few layers of management as possible

Fayol’s Principles of Management

Centralization Fayol preferred a less centralized management hierarchy. He didn’t want decisions made too far away from the problem

Unity of Direction Today we would call this singleness of purpose

Initiative Employees should be able to act on their own which spurs creativity and innovation

Fayol’s Principles of Management

Equity employees should be treated fairly.

For personnel to be encouraged to carry out their duties with all the devotion and loyalty of which they are capable, they must be treated with respect for their own sense of integrity, and equality results from the combination of respect and justice

Order The arrangement of positions in the organization should maximize efficiency and provide employees with career opportunities

Fayol’s Principles of Management

Discipline Managers need to enforce rules to achieve company goals.

Remuneration of Personnel Fayol was an early supporter of bonuses and profit sharing plans

Stability and tenure of employees Long-term employees lead to better producing companies.

Fayol’s Principles of Management

Subordination of Individual Interests to the common interest Employees need to understand how their performance affects the entire organization

Esprit de Corp Managers should develop a shared feeling of devotion to a common cause

PLANNING

LEADING

CONTROLLING ORGANIZING

Fayol’s Functions of Management

Fayol’s Qualities of Effective Plans

• UNITY At any one time an organization should have only one guiding organizational goal

• CONTINUITY Planning is an ongoing process and previous plans should be modified to fit together in the

corporate framework

• ACCURACY Managers should collect and utilize all available information to make a

plan as accurate as possible

• FLEXIBILITY A manager should not be stuck with a static plan, but be able to change and alter as situations do.

Common criticisms of Henri Fayol

Management is not always universal: Fayol was criticized because he only had experience in a coal mine. Many have said just because you can manage a coal mine does not necessarily mean you can manage a hospital.

His writing is lessons learned in his career: Everything that Fayol wrote about was something from his career as the managing director of a mining company. The criticism is that his background was not all that diverse.

Common Criticism’s of Henri Fayol

Taylor’s argument: Taylor thought that specialization was the best form of management. He thought that each worker did eight different things and that for each thing there should be a supervisor. Fayol thought that each person should only have one supervisor. Further, Fayol liked having teams do work together and making their own decisions rather than having a specialist do every little thing.

Common Criticisms of Fayol

Modern Criticism: Fayol refused to purchase stock in his own company because he felt it compromised his position as the firm’s managing director. Today, managers are expected to have their pay tied to stock because it is seen as their job to increase shareholder wealth.

Fayol, also, wanted to board of director’s and shareholders to have limited power because he felt they were incompetent. This is criticized by those today who demand shareholder rights be increased.