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Henri Fayol
Father of Modern Operational Management Theory
1841-1925
BIOGRAPHY
1841 July 29
Born in a suburb of Istanbul, Turkey

1860

Parents: Andr Fayol, Eugnie Cantin Fayol

- His father was an engineer who worked on Galata Bridge which spans Golden Horn, a waterway in
Instanbul
Graduated from "cole National Suprieur des Mines (English: National School of Mines) in St. tienne in
France
At the age of 19, he started to work as a Mining Engineer at "Compagnie de CommentryFourchambault-Decazeville in Commentary

1888 1918
He became managing director when the company started to employ over 1000 people

Around 1900, the mining company was one of the largest producers of iron and steel. At that time, this
industry was considered to be vital for France.

WORKS AND ACHIEVEMENTS

On Mining Enginieering
Fayol had written several articles on mining engineering, starting in the 1870s,

1879: On the spontaneous heating of coal

1887: The formation of coal beds
1890: The sedimentation of the Commentry, and on plant fossils

On Management
1916: Published work experiences in "Administration Industrielle et Gnrale. In this work Fayol presented
his theory of management, known as Fayolism.
- Through this work, he was able to examine the nature of management and administration. He was
little known outside France until the late 1940s when Constance Storrs published her translation of
Fayol's 1916 work Administration Industrielle et Generale.
-

Henri Fayol was also one of the founders of the principles of modern management. His research
work was in competition with that of another great theoretician namely Frederick Taylor.

Five primary functions of management

Fourteen principles of management

ERA OF SCIENTIFIC MANAGEMENT

The major difference between Fayol and Taylor is Fayol's concern with the "human" and behavioral
characterisitcs of employees and his focus on training management instead of on individual worker efficiency.
Taylor, on the other hand, was concerned with task time and improving worker efficiency.
Frederick Taylor

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- Father of Scientific Management
- Treat workers as machine
- Management process from bottom-up
- BOTTOM-UP = bottom up, or starting with the most elemental units of activity and making individual
workers more efficient
Henry Fayol
- Father of Modern Operational Management Theory
- Treat workers as Capital Asset
- Management process from top-down
-

TOP-DOWN = Of or relating to a perspective that progresses from a single, large basic unit to
multiple, smaller subunits. It is focused on educating management on improving processes first and
then moving to workers. Fayol took a top-down approach to management by focusing on
managerial practices to increase efficiency in organizations. His writing provided guidance to
managers on how to accomplish their managerial duties and on the practices in which they should
engage.

Fayolism = Theory of management that analyzed and synthesized the role of management in
organizations
Fayol is also famous for putting forward 14 principles of management and the five elements that
constitute managerial responsibilities.

FIVE FUNCTIONS OF MANAGEMENT

1. Planning
- Looking ahead
- Participation of the entire organization
- Linked and coordinated on different levels
- Consider available resources and flexibility
2.
-

Organizing
Sufficient capital, staff, & raw materials
Organization structure with a good division of functions and tasks
Number of functions increase, organization expand horizontally and vertically
Requires a different type of leadership

3.
-

Commanding
Giving orders and clear working instructions
Concrete instruction with the respect to activities
Successful managers
Have integrity, communicate clearly, and base their decisions on regular audits
Capable of motivating a team
Capable of encouraging employees to take initiative

4.
-

Coordinating
All activities are harmonized
Positive influencing of employees behavior
Stimulating motivation and discipline within group dynamics
Requires clear communication and good leadership

5. Controlling
- Conformity of activities with the plan
- Four steps
Establish performance standards
Measure and report actual performance

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Compare results with performance & standards
Take corrective or preventive measures
- Each step is about creative problem solving
- Starts with creating an environmental analysis
- Ends with evaluating the results implemented solutions
FOURTEEN PRINCIPLES OF MANAGEMENT
In the last century, organizations already had to deal with management in practice. In the early 1900s,
large organizations, such as production factories, had to be managed too. At the time there were only few
(external) tools, models and methods available. Thanks to scientists like Henri Fayol (1841-1925) the first
foundations were laid for modern management.
These first concepts, also called principles are the underlying factors for successful management. Henri
Fayol explored this comprehensively and, as a result, he synthesized the 14 principles of management. Henri
Fayol s principles and research were published in the book General and Industrial Management (1916).
The 14 principles of management can be used to manage organizations and are useful tools for
forecasting, planning, process management, organization management, decision-making, coordination and
control.

1. Division of Work
- In practice, employees are specialized in different areas and they have different skills. Different levels of
expertise can be distinguished within the knowledge areas (from generalist to specialist). Personal and
professional developments support this.
-

According to Henri Fayol specialization promotes efficiency of the workforce and increases productivity.
In addition, the specialization of the workforce increases their accuracy and speed. This management
principle is applicable to both technical and managerial activities.

When employees are specialized, output can increase because they become increasingly skilled and
efficient.

2. Authority and Responsibility

- Managers must have the authority to give orders, but they must also keep in mind that with authority
comes responsibility.
-

In order to get things done in an organization, management has the authority to give orders to the
employees. Of course with this authority comes responsibility. According to Henri Fayol, the
accompanying power or authority gives the management the right to give orders to the subordinates.
The responsibility can be traced back from performance and it is therefore necessary to make
agreements about this. In other words, authority and responsibility go together and they are two sides of
the same coin.

3. Discipline
- Discipline must be upheld in organizations, but methods for doing so can vary.
-

This third principle of the 14 principles of management is about obedience. It is often a part of the core
values of a mission and vision in the form of good conduct and respectful interactions. This
management principle is essential and is seen as the oil to make the engine of an organization run
smoothly.

4. Unity of Command
- Employees should have only one direct supervisor. : Workers should receive orders from only one
manager.

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-

The management principle Unity of command means that an individual employee should receive
orders from one manager and that the employee is answerable to that manager. If tasks and related
responsibilities are given to the employee by more than one manager, this may lead to confusion which
may lead to possible conflicts for employees. By using this principle, the responsibility for mistakes can be
established more easily.

5. Unity of Direction
- Teams with the same objective should be working under the direction of one manager, using one plan.
This will ensure that action is properly coordinated.
-

This management principle of the 14 principles of management is all about focus and unity. All
employees deliver the same activities that can be linked to the same objectives. All activities must be
carried out by one group that forms a team. These activities must be described in a plan of action. The
manager is ultimately responsible for this plan and he monitors the progress of the defined and planned
activities. Focus areas are the efforts made by the employees and coordination.

6. Subordination of Individual Interest to the General Interest

- The interests of one employee should not be allowed to become more important than those of the
group. This includes managers.
- The interests of one person should not take priority over the interests of the organization as a whole.
-

There are always all kinds of interests in an organization. In order to have an organization function
well, Henri Fayol indicated that personal interests are subordinate to the interests of the organization
(ethics). The primary focus is on the organizational objectives and not on those of the individual. This
applies to all levels of the entire organization, including the managers.

7. Remuneration
- Employee satisfaction depends on fair remuneration for everyone.
-

This includes financial and non-financial compensation.

Renumeration: money paid for work or a service.

Many variables, such as cost of living, supply of qualified personnel, general business conditions, and
success of the business, should be considered in determining a workers rate of pay.

Motivation and productivity are close to one another as far as the smooth running of an organization is
concerned. This management principle of the 14 principles of management argues that the
remuneration should be sufficient to keep employees motivated and productive. There are two types of
remuneration namely non-monetary (a compliment, more responsibilities, credits) and monetary
(compensation, bonus or other financial compensation). Ultimately, it is about rewarding the efforts that
have been made.

8. The Degree of Centralization

- This principle refers to how close employees are to the decision-making process. It is important to aim for
an appropriate balance
-

Centralization: lowering the importance of the subordinate role. Decentralization is increasing the
importance. The degree to which centralization or decentralization should be adopted depends on the
specific organization in which the manager is working.

Management and authority for decision-making process must be properly balanced in an organization.
This depends on the volume and size of an organization including its hierarchy. Centralization implies the
concentration of decision making authority at the top management (executive board). Sharing of

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authorities for the decision-making process with lower levels (middle and lower management), is
referred to as decentralization by Fayol. Henri Fayol indicated that an organization should strive for a
good balance in this.
9. Scalar Chain
- Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
-

Clear line in the area of authority

Top to bottom and all managers at all levels

Hierarchy presents itself in any given organization. This varies from senior management (executive
board) to the lowest levels in the organization. Henri Fayols hierarchy management principle states
that there should be a clear line in the area of authority (from top to bottom and all managers at all
levels). This can be seen as a type of management structure. Each employee can contact a manager
or a superior in an emergency situation without challenging the hierarchy. Especially, when it concerns
reports about calamities to the immediate managers/superiors.

Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line
supervisor to the president, possess certain amounts of authority. The President possesses the most
authority; the first line supervisor the least. Lower level managers should always keep upper level
managers informed of their work activities. The existence of a scalar chain and adherence to it are
necessary. If the organization is to be successful.

10. Order
- The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
-

According to this principle of the 14 principles of management, employees in an organization must

have the right resources at their disposal so that they can function properly in an organization. In
addition to social order (responsibility of the managers) the work environment must be safe, clean and
tidy.

For the sake of efficiency and coordination, all materials and people related to a specific kind of work
should be treated as equally as possible.

11. Equity
- Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with
kindness where appropriate.
12. Stability of Tenure of Personnel
- Managers should strive to minimize employee turnover. Personnel planning should be a priority.
-

Deployment and managing of personnel and this should be in balance with the service that is provided
from the organization. Management strives to minimize employee turnover and to have the right staff in
the right place. Focus areas such as frequent change of position and sufficient development must be
managed well.

Retaining productive employees should always be a high priority of management. Recruitment and
Selection Costs, as well as increased product-reject rates are usually associated with hiring new
workers.

13. Initiative
- Employees should be given the necessary level of freedom to create and carry out plans.
-

Henri Fayol argued that with this management principle employees should be allowed to express new
ideas. This encourages interest and involvement and creates added value for the company. Employee

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initiatives are a source of strength for the organization according to Henri Fayol. This encourages the
employees to be involved and interested.

14. Esprit de Corps

- Organizations should strive to promote team spirit and unity.
-

Encourage harmony and general good feelings among employees

Striving for the involvement and unity of the employees. Managers are responsible for the development
of morale in the workplace; individually and in the area of communication. Esprit de corps contributes
to the development of the culture and creates an atmosphere of mutual trust and understanding.