Henry Fayol’s Principles of Management and Current Context
Eng. Madhawa Habarakada
Materials Engineer, Quality Assurance Manager, QA/ISO Expert, TPM/LEAN Practitioner, Trainer, Student Mentor, Freelance Auditor, Toastmaster.
Introduction
An organization, institution, or a business entity is a combination of employer, employees, and infrastructure is an open or a closed system, where that system has a vision and set of objectives to fulfill. To achieve its goals, corporate objectives, and situational objectives, a good management system and a framework are essential to carry out the required arrangements and facilitate the success of the system.
A good management system has four basic functions which are also called as POLC Framework of Management. (notesmatic.com)
Without these four elements in an organization, a proper structure related to managing the organization will not be available and the focus on the organizational goals would be less.
Ancient Context
In the early ages, there are several texts related to management although they have not carried the word management in those teachings or writings.
One instance would be the teachings of the great philosopher Socrates. Bragues G (2011) states that the Socratic perspective conforms that, businesses should run not only considering profit but also consider social responsibility and satisfy the rational human wants.
The ancient “Bhagawath Gita†which was written in ancient times in India, could be considered as another good example for management theories elaborated in the earliest ages. L.L. (2021) identified the connections between Henri Fayol’s theories and the contents of Bhagawath Gita.
Industrial Age Context
In the initial stage of the industrial age, solid management systems were not available and with the establishment of the industries, such requirements arose as the industries became bigger and much complex.
The classical approaches of management originated in the late 19th century where the modern concepts of management were initially developed. Management theories were developed published by writers like Taylor, Fayol, Gullick and Urwick, Weber, Mooney & Reily, and others who emphasize mainly work planning, principles of management, technical requirements, formal structures, rational and logical behavior, industrial management considering specialization, quality, efficiency, cost reduction, and management-worker relationships. (Bragues, G., 2011)
Henri Fayol
Henri Fayol, who has been identified as the “father of modern operational management theory†is one of the most influential contributors to modern management concepts. Fayol describes management as a universal human activity that applies equally well to the family as it does to the corporation which was also stated by Socrates in his ancient teachings. (www.mbaknol.com)
Fayol worked initially as a mining engineer in an iron and coal company named, “Commentry-Fourchambault†in France for 58 years, and with the experience, he became the CEO of the same company. (theinvestorsbook.com)
He used his experience and understandings at all levels of the organization for problem-solving and managing the people in the organization which ultimately enabled him to develop the management theories which are widely used in the modern world directly or indirectly. (www.mindtools.com)
One classic theory he developed and related to management is the “Five functions of Management†which gives a big picture of management principles. (www.mindtools.com)
While the “five functions of management†discuss the management practices at a glance, his most famous “14 principles of management†is a theory that is widely identified as one base theory of the modern management concepts.
Henri Fayol’s five functions of management
In this theory, Fayol discusses five basic functions which need to be practiced for a successful management strategy. (www.mindtools.com)
Planning
Fayol describes this function as “to assess the future and make provision for itâ€. In the current context, this is a function that is highly practiced by small to large-scale organizations.
The planning is in every workflow of an organization from a simple per shift cadre arrangement to huge 5–10-year corporate plans development for the future. Organizations develop plans for day-to-day activities to long-term goal-setting activities where they consider company resources, market trends, political stances, economical conditions, technology enhancements, etc.Â
Also, the ISO 9001 (Quality Management System) standard talks about planning as a major management component where an organization needs to identify the risks & opportunities and take corrective and preventive actions to overcome the risks and gain advantages from the opportunities (ISO 9001:2015, Clause 6. Planning). Organizations use analytical methods like PESTEL analysis, SWOT analysis, Porter’s five forces to determine the internal and external risks and opportunities in this context. Â
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Organizing
Fayol says that it is needed to lay outlines of authorities and responsibilities for the employees.
Almost all organizations nowadays have a clear understanding of their management levels and understand the need for responsibilities and authority. Management systems like ISO 9001 (Quality Management System requirements), ISO 14001 (Environmental Management System requirements), ISO 45001 (Occupational health and safety management system requirements) talk about the responsibilities and accountabilities of each employment level.
ISO 9001:2015 standard, states that “Top management shall ensure that the responsibilities and authorities for relevant roles are assigned, communicated and understood within the organization.†(ISO 9001:2015. Clause 5.3. Organizational roles, responsibilities, and authorities).
Hence, organizations prepare their Organizational structures, define responsibilities and authorities of each employee in their “Job Descriptions†and other related documentation, keep records, and require employees to adhere to those responsibilities.
Commanding
It is said by Fayol that the managers must know the skills of the employees and delegate the tasks appropriately to run a successful organization.
Organizations create job specifications including the employee capabilities, skill matrices for operative level employees by identifying the capabilities and knowledge of every employee. Considering the skill sets of each employee, managers will allocate job functions accordingly. Â
Coordinating
Fayol states that in a well-coordinated organization, each department understands their responsibilities and the needs of peer teams, and their obligations to them.
This is directly linked to the previously stated responsibilities and authorities functions and then to proper communication functions. ISO 9001 also states that “the organization shall determine the internal and external communications relevant†(ISO 9001:2015, Clause 7.4. Communication).
Controlling
It is stated in the five functions that, it is needed to check whether the placed rules, plans, and processes are practiced in the organization by its employees.
This is clearly defined in almost all modern management systems like ISO management systems where continuous assessments are needed to evaluate the applicability, effectiveness, and successful implementation. In ISO 9001 Quality Management System, states that the organization should identify the things to be monitored & measured, methods of monitoring, time duration, and how the results should be analyzed and evaluated. (ISO 9001:2015, Clause 9.1. Monitoring, measurement, analysis, and evaluation). Additionally, ISO 9001 standard also requests frequent internal & 3rd party audits and review of the results periodically in planned intervals to review the progress and propose improvement actions. (ISO 9001:2015, Clause 9.2. Internal Audit and Clause 9.3. Management Review).
Applicability in the current context
It can be seen that the ancient theories of management have some similarities to Fayol’s theories of management. (eg. Teachings of Socrates, 14 principles have connections to Bhagawath Gita).
Fayol’s five functions of management are almost the same as the currently used POLC framework although with little differences in definitions, where an additional function of “coordinating†is included by Fayol. Additionally, widely used Deming’s PDCA cycle can also be linked to Fayol’s five functions of management (ISO 9001:2015, Clause 0.3.2. Plan-Do-Check-Act Cycle)
Latest International Management systems like ISO 9001 (Quality Management System), SA 8000 (Social Accountability Standard) has pretty much similarities when compared with Fayol’s 14 principles of management.
But we can observe some differences of those theories in the latest concepts like Total Quality Management, Total Productivity Maintenance where some functions are transferred to the lower employment categories from Management categories, and some of Fayol’s definitions are disregarded (eg. In Fayol’s 14 principles, it is said that employees should be given one single job function and multi-tasking should be avoided. But in the current context, having multi-disciplinary capabilities have become a requirement and concepts like TPM require machine operators to carry out basic maintenance activities also.)
One major point which Fayol has disregarded is the “Customer†who is one of the major stakeholders of at organization. During the last decade, “Customer Satisfaction†was considered as a key success factor of an organization. And during the current decade, it has changed to “Customer Delightâ€.
Conclusion
Fayol developed these management theories using his knowledge and personal experience during his time in the 19th century. Also his theories were mainly focused on manufacturing environments and such industries.
With the changes in the industries, technological advancements, cultural and societal changes with time, and considering different business scenarios, some of the theories he has elaborated might not be suitable to the current contexts.
Although there are few differences in some theories considering the current industrial norms and concepts, it can be concluded that the majority of Henri Fayol’s management theories are still applicable to today’s management contexts.
References