Considered based around activity and efficiency, which soon

Considered by many to be the founder of Management Theory,
Fayol, in the 20th century, developed “The Fourteen Principles of
Management”. Working at a failing mining company, Fayol’s Principles turned the
firm into one of France’s most successful businesses. At the time, managers lacked
sufficient role-specific training, meaning the whole organisation suffered from
inefficiency and poor leadership. Fayol provided a normative and prescriptive framework
based around activity and efficiency, which soon became globally adopted by
firms as fundamental management theory. However, radical changes to markets, technology
and communication have since raised issues over the relevance of Fayol’s principles,
and whether they hold value and application in modern ideas of management.

 

He broke down managerial responsibility into five functions:
planning, organising, co-ordinating, commanding and controlling1. His
commanding principles primarily focused on the relationship between the
employee and the manager. Through ‘Unity of Command’, Fayol gave workers
clarity in their responsibilities. Orders are given by one superior manager (instead
of multiple) to avoid confusion and conflicts between employees. This principle
makes it easier for mistakes to be found out and to establish the
responsibility of these mistakes. His ‘Scalar Chain’ principle stated there
should be a clear hierarchy between workers and managers, particularly when
communicating, in order to avoid ambiguity. The chain pattern should be
followed in all departments if it is to be effective.

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Although successful in the 19th and 20th
century, changes in markets and firms’ ideologies in recent times have meant
Fayol’s rigid and strict principles on command can be argued as outdated. Post-capitalist
companies such as Google do not cohere to Fayol’s command hierarchy for they
adopt a flat organisational structure. Low level employees do not follow the
Scalar Chain principle as they can bypass middle management and report directly
to the CEO. This can be more effective than Fayol’s idea of command for
employees create their own standards of authority that they are motivated to adhere
to as a team, whereas Fayol’s principles would suggest motivation to work must
come from a superior authority, which could lead to belittlement and demotivation.
However, some aspects of the Unity of Command principle are still relevant. Most
modern manufacturing firms still adopt a structure where individual workers join
a team and follow commands from one superior manager. To follow orders from
multiple managers would lead to confusion and inefficiency.

 

Fayol’s co-ordination function is perhaps the most relevant to
modern management. Co-ordinating organisations harmonised the employees and
managers together, encouraging loyalty that was rewarded with remuneration.
Fayol promoted weekly meetings between all levels of management, from head of
departments to lower level managers, in which common matters of interest were
discussed. This helps to create flows of information and communication both top
down and bottom up, giving all workers knowledge on the organisation’s goals
and where they need to improve to meet these goals. As a result, the company continues
to improve and constantly develops after identifying and solving problems,
becoming united in trying to achieve a common goal. This is very much applicable
in modern times in the form of corporate goals, team targets and other
organisational objectives.

 

Although still relevant in modern firms, the ways in which firms’
co-ordinate have changed in recent times. Where previously workers would have
communicated either via mouth or paper, which could be lengthy, the creation of
the internet has radically changed how an organisation is run for people can converse
and hold meetings online in seconds via e-mail, skype or text message. A Norwegian
firm called Oticon, who operates a spaghetti structure, has banned the use of
paper at its offices and all forms of communication are now done either through
a PC network or face to face2. Fayol’s
co-ordination function is therefore limited by technological advances but the
general premise that all workers in the firm should be active in communicating across
all its departments and workers is fundamental in most modern-day management theories.

 

Fayol’s principles still provide a good framework in what
makes an effective manager. A successful post-capitalist manager would have
gained the respect of its workers e.g. by setting a good example at work. Fayol’s
principles promote this type of management, as ‘Equity’ emphasised fairness and
justice to all employees. This is important for if employees feel they are
being treated equally, they are more likely to feel valued and work more
productively. Fayol felt ‘remuneration’ should be given by managers to further
incentivise workers. A manager who gives non-monetary remuneration such as
compliments or monetary remuneration like bonuses is more likely to gain
respect. An effective modern manger would still use this principle by rewarding
employees when deserved, in order to maintain motivation.

 

Fayol’s planning function of management ties into the
framework being an effective 21st century manager. This function was
perhaps the most innovative. A good plan of action unifies the organisation by
focusing on the nature, priorities and condition of the business and the
longer-term predictions for the industry and economy3. Fayol
sets out the principle of ‘Esprit de Corps’ which strives for the involvement
and unity of the employees. An effective manager will include all members of
his team in the plan as to not discriminate, thereby empowering and giving
freedom to his employees to execute the plan.

 

Fayol considered this function but most difficult to
implement into management theory as it requires the participation of all
employees on all levels. At his mining company, it would have been easy to get
the backing from all employees’ due to his large level of respect. However, this
will be even harder in a post-capitalist organisation for large TNC’s exist now
such as Apple and BP, would have many different departments and divisions across
the whole world, all of which having different objectives and goals, making it
impossible for all employees to be united under one common goal.

 

One of Fayol’s most well-known principles was ‘Division of Labour’.
Working at a mining company, if workers specialised in a particular division of
the production line based on their skillset and knowledge (e.g. miners mining
raw materials) the whole production process would be more productive and
efficient for accuracy and speed are increased. The mining company he worked
for became so successful as they became for more efficient that competitors.
This principle is still used globally as fundamental management in
manufacturing firms.

 

However, this principle is limited in many developed
countries nowadays due to the regression of the manufacturing sector. The
mining industry in the UK and the car industry in Detroit, USA underwent
serious economic decline, leading to structural unemployment. This especially impacted
those who specialised in jobs these industries for they cannot take on other employment
once they are made redundant. Thus, if division of labour requires specialisation
in a particular skillset then managers must make sure that their employees do
not over specialise and become purely dependant in a specific field of work. Furthermore,
division of labour can actually decrease productivity if workers become
de-motivated from boring and repetitive tasks.

 

Another issue with this principle is that workers now tend
to change jobs far more frequently than previously. Where Fayol stayed at the mining
company is entire working life, the rise of employee welfare and flatter organisations
have meant employees demand wider reaching roles that provide work fulfilment.
As a result, people are less willing to specialise and participate in division
of labour, making it less relevant nowadays. However, in any workplace, the splitting
down of large tasks into smaller ones to people with differing levels of
expertise and skills, will only improve efficiency and speed, thus increasing
productivity. It therefore can be and effective and applicable way of modern
managing.

 

Overall Fayol provides a basic, fundamental structure of
what management is within any organisation which can still be seen in general
application of many post-capitalist firms’ management ideas. However, the extent
of which they can be used become limited due to major technological advances.
The function that is still important to 21st century managers is the
planning functions, for all managers must draw up plans of action that unite all
employees behind one common goal. To become more applicable to what post-capitalist
managers understand as management, other theorists have attempted to develop
his management theory. For example, using Fayol’s principles, Mintzberg defined
managerial roles as interpersonal roles, information processing roles and decision-making
roles.

1 Hindle, T. (2012) ‘The
Economist Guide to Management Ideas and Gurus’, Henri Fayol (pp. 237-238)

2 Eskerod, P. and Darmer, P. (1994). Cases in
Organisational Behaviour (pp. 43-46)

3 Parker, L.  and
Ritson, P. (2005). Revisiting Fayol anticipating contemporary management, British
Journal of Management, (pp. 175-194)

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