Administrative Theory
Scientific management was primarily concerned with increasing the productive efficiency of individual workers at the shop floor. The role of managers and their functions in the total organisation were not given adequate attention. Around the same time, that is the first quarter of the 20th century Henri Fayol, director of a coal mining company in France, made a systematic analysis of the process of management. His approach to the study of management is also known as the process or Functional Approach.
According to Fayol, business activities in any organisation consist of six inter-dependent operations viz., technical, commercial, financial, security, accounting and administrative or managerial operations. He analysed the nature of managerial activities and skill requirements which were so far given little attention by thinkers. He considered the process of management to be of universal application and distinguished among five elements of the process viz., to forecast and plan, to organise, to command, to coordinate, and to control. The concept of management was, thus, defined as the process of performing certain functions like planning, organising, etc. These functions were expected to be performed by managers at all levels in the organisation as well as in all types of industries and in all countries.
Fayol emphasized that management involved the application of certain skills which could be acquired by persons on the basis of systematic instructions and training. Once acquired, the skills could be applied to all types of institutions including the church, schools, political as well as industrial organisations.
Besides a systematic analysis of the management process and management functions, Fayol formulated a set of fourteen principles as guidelines for implementing the process of management. These principles were stated in flexible terms and expected to be of use of managers under all circumstances. The skill and abilities required for effective management were stated to be dependent on the managers’ position at different levels of organisation. According to Fayol, administrative skills were more essential for higher level managers’, while technical abilities were required more at the lower level positions. He also believed that managerial training was essential for people in all walks of life. He stressed, for the first time, the necessity of formal education and training in management. In short, Fayol’s analysis provides a set of means (viz., planning, organising, commanding, coordinating and controlling) for viewing the management process and guidance (i.e., the principles for implementing the process).
The fourteen principles of management are as follow.
- Division of work
- Authority and Responsibility
- Discipline
- Unity of command
- Unity of Direction
- Subordination of individual interest to general interest
- Remuneration of Personnel
- Centralisation
- Scalar Chain
- Order
- Equity
- Stability of Tenure
- Initiative
- Esprit de corps
The Administrative Theory of Management and Functional Approach to management may be said to have developed on the foundation laid by Fayol. He provided a conceptual framework for analyzing the process of management. At the same time, he isolated and analysed management as a separate, distinct activity. Management as a body of knowledge gained immensely from Fayol’s analysis of managerial skills of universal relevance, and principles of general management developed by him. Although some critics called it inconsistent, vague and pro-management based theory, still this theory experts considerable influence on the practice as well teaching of management the world over.
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