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Henri Fayol's Basic Management Theory and Its Application to Current Business Environment The current production or delivery of either goods or services has reached an enormous level of output, which sometimes begins to remind the situation alike to a starving man who suddenly finds food in the desert. The society's spending on goods is huge, however, in the nearest future, the market can encounter the over saturated state, and the developed facilities will bear great fixed cost. There are many theories of management, which deal with potential economic issues. In our case the global economy is under a threat of market instability, of unpredictable behavior in the future. One of the classical theories, created by Henri Fayol, gives the answers to the question through the standard functions of management - Planning, Organizing, Commanding, Coordination and Controlling, and their dynamic change an modification. Fayol, was little known while working as engineer in France, but only until the 1916 when the first translation of his "Administration Industrielle et Generale" was published for English speaking readers.
Basing his reasoning on the personal research and experience, Fayol describes his understanding of the administration process and enterprise management. The economist often explains his point of view on actual live examples. In 1916, five years after F. W. Taylor publishes "The Principles of Scientific Management" in the USA, Fayol examines the essence of management and administration on the example of his French mining association experience. The management avant-garde, Henri Fayol, first attempted to arrange management understanding and adjust it to managerial activities and responsibilities.
Fayol developed fourteen principles for organizational design and effective administration and suggested that managers obtain proper preparation in their application (Fayol, p. 94). These fourteen principles serve as fundamental for the whole idea of his method. In order for the correct understanding of Fayol's theory every manager should be aware of these principles. The author strongly believed that, whether performing the role of the change agent or not, change is an integral part of a managers job.
Change is An alteration in people, structure or technology. (Robbins et al. , p. 437) Change occurs within and around organizations at an unprecedented speed and complexity. Change poses threats and creates opportunities. The fact that change creates opportunities is reason why managers need to encourage change. What a manager can change falls distinctively into the three categories stated in the definition of change: people, structure and technology. The manager can make alterations in these areas in an attempt to adapt to or facilitate change. The change of people involves changing attitudes, expectations, perceptions and behavior.
These changes are used to help people within organizations to work together more effectively. Changing structure relates to job design, job specialization, hierarchy, formalization and all other organizational structural variables. These changes are ones that need to be flexible and not static to be adaptable to change. However, from the fundamental standpoint of Fayol's strategy, the change must always be accompanied by the strict discipline and diligent acceptance of the authority. Without the discipline, which is essential to the business, and proper adherence to the consistency and standards, no enterprise could prosper. Viewing this from the modern perspective we can notice that many companies operate in such conditions.
Besides the global standard ISO was created based on these two principles of Fayol (Urwick, p. 177). An organizations environment has both specific and general components, or micro and macro environments. The organization also has its own personality or culture. Fayol's principle of Esprit de corps emphasizes the need for the maintenance of this team spirit, and harmonious interpersonal relations of the personnel (Pugh, p. 64).
Only with a well-set common goal and devotion to it the enterprise can suffer the hard times of unpredictable future events. Fayol recommends the necessity of One-Target-Approach because this will provide the company with a decent flexibility in choosing the correct business model and strategy. The group understanding of the goal, and nowadays commonly used concept of the companys mission, allows every member to participate in the development of the future success of the enterprise. Todays organizations are characterized by frequent disruptions to its environment. New strategy, new technology and change in employee mix or attitudes are all internal factors that can create force for change.
The introduction of new equipment or technology can create the need for change within the workplace. The staff will need to learn how to use the new equipment and it may affect the duties required of them. Fayol stresses out that companies need something called the Stability of Tenure (Taylor, p. 152), which allows the employees to use some time to adapt to the new workplace conditions with less stress. To Fayol the Stability of Tenure promotes loyalty to the business, its goals and assets. But in order for the personnel to show the loyalty to the enterprise, the business must also be loyal and generous to its workers. The relevant remuneration of the staff is a must for any organization that desires quick and continuous development and prosperity.
Fayol defines the remuneration as " the price of services rendered. " The writer strongly believed that for every unit of the companys growth the same plus a little more unit of personal growth must be present for the responsible worker. New company strategies, which may involve the future change in management practices, enterprise agreements and industrial relations, will create a vast variety of needs for change. So will the attitudes of the workers. In fact employee attitudes can create the need for new company strategies in the case of job dissatisfaction, poor team spirit, lack of commitment and job insecurity. External forces affecting an organization demand change by creating threats and opportunities. The organization it compelled to respond to these threats and opportunities.
As per Henri Fayol's point of view it is very important to recognize every threat form the single, centralized perspective. Though it may seem that the centralization Fayol talks about is rather contrary to the decentralized approach used by the businesses today, the author gives his explanation of the concept, and mentions that the decentralization - is frequently centralized-decentralization. He means that every process of the enterprise must be separated with a clearly defined leader and subordination along with unity of command. The unity of command allows the company to respond to the change of the environment with a single effort and common direction (a very necessary thing when company is going through the stage of some crisis). The approach of resource and labor specialization provides the business with the ability to concentrate them at the specialized part of the activity, causing more understanding of the task followed by a deeper insight and focus on proper completion. Fayol was one of the first economists to introduce the concept of workgroups that now serve as one of the fundamental principle for the Japanese type of enterprise management. (Sheldrake, p. 132) Fayol pays a great deal of attention in his works to the human resource management side of business administration.
Sometimes his works go deep into psychological analysis of the cause and effect in the economy and business. In the critical situation the human factor plays a very important role. At the time when some process needs to be changed, the actual change does not occur until the force for change exceeds that of the force resisting the change. People who may not necessarily lose from the change still contribute to the force resisting change. People inherently resist change because change causes uncertainty and ambiguity.
Through good management these uncertainties and ambiguities will be removed and the resistance to change will not be as great. Fayol says that a successful approach to changing the structure and processes within the organization should start with thorough planning. Planning is a process that involves defining the organizations objectives or goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. (Robbins et al. , p. 247) One of the reasons for planning is to reduce the impact of change. It does this by creating an environment that is accepting of change and by predicting change. Fayol agreed to the fact that planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses. (Robbins et al. , p. 247) Planning just enables us to best cope with and manage change. Managers in this chaotic world need to respond quickly to every threatening condition.
Though Henri Fayol is a world widely recognized economist and the founder of several economic doctrines, his views on management of the enterprise seem to be obsolete nowadays. Modern approach on the successful and stress-resistant company is a view at the organization that is well structured for change is one that is organic. An organic organization has the structural characteristics mentioned above and others like wide span of control, cross-functional teams, free flow of information and low formalization. Organic organizations have organizational structure that is highly adaptive and flexible with little work specialization, minimal formalization and little direct supervision of employees. (Robbins et al. , p. 362) The Fayol Theory is recognized as quite opposite to the aforementioned idea. Organic structures incorporate the use of teams. Teams use a much flatter design of management.
The learning organization is the best-structured organization for resisting the stressful environment. This is quite apparent in the definition An organization that has developed the continuous capacity to adapt and change because all members take an active role in identifying and resolving work related issues. (Robbins et al. , p. 376) To achieve this the organization has a structure that is not constrained by any boundaries. Leadership is the ability to influence a group towards the achievement of goals. (Robbins et al. , p. 593) Transformational leaders are the style or type of leader best suited for modern environment business. In the conclusion I would like to overview Henri Fayol's model of the enterprise administration and compare it to the current business practice. In brief, Fayol's Theory is rather totalitarian, his view of a firmly placed to a set order of boundaries enterprise is not flexible enough to face the everyday changes in the market conditions. However, we must note that his works are based on the economic situation of the first half of the twentieth century when global economy was just a shadow prospect of the future.
At those times the economies of the countries were in the early growth stage, and accompanied with the geo-political situation of the times, Fayol's theory was relatively adequate and applicable. BIBLIOGRAPHY Barney, J. , Ricky, W. The Management of Organizations. U. S. A. : Houghton Mifflin Company, 1992.
Cummings, T. , Worley, C. Organization Development & Change. Ohio: South-Western College Publishing, 1997. Graham, R. , Englund, R. Creating an Environment for Successful Projects. California: Jossey-Bass Inc. , 1997.
Robbins, S. , Bergman, R. , Stagg, I. , Coulter, M. Management. Sydney: Prentice-Hall Australia Pty Ltd, 2000. Fayol, Henri. General and industrial management. London: Pitman, 1949.
Sheldrake, John. Management theory: from Taylorism to Japan ization. Boston: International Thomson Business Press, 1997. Urwick, L. , and Beach, E.
F. L. The making of scientific management. London: I. Pitman, 1961. Taylor, Frederick Winslow. (January 1998) The Principles of Scientific Management.
Dover; Pubns, 1998. Pugh, Derek Salman. Great writers on organizations. Hants, England: Brookfield, c 1993.
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Research essay sample on Point Of View Henri Fayol
